Tulkubash Exploration & Drilling Program Complete

RNS Number : 8417P

Chaarat Gold Holdings Ltd

15 October 2019

 

15 October 2019

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Tulkubash Exploration Update and Completion of 2019 Drilling Programme

Chaarat Gold Holdings Ltd (AIM: CGH), the AIM-quoted gold mining company operating the Kapan mine in Armenia and developing the Tulkubash Project in the Kyrgyz Republic, is pleased to provide further drilling results from its ongoing 2019 exploration and drilling programme at Tulkubash (the "Tulkubash Project"). The Tulkubash Project will become the Company's second operating gold mine, scheduled to commence production in 2021.

Highlights

·    An additional c.8,100 metres have been drilled since the last exploration update dated 28 August 2019.

·    Assays are pending from 25 drill holes and from extensive lengths of road-cut sampling. These results will be compiled and interpreted as they are received.

·    The primary objective of this drilling programme has been to identify shallow mineralisation within and near the current pit designs and to extend mineralisation along strike to the northeast.

·    The current year's programme forms part of a multi-year drilling programme focused on adding further reserves, with the long-term objective of demonstrating a mine life of at least 15 years at the Tulkubash Project.

·    The Company expects to publish an update to the Tulkubash Mineral Resource estimate before year-end 2019. This will form the basis for an update to the Tulkubash Reserve estimate and economic model during Q1 2020.

·    Drilling since the 28 August update has focused on the prospective Shir Canyon area, representing the strike extension to the northeast from the 2018 year-end Resource boundary. This is an area where road-cut sampling earlier this season identified numerous areas of anomalous (in cases, ore-grade) gold geochemistry at surface. Assays from much of this drilling remain pending, but encouraging results received to date include:

o  DH19T508: 13.5 metres @ 0.81 g/t Au starting at 36.0 metres;

o  DH19T528: 15.0 metres @ 1.00 g/t Au starting at 19.5 metres and 21.0 metres @ 0.58 g/t Au starting at 78.0 metres;

o  DH19T535: 28.5 metres @ 0.99 g/t Au starting at 6.0 metres;

o  DH19T536: 7.5 metres @ 1.75 g/t Au starting at 16.5 metres; and

o  DH19T544: 6.0 metres @ 1.59 g/t Au starting at 7.5 metres and 4.5 metres @ 3.23 g/t Au starting at 37.5 metres;

o  DH19T556: 7.5 metres @ 3.56 g/t Au starting at 166.0 metres.

It should be noted that these holes are drilled at shallow angles and the depth of these intercepts from surface is considerably less than down-hole drill depth. This is illustrated in the cross sections that accompany this Press Release.

·    Roadcut and outcrop mapping and sampling northeast along strike from the current Resource boundary have extended the broad area of > 1 g/t Au in rock chip samples described in the 28 August Press Release by about 450 metres to the northeast.

·    A new high-grade target has been identified in the Shir Canyon area: A road cut sample reported earlier, 2 metres of 19.67 g/t Au within 8 metres of 5.12 g/t Au, is now interpreted as occurring in Chaarat Formation shales. Initial metallurgical testing indicates that this may represent mineralisation that is leachable but higher grade than typical Tulkubash mineralisation. Work on this target has just begun, but initial drill results are encouraging.

·    District-scale exploration continues to identify and validate new gold targets, supporting the hypothesis that the 24km Tulkubash Exploration License is an emerging gold district with the potential to host numerous gold deposits.

·    During 2019, 120 holes have been drilled to date totalling about 19,500 metres. The five remaining holes of the 2019 campaign are in progress and will be completed by the end of October, bringing the total drilling for the year to approximately 20,000 metres in line with previous guidance.

·    The current drilling includes an initial approximate 1,000 metre programme in the Karator and Ishakuldy areas, respectively 1.5 kilometres and 5 kilometres northeast of the current Resource limits. This programme is designed to begin testing drill targets identified along strike and to validate the district-scale potential of Tulkubash. This programme is expected to continue in 2020.

·    No exploration drilling is scheduled during the winter months.

The following link provides a plan showing the location of 2019 drilling at Tulkubash:

https://www.chaarat.com/investors/reports/agm-notices-and-other/

Dorian L. (Dusty) Nicol, the Company's Senior Vice President Exploration, commented:

"We are encouraged by our results to date this year: infill and step-out drilling within and adjacent to the currently defined Resource, exploration drilling in a new target area (Shir Canyon), and ongoing district-scale reconnaissance exploration are all providing encouraging results. The Resource identified to date lies within only 4 km of the Company's 24 km long exploration licence.

"Beyond this, Shir Canyon represents the potential strike extension to the northeast of our current (2018 year-end) Resource boundary. Drill testing within the broad area of +1 g/t Au mineralisation identified on surface has defined four gold lodes over a strike length of about 320 metres and remain open along strike to the northeast. Much of the assay data from drilling in this area is still pending, but results received to date are encouraging.

"We have also commenced the initial drill testing of targets at Karator and Ishakuldy this season. Additional trenching and road cut sampling in these targets continue to identify areas of hydrothermal alteration and anomalous geochemistry which has already identified numerous additional drill targets for follow up in future drill seasons.

"We continue to integrate field mapping and drill data with satellite imagery and geochemical data to identify multiple new target areas throughout the Company's exploration license. Our objective remains to continue developing a database of these geological and geochemical data that will allow the application of advanced data handling techniques to optimize ongoing exploration and discovery. The database being developed will lend itself to the application of Artificial Intelligence / Machine Learning to identify new drill targets."

Drilling Results

The following table summarizes significant drill results obtained since the 28 August update. Significant intercepts are defined as greater than 10m in width above a 0.25 g/t cut-off or greater than 3m in width at a 0.25 g/t cut-off assaying greater than 1.0 g/t Au. All results are from diamond core holes. The sample intervals are constrained by geology and range from a minimum of 0.4 metres to a maximum of 1.5 metres, generally averaging 1.5 metres in length. Mean grades are calculated at the stated cut-off with no upper cap applied. The maximum length of internal waste in any interval is 3.0 metres. Approximate true width is estimated from cross sectional interpretations.

https://www.chaarat.com/investors/reports/agm-notices-and-other/

DH	Section	Interval		Thickness (m)	True Thickness (m)	Au (g/t)
		From (m)	To (m)
DH19T515	4120	102.0	108.0	6.0	5.6	1.14
DH19T515	4120	117.0	120.0	3.0	2.7	1.10
DH19T508	4280	36.0	49.5	13.5	11.7	0.81
incl	4280	43.5	49.5	6.0	5.6	1.26
DH19T513	4280	94.5	100.5	6.0	5.4	1.04
DH19T523	4520	136.5	139.5	3.0	2.7	1.05
DH19T524	4600	118.5	129.0	10.5	9.4	0.39
DH19T521	4680	18.0	22.5	4.5	4.1	1.30
DH19T522	4680	36.0	48.0	12.0	10.8	0.46
DH19T528	4680	19.5	34.5	15.0	10.8	1.00
incl	4680	31.5	34.5	3.0	2.7	2.61
DH19T528	4680	78.0	99.0	21.0	18.0	0.58
DH19T528	4680	123.0	126.0	3.0	2.7	1.72
DH19T529	4680	21.0	25.5	4.5	4.1	0.99
DH19T536	4760	16.5	24.0	7.5	6.8	1.75
DH19T540	4760	82.5	94.5	12.0	10.6	0.49
DH19T544	4760	7.5	13.5	6.0	5.4	1.59
DH19T544	4760	37.5	42.0	4.5	4.0	3.23
DH19T544	4760	51.0	54.0	3.0	2.7	1.36
DH19T534	4840	99.0	103.5	4.5	4.1	2.57
DH19T534	4840	193.5	196.5	3.0	2.7	1.52
DH19T535	4840	6.0	28.5	22.5	19.5	0.99
DH19T551	4840	52.5	55.5	3.0	2.7	1.47
DH19T551	4840	61.5	64.5	3.0	2.7	2.4
DH19T548	5000	81.0	84.0	3.0	2.7	1.47
DH19T556	5080	166.0	173.5	7.5	6.9	3.56

Results from drilling in the northeast portion of the Tulkubash Resource continue to return positive results with the identification of additional shallow, high-grade gold lodes extending between the Satellite pit area and the East Pit. This new mineralisation may have the potential to expand and combine the small pits into larger pits. Shir Canyon is developing as a significant target area in its own right.

The following link tabulates the drill results received to date this season and illustrates the drill hole locations and interpretive cross-sections:

https://www.chaarat.com/investors/reports/agm-notices-and-other/

Shir Canyon Target Area

New drill road construction extending northeast along the Tulkubash Trend had exposed strongly altered and mineralised Tulkubash Quartzites in road cuts. As reported in the 28 August Press Release, these also defined an extensive area of anomalous (+1 g/t Au) gold geochemistry in road cut samples that define a mineralised corridor 100 to 150m in width and at least 550m along strike on surface. Drilling and surface mapping in Shir Canyon have now defined four distinct gold lodes, adding about 960 metres to the strike length of drilled Tulkubash mineralisation. All four lodes are open to the northeast.

Two of these lodes appear to be a new style of high-grade gold mineralisation at Tulkubash. These are "Tulkubash-style" lodes that are hosted within Chaarat Formation mudstones and shales. This occurrence is similar to the refractory Kyzyltash mineralisation, but the initial cyanide solubility assays indicate favourable leaching characteristics.  The discovery of high-grade (up to 13.80 g/t Au over 1.5 metres in drill hole DH19T556) and leachable gold mineralisation at Tulkubash represents an exciting and significant new target concept which may generate additional targets throughout the district. Work in 2019 has only begun to test this target in the Shir Canyon area. The mineralisation discovered to date remains open along strike. As of now, the Company has received assays from one drill hole into this target, DH19T544, which had 6.0 metres @ 1.59 g/t Au starting at 7.5 metres and 4.5 metres @ 3.23 g/t Au starting at 37.5 metres. Assays are pending from other holes drilled into this target.

This link provides a plan showing the location and results of drilling in Shir Canyon and its relationship to the road cut sampling:

https://www.chaarat.com/investors/reports/agm-notices-and-other/

District-Scale Potential

The current Tulkubash Resource Estimate of 1.6 million ounces Au (based on drilling through 2018; see Press Release dated 2 January 2019) is located within approximately 4.0 kilometres of a 24-kilometrestrike length of favourable geology. Ongoing reconnaissance exploration continues to identify favourable geology along this strike length, typically associated with multiple occurrences of anomalous gold geochemistry, favourable structural geology (including crackle brecciation), and favourable hydrothermal alteration. This supports the likelihood that Tulkubash is an emerging gold district with the potential to host numerous deposits.

The programme of geologic mapping combined with a geochemical exploration program continued this season, focussed on mapping favourable alteration and structural preparation along the Tulkubash Trend which extends approximately five kilometres northeast from Shir Canyon to Ishakuldy. This trend is characterized by widespread gold anomalies associated with favourable brecciation and silicification in the Tulkubash Quartzite. Initial drill holes into two priority drill targets, Ishakuldy and Karator, have been drilled this season. Assay results are pending.

This link provides a plan showing the location of drill targets and exploration sampling:

https://www.chaarat.com/investors/reports/agm-notices-and-other/

Systematic trenching near the Ishakuldy Target continues to extend the strike of high-grade mineralisation at the surface. Channel samples from trench TR19052 returned 10.0m at 4.66 g/t Au. Samples from the new road cuts at Karator returned 14.0m at 1.00 g/t Au which confirmed and extended mineralisation trench TR10017 which contained 13.0m of 1.27 g/t Au.

Reconnaissance mapping and geochemical exploration indicate that the zone of favourable geology associated with Tulkubash gold mineralisation extends to the northeast for at least 15 kilometres where the trend intersects a granitic intrusive body. These intrusive rocks are associated with gold mineralisation that may be related to a shallow porphyry system, which may represent additional exploration targets. Exploration management believes that these intrusive rocks may have provided the heat source for the Tulkubash mineralisation, in which case the intensity of mineralisation could be expected to increase approaching this zone.

This link provides a plan showing the Tulkubash Trend and the prospective intrusive rocks:

https://www.chaarat.com/investors/reports/agm-notices-and-other/

As part of the district-scale exploration at Tulkubash, the Company has also continued the satellite image interpretation begun earlier this season to develop a better understanding of structural geology and to identify new target areas. Results continue to be encouraging and have generated targets for ground follow-up.

In order to cost-effectively accelerate district-scale exploration in tandem with the addition of Resources and mine life to the Tulkubash oxide gold deposit, the Company continues to implement a staged programme comprising the following steps:

·      Q4 2019: Compilation and interpretation of 2019 drill data into an updated Tulkubash Mineral Resource Estimate.

·    Winter 2019/2020: Further remote sensing interpretation taking advantage of "ground truthing" and calibration of this technique during the 2019 field season. Integration of digitized data with geologic (particularly structural) and geochemical data into a layered database. The goal is to develop a database that will allow application of advanced data handling (Artificial Intelligence / Machine Learning) to recognize signatures of mineralisation and optimize drill target identification.

·    Summer 2020: Continuation of drilling in Shir Canyon to add Resource and mine life and optimise project economics based on Q1 2020 Reserve update. Further drilling at Ishakuldy and Karator targets to add Resource. Additional field work following up on reconnaissance targets generated by previous work, including drilling where warranted.

Ongoing exploration will continue to focus on adding Reserves and mine life to the Tulkubash oxide gold deposit, with the objective of demonstrating a minimum 15-year mine life. In addition, the Company will continue its district-scale exploration with the objective of discovering additional, new gold orebodies and new mines.

QA/QC Procedures: Sampling Methodology and Quality Control

All results have been generated from diamond core holes. Samples are shipped to the ALS Global Laboratory in Kara-Balta, Kyrgyz Republic for sample preparation and assay. Gold is analysed using a 30-gramme fire assay with an atomic absorption spectroscopy (AAS) finish. A quality control/quality assurance protocol is employed in the programme which includes standards and blanks in every batch of assays. Check assays are conducted on every 20^th sample by a second independent laboratory.

Competent Person

The Competent Person with overall responsibility for this press release for the Company, and who has reviewed the information contained herein, is Dorian L. (Dusty) Nicol (FAussIMM), the Company's Senior Vice President Exploration. He is a geologist with more than 44 years of experience in the Resource industry who has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. He has supervised the work which is the subject of this release. Mr. Nicol consents to the inclusion in this announcement of the matters based on this information in the form and context in which it appears.

A JORC Code Table 1 appears as an Appendix to this press release.

Enquiries

Chaarat Gold Holdings Limited Artem Volynets (CEO)	[phone]
	[e-mail]
Numis Securities Limited
John Prior, Paul Gillam (NOMAD)	[phone]
James Black (Corporate Broking)
Tavistock Communications
Charles Vivian Gareth Tredway	[phone] [phone]

About Chaarat

Chaarat is a gold mining company which owns the Kapan operating mine in Armenia as well as Tulkubash and Kyzyltash Gold Projects in the Kyrgyz Republic. The Company has a clear strategy to build a leading emerging markets gold company with an initial focus on Central Asia and the FSU through organic growth and selective M&A.

Chaarat is engaged in active community engagement programmes to optimise the value of the Chaarat investment proposition.

Chaarat aims to create value for its shareholders, employees and communities from its high-quality gold and mineral deposits by building relationships based on trust and operating to the best environmental, social and employment standards. Further information is available at www.chaarat.com.

Glossary of Technical Terms

"Au"	chemical symbol for gold
"Breccia" "Chaarat Formation"	A rock composed of fragments of rocks cemented by a finer-grained matrix Ordovician-age (443 million to 485 million-year-old) shales and mudstones (fine-grained sedimentary rocks) hosting gold mineralisation at the Company's Kyzyltash and Tulkubash gold projects
"Crackle Breccia"	A breccia in which the fragments have not been rotated with respect to one another
"cut off"	the lowest grade value that is included in a Resource statement. It must comply with JORC requirement 19: "reasonable prospects for eventual economic extraction" the lowest grade, or quality, of mineralised material that qualifies as economically mineable and available in a given deposit. It may be defined on the basis of economic evaluation, or on physical or chemical attributes that define an acceptable product specification
"g/t"	grammes per tonne, equivalent to parts per million
"Inferred Resource"	that part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability
"Indicated Resource"	that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed
"Intrusive Rock"	A rock formed from cooling magma that cooled below the surface of the earth. As opposed to a volcanic rock which cools from magma on the surface.
"JORC"	The Australasian Joint Ore Reserves Committee Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2012 (the "JORC Code" or "the Code"). The Code sets out minimum standards, recommendations and guidelines for Public Reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves
"koz"	thousand troy ounces of gold
"Measured Resource"	that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity
"Mineral Resource"	a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such form, quality and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories when reporting under JORC
"Mt"	million tonnes
"oz"	troy ounce (= 31.103477 grammes)
"Porphyry"	A large mineral deposit (often gold-copper) that forms in the final stages of cooling of certain intrusive rocks
"Reserve"	the economically mineable part of a Measured and/or Indicated Mineral Resource
"Silicification"	The addition of silica to a rock as part of the ore forming process
"Skarn"	A usually high-grade mineral deposit (often gold-copper) that forms when certain intrusive rocks are emplaced into limestones, which react chemically with the magma
"t" "Tulkubash Formation"	tonne (= 1 million grammes) Devonian-age (359 million to 419 million-year-old) sandstones and quartzites, hosting oxide gold mineralisation at the Company's Tulkubash Project in Kyrgyzstan

APPENDIX: JORC Code, 2012 Edition - Table 1 report template

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria	JORC Code explanation	Commentary
Sampling techniques	·    Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. ·    Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. ·    Aspects of the determination of mineralisation that are Material to the Public Report. ·    In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.	·    All drilling was undertaken by standard and triple tube core barrel diamond core drilling, with all sampling in accordance with industry standard techniques. ·    Diamond core is cut in half using a core saw, creating half core samples typically 1.5 m in length. ·    Road cut samples are collected using continuous random rock chips in 2.0m lengths along road cut exposures. ·    Trench samples are collected from carefully cut channels in either 1.0 or 2.0 m lengths. ·    Duplicate samples are created from coarse rejects and from pulps. ·    Sample preparation is undertaken at ALS Global (Kara Balta) followed by 30 g charge fire assay with an AA finish. Multi-element analysis is conducted using ICP-AES after aqua regia digestion. Total Sulphur is determined using a LECO analyser.
Drilling techniques	·    Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).	·    In 2019 a total of 19,549 m of sampling across 120 drillholes, and 3,240 m of sampling from channels has been completed across the Tulkubash deposit. The totals for the project are 97,215m of sampling from 688 drillholes and 23,200m of sampling from 795 trenches or similar. ·    Diamond drillholes are predominantly HQ size using standard and triple tube holes reducing to NQ diameter where ground conditions are poorer. ·    Holes are drilled using contractor drill rigs.
Drill sample recovery	·    Method of recording and assessing core and chip sample recoveries and results assessed. ·    Measures taken to maximise sample recovery and ensure representative nature of the samples. ·    Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.	·    Core recovery is measured and recorded by Chaarat geologists, with an average recovery of +95%. ·    In areas of highly fractured rock triple-tube core drilling has been utilized.
Logging	·    Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. ·    Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. ·    The total length and percentage of the relevant intersections logged.	·    Historically, core was logged geologically and geotechnically by company geologist into standard hard copy logging sheets and transcribed into Microsoft Excel®. Since 2018, core is logged digitally using AGR4 software. ·    Logging is performed at nominal 1.5 m intervals, reducing to shorter lengths when required. ·    Logging does cross mineralised boundaries due to the mineralisation style being fracture controlled in a brittle unit containing few obvious contacts. ·    The core is photographed wet with photographs stored within the database. ·    All drillholes up to the 18th August 2019 have been logged. ·    Logging is to a standard suitable for the support of a Mineral Resource Estimate.
Sub-sampling techniques and sample preparation	·    If core, whether cut or sawn and whether quarter, half or all core taken. ·    If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. ·    For all sample types, the nature, quality and appropriateness of the sample preparation technique. ·    Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. ·    Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling. ·    Whether sample sizes are appropriate to the grain size of the material being sampled.	·    Competent core samples are split on site using a core saw, while highly fractured material is sampled with a trowel. ·    Half core samples are placed in labelled polyethylene sample bags and weighed. ·    All current samples are transported to ALS Global (Kara Balta) for sample preparation and analysis, where crushing, milling, homogenization and sample splitting was completed in accordance with company standards. ·    Duplicate sample for QA/QC were taken every 20 samples from crushed rejects and duplicate pulps.
Quality of assay data and laboratory tests	·    The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. ·    For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. ·    Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.	·    Samples collected from 2007 to 2013 were prepared and assayed at the IRC Laboratory in Kara Balta. All samples are analysed for gold by aqua regia digestion followed by atomic absorption. Sample returning grades higher than 0.3 g/t Au were sent to ALS Global (Kara Balta) for re-testing by 30 g fire assay. ·    The 2014 sample preparation took place at the IRC Laboratory in Kara Balta, with analysis taking place at ALS Global (Kara Balta). ·    From 2017 all sample preparation and analysis are undertaken at the ALS Global laboratory in Kara Balta. Referee check samples are sent to SGS Vostok for analysis. ·    Assay quality control was achieved by the use of duplicates, blanks and standard reference material (SRM). ·    The QA/QC programme and results are in line with industry best practice and the resultant dataset is suitable for Resource estimation.
Verification of sampling and assaying	·    The verification of significant intersections by either independent or alternative company personnel. ·    The use of twinned holes. ·    Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. ·    Discuss any adjustment to assay data.	·    Below detection limit assay results have been replaced with values of half detection limit (0.025 g/t Au) and absent values have been replaced with 0.0001 g/t Au.
Location of data points	·    Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. ·    Specification of the grid system used. ·    Quality and adequacy of topographic control.	·    All collar locations are reported in Gauss Kruger Pulkovo 1942 Zone 12 with their locations recorded using a Leica Total Station (centimeter accuracy) ·    Downhole surveys were recorded with Reflex "EZ-shot" electronic single-shot equipment. ·    A Total Station survey along roads, ridges, valleys and traverses has produced a contoured topography across the Tulkubash Resource area.   ·    Regional topography data is derived from satellite data.
Data spacing and distribution	·    Data spacing for reporting of Exploration Results. ·    Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. ·    Whether sample compositing has been applied.	·    The current data spacing, nominally fans on 80m fences, with significant areas on strike at 40m or less, is sufficient to establish grade continuity and provides sufficient support for Measured and Indicated classifications.
Orientation of data in relation to geological structure	·    Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. ·    If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.	·    Surface drilling is inclined, attempting to cut the mineralization at a close to normal angle to the strike orientation as possible. ·    Underground drilling is orientated normal to the strike of the structure. ·    The holes were designed to provide intercepts perpendicular to the mineralization as possible. ·    The drilling dip ranges from 35 to 90o, striking generally between 125 and 147o.
Sample security	·    The measures taken to ensure sample security.	·    Labelled samples are transported to and from the laboratory by company personal or contractors, employing a full chain of custody documentation procedure. ·    Reject pulps and coarse rejects are returned to Chaarat and stored along with drill core at their locked and secure core storage facility in Bishkek.
Audits or reviews	·    The results of any audits or reviews of sampling techniques and data.	·    Chaarat's competent person visited the project during the current drilling campaign and reviewed the protocols and procedures adopted by Chaarat's company geologists. ·    Chaarat has completed an analysis of the QA/QC data. The data is deemed appropriate for Resource estimation.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	Commentary
Mineral tenement and land tenure status	·    Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. ·    The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.	·    two licenses controlling the Property: a mining (or production) license of 700.03 ha covering the defined Mineral Resources, and an exploration license of 6,776 ha covering prospective ground along trend to the northeast Point No. X Y 1 126 77 600 46 55 400 2 126 79 000 46 56 900 3 126 79 264 46 56 711 4 126 82 604 46 60 152 5 126 83 150 46 59 556 6 126 82 728 46 59 261 7 126 82 757 46 58 554 8 126 79 776 46 55 887 9 126 79 487 46 56 116 10 126 78 500 46 54 800 ·    There are no known impediments to obtaining further necessary licences to operate
Exploration done by other parties	·    Acknowledgment and appraisal of exploration by other parties.	·    No other appraisal or exploration is being done by other parties
Geology	·    Deposit type, geological setting and style of mineralisation.	·    Tulkubash Formation consists of medium- to fine-grained quartzites and medium- to coarse-grained arkosic sandstones mineralized in fractures by crackle brecciation and is oxidized and can be processed by conventional heap-leach processes
Drill hole Information	·    A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: o easting and northing of the drill hole collar o elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar o dip and azimuth of the hole o down hole length and interception depth o hole length. ·    If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.	·    As reported in Press Release
Data aggregation methods	·    In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated. ·    Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail. ·    The assumptions used for any reporting of metal equivalent values should be clearly stated.	·    Mineralised intercepts are defined as being above a cut-off grade for potentially economic mineralization of 0.35 g/t Au equivalent from Leapfrog Indicators ·    Samples are composited prior to mineral Resource estimate to 1.5m (mean sample length). The samples are assessed for a top-cap at this stage, and any outliers are reduced to the capping value of 15 g/t Au.
Relationship between mineralisation widths and intercept lengths	·    These relationships are particularly important in the reporting of Exploration Results. ·    If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. ·    If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg 'down hole length, true width not known').	·    Intercepts are designed to be as close to normal to the mineralization as possible. ·    The drill hole angle in relation to the mineralization is not certain. ·    All mineralized intercepts reported as apparent thicknesses based on cross sectional interpretation.
Diagrams	·    Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.	·    As reported in Press Release
Balanced reporting	·    Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.	·    As reported in Press Release
Other substantive exploration data	·    Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.	·    No other substantive exploration data relevant to this Press Release has been completed
Further work	·    The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling). ·    Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.	·    Approximately 19,459m of a planned 20,000m field season exploration campaign has been completed. Further exploration focusing on strike extension and some infill of existing Resource is targeted.

 

 

END

 

 

DRLMIBRTMBIBBTL