TIDMCGH
RNS Number : 5200M
Chaarat Gold Holdings Ltd
24 May 2022
24 May 2022
Chaarat Gold Holdings Limited
("Chaarat" or "the Company")
Tulkubash Reserve and Resource Update
Chaarat (AIM:CGH), the AIM-quoted gold mining Company with an
operating mine in Armenia, and assets at various stages of
development in the Kyrgyz Republic is pleased to announce the
results of the revised JORC compliant Tulkubash Mineral Resource
Estimate ("MRE") and Ore Reserves ("OR") estimate following the
2021 drilling programme.
Highlights
-- Contained gold ounces in the Ore Reserves increased by 13% to
647 thousand ounces ("koz") compared to 571 koz in the 2021
bankable feasibility study (BFS).
-- Proven & Probable Reserves increased from 20.9Mt to
23.1Mt (+11%) with a slightly increased grade of 0.87 g/t compared
to 0.85 g/t (+2%) in the BFS;
-- The pit shell optimisation for the Ore Reserve was based on a
USD$ 1,600/oz gold price vs USD 1,450/oz gold price in the 2021 BFS
as per latest long term gold price forecasts.
The targeted 2021 drilling programme has resulted in an improved
Mineral Resource model which has contributed to an increase in Ore
Reserves. Contained gold in the Measured and Indicated Resources
remains unchanged at 789 koz, while Measured and Indicated
Resources decreased from 28.5 to 25.1 Mt (-12%) and gold grade
increased from 0.86 g/t to 0.98 g/t (+14%). The Inferred Resources
have decreased as a result of more conservative constraining
factors applied to the MRE. Drilling within the existing Mineral
Resource footprint demonstrated increased continuity in and between
the ore zones and was successful in improving the pit designs.
Further exploration conducted at Tulkubash during 2021
identified several additional new target areas, confirming the
Company's belief that Tulkubash has the potential for further mine
life extensions. To date, only about 5 kms of a prospective 24 km
trend has been systematically drilled. An additional 4 kms of the
prospective trend has been trenched and drill tested in 2021,
confirming further perspectivity to the northeast.
Mike Fraser, Chief Executive Officer, commented:
"I'm pleased to report the results of the 2021 drilling
programme at our Tulkubash gold project in the Kyrgyz Republic. The
drilling has delivered a 13% increase in gold in the Ore Reserve to
647koz at a grade of 0.87g/t, adding about a year of production to
what was already an economically robust project, while also
improving our understanding of this exciting asset."
UpdateD MINERAL Resource Statement
The objective of the 2021 drilling programme was to upgrade
Inferred and unclassified Mineral Resources in the mid zone and
east area for potential conversion to Ore Reserves. For further
information on the drilling campaign please refer to the 2021
release here .
The results of the 2021 drilling have been incorporated into an
updated JORC-compliant Mineral Resource Estimate. The new block
model and MRE addresses the recommendations of the external
consultants that reviewed the 2021 BFS MRE.
The table below summarizes the updated Tulkubash end of year
2021 Mineral Resource at 0.21 g/t Au cut-off grade constrained by a
USD$1,800/oz pit shell. Operating cost parameters used were as per
the 2021 BFS.
Table 1. End of Year 2021 Mineral Resource Estimate ("EOY
2021")
Classi Tonnes (Mt) Au (g/t) Metal (Oz)
fication
Measured - - -
------------ --------- -----------
Indicated 25.1 0.98 789
------------ --------- -----------
M&I 25.1 0.98 789
------------ --------- -----------
Inferred 11.2 0.62 222
------------ --------- -----------
TOTAL 36.3 0.87 1,011
------------ --------- -----------
-- Figures are rounded in accordance with disclosure guidelines.
-- The Mineral Resource was estimated using 5 m x 5 m x 5 m (x,
y, z) blocks, with minimum sub-block dimensions of 1 m x 1 m x 1 m
(x, y, z).
-- The estimate was constrained to the mineralised zone using wireframe solid models.
-- Grade estimates were based on 1.5 m composited assay data.
-- The interpolation of the metal grades was undertaken using Ordinary Kriging.
-- The Mineral Resource was bounded by a pit shell based on a gold price of $1,800/oz Au.
-- A cut-off grade of 0.21 g/t Au was applied to report the Mineral Resources.
A JORC Table appears as an Appendix to this press release.
UPDATED ORE Reserve Statement
The updated Ore Reserve for the Tulkubash project based on a
gold price of $1,600/oz is shown below. Total OR are estimated at
23.1 Mt grading 0.87 g/t Au and containing 647 koz of gold. This is
an 13% increase in contained gold in Proven & Probable Reserves
compared to the 2021 BFS OR.
Table 2. 2022 Tulkubash Ore Reserve Estimate ("2022 OR")
Classification Ore (Mt) Grade (g/t Contained Au
Au) (koz)
Proven -- -- --
--------- ----------- -------------
Probable 23.1 0.87 647
--------- ----------- -------------
Total 23.1 0.87 647
--------- ----------- -------------
Notes to the Ore Reserve Statement:
1) This statement of Ore Reserves has been prepared by Mr. Peter
C. Carter, an independent consulting mining engineer, based on a
review of work performed by Chaarat Gold and associated technical
staff.
2) Mr. Carter is a member of the Association of Professional
Engineers and Geoscientists of British Columbia and is qualified as
a Competent Person under the JORC Code, 2012.
3) There are no Proven Reserves as drillhole density and
historical data quality do not support Measured Resources.
4) Tonnages are in metric tonnes.
5) Figures have been rounded to three significant figures.
6) Ore Reserves are reported inclusive of mining dilution (10%) and mining recovery (97.5%).
7) A gold price of US$1,600/oz was used in the preparation of the estimate.
8) Ore Reserves are based on a marginal cut-off grade of 0.22 g/t Au.
9) Estimated metallurgical recovery for the Ore Reserve is 74.0%
based on a geo-metallurgical model.
10) Reserve is contained in a minable pit design generated from
an optimised pit shell based on a gold price of $1,350/oz
The Ore Reserve has a strip ratio of 2.9:1 and an average
recovery of 74.1% representing 479,000 oz Au recovered. By-product
silver is not reported as part of the reserve as its contribution
to the project value is immaterial.
Changes from 2021 BFS
While tonnes have decreased in the EOY 2021 MRE gold grade has
increased from the BFS as has waste and strip ratio. Wire frames
have been revised, a variable rather than fixed gold recovery has
been developed. These changes are summarised in table 3. Details
can be found in the MRE Report that is available on our
homepage.
Table 3. Comparison of EOY 2021 MRE and 2021 BFS MRE
M&I Au Inferred Au Recovery
Mt g/t Koz Mt g/t Koz %
----- ----- ---- --------- ----- ---- ---------
EOY 2021 25.1 0.98 789 11.2 0.62 222 74.1
----- ----- ---- --------- ----- ---- ---------
2021 BFS 28.5 0.86 789 21.4 0.56 388 73.6
----- ----- ---- --------- ----- ---- ---------
Variance -3.4 0.12 - -9.8 0.06 166 0.5
----- ----- ---- --------- ----- ---- ---------
The additional 2021 infill drilling targeted areas led to an
increase in Ore Reserves and an improved recovery model. The
updated pit design also resulted in a slightly increased strip
ratio.
Table 4. Comparison of 2022 and 2021 BFS Ore Reserves
Ore Au Recovery Waste Total Strip
Ratio
===== =========== =========== ====== ====== =======
Mt g/t Koz % Au Koz Mt Mt w:o
2022
OR 23.1 0.87 647 74.1 479 66.4 89.5 2.9
2021
BFS 20.9 0.85 571 73.6 420 54.0 74.9 2.6
Variance 2.1 0.02 76 0.5 57 12.4 4.6 0.3
The largest portion of the Ore Reserve is contained in the Main
Zone (MZ) Pit (19.8 Mt). To the northeast of MZ lies the Mid Zone,
composed of six small satellite pits, accounting for a further 3.1
Mt of ore. Further northeast lies the East Zone, which contains
another 0.2 Mt in a single separate pit. The East Zone is not fully
drilled off and offers the opportunity to continue growing the Ore
Reserve in the coming drill seasons.
Table 5. Breakdown of the updated Ore Reserves by Zone
Zone Ore Grade Metal Waste Total Strip Ratio
===== ======= ======= ====== ====== ============
Mt g/t Au Koz Au Mt Mt w:o
Main 19.8 0.90 570 55.6 74.8 2.8
Mid 3.1 0.66 65 9.4 12.5 3.1
East 0.2 1.46 12 1.4 1.6 5.7
Total 23.1 0.87 647 66.4 89.5 2.9
Enquiries
+44 (0)20 7499
Chaarat Gold Holdings Limited 2612
Mike Fraser, Chief Executive Officer IR@chaarat.com
Canaccord Genuity Limited (NOMAD and + 44 (0)20 7523
Joint Broker) 8000
Henry Fitzgerald-O'Connor
James Asensio
+44 (0)20 7220
finnCap Limited (Joint Broker) 0500
Christopher Raggett
Panmure Gordon (UK) Limited (Joint +44 (0)20 7886
Broker) 2500
John Prior
Hugh Rich
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 through organic growth and
selective M&A.
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/ .
Competent Person- Mineral Resource Estimate
The information in this announcement that relates to exploration
results is based on and fairly represents information and
supporting documentation prepared by Dimitar Dimitrov, P. Geo, AIG
member and a Competent Person as defined in the 2012 edition of the
JORC Code 'Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves' and is a Qualified Person under
the AIM Rules . Mr. Dimitar Dimitrov is a full-time employee of the
company. Mr. Dimitrov consents to the publication of this new
release dated May 24(th) , 2022 by Chaarat. Mr. Dimitrov certified
that this news release fairly and accurately represents the
information for which he is responsible.
Competent Person -Ore Reserve Estimate
The updated Ore Reserve estimate was prepared by Chaarat
engineering staff at their Bishkek offices in the Kyrgyz Republic.
The work was reviewed by Peter C. Carter, BSc, MBA, P.Eng, a
consulting engineer registered in the province of British Columbia,
Canada. Mr. Carter is qualified as a Competent Person as defined by
the JORC code (2012) and a Qualified Person under the AIM Rules. He
has reviewed the technical information related to the Ore Reserves
in this press release and approves their use herein.
Quality Assurance/Quality Control Procedures: Sampling
Methodology and Quality Control
All results used in the mineral resource estimate are from
mostly diamond core drill holes, only 2020 drilling is reverse
circulation. All core samples are cut along its long axis, half
core packed, weighted and 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. External check assays are
conducted on every 20(th) sample by a second independent
laboratory, SGS Vostok Limited Lab in Chita, Russia.
Geological Modelling Procedures
Only drilling data was engaged in the Resource estimation,
although channels, trenches, and road cuts assays were used for ore
zones interpretation as well. The Tulkubash deposit is interpreted
as a brittle shear zone, formed in a shallow epithermal
environment, consisting of a SW-NE corridor of low-grade
mineralization, hosting a series of discrete, higher grade, steeply
dipping lodes. Only the oxidized portion of the mineralisation is
targeted for the planned conventional open pit mining and further
heap leaching. The ore wireframes, including low- and high-grade
types has been generated manually from section to section. Gold
grades estimation was done by using Ordinary Kriging (OK), and
Inverse Distance Weighting (IDW2) approach was used for the Silver
and density interpolation. Micromine(TM) was used in the process of
ore modelling, variography and resource estimation.
Pit Optimisation
Ore Reserves were defined as a subset of Measured and Indicated
Resources. Whittle 4X pit optimization software was applied to the
resource block model to develop a series of nested pit shells,
corresponding to a range of gold prices from $1,000/oz to
$1,800/oz.
Technical and economic parameters applied to drive the
optimization are based on those from the 2021 FS. Cost parameters
used to define the Ore Reserve are shown in the table below. A gold
price of $1,600/oz, based on consensus forecasts for the operating
period, was used to value the resulting pit shells.
The pit slopes used during the optimization varied between 49
degrees and 55 degrees based on feasibility design recommendations
for the MZ Pit area.
Table 6. Cost Parameters applied for Pit Optimization
Operating Cost Units Value
Mining (ore) $/t mined 2.5 5
--------------- --------
Mining (waste) $/t mined 1.83
--------------- --------
Mining (owner) $/t processed 0.34
--------------- --------
Process $/t processed 4.79
--------------- --------
G&A $/t processed 1.27
--------------- --------
Refining $/oz 9.78
--------------- --------
Royalty % 1 4 .0*
--------------- --------
* Sliding scale royalty appropriate at Au prices of
$1,501-$1,600/oz
Gold recovery for the updated Reserve averaged 73%. Recovery was
estimated on a block-by-block basis using oxidation state and
extractions derived from metallurgical test work. The improvement
in recovery from the 2021 FS was due to the inclusion of more,
highly oxidized material from the Mid and East Zones in the
reserve.
Optimisation Results
The results of the pit optimization indicated that a gold price
of $1,350/oz produced the highest value shell with the lowest risk.
The shell was composed of seven separate entities, collectively
containing 21.8 Mt ore at a grade of 0.97 g/t Au and a strip ratio
of 2.9:1. This pit shell was selected as the basis for developing
minable pit designs.
Mine Design
The shell for each separate pit was used to guide a
computer-aided, manual design process. Constructible features such
as ramps and safety benches were designed within the optimised pit
limits to turn the three-dimensional surface into a minable pit
design. The result of the pit design process was an ore reserve
within 5% of the optimised minable resource.
The tonnage and grade in the minable pits, was adjusted for
mining dilution and ore losses expected from the mining process.
Mining dilution was calculated directly from the block model along
the ore/waste contacts. Average dilution was estimated at 10% and
varied from zone to zone. Ore losses from mining were applied at
2.5%.
Glossary of Technical Terms
"Ag" chemical symbol for silver
"Au" chemical symbol for gold
"AuEq" the value of a tonne of mineralised material
calculated by summing the value of each contained
payable metal and expressing it as an equivalent
gold content at a given set of metals prices
"Cu" the chemical symbol for copper
"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
"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)
"Pb" the chemical symbol for lead
"Probable Reserve" the part of Indicated and in some cases Measured
Resource that can be mined at a profit. It includes
diluting materials and allowances for losses
that may occur during mining.
"Proven Reserve" the part of Indicated Measured Resource that
can be mined at a profit. It includes diluting
materials and allowances for losses that may
occur during mining.
"Ore Reserves" the part of a Measured and/or Indicated Mineral
Resource that can be mined at a profit. Ore Reserves
are subdivided in order of increasing confidence
into Probable and Proven categories when reporting
under JORC.
"t" tonne (= 1 million grammes)
"Zn" the chemical symbol for zinc
Appendix 1: JORC_Table
JORC Code, 2012 Edition - Table 1 report template
Section 1 Sampling Techniques and Data
Criteria JORC Code explanation Commentary
============================================================
Sampling
techniques * Nature and quality of sampling (eg cut channels, * Sampling comprises predominantly wireline diamond
random chips, or specific specialized industry drilling core, along with channel sampling from
standard measurement tools appropriate to the trenches, road cuts and underground adit. Limited RC
minerals under investigation, such as down hole gamma drilling program was completed in 2020 as well
sondes, or handheld XRF instruments, etc). These
examples should not be taken as limiting the broad
meaning of sampling. * Data from the surface trenches, road cuts and
underground adit has been used during the
interpretation of the mineralization, but was
* Include reference to measures taken to ensure sample excluded from interpolation process
representivity and the appropriate calibration of any
measurement tools or systems used.
* Core was drilled through the full expected
mineralization intersection, as normal to the strike
* Aspects of the determination of mineralization that and dip as possible
are Material to the Public Report.
* All drilling is diamond core, standard or triple-tube,
* In cases where 'industry standard' work has been done predominantly at HQ diameter. Half core, cut along
this would be relatively simple (eg 'reverse the core axis, has been used for sampling
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 * All the trench and road cut sampling were done with
explanation may be required, such as where there is ordinary hammer, following marked sample boundaries
coarse gold that has inherent sampling problems.
Unusual commodities or mineralisation types (eg
submarine nodules) may warrant disclosure of detailed * The average down-hole sample length is 1.5m, the
information. average trench and road cut sample length is 2.0m
* The average sample weight is approx. between 4-6 kg
* 1.0 m samples were collected from a cyclone, using a
riffle splitter, during the RC drilling process
* Samples were split along the major lithological
breaks
* All the sampling practices are meeting the industry
standards
* Handled XRF instrument was also available, and
certain data from core and road cut measurements made
through the exploration activities is available as
well, although this data is not used directly for the
current mineral assessment
============= ============================================================ ===============================================================
Drilling
techniques * Drill type (e.g. core, reverse circulation, open-hole * Almost, only diamond core drilling was conducted in
hammer, rotary air blast, auger, Bangka, sonic, etc.) Tulkubash project, except 2020 campaign, when limited
and details (e.g. core diameter, triple or standard RC drilling was completed
tube, depth of diamond tails, face-sampling bit or
other type, whether core is oriented and if so, by
what method, etc.). * All the available drilling is included in
MRE_update_21, 729 holes with total length of
102,406.2m (incl. 24 holes / 2,760.3m at 2021 and 21
RC holes - 2,434.3m at 2020)
* Additional 13 orientated, geotechnical holes
(completed at 2021), with a total length of 1,549.9m
are providing structural and lithological data, but
were not included in the current Resource modelling
* HQ was used as a major drilling diameter, PQ (at the
hole upper levels and NQ at the hole deeper zones)
were also sporadically used, aiming to guarantee best
drilling performance in fractured host rock
* 124mm drilling diameter was used in the RC drilling
* For better core recovery triple - tube was used in
the critical areas
* The majority of the drilling is inclined, SE or NW
orientated, aiming to intercept the expected
mineralization strike as normal as possible
* Overall, no orientation was applied in the drilling
campaigns, although more than 3,300 orientated
structural measurements are available after the
geotechnical drilling, in Main Pit area
* The used drilling equipment was in good condition,
provided and operated by local subcontractor with
wide experience in central Asia region
* All drilling procedures are meeting the industry
standards
============= ============================================================ ===============================================================
Drill sample
recovery * Method of recording and assessing core and chip * Core recovery is logged as percent of the core
sample recoveries and results assessed. recovery length VS drill run length, and it is
measured by company's geologists and technicians,
directly in the core boxes, immediately after the
* Measures taken to maximize sample recovery and ensure core is transported to the field core shed
representative nature of the samples.
* Through the drilling process, in an attempt to
* Whether a relationship exists between sample recovery maximize the core recovery were used triple - core
and grade and whether sample bias may have occurred tube and additive drilling muds
due to preferential loss/gain of fine/coarse
material.
* Overall diamond core recovery is above 90%
* RC drilling recovery is approx. 80% (based on the
recovery weights)
* The average down-hole sample length is 1.5m (1m for
RC)
* The average trench / road cut sample length is 2.0m
* All samples were split along the observed major
lithological breaks
* There doesn't appear to be a relationship bias
between grade and length, or sample weight and
recovery
* All sampling practices are meeting the industry
standards
============= ============================================================ ===============================================================
Logging
* Whether core and chip samples have been geologically * The implemented core logging protocol is documented:
and geotechnically logged to a level of detail to lithology, hydrothermal alteration, oxidation stage,
support appropriate Mineral Resource estimation, degree of fracturing, mineralization, structures, RQD
mining studies and metallurgical studies. ,
core recovery, and RMR based logging for the
geotechnical holes. Entire core is regularly
* Whether logging is qualitative or quantitative in photographed.
nature. Core (or costean, channel, etc) photography.
* Total length of the logged drill holes is 103, 956.2m
* The total length and percentage of the relevant (including geotechnical)
intersections logged.
* Total length of the logged surface workings (trenches
,
road cuts and profiles) is approx. 38km
* Each day, the core was transported to the field core
storage area for logging. The core trays are wooden,
including wooden cover as well, to prevent losses or
extra moving
* Core logging is done by company's geologists in
laptops, using AGR 4.0 software as a base platform.
Before using AGR platform, the logging was done on
the hard copy and further transcribed into Microsoft
Excel
* Surface workings logging was done by company's
geologists and / or sub-contractors, under the
supervision of company's geologists
* Photo documentation is done on wet trays, and data is
also incorporated in the database.
* At the end of the field season all core is
transported at the main core storage facility, in
Malovodnoye village, located close to Bishkek
* Logging procedures are meeting the industry standards
,
and are reasonable for Mineral Resource estimation
Sub-sampling
techniques * If core, whether cut or sawn and whether quarter, * All of the drilled core is sampled, except the
and sample half or all core taken. initial diluvium / alluvium zones
preparation
* If non-core, whether riffled, tube sampled, rotary * All intact core samples are cut along its long axis,
split, etc and whether sampled wet or dry. using core saw, half core is packed in a labelled
polyethylene bag, weighted, and further transported
to laboratory for sample preparation and assaying. In
* For all sample types, the nature, quality and case of intensively fractured zones, samples are
appropriateness of the sample preparation technique. taken with trowel
* Quality control procedures adopted for all * All in situ bedrock, outcropped in trenches and new
sub-sampling stages to maximize representivity of road cuts were sampled as well
samples.
* Rock density measurements are using field Archimedes'
* Measures taken to ensure that the sampling is principle, approach with wax. Density sampling was
representative of the in situ material collected, designed as per 1 sample (approx. 10 cm) for each 5
including for instance results for field meters (at 2021) and 1 sample per each 20m in the
duplicate/second-half sampling. historical campaigns. In areas of intensively
fractured material the interval is wider due lack of
proper material. No density was measured at 2020
* Whether sample sizes are appropriate to the grain campaign as, RC drilling is not providing intact
size of the material being sampled. material
* The collection of geological data meets the
industrial standards
============================================================
Quality of
assay data * The nature, quality and appropriateness of the * Samples collected from 2007 to 2014 were prepared and
and assaying and laboratory procedures used and whether assayed at IRC Laboratory in Karla Balta, Kyrgyzstan.
laboratory the technique is considered partial or total.
tests
* Sample collected from 2017 to 2019 were prepared and
* For geophysical tools, spectrometers, handheld XRF analysed at ALS Global (Karla Balta), and referee
instruments, etc, the parameters used in determining check samples were sent to SGS Vostok Limited (Chita,
the analysis including instrument make and model, Russa)
reading times, calibrations factors applied and their
derivation, etc.
* 2020 (RC drilling) and 2021 campaigns were used
Steward Assay and Environmental Laboratories LLC
* Nature of quality control procedures adopted (eg (Karla Balta, Kyrgyzstan). SGS (Chita, Russia) was
standards, blanks, duplicates, external laboratory used for an external control laboratory at 2021
checks) and whether acceptable levels of accuracy (ie campaign
lack of bias) and precision have been established.
* Through the sample preparation process, the entire
sample is crushed to passing 90% at 2mm. Two pulps
are made by pulverizing to 85% passing 0.075 mm. One
pulp is return to the company as duplicate, the
second one is analysed, including:
- Fire assay - lead collection with AA
- Aqua Regia digestion with following ICP-OES reading
- Analyses of Stotal, Ssulphide, Ssulphate, by chemical
treatment and LECO, for certain selected
samples (above 0.25 ppm Au)
- LeachWELL analysis for certain selected samples ( above
0.25 ppm Au)
* Lower detection limit for Au is 0.05ppm and for Ag is
1ppm
* Assay quality control was achieved using, reference
material (standards, provided by RockLab), blank
material (barren sediments), coarse and pulp
duplicates, along with field duplicates (applied in
for first time at 2021 campaign), and external
laboratory control sampling
* The QA/QC design and results are adequate to support
estimation of Mineral Resource
Verification
of sampling * The verification of significant intersections by * No twin holes have been conducted at Tulkubash area
and assaying either independent or alternative company personnel.
* All the assay results are received electronically as
* The use of twinned holes. an Excel spreadsheet, and further incorporated in the
database by company's database manager
* Documentation of primary data, data entry procedures,
data verification, data storage (physical and * The access to the database is limited, and only
electronic) protocols. authorized employees can make corrections in it
* Discuss any adjustment to assay data. * Prior to data interpretation, the lower detection
limits of Au (0.05 ppm) are changed to half of the
detection limit (0.025 ppm). In regard to Ag same
formula (half of the lower detection limit) was
applied. For the elements with results restricted by
upper detection limit, a conservative formula y =
x*1.01 was applied
* Data entry procedures and QA/QC verification meet the
industrial standards and adequate to support MRE
============================================================
Location of
data points * Accuracy and quality of surveys used to locate drill * All collar locations are reported at Gauss Kruger
holes (collar and down-hole surveys), trenches, mine Pulkovo 1942 Zone 12
workings and other locations used in Mineral Resource
estimation.
* The survey is conducted, using Lecia Total Station
(centimetre accuracy)
* Specification of the grid system used.
* All the holes have been downhole surveyed,
* Quality and adequacy of topographic control. measurements taken between 25 - 50m interval, using
REFLEX EZ SHOT tool
* The topographic model is based on satellite data
* Roads, drill sites and other topographic details have
been added after on-the-ground survey made by field
survey team
* The quality of the topographic control is adequate
for MRE and meet the industrial standards
Data spacing
and * Data spacing for reporting of Exploration Results. * The hole collars are in accordance with existing
distribution profiles, designed perpendicular to the mineralised
zones
* Whether the data spacing and distribution is
sufficient to establish the degree of geological and
grade continuity appropriate for the Mineral Resource * Main Pit area achieves average distance between the
and Ore Reserve estimation procedure(s) and drilling profiles of 40m
classifications applied.
* At 2021 campaign, additional infill holes were
* Whether sample compositing has been applied. located in several most promising clusters at
Tulkubash Middle Zone and East Zone, aiming to
upgrade the existing data, and to decrees the average
drilling space of these clusters up to 40m
(sufficient to upgrade the Inferred Resource to
Indicated)
* Database from trenches, road cuts and adits were used
only for the interpretation process, but excluded
from the grade interpolation
* The drilling grid allows to establish grade
continuity and estimation parameters such as average
grade and mineralization volume
* Sample compositing of 1.5m was applied prior to
interpolation process (1.0m for the RC drilling)
============================================================
Orientation
of data in * Whether the orientation of sampling achieves unbiased * All the exploration holes were designed in attempt to
relation to sampling of possible structures and the extent to intercept the expected NE strike of the
geological which this is known, considering the deposit type. mineralization as normal as possible, and to avoid
structure any sampling biases. The average bearing is SE or NW,
with drilling angle approx. 50 degrees
* 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.
Sample
security * The measures taken to ensure sample security. * The samples are sufficiently secure, with security
guards in the entry, on both - field camp and
Malovodnoye core shed
============================================================
Audits or
reviews * The results of any audits or reviews of sampling * The following independent audit was completed out
techniques and data. during the entire period of exploration works at
Tulkubsh project:
* SRK consulting (Update of Mineral Resource Estimates,
for Chaarat Gold Project, Kyrgyzstan, Feb. 2010)
* Wardell Armstrong (Tulkubash Resource Modelling,
Apr.2011)
* Gustavson Associates (Chaarat Gold Project Resource
Estimation, June 2014)
* GeoSystems International (Mineral Resource Update,
Jan.2018)
* Tetra Tech (Competent Person Report for Chaarat Gold
Project, Kyzrgyz Republic, Dec.2018)
* Sound Mining (Competent Person's Report on Tulkubash
Gold Project, for Chaarat Gold Holdings Limited, Jan
2019)
* LogiProc (Tulkubash Gold Project Bankable Feasibility
Study Update Report, Aug.2019)
* Wardell Armstrong (Review of Modelling Estimation and
Classification, based on Resource Model, provided by
IGT up to June 2020)
* Roscoe Postle Associates Inc. (RPA), part of SLR
Consulting (RPA Due Diligence of Tulkubash Resource
Model, based on Resource Model provided by IGT up to
June 2020)
* Institute of Geotechnologies (IGT) (The Tulkubash
Gold Project Mineral Resource Estimate, for Chaarat
ZAAV SJSC, Dec. 2020)
============= ============================================================ ===============================================================
Section 2 Reporting of Exploration Results
Criteria JORC Code explanation Commentary
Mineral
tenement and * Type, reference name/number, location and ownership * Chaarat ZAAV CJSC (CZ) is established in Kyrgyz
land tenure including agreements or material issues with third Republic, and is wholly - owned subsidiary of Chaarat
status parties such as joint ventures, partnerships, Gold Holding Ltd (Chaarat).
overriding royalties, native title interests,
historical sites, wilderness or national park and
environmental settings. * CZ is developing Tulkubash Gold Project (Project)
located in the Sandalash Range of the Alatau
Mountains in the Chatkal district of the Jalal Abad
* The security of the tenure held at the time of region (province) of north-western Kyrgyzstan
reporting along with any known impediments to
obtaining a licence to operate in the area.
* The Property is located at latitude 42deg1'6.91" N
and longitude 71deg9'39.04" E and is close to the
border with Uzbekistan. The Project site is located
approximately 300 km southwest of the capital Bishkek,
60 km northeast of the regional administrative center
of Kanysh-Kiya in the Chatkal Valley, and 300 km by
road from the nearest railway station in Shamaldy-Say
* CZ sole holds two licenses, controlling the Property.
* Mining (production) license: #3117AE of 700.03ha,
valid to 2032 is covering defined Mineral Resources
of SW part of the Property, which comprising Main Pit
/ Middle Zone and East Zone areas.
* Exploration license # 3319AP, valid till October 2023
(including retain option), with area of 6776 ha is
covering prospective ground in NE direction.
* CZ is obtaining consent of the local state
administration and the local governments of Chatkal
Region, required to conduct exploration work
* As per Kyrgyz Republic legislation, land allocation
is granted for subsoil use (e.g. road construction,
industrial sites, or other infrastructure facilities)
for the term of license validity
* CZ bear a full legal responsibility for compliance
with environmental requirements under Kyrgyz Republic
legislation. CZ is required to obtain relevant
environmental permits, make quarterly payments for
environmental pollution as per Kyrgyz Laws and submit
reports on compliance with environmental requirements
Exploration
done by other * Acknowledgment and appraisal of exploration by other * Initial reconnaissance commences in Soviet era, in
parties parties. regard with identified antimony mineralization.
Following the breakup of Soviet Union, Apex Asia in
joint venture of Newmont Overseas Ltd complete
approx. 1800m drilling and conduct geophysical
survey. After 2002 CZ was formed and have acquired
what is now known as Chaarat Mining License. Till
2021 CZ manage to confirm the presence of economic
gold mineralization in the SW area of the Property
and to opened room for further exploration in NE
direction
Geology
* Deposit type, geological setting and style of * Chaarat Gold Project (Project) is located within Tien
mineralisation. Shan Metallogenic Belt, a Hercynian fold and thrust
belt, with length more than 2,500 km. Tien Shan belt
consists of three tectono-stratigraphic units, each
divided by major structural zones, and is thought to
represent accretionary prisms, on the margin of
proto-Eurasian continent. The Project is located in
the middle Tien Shan province, made of Ordovician -
Carboniferous fragments. Structurally, the t errain
is intensively deformed by pre and post
mineralization structural activities, dominated by SE
and NW verging fore / back thrusts and steep N-NE
strike-slip faults. Genetically, the mineralization
system could be reference to "Orogenic" and
"Intrusion Related" types. It has NE strike and is
thought to be closely related with structurally
controlled Permian aged magmatism.
* Two main host rock / mineralization types can be
outlined in the deposit. Oxidized type of gold
mineralization, hosted in Devonian silicified
sandstones of Tulkubash formation, represented by
relatively steep, NE striking lenses, controlled by
series of dilatational jogs.
The second type of mineralization is unoxidized Au zone,
containing refractory gold, hosted
in Ordovician flysch complex, dominated by fine-grained
black shales, locally appeared in
green-schist facies, and with features of comprehensive
structural deformations and contact
metasomatism. Both ore types are thought to relate to one
hydrothermal system, developed in
different facies due to difference in the host rock and the
stratigraphic position
* 2021 infill drilling (and Mineral Resource update)
was conducted in Middle Zone and East Zone, which
along with Main Pit area are part of the oxidized
Tulkubash mineralization type
Drill hole
Information * A summary of all information material to the * Appproximately 105 km drilling have been carried out
understanding of the exploration results including a in the Tulkubash area after 2000, including RC and
tabulation of the following information for all Geotechnical drilling.
Material drill holes:
* The 2021 drilling campaign is including approx.
o easting and northing of the drill hole collar 2,760m (shown in the table below), aiming to update
o elevation or RL (Reduced Level - elevation above sea the available Resource Model, particularly in its
level in metres) of the drill hole Middle Zone and East Zone:
collar
o dip and azimuth of the hole BHID Az DIP East North RL Depth
o down hole length and interception depth DH21T587 140 -55 12680050 4657226 2853 134.6
o hole length. ---- ---- --------- -------- ----- ------
* If the exclusion of this information is justified on DH21T588 140 -55 12680084 4657241 2855 163.1
the basis that the information is not Material and ---- ---- --------- -------- ----- ------
this exclusion does not detract from the DH21T589 140 -47 12679982 4657121 2781 80.1
understanding of the report, the Competent Person ---- ---- --------- -------- ----- ------
should clearly explain why this is the case. DH21T590 140 -50 12680458 4657549 2722 80.7
---- ---- --------- -------- ----- ------
DH21T591 140 -55 12680481 4657579 2725 80
---- ---- --------- -------- ----- ------
DH21T592 135 -55 12680602 4657748 2821 140
---- ---- --------- -------- ----- ------
DH21T593 135 -60 12680894 4658292 3084 175.2
---- ---- --------- -------- ----- ------
DH21T594 136 -70 12681103 4658543 3117 149.8
---- ---- --------- -------- ----- ------
DH21T595 135 -50 12680948 4658294 3063 110.2
---- ---- --------- -------- ----- ------
DH21T597 136 -50 12681105 4658543 3117 71.5
---- ---- --------- -------- ----- ------
DH21T599 135 -60 12680739 4658062 2997 90.5
---- ---- --------- -------- ----- ------
DH21T600 135 -65 12680706 4658090 3021 150.4
---- ---- --------- -------- ----- ------
DH21T602 135 -50 12680771 4658146 3034 150
---- ---- --------- -------- ----- ------
DH21T606 95 -55 12681281 4658537 3037 100.2
---- ---- --------- -------- ----- ------
DH21T609 135 -55 12681179 4658588 3132 80.5
---- ---- --------- -------- ----- ------
DH21T610 135 -50 12681182 4658740 3129 85
---- ---- --------- -------- ----- ------
DH21T611 135 -58 12681146 4658608 3146 150.4
---- ---- --------- -------- ----- ------
DH21T612 135 -60 12681226 4658634 3120 85
---- ---- --------- -------- ----- ------
DH21T613 135 -50 12680097 4657281 2857 130.2
---- ---- --------- -------- ----- ------
DH21T614 135 -65 12680042 4657176 2819 120.4
---- ---- --------- -------- ----- ------
DH21T616 135 -50 12681190 4658682 3139 160
---- ---- --------- -------- ----- ------
DH21T617 135 -60 12681151 4658663 3156 85.1
---- ---- --------- -------- ----- ------
DH21T618 136 -50 12681231 4658755 3140 60.2
---- ---- --------- -------- ----- ------
DH21T619 135 -58 12679996 4657168 2817 127.2
---- ---- --------- -------- ----- ------
Data
aggregation * In reporting Exploration Results, weighting averaging * Middle Zone and East Zone holes done in 2021 were
methods techniques, maximum and/or minimum grade truncations incorporated into existing block model from 2020,
(eg cutting of high grades) and cut-off grades are aiming to upgrade the Inferred Resources in these
usually Material and should be stated. areas.
* Where aggregate intercepts incorporate short lengths * Overall, the results from 2021 exploration campaign,
of high grade results and longer lengths of low grade have available grade intercepts, with COG of 0.21g/t,
results, the procedure used for such aggregation accepted for Tulkubash style mineralization, certain
should be stated and some typical examples of such rules are applied. For a maximum length of interval
aggregations should be shown in detail. below the COG, but included in the calculations, is
considered 6.0m. Each interval should start and end
with sample >= COG. For top cap grade is considered
* The assumptions used for any reporting of metal 20 ppm, weighted averaging (length X grades)
equivalent values should be clearly stated. techniques are used for mean grades calculations
* No Au equivalent was used
Relationship
between * These relationships are particularly important in the * Middle Zone / East Zone collars are supported by
mineralization reporting of Exploration Results. sufficient amount of historical data, aiming to avoid
widths and any significant fluctuation between the intercepts
intercept and the true width
lengths * If the geometry of the mineralization 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 (e.g. 'down hole length, true width not
known').
Diagrams
* Appropriate maps and sections (with scales) and * Wide variety of 2D and 3D graphics, maps, plots and
tabulations of intercepts should be included for any wireframes are available, the combination of which is
significant discovery being reported These should fully sufficient to visual description of the
include, but not be limited to a plan view of drill reported data
hole collar locations and appropriate sectional
views.
Balanced
reporting * Where comprehensive reporting of all Exploration * Middle Zone and East Zone results from 2021 will be
Results is not practicable, representative reporting used for updating the last available Mineral Resource
of both low and high grades and/or widths should be model for Tulkubash area, prepared by Institute of
practiced to avoid misleading reporting of Geotechnologies (IGT) in Dec. 2020
Exploration Results.
Other
substantive * Other exploration data, if meaningful and material, * Along with the Resource update made 2021, several
exploration should be reported including (but not limited to): other technical assessments for Tulkubash area were
data geological observations; geophysical survey results; also done, including geotechnical / hydrogeological
geochemical survey results; bulk samples - size and drilling in Main Pit area based on 13 holes (approx.
method of treatment; metallurgical test results; bulk 1,550m)
density, groundwater, geotechnical and rock
characteristics; potential deleterious or
contaminating substances. * Acid Rock Drainage (ARD) survey for Tulkubash's Main
Pit area is in progress
Further work
* The nature and scale of planned further work (eg * Magnetic drone-based geophysics in the whole Property
tests for lateral extensions or depth extensions or area, including Tulkubash area, is planned to define
large-scale step-out drilling). additional exploration targets.
* Diagrams clearly highlighting the areas of possible * The Karator and Ishakuldy exploration targets of
extensions, including the main geological Tulkubash stile, outlined on 2 and 5 km to northeast
interpretations and future drilling areas, provided are planned for further resource definition drilling.
this information is not commercially sensitive.
=============== =============================================================== ===============================================================
Section 3 Estimation and Reporting of Mineral Resources
Criteria JORC Code explanation Commentary
============================================================
Database
integrity * Measures taken to ensure that data has not been * The field data is compiled on the site and further
corrupted by, for example, transcription or keying combined, verified and stored in AGR 4.0 database
errors, between its initial collection and its use platform, and in Excel spread sheets as well.
for Mineral Resource estimation purposes.
* Prior the process of the Resource Modelling, the
* Data validation procedures used. historic data and the new available one, were
verified one more time, using Micromine software
* The database used for the Mineral Resource update
report has been previously audited by Gustavson and
Associates (2014), by GeoSystems International (2018),
by Sound Mining (2019), by IGT (2020)
=============== ============================================================ ======================================================================================================================================================
Site visits
* Comment on any site visits undertaken by the * Last field visit by Competent Person was made between
Competent Person and the outcome of those visits. 25.08.2021 to 02.09.2021 by Dimitar Dimitrov
* If no site visits have been undertaken indicate why * Mr.Dimitar Dimitrov P. Geo, AIG member and a
this is the case. Competent Person as defined in the 2012 edition of
the JORC Code 'Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore
Reserves', is a full-time employee of the company.
=============== ============================================================ ======================================================================================================================================================
Geological
interpretation * Confidence in (or conversely, the uncertainty of ) * Mineralization and associated hydrothermal alteration,
the geological interpretation of the mineral deposit. developed along a system of regional structural
deformations, is genetically associated with Permian
magmatism
* Nature of the data used and of any assumptions made.
* Tulkubash mineralization zones are presented by
* The effect, if any, of alternative interpretations on series of dilatational jogs, hosted in silicified
Mineral Resource estimation. sandstones
* The use of geology in guiding and controlling Mineral * No hard borders can be outlined, as all Tulkubash
Resource estimation. mineralization is host rock has similar facies
* The factors affecting continuity both of grade and * The interpretation is based on gold distribution,
geology. using actual drilling, trenches and underground adits
* Overall, there is a good level of confidence in the
geological continuity, although detailed drilling is
required to advance the interpretation of the
different mineralization lenses
* The wireframing process is using 0.2 ppm and 0.7 ppm
Au to contour high and low grade domains.
* The low grade domains are considered as Resource
outer shell, while the high grades are incorporated
within it
=============== ============================================================ ======================================================================================================================================================
Dimensions
* The extent and variability of the Mineral Resource * The Mineral Resource extends approx. 4, 900m along
expressed as length (along strike or otherwise), plan strike, with maximum plan width of 500m, maximum
width, and depth below surface to the upper and lower depth below surface of approx. 300m
limits of the Mineral Resource.
=============== ============================================================ ======================================================================================================================================================
Estimation and
modelling * The nature and appropriateness of the estimation * The 2021 Mineral Resource update, was made internally,
techniques technique(s) applied and key assumptions, including by Chaarat geological department, and it was
treatment of extreme grade values, domaining, completed at March. 2022
interpolation parameters and maximum distance of
extrapolation from data points. If a computer
assisted estimation method was chosen include a * The 2021 Mineral resource update is using only drill
description of computer software and parameters used. hole data for the Resource interpolation, although
assays from surface workings are used only in the
interpretation process.
* The availability of check estimates, previous
estimates and/or mine production records and whether
the Mineral Resource estimate takes appropriate * Micromine Software (under the license of Chaarat) was
account of such data. used for the block modelling
* The assumptions made regarding recovery of * The Mineral Resource was estimated into block model,
by-products. using ordinary kriging for Au, Ag is also estimated
via IDW2 although it was not reported. IDW2 was used
for density and recovery interpolation as well
* Estimation of deleterious elements or other non-grade
variables of economic significance (e.g. sulphur for
acid mine drainage characterisation). * Block model with parent block size of 5*5*5 m was
generated within the wireframe domains, with 1m
minimum sub-selling applied
* In the case of block model interpolation, the block
size in relation to the average sample spacing and
the search employed. * Grade estimates was done by 1.5m composite sampling
* Any assumptions behind modelling of selective mining * Log probability plots and coefficient of variation
units. were analysed for each domain for top cuts
determination, including Au, Ag and Density
* Any assumptions about correlation between variables.
* Two different variogram models were applied for low
and high-grade domains
* Description of how the geological interpretation was
used to control the resource estimates.
* Block model was checked visually by sections, and
geostatistical, using Q-Q and swath plots
* Discussion of basis for using or not using grade
cutting or capping.
* The grade distribution in the block model is
sufficiently matching the assay results
* The process of validation, the checking process used,
the comparison of model data to drill hole data, and
use of reconciliation dta if available. * No estimation of deleterious elements was made
* The Reported results are giving reasonable prospects
for eventual economic extraction, taking in to
account the estimated gold recovery
* The updated at 2021 constrained Mineral Resource is:
Density (g/cm Mt Au (g/t) Au (koz) Class
(3) )
------- --------- ---------
2.66 25.11 0.98 789 Indicated
2.56 11.226 0.62 222 Inferred
-------------- ------- --------- --------- ----------
=============== ============================================================ ======================================================================================================================================================
Moisture * All Mineral Resource is estimated and reported on a dry basis
* Whether the tonnages are estimated on a dry basis or
with natural moisture, and the method of
determination of the moisture content.
=============== ============================================================ ======================================================================================================================================================
Cut-off
parameters * The basis of the adopted cut-off grade(s) or quality * Mineral Resources have been reported at cut-off grade
parameters applied. of 0.21 ppm Au
* Cut-off grade determined using appropriate economic
and technical parameters for open pit mining
operations and heap leach gold extraction
=============== ============================================================ ======================================================================================================================================================
Mining factors The applied open pit optimisation parameters are including: c Item Unit Resource_update_2021 Open pit
or assumptions * Assumptions made regarding possible mining methods, optimization
minimum mining dimensions and internal (or, if Econ. Initial Capital Cost $'000 99016.42
applicable, external) mining dilution. It is always ------------- --------------------------- ----------- -------------------------------
necessary as part of the process of determining Selling Cost $/oz 9.89
reasonable prospects for eventual economic extraction --------------------------- ------------------------- -------------------------------
to consider potential mining methods, but the Royalty % 18
assumptions made regarding mining methods and --------------------------- ------------------------- -------------------------------
parameters when estimating Mineral Resources may not Discount Rate % 5
always be rigorous. Where this is the case, this --------------------------- ------------------------- -------------------------------
should be reported with an explanation of the basis Metal Price Au $/oz 1800
of the mining assumptions made. ------------- --------------------------- ----------- -------------------------------
Ag $/oz 21.7
--------------------------- ------------------------- -------------------------------
OP. Costs Mining $/t mined 1.89
------------- --------------------------- ----------- -------------------------------
Extra Ore Mining /Haulage $/t ore 0.84
--------------------------- ------------------------- -------------------------------
Processing $/t ore 4.25
--------------------------- ------------------------- -------------------------------
Stacking $/t ore 0.54
--------------------------- ------------------------- -------------------------------
Owner's Mining Cost $/t ore 0.34
--------------------------- ------------------------- -------------------------------
G/A $/t ore 1.27
--------------------------- ------------------------- -------------------------------
Other Par. Recovery Au % Variable by block
------------- --------------------------- ----------- -------------------------------
Refining Recovery-Au % 99.8
--------------------------- ------------------------- -------------------------------
Refining Recovery-Ag % 60
--------------------------- ------------------------- -------------------------------
Internal Cut-off g/t 0.21
--------------------------- ------------------------- -------------------------------
Pit Slopes Variable by location
--------------------------- ----------- -------------------------------
Op. Limits Mining t/year 27000000
------------- --------------------------- ----------- -------------------------------
Processing t/year 5000000
--------------------------- ------------------------- -------------------------------
=============== ============================================================ ======================================================================================================================================================
Metallurgical
factors or * The basis for assumptions or predictions regarding * Recovery model, based on the stage of oxidation, was
assumptions metallurgical amenability. It is always necessary as prepared in attempt to adjust the designing of the
part of the process of determining reasonable reported Resource shell. An unoxidized cluster,
prospects for eventual economic extraction to containing refractory gold mineralization, with low
consider potential metallurgical methods, but the recovery was outlined beneath the Main Pit area, and
assumptions regarding metallurgical treatment accordingly excluded in the process of pit
processes and parameters made when reporting Mineral optimization. The average recovery in the constrained
Resources may not always be rigorous. Where this is Resource, estimated per zones is 72-76 %
the case, this should be reported with an explanation
of the basis of the metallurgical assumptions made. Recovery_Au (%) Class Zone
----------
71.91 Indicated Main_Pit
75.97 Indicated East_zone
75.01 Indicated Mid_zone
74.47 Inferred Main_Pit
75.49 Inferred East_one
76.14 Inferred Mid_zone
---------------- ---------- ----------
=============== ============================================================ ======================================================================================================================================================
Environmental
factors or * Assumptions made regarding possible waste and process * There are not considered to be any environmental
assumptions residue disposal options. It is always necessary as factors likely to affect the assumption that the
part of the process of determining reasonable deposit has reasonable prospects for eventual
prospects for eventual economic extraction to economic extraction
consider the potential environmental impacts of the
mining and processing operation. While at this stage
the determination of potential environmental impacts,
particularly for a greenfields project, may not
always be well advanced, the status of early
consideration of these potential environmental
impacts should be reported. Where these aspects have
not been considered this should be reported with an
explanation of the environmental assumptions made.
=============== ============================================================ ======================================================================================================================================================
Bulk density
* Whether assumed or determined. If assumed, the basis * Dry bulk density is measured using paraffin -coated
for the assumptions. If determined, the method used, immersion (Archimedes) method to evaluate the
whether wet or dry, the frequency of the measurements specific gravity (SG)
,
the nature, size and representativeness of the
samples. * Density (SG) values have been interpolated into the
block model, using Inverse Distance Weighting (IDW)
method
* The bulk density for bulk material must have been
measured by methods that adequately account for void
spaces (vugs, porosity, etc), moisture and * The density data are comprising total of 1,623 dry
differences between rock and alteration zones within specimens, measured by Chaarat
the deposit.
* In 2020 no density measurements were done, as RC
* Discuss assumptions for bulk density estimates used drilling is not providing proper material
in the evaluation process of the different materials.
=============== ============================================================ ======================================================================================================================================================
Classification
* The basis for the classification of the Mineral * Classification of Mineral Resources is based upon a
Resources into varying confidence categories. review of geological continuity, quality of
supporting data, spatial grade continuity and quality
of a block model
* Whether appropriate account has been taken of all
relevant factors (ie relative confidence in
tonnage/grade estimations, reliability of input data, * Mineral Resource Classification was made manually,
confidence in continuity of geology and metal values, from section to section
quality, quantity and distribution of the data).
* Following criteria has been t aken in account during
* Whether the result appropriately reflects the the Resource Classification:
Competent Person's view of the deposit.
-The model has been classified only into two categories of Indicated and Inferred, as it is
considered that the available data is not sufficient for Measured category
-Drill hole spacing in plan: for Indicated was used average 30-40m drilling grid, for Inferred
40-80m
-Total depth of mineral Resource classification: Inferred was restricted up to 80m from the
last hole, for Indicated the restriction is 40-60m
* The results of the validation of the block model
shows acceptable correlation in the input data to the
estimated grades
* The Competent Person is confident that all relevant
factors have been considered and the results reflects
these views.
=============== ============================================================ ======================================================================================================================================================
Audits or * No external reviews have been made for 2021 Mineral Resource Update
reviews * The results of any audits or reviews of Mineral
Resource estimates.
=============== ============================================================ ======================================================================================================================================================
Discussion of
relative * Where appropriate a statement of the relative * The Mineral Resource is appropriate for the Tulkubash
accuracy/ accuracy and confidence level in the Mineral Resource style of mineralization, and it is adequate to the
confidence estimate using an approach or procedure deemed available data. It is considered that the current
appropriate by the Competent Person. For example, the drill hole spacing is sufficient to demonstrate
application of statistical or geostatistical geological continuity of the mineralization
procedures to quantify the relative accuracy of the
resource within stated confidence limits, or, if such
an approach is not deemed appropriate, a qualitative * Accuracy of the Mineral Resource is sufficient to
discussion of the factors that could affect the permit economic development of the deposit
relative accuracy and confidence of the estimate.
* The Mineral Resource relates to global estimate
* The statement should specify whether it relates to
global or local estimates, and, if local, state the
relevant tonnages, which should be relevant to * The application of top cuts and compositing in the
technical and economic evaluation. Documentation Mineral Resource are considering as appropriate
should include assumptions made and the procedures
used.
* The Mineral Resource estimation methodology is deemed
appropriate, based upon validation of the model,
* These statements of relative accuracy and confidence using visual, statistical and graphical checks. Any
of the estimate should be compared with production alternative methods are likely to yield only minor
data, where available. changes to global Mineral Resource
* The mineralization domains have been adhered to
geostatistical and grade estimation works, and the
spatial distribution of grade in the Mineral Resource
model is representative of the sample data
=============== ============================================================ ======================================================================================================================================================
Section 4 - Estimation and Reporting of Ore Reserves
Mineral
Resource * Description of the Mineral Resource estimate used as * Tulkubash April 2022, resource based on all DDH data
estimate for a basis for the conversion to Ore Reserves inclusive of the 2021 exploration program.
conversion to
Ore Reserves
* Clear statement as to whether the Mineral Resources * Grades estimated with Ordinary Kriging into ore zones
are reported additional to, or inclusive of, the Ore defined by wireframe modelling
Reserves
* Total M&I; 25.2 Mt @ 0.98 g/t Au containing 798 Koz
* Inferred 11.2 Mt @ 0.62 g/t Au containing 222 Koz
* Resource defined by 0.21 g/t Au cutoff within an
$1,800/oz pit shell
* Mineral Resource is inclusive of the Ore Reserve
Site Visits
* Comment on any site visit undertaken by the Competent * Peter C. Carter is qualified as a CP under JORC code
Person and the outcome of those visits (2012)
* As a previous member of Chaarat staff, Mr. Carter has
visited the site on numerous occasions in 2018 and
2019
* There have been no material changes to the project
site with respect to Ore Reserves since Mr. Carter's
last site visit
---------------------------------------------------------------------- ---------------------------------------------------------------
Study Status
* The type and level of study undertaken to enable the * The basis for the conversion of the Mineral Resource
Mineral Resource to be converted to Ore Reserves to an Ore Reserve is the 2021 Updated Feasibility
Study completed by LogiProc PLC and Sound Mining Inc
of Johannesburg, RSA.
* The code requires that a study, at least to
Pre-feasibility Study level has been undertaken to
convert Mineral Resources to Ore Reserves. Such * The study represents a Class 3 estimate of the
studies will have been carried out and will have project value with an accuracy of -10% to +15%.
determined a mine plan that is technically achievable
and economically viable, and that material Modifying
Factors have been considered. * The study determined the project to be both
technically and economically viable.
* Modifying Factors have been considered in the
conversion of the Mineral Resource to an Ore Reserve
* Some technical parameters have changed since
completion of the FS and have been updated
---------------------------------------------------------------------- ---------------------------------------------------------------
Cutoff Grade
* Nature of cutoff grade * A cutoff grade for recovered Au was employed due to
the variable recovery in the geo-metallurgical model
* The cutoff grade parameters are based on those from
the 2021 FS updated
* Recovered Au cutoff = 0.16 g/t Au
* True marginal cutoff = 0.22 g/t Au at 74% recovery
---------------------------------------------------------------------- ---------------------------------------------------------------
* Parameters used to calculate cutoff grade * Owner's Mining = 0.34 $/t ore
* Ore Haul = 0.72 $/t ore
* Process = 4.79 $/t ore
* G&A = 1.25 $/t ore
* Refining = 9.78 $/oz
* Gold Price = 1,600 $/oz Au
* Royalty = 14%
---------------------------------------------------------------------- ---------------------------------------------------------------
Mining Factors
or Assumptions * The methods and assumptions used as reported in the * Mineral Resource model used a parent block size of 5
PFS or FS to convert the Mineral Resource to an Ore m x 5 m x 5 m which respects the selective mining
Reserve. unit
* Pit optimization conducted with Whittle 4X
* Mining costs were $2.55/t ore and $1.83/t waste
* Other parameters as per cutoff grade calculation and
recommended pit slopes
* Shells optimised for $1,000-$1800/oz Au
* $1,350/oz shell selected as basis for pit design
* Manual design process using GEMS software used to
generate minable pit design
* Ore Reserve inside manual design within 5% of the
minable resource within optimised shell
---------------------------------------------------------------------- ---------------------------------------------------------------
* Use of Inferred Mineral Resources * Inferred Mineral Resources were not permitted to
influence the pit optimization and were treated as
waste during mine design and reserve calculation
---------------------------------------------------------------------- ---------------------------------------------------------------
* Dilution and Mining Recovery * 0.5 m "dilution skin" modeled around ore
* Average dilution 10.1% at 0.14 g/t Au
* Dilution grade high due to presence of Inferred
Resources adjacent to ore zones
* Mining losses estimated at 2.5% resulting in 97.5%
ore recovery
---------------------------------------------------------------------- ---------------------------------------------------------------
* Geotechnical * Pit slopes based on slope design study by WAI in 2017
* IRAs of 51(o) and 58(o)
* Overall slopes of 40-50(o)
* 5 m benches; 8 m berms; 20 m highwalls
* Design criteria extrapolated to Mid and East Zone as
those areas host only 12% of the reserve
---------------------------------------------------------------------- ---------------------------------------------------------------
* Adjusted Reserve * 23.1 Mt ore grading 0.87 g/t Au containing 647 Koz Au
* 66.4 Mt associated waste
* 2.9:1 strip ratio
* 89.5 Mt total material
---------------------------------------------------------------------- ---------------------------------------------------------------
* Open Pit Description * 7 pits arranged along 4 km of strike
* Main Zone (MZ) Pit; 1 large pit; contains 88% of the
reserve by contained metal
* Mid & East Zone; 6 small pits; 12% of reserve
---------------------------------------------------------------------- ---------------------------------------------------------------
Mining Plan
* Mining Approach * Contract mining
* Contracting reduces capital costs and training burden
* Contractor experienced in western-style open pit gold
mining
* Contractor has similar culture and language as local
workforce
---------------------------------------------------------------------- ---------------------------------------------------------------
* Mining Method * Conventional drill-blast, truck-shovel open pit
mining method
* Small equipment able to provide production capacity,
selectivity, and flexibility in restricted working
areas
---------------------------------------------------------------------- ---------------------------------------------------------------
* Mine Production Plan * 6 years of mining including 1.1 years of
pre-stripping
* 350 days of operation per year
* Average mining rate, 43,000 tpd over LOM
* Peak mining rate, 53,000 tpd 2025-2027
* Average strip ratio during operating period, 2.6:1
---------------------------------------------------------------------- ---------------------------------------------------------------
* Ore Control * Blasthole cuttings tested for g/t Au, % Total Sulfur,
CN solubility
* Geologists log cuttings for degree of oxidation
* Ore and waste blocks flagged by surveyors for
excavation
---------------------------------------------------------------------- ---------------------------------------------------------------
* Mine Water Management * Groundwater inflows of 30 m3/hr anticipated
* Inflows to be collected in sumps and pumped to a
holding pond
* Runoff will be diverted around the open pits by
ditches
* Collected water used for dust suppression or treated
and released
---------------------------------------------------------------------- ---------------------------------------------------------------
* Slope Stability * Pre-shear and buffer blasting to protect pit walls
* Walls to be cleaned with by excavators with hydraulic
hammers
* Visual inspections and survey employed to monitor
movement
* Mapping of structural features to optimize design
safety
---------------------------------------------------------------------- ---------------------------------------------------------------
* Mining Equipment * 5 x 5 m3 excavator + 1 x 5 m3 FEL
* 6 x crawler-type, 115 mm, blasthole drills
* Max 70 x highway-type, 35t haul trucks
* 40-50 t bulldozers and 200 HP graders in support
---------------------------------------------------------------------- ---------------------------------------------------------------
Mine
Infrastructure * Dumps & Stockpiles * Main waste dump
* 8 Mt of waste used to backfill pits 2027-28
* Ore SP 600 kt capacity located near Sandalash River
bridge
* All stockpiled ore processed by end of LOM
---------------------------------------------------------------------- ---------------------------------------------------------------
* Mine Roads * Dual access to MZ Pit
* 6.5 Km Ore Haul Road from Sandalash River bridge to
ROM Pad
* All haul roads 15 m wide for 2-way traffic; maximum
grade 10%
---------------------------------------------------------------------- ---------------------------------------------------------------
* Mine Facilities * Maintenance Workshop
* Magazine
* AN Storage
* Fuel Farm
* Offices & communications
---------------------------------------------------------------------- ---------------------------------------------------------------
Metallurgical
Factors or * Proposed metallurgical process and flowsheet * Heap leach (HL) processing selected
assumptions
* 3-stage crushing of ore to P100 12 mm
* Crushed ore stacked by trucks in 7 m lifts on
valley-fill leach pad
* Au adsorbed onto activated carbon from PLS in CIC
circuit
* Loaded carbon stripped in AARL-type elution circuit
* Electrowinning and smelting on site produce dore for
shipment
---------------------------------------------------------------------- ---------------------------------------------------------------
* Appropriateness of process to the style of * About 70% of the Au is readily CN soluble
mineralization
* Host rock fractures easily to produce 12 mm crush
* No agglomeration at crush sizes > 6 mm
* Lowest capital and operating costs for treating low
grade, oxidized ore
---------------------------------------------------------------------- ---------------------------------------------------------------
* Is the metallurgical process well-tested or novel in * Process is robust and widely used
nature?
* Practical for cold-weather conditions
* Heap leaching proven globally over last 40 years
---------------------------------------------------------------------- ---------------------------------------------------------------
* Nature of metallurgical test work * Process scoping test work conducted by Mintek, SGS,
RDI, BGRIMM, and Hazen
* HL test programs by WAI (2017), MLI (2018), SAEL
(2019 & 2021)
* HL testing included bottle roll (BR), column leach
(CL), load-permeability, and agglomeration test work
---------------------------------------------------------------------- ---------------------------------------------------------------
* Amount and representativeness of metallurgical test * 93 composite samples tested in all three programs
work
* 78 BR and 11 CL tests produced results representing
potential leach feed
* 75% of samples from Main Zone, 25% from Mid Zone and
potential East Zone
* Results indicate BR good proxy HL recovery
---------------------------------------------------------------------- ---------------------------------------------------------------
* Nature of metallurgical domaining * Sulphide and oxide domains defined
* Three oxidation states established
* BR results matched to each ox state
* IDW2 used to estimate recovery for individual blocks
in oxide domain
---------------------------------------------------------------------- ---------------------------------------------------------------
* Metallurgical recovery factors applied * Recoveries derived from geo-metallurgical model
* Overall recovery for the Ore Reserve 74%
* Average recovery in Main Zone 73.8%, Mid Zone 75.9%,
and 76.4% East Zone
---------------------------------------------------------------------- ---------------------------------------------------------------
* Assumptions or allowances for deleterious elements * Ore is associated with arsenic and antimony
* Neither element is present in amounts which affect
the selected process or create environmental issues
---------------------------------------------------------------------- ---------------------------------------------------------------
* Existence of bulk sample or pilot scale test work and * No bulk samples or pilot scale test work has been
the degree to which such samples are considered conducted
representative
* The samples tested are representative of the
variability of leach feed across the entire known
deposit
---------------------------------------------------------------------- ---------------------------------------------------------------
* The Ore Reserve is not defined by a specification
* For minerals that are defined by specification, has
the ore reserve estimate been based on the
appropriate mineralogy to meet the specification?
---------------------------------------------------------------------- ---------------------------------------------------------------
Environmental
* The status of studies of potential environmental * ESIA completed by WAI in 2018, updated in 2020
impacts of the mining and processing operations.
* Kyrgyz EIA (OVOS) completed in 2015
* OVOS being updated in support of project permitting
---------------------------------------------------------------------- ---------------------------------------------------------------
* Details of waste rock characterization * NAG testing in 2020 on 110 samples distributed
throughout deposit
* Average NAG pH 5-6 indicating little or no acid
generating potential
* ABA testing indicates 6% of samples PAG
---------------------------------------------------------------------- ---------------------------------------------------------------
* Consideration of potential sites and status of design * Project site terrain is extremely rugged and
options considered constrained
* Only location able to accommodate the heap leach pad
and process facility was the selected Dry Valley site
* Dry Valley enables a valley-fill leach pad design
suited for cold weather operation
* Detailed engineering is in progress
---------------------------------------------------------------------- ---------------------------------------------------------------
* Status of approvals for process residue storage and * Dry Valley location for the heap leach pad is
waste dumps approved
* MZ waste dump in the Irisai Valley is approved
* Permitting process for various aspects of the process
facility is ongoing
---------------------------------------------------------------------- ---------------------------------------------------------------
Infrastructure
* Existence of appropriate infrastructure * New site access road completed
* Exploration/Pioneer camps established
* Permanent camp under construction
* All other infrastructure to be provided during
construction
---------------------------------------------------------------------- ---------------------------------------------------------------
* Availability of land for development * Chaarat has been granted surface rights for the land
required to develop the project
---------------------------------------------------------------------- ---------------------------------------------------------------
* Power * A 4.5 MW diesel-fired power plant will supply the
site with electricity
---------------------------------------------------------------------- ---------------------------------------------------------------
* Water * Process water and raw water will be sourced from
boreholes located near the plant and camp
respectively
* Raw water at the camp and ADR plant will be treated
to generate potable water
---------------------------------------------------------------------- ---------------------------------------------------------------
* Transportation * All personnel, goods, and materials will be
transported to and from site via road
* Bulk materials and equipment will arrive by rail in
Bishkek, 750 km from site, finishing the journey by
truck
---------------------------------------------------------------------- ---------------------------------------------------------------
* Labor * The project workforce is estimated at 720
* On a 15-15 continuous shift schedule, half the
workforce will be on site at any given time
* 80% of the workforce is expected to be national with
a target of 30% coming from local villages
---------------------------------------------------------------------- ---------------------------------------------------------------
* Accommodation * The workforce will be housed on site in a 360-man
permanent camp
---------------------------------------------------------------------- ---------------------------------------------------------------
* Ease with which infrastructure can be provided * All infrastructure will be installed during the
28-month construction period
---------------------------------------------------------------------- ---------------------------------------------------------------
Costs
* Derivation and assumptions regarding capital costs * Capital costs from 2021 FS
* LOM CAPEX estimated at $131 M
* Initial capital approximately $116 M
* Deferred and Closure costs = $15 M
* Contingency was applied at 10%
* AACE Class 3 estimate, -10% to +15%
---------------------------------------------------------------------- ---------------------------------------------------------------
* Methodology used to estimate operating costs * Mining cost from quote by the Contractor based on the
detailed mine plan
* Process, Owner Mining, and G&A were developed from
first principles based on detailed operating plans
* All other are based on the 2021 FS Update
---------------------------------------------------------------------- ---------------------------------------------------------------
* Allowances made for deleterious elements * Project does not incur any added cost due to
deleterious elements
---------------------------------------------------------------------- ---------------------------------------------------------------
* Source of exchange rates used in the study * Exchange rates for Rubles, Som, and Euros to USD were
as per prevailing rates in H1 2021
---------------------------------------------------------------------- ---------------------------------------------------------------
* Derivation of transportation charges * Transportation costs were included in the price of
all goods and materials
* Cost of shipping was based on estimates a specialist
logistics service provider in the region
---------------------------------------------------------------------- ---------------------------------------------------------------
* Basis for forecasting refining charges * Refining charges were based on advice from the Kyrgyz
gold refinery at Kara-Balta
---------------------------------------------------------------------- ---------------------------------------------------------------
* Allowances for royalties, both government and private * Kyrgyzstan has a sliding scale royalty system pegged
to gold price
* At a gold price of $1,600/oz Au the royalty payable
is 14%
* No private royalty payable on the project
* Royalties are applied in lieu of corporate tax in
Kyrgyzstan
---------------------------------------------------------------------- ---------------------------------------------------------------
Revenue
Factors * Head grade and recovery * Average head grade 0.87 g/t Au from the block model,
adjusted for dilution
* Average Au recovery 74% from geo-metallurgical model
---------------------------------------------------------------------- ---------------------------------------------------------------
* Metal price * Commodity broker consensus forecast Feb 2022,
$1,618/oz over production period
* Gold price used $1,600/oz Au
* By-product silver priced at $20.00/oz Ag
---------------------------------------------------------------------- ---------------------------------------------------------------
* Exchange rates * Payment made in USD, foreign exchange not applicable
to revenue
---------------------------------------------------------------------- ---------------------------------------------------------------
* Transportation and treatment charges * Refining and transport costs from Kyrgyz national
gold refinery at Kara-Balta and a bonded carrier
respectively
---------------------------------------------------------------------- ---------------------------------------------------------------
* No penalties payable on Tulkubash dore
* Refining penalties
---------------------------------------------------------------------- ---------------------------------------------------------------
* Net Smelter Returns * Dore, 45% Au and 55% Ag, payable 99.5% and 85%
respectively
---------------------------------------------------------------------- ---------------------------------------------------------------
Market
Assessment * The demand, supply, and stock situation for the * All producers of precious metals in Kyrgyzstan are
commodity, consumption trends and factors likely to obliged to offer their output for sale to the
affect supply and demand in the future National Bank of the Kyrgyz Republic at world spot
prices
* If NBKR declines to purchase metals offered, the
producer is free to directly sell on world markets
---------------------------------------------------------------------- ---------------------------------------------------------------
* Not applicable
* A customer/competitor analysis along with
identification of likely market windows for the
product
---------------------------------------------------------------------- ---------------------------------------------------------------
* Price and volume forecasts and the basis of these * The forecast gold price averages $1,600/oz over LOM
forecasts
* Average annual production forecast to be 106 Koz Au
during 3 years of full operation
---------------------------------------------------------------------- ---------------------------------------------------------------
* Not applicable
* For industrial minerals, the customer specification,
testing, and acceptance requirements prior to a
supply contract
---------------------------------------------------------------------- ---------------------------------------------------------------
Economic
* Production Plan * Operations will mine 23.1 Mt ore grading 0.87 g/t Au
and 66.4 Mt associated waste over 6-year period
* Project will recover 479 Koz primary Au and 386 Koz
by-product Ag over a 5-year LOM
---------------------------------------------------------------------- ---------------------------------------------------------------
* 2021 FS LOM capital of $131 M
* Capital Costs
---------------------------------------------------------------------- ---------------------------------------------------------------
* Operating Costs * Mining, Contract = $2.15/t mined
* Mining, Owner = $0.34/t ore
* Process = $4.80/t ore
* G&A = $1.27/t ore
* Unit costs for production period only
---------------------------------------------------------------------- ---------------------------------------------------------------
* Financial Considerations * Royalty applied at 14% in lieu of tax
* Base Case discount rate = 5%
* Project value calculated from July 1, 2022
* Model is unleveraged, assumes 100% equity
---------------------------------------------------------------------- ---------------------------------------------------------------
* Cost Exclusions * Inflation
* Engineering
* Permitting
* Exploration
* Interest and financing charges
---------------------------------------------------------------------- ---------------------------------------------------------------
* Economic Performance * After-tax NPV discounted at 5% = $138 M
* After-tax IRR = 33%
* Simple Payback = 2.3 years
---------------------------------------------------------------------- ---------------------------------------------------------------
* Comparison to 2019 FS * 19% increase in NPV at $1,450/oz Au
* 62% increase in NPV at $1,600/oz Au
---------------------------------------------------------------------- ---------------------------------------------------------------
* Sensitivity Analysis * Project NPV declines to $92 M 10%
* Each 1% change in CAPEX = $1.1 M change in NPV
* Each 1% change in OPEX = $2.5 M change in NPV
* Each 1% change in gold price result in $3-$4 M change
in NPV
* Project is breakeven is at a gold price of about
$1,090/oz Au
---------------------------------------------------------------------- ---------------------------------------------------------------
Social
* Status of agreements with key stakeholders and * Chaarat has a standing agreement to fund annual
matters leading to social license to operate "social package" for Chatkal as per Kyrgyz
legislation
* Chaarat has committed to hiring quotas from local
villages
* Chaarat has promoted the development of local
business, education, and social events
* Chaarat maintains a program of engagement with the
local government and population
---------------------------------------------------------------------- ---------------------------------------------------------------
Other
* Naturally Occurring Risks * The project is subject to risks from geohazards,
seismicity, and extreme weather
* The project design has been developed to mitigate,
control, or manage these risks
---------------------------------------------------------------------- ---------------------------------------------------------------
* Legal Agreements * Chaarat has partnered with its Mining Contractor,
Ciftay Insaat
* Ciftay has taken a 12% stake in the project worth $31
M
* Ciftay will perform construction earthworks, mining,
ore stacking, and operate the Permanent Camp under a
variety of separate contracts
---------------------------------------------------------------------- ---------------------------------------------------------------
* Permitting * Chaarat holds a mining license for the operating area,
700 ha, and an exploration license for the
surrounding 6,770 ha
* Surface rights have been secured for all land
required to develop the project
* A permitting process is in place to acquire all
permits and approvals required for construction and
operation
---------------------------------------------------------------------- ---------------------------------------------------------------
Ore Reserve
Classification * Basis for classifying the ore reserve into various * Drillhole data density
confidence categories
* Search for Probable reserves 40 m
* Grade/thickness variability
* Continuity along strike
---------------------------------------------------------------------- ---------------------------------------------------------------
* Do the results reflect the CP's view of the deposit? * Yes. The absence of Measured Resources precludes
declaring Proven Reserves
* The Probable Reserves are based on accepted standards
for similar deposits and appropriately reflect the
quality of the geologic, technical, and economic
factors used to define them
---------------------------------------------------------------------- ---------------------------------------------------------------
* None, there are no Measured Resources
* What proportion of Probable Ore Reserves have been
derived from Measured Mineral Resources?
---------------------------------------------------------------------- ---------------------------------------------------------------
Audits or
Reviews * Results of any audits or reviews of the Ore Reserve * No third-party audits or reviews have been completed
estimate on the updated Ore Reserve
---------------------------------------------------------------------- ---------------------------------------------------------------
Discussion of
relative * Qualitative discussion of the factors that would * Mineral Resource Estimate based on an additional
accuracy affect the accuracy and confidence of the estimate 2,760 m of drilling
/confidence
* State whether the accuracy/confidence refers to the * Variography and sample selection criteria reviewed
global or a local Ore Reserve estimate
* Wireframe and sulfide contact interpretation reviewed
and updated
* Previous MRE reviewed by external parties with no
fatal flaws found
* Accuracy and confidence refer to the global Ore
Reserve estimate
* Project design is flexible enough to accommodate
local variations in presentation of tonnage and grade
---------------------------------------------------------------------- ---------------------------------------------------------------
* Modifying Factors which may affect the * The mining plan employs a conventional approach with
accuracy/confidence of the Ore Reserve estimate achievable mining rates
* Some geotechnical and hydrogeological factors need
further definition, however, this will not affect the
accuracy of the Ore Reserve estimate
* Process technology is proven
* Recovery estimate reflects test work
* CAPEX and OPEX estimates are FS-level; review
required to confirm current validity
* The project can manage variations in metal and
commodity prices of 10-20%
* The project is subject to political and regulatory
risks typical for a developing country
* Natural risks such as geohazards and seismicity have
been considered in the project design
---------------------------------------------------------------------- ---------------------------------------------------------------
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