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 -- Sampling comprises predominantly
cut channels, random chips, or wireline diamond drilling core, along
specific specialized with channel sampling
industry standard measurement tools from trenches, road cuts and
appropriate to the minerals under underground adit. Limited RC drilling
investigation, such program was completed in
as down hole gamma sondes, or handheld 2020 as well
XRF instruments, etc). These examples -- Data from the surface trenches,
should not be road cuts and underground adit has
taken as limiting the broad meaning of been used during the
sampling. interpretation of the mineralization,
-- Include reference to measures taken but was excluded from interpolation
to ensure sample representivity and process
the appropriate -- Core was drilled through the full
calibration of any measurement tools expected mineralization intersection,
or systems used. as normal to the
-- Aspects of the determination of strike and dip as possible
mineralization that are Material to -- All drilling is diamond core,
the Public Report. standard or triple-tube, predominantly
-- In cases where 'industry standard' at HQ diameter. Half
work has been done this would be core, cut along the core axis, has
relatively simple (eg been used for sampling
'reverse circulation drilling was used -- All the trench and road cut
to obtain 1 m samples from which 3 kg sampling were done with ordinary
was pulverised hammer, following marked sample
to produce a 30 g charge for fire boundaries
assay'). In other cases more -- The average down-hole sample length
explanation may be required, is 1.5m, the average trench and road
such as where there is coarse gold cut sample length
that has inherent sampling problems. is 2.0m
Unusual commodities -- The average sample weight is
or mineralisation types (eg submarine approx. between 4-6 kg
nodules) may warrant disclosure of -- 1.0 m samples were collected from a
detailed information. 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 -- Almost, only diamond core drilling
circulation, open-hole hammer, rotary was conducted in Tulkubash project,
air blast, auger, except 2020 campaign,
Bangka, sonic, etc.) and details (e.g. when limited RC drilling was completed
core diameter, triple or standard -- All the available drilling is
tube, depth of diamond included in MRE_update_21, 729 holes
tails, face-sampling bit or other with total length of
type, whether core is oriented and if 102,406.2m (incl. 24 holes / 2,760.3m
so, by what method, at 2021 and 21 RC holes - 2,434.3m at
etc.). 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 recovery is logged as percent
core and chip sample recoveries and of the core recovery length VS drill
results assessed. run length, and
-- Measures taken to maximize sample it is measured by company's geologists
recovery and ensure representative and technicians, directly in the core
nature of the samples. boxes, immediately
-- Whether a relationship exists after the core is transported to the
between sample recovery and grade and field core shed
whether sample bias -- Through the drilling process, in an
may have occurred due to preferential attempt to maximize the core recovery
loss/gain of fine/coarse material. were used triple
- core tube and additive drilling muds
-- 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 -- The implemented core logging
been geologically and geotechnically protocol is documented: lithology,
logged to a level hydrothermal alteration,
of detail to support appropriate oxidation stage, degree of fracturing,
Mineral Resource estimation, mining mineralization, structures, RQD, core
studies and metallurgical recovery, and
studies. RMR based logging for the geotechnical
-- Whether logging is qualitative or holes. Entire core is regularly
quantitative in nature. Core (or photographed.
costean, channel, etc) -- Total length of the logged drill
photography. holes is 103, 956.2m (including
-- The total length and percentage of geotechnical)
the relevant 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 and sample -- If core, whether cut or sawn and -- All of the drilled core is sampled,
preparation whether quarter, half or all core except the initial diluvium / alluvium
taken. zones
-- If non-core, whether riffled, tube -- All intact core samples are cut
sampled, rotary split, etc and whether along its long axis, using core saw,
sampled wet or half core is packed
dry. in a labelled polyethylene bag,
-- For all sample types, the nature, weighted, and further transported to
quality and appropriateness of the laboratory for sample
sample preparation preparation and assaying. In case of
technique. intensively fractured zones, samples
-- Quality control procedures adopted are taken with trowel
for all sub-sampling stages to -- All in situ bedrock, outcropped in
maximize representivity trenches and new road cuts were
of samples. sampled as well
-- Measures taken to ensure that the -- Rock density measurements are using
sampling is representative of the in field Archimedes' principle, approach
situ material collected, with wax. Density
including for instance results for sampling was designed as per 1 sample
field duplicate/second-half sampling. (approx. 10 cm) for each 5 meters (at
-- Whether sample sizes are 2021) and 1 sample
appropriate to the grain size of the per each 20m in the historical
material being sampled. campaigns. In areas of intensively
fractured material the interval
is wider due lack of proper material.
No density was measured at 2020
campaign as, RC drilling
is not providing intact material
-- The collection of geological data
meets the industrial standards
Quality of assay data and laboratory -- The nature, quality and -- Samples collected from 2007 to 2014
tests appropriateness of the assaying and were prepared and assayed at IRC
laboratory procedures used Laboratory in Karla
and whether the technique is Balta, Kyrgyzstan.
considered partial or total. -- Sample collected from 2017 to 2019
-- For geophysical tools, were prepared and analysed at ALS
spectrometers, handheld XRF Global (Karla Balta),
instruments, etc, the parameters used and referee check samples were sent to
in determining the analysis including SGS Vostok Limited (Chita, Russa)
instrument make and model, reading -- 2020 (RC drilling) and 2021
times, calibrations campaigns were used Steward Assay and
factors applied and their derivation, Environmental Laboratories
etc. LLC (Karla Balta, Kyrgyzstan). SGS
-- Nature of quality control (Chita, Russia) was used for an
procedures adopted (eg standards, external control laboratory
blanks, duplicates, external at 2021 campaign
laboratory checks) and whether -- Through the sample preparation
acceptable levels of accuracy (ie lack process, the entire sample is crushed
of bias) and precision to passing 90% at
have been established. 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 and assaying -- The verification of significant -- No twin holes have been conducted
intersections by either independent or at Tulkubash area
alternative company -- All the assay results are received
personnel. electronically as an Excel
-- The use of twinned holes. spreadsheet, and further
-- Documentation of primary data, data incorporated in the database by
entry procedures, data verification, company's database manager
data storage (physical -- The access to the database is
and electronic) protocols. limited, and only authorized employees
-- Discuss any adjustment to assay can make corrections
data. in it
-- 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 -- All collar locations are reported
used to locate drill holes (collar and at Gauss Kruger Pulkovo 1942 Zone 12
down-hole surveys), -- The survey is conducted, using
trenches, mine workings and other Lecia Total Station (centimetre
locations used in Mineral Resource accuracy)
estimation. -- All the holes have been downhole
-- Specification of the grid system surveyed, measurements taken between
used. 25 - 50m interval,
-- Quality and adequacy of topographic using REFLEX EZ SHOT tool
control. -- 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 distribution -- Data spacing for reporting of -- The hole collars are in accordance
Exploration Results. with existing profiles, designed
-- Whether the data spacing and perpendicular to the
distribution is sufficient to mineralised zones
establish the degree of geological -- Main Pit area achieves average
and grade continuity appropriate for distance between the drilling profiles
the Mineral Resource and Ore Reserve of 40m
estimation procedure(s) -- At 2021 campaign, additional infill
and classifications applied. holes were located in several most
-- Whether sample compositing has been promising clusters
applied. 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 relation to -- Whether the orientation of sampling -- All the exploration holes were
geological structure achieves unbiased sampling of possible designed in attempt to intercept the
structures and expected NE strike
the extent to which this is known, of the mineralization as normal as
considering the deposit type. possible, and to avoid any sampling
-- If the relationship between the biases. The average
drilling orientation and the bearing is SE or NW, with drilling
orientation of key mineralised angle approx. 50 degrees
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 -- The samples are sufficiently
security. secure, with security guards in the
entry, on both - field
camp and Malovodnoye core shed
Audits or reviews -- The results of any audits or -- The following independent audit was
reviews of sampling techniques and completed out during the entire period
data. 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 Commentary
explanation
Mineral -- Type, -- Chaarat ZAAV CJSC (CZ) is established in Kyrgyz Republic, and is wholly - owned subsidiary
tenement and reference of Chaarat Gold Holding Ltd (Chaarat).
land tenure name/number, -- CZ is developing Tulkubash Gold Project (Project) located in the Sandalash Range of the
status location and Alatau Mountains in the Chatkal district of the Jalal Abad region (province) of north-western
ownership Kyrgyzstan
including -- The Property is located at latitude 42deg1'6.91" N and longitude 71deg9'39.04" E and is
agreements or close to the border with Uzbekistan. The Project site is located approximately 300 km southwest
material issues of the capital Bishkek, 60 km northeast of the regional administrative center of Kanysh-Kiya
with third in the Chatkal Valley, and 300 km by road from the nearest railway station in Shamaldy-Say
parties such as -- CZ sole holds two licenses, controlling the Property.
joint ventures, -- Mining (production) license: #3117AE of 700.03ha, valid to 2032 is covering defined Mineral
partnerships, Resources of SW part of the Property, which comprising Main Pit / Middle Zone and East Zone
overriding areas.
royalties, -- Exploration license # 3319AP, valid till October 2023 (including retain option), with area
native title of 6776 ha is covering prospective ground in NE direction.
interests, -- CZ is obtaining consent of the local state administration and the local governments of
historical Chatkal Region, required to conduct exploration work
sites, -- As per Kyrgyz Republic legislation, land allocation is granted for subsoil use (e.g. road
wilderness or construction, industrial sites, or other infrastructure facilities) for the term of license
national park validity
and -- CZ bear a full legal responsibility for compliance with environmental requirements under
environmental Kyrgyz Republic legislation. CZ is required to obtain relevant environmental permits, make
settings. quarterly payments for environmental pollution as per Kyrgyz Laws and submit reports on compliance
-- The security with environmental requirements
of the tenure
held at the time
of reporting
along with any
known
impediments
to obtaining a
licence to
operate in the
area.
Exploration -- -- Initial reconnaissance commences in Soviet era, in regard with identified antimony mineralization.
done by other Acknowledgment Following the breakup of Soviet Union, Apex Asia in joint venture of Newmont Overseas Ltd
parties and appraisal of complete approx. 1800m drilling and conduct geophysical survey. After 2002 CZ was formed and
exploration by have acquired what is now known as Chaarat Mining License. Till 2021 CZ manage to confirm
other parties. 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, -- Chaarat Gold Project (Project) is located within Tien Shan Metallogenic Belt, a Hercynian
geological fold and thrust belt, with length more than 2,500 km. Tien Shan belt consists of three tectono-stratigraphic
setting and units, each divided by major structural zones, and is thought to represent accretionary prisms,
style of on the margin of proto-Eurasian continent. The Project is located in the middle Tien Shan
mineralisation. 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 -- A summary of -- Appproximately 105 km drilling have been carried out in the Tulkubash area after 2000,
Information all information including RC and Geotechnical drilling.
material to the -- The 2021 drilling campaign is including approx. 2,760m (shown in the table below), aiming
understanding of to update the available Resource Model, particularly in its Middle Zone and East Zone: BHID Az DIP East North RL Depth
the exploration DH21T587 140 -55 12680050 4657226 2853 134.6
results DH21T588 140 -55 12680084 4657241 2855 163.1
including DH21T589 140 -47 12679982 4657121 2781 80.1
a tabulation of DH21T590 140 -50 12680458 4657549 2722 80.7
the following DH21T591 140 -55 12680481 4657579 2725 80
information for DH21T592 135 -55 12680602 4657748 2821 140
all Material DH21T593 135 -60 12680894 4658292 3084 175.2
drill holes: DH21T594 136 -70 12681103 4658543 3117 149.8
o easting and DH21T595 135 -50 12680948 4658294 3063 110.2
northing of the DH21T597 136 -50 12681105 4658543 3117 71.5
drill hole DH21T599 135 -60 12680739 4658062 2997 90.5
collar DH21T600 135 -65 12680706 4658090 3021 150.4
o elevation or DH21T602 135 -50 12680771 4658146 3034 150
RL (Reduced DH21T606 95 -55 12681281 4658537 3037 100.2
Level - DH21T609 135 -55 12681179 4658588 3132 80.5
elevation above DH21T610 135 -50 12681182 4658740 3129 85
sea level in DH21T611 135 -58 12681146 4658608 3146 150.4
metres) of the DH21T612 135 -60 12681226 4658634 3120 85
drill hole DH21T613 135 -50 12680097 4657281 2857 130.2
collar DH21T614 135 -65 12680042 4657176 2819 120.4
o dip and DH21T616 135 -50 12681190 4658682 3139 160
azimuth of the DH21T617 135 -60 12681151 4658663 3156 85.1
hole DH21T618 136 -50 12681231 4658755 3140 60.2
o down hole DH21T619 135 -58 12679996 4657168 2817 127.2
length and
interception
depth
o hole length.
-- If the
exclusion of
this information
is justified on
the basis that
the information
is
not Material and
this exclusion
does not detract
from the
understanding of
the report, the
Competent Person
should clearly
explain why this
is the case.
Data -- In reporting -- Middle Zone and East Zone holes done in 2021 were incorporated into existing block model
aggregation Exploration from 2020, aiming to upgrade the Inferred Resources in these areas.
methods Results, -- Overall, the results from 2021 exploration campaign, have available grade intercepts, with
weighting COG of 0.21g/t, accepted for Tulkubash style mineralization, certain rules are applied. For
averaging a maximum length of interval below the COG, but included in the calculations, is considered
techniques, 6.0m. Each interval should start and end with sample >= COG. For top cap grade is considered
maximum and/or 20 ppm, weighted averaging (length X grades) techniques are used for mean grades calculations
minimum -- No Au equivalent was used
grade
truncations (eg
cutting of high
grades) and
cut-off grades
are usually
Material and
should be
stated.
-- Where
aggregate
intercepts
incorporate
short lengths of
high grade
results and
longer lengths
of low grade
results, the
procedure used
for such
aggregation
should be stated
and some typical
examples of such
aggregations
should be shown
in detail.
-- The
assumptions used
for any
reporting of
metal equivalent
values should be
clearly stated.
Relationship -- These -- Middle Zone / East Zone collars are supported by sufficient amount of historical data,
between relationships aiming to avoid any significant fluctuation between the intercepts and the true width
mineralization are particularly
widths and important in the
intercept reporting of
lengths Exploration
Results.
-- 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 -- Wide variety of 2D and 3D graphics, maps, plots and wireframes are available, the combination
maps and of which is fully sufficient to visual description of the reported data
sections (with
scales) and
tabulations of
intercepts
should be
included
for any
significant
discovery being
reported These
should include,
but not be
limited to a
plan view of
drill hole
collar locations
and appropriate
sectional views.
Balanced -- Where -- Middle Zone and East Zone results from 2021 will be used for updating the last available
reporting comprehensive Mineral Resource model for Tulkubash area, prepared by Institute of Geotechnologies (IGT)
reporting of all in Dec. 2020
Exploration
Results is not
practicable,
representative
reporting of
both low and
high grades
and/or widths
should be
practiced to
avoid misleading
reporting of
Exploration
Results.
Other -- Other -- Along with the Resource update made 2021, several other technical assessments for Tulkubash
substantive exploration area were also done, including geotechnical / hydrogeological drilling in Main Pit area based
exploration data, if on 13 holes (approx. 1,550m)
data meaningful and -- Acid Rock Drainage (ARD) survey for Tulkubash's Main Pit area is in progress
material, should
be reported
including (but
not
limited to):
geological
observations;
geophysical
survey results;
geochemical
survey results;
bulk samples -
size and method
of treatment;
metallurgical
test results;
bulk density,
groundwater,
geotechnical and
rock
characteristics;
potential
deleterious or
contaminating
substances.
Further work -- The nature -- Magnetic drone-based geophysics in the whole Property area, including Tulkubash area, is
and scale of planned to define additional exploration targets.
planned further -- The Karator and Ishakuldy exploration targets of Tulkubash stile, outlined on 2 and 5 km
work (eg tests to northeast are planned for further resource definition drilling.
for lateral
extensions or
depth
extensions or
large-scale
step-out
drilling).
-- Diagrams
clearly
highlighting the
areas of
possible
extensions,
including the
main geological
interpretations
and future
drilling areas,
provided this
information is
not commercially
sensitive.
Section 3 Estimation and Reporting of Mineral Resources
Criteria JORC Code explanation Commentary
Database -- Measures taken to -- The field data is compiled on the site and further combined, verified and stored in AGR
integrity ensure that data has 4.0 database platform, and in Excel spread sheets as well.
not been corrupted by, -- Prior the process of the Resource Modelling, the historic data and the new available one,
for example, were verified one more time, using Micromine software
transcription -- The database used for the Mineral Resource update report has been previously audited by
or keying errors, Gustavson and Associates (2014), by GeoSystems International (2018), by Sound Mining (2019),
between its initial by IGT (2020)
collection and its use
for Mineral Resource
estimation
purposes.
-- Data validation
procedures used.
Site visits -- Comment on any site -- Last field visit by Competent Person was made between 25.08.2021 to 02.09.2021 by Dimitar
visits undertaken by Dimitrov
the Competent Person -- Mr.Dimitar Dimitrov P. Geo, AIG member and a Competent Person as defined in the 2012 edition
and the outcome of of the JORC Code 'Australasian Code for Reporting of Exploration Results, Mineral Resources
those and Ore Reserves', is a full-time employee of the company.
visits.
-- If no site visits
have been undertaken
indicate why this is
the case.
Geological -- Confidence in (or -- Mineralization and associated hydrothermal alteration, developed along a system of regional
interpretation conversely, the structural deformations, is genetically associated with Permian magmatism
uncertainty of ) the -- Tulkubash mineralization zones are presented by series of dilatational jogs, hosted in
geological silicified sandstones
interpretation of the -- No hard borders can be outlined, as all Tulkubash mineralization is host rock has similar
mineral deposit. facies
-- Nature of the data -- The interpretation is based on gold distribution, using actual drilling, trenches and underground
used and of any adits
assumptions made. -- Overall, there is a good level of confidence in the geological continuity, although detailed
-- The effect, if any, drilling is required to advance the interpretation of the different mineralization lenses
of alternative -- The wireframing process is using 0.2 ppm and 0.7 ppm Au to contour high and low grade domains.
interpretations on -- The low grade domains are considered as Resource outer shell, while the high grades are
Mineral Resource incorporated within it
estimation.
-- The use of geology
in guiding and
controlling Mineral
Resource estimation.
-- The factors
affecting continuity
both of grade and
geology.
Dimensions -- The extent and -- The Mineral Resource extends approx. 4, 900m along strike, with maximum plan width of 500m,
variability of the maximum depth below surface of approx. 300m
Mineral Resource
expressed as length
(along strike or
otherwise), plan width,
and depth below surface
to the upper and lower
limits of the Mineral
Resource.
Estimation and -- The nature and -- The 2021 Mineral Resource update, was made internally, by Chaarat geological department,
modelling appropriateness of the and it was completed at March. 2022
techniques estimation technique(s) -- The 2021 Mineral resource update is using only drill hole data for the Resource interpolation,
applied and key although assays from surface workings are used only in the interpretation process.
assumptions, -- Micromine Software (under the license of Chaarat) was used for the block modelling
including treatment of -- The Mineral Resource was estimated into block model, using ordinary kriging for Au, Ag
extreme grade values, is also estimated via IDW2 although it was not reported. IDW2 was used for density and recovery
domaining, interpolation as well
interpolation -- Block model with parent block size of 5*5*5 m was generated within the wireframe domains,
parameters and maximum with 1m minimum sub-selling applied
distance of -- Grade estimates was done by 1.5m composite sampling
extrapolation from data -- Log probability plots and coefficient of variation were analysed for each domain for top
points. If a computer cuts determination, including Au, Ag and Density
assisted estimation -- Two different variogram models were applied for low and high-grade domains
method was chosen -- Block model was checked visually by sections, and geostatistical, using Q-Q and swath plots
include a description -- The grade distribution in the block model is sufficiently matching the assay results
of computer software -- No estimation of deleterious elements was made
and parameters used. -- The Reported results are giving reasonable prospects for eventual economic extraction,
-- The availability of taking in to account the estimated gold recovery
check estimates, -- The updated at 2021 constrained Mineral Resource is:Density (g/cm Mt Au (g/t) Au (koz) Class
previous estimates (3) )
and/or mine production 2.66 25.11 0.98 789 Indicated
records 2.56 11.226 0.62 222 Inferred
and whether the Mineral
Resource estimate takes
appropriate account of
such data.
-- The assumptions made
regarding recovery of
by-products.
-- Estimation of
deleterious elements or
other non-grade
variables of economic
significance
(e.g. sulphur for acid
mine drainage
characterisation).
-- In the case of block
model interpolation,
the block size in
relation to the average
sample
spacing and the search
employed.
-- Any assumptions
behind modelling of
selective mining units.
-- Any assumptions
about correlation
between variables.
-- Description of how
the geological
interpretation was used
to control the resource
estimates.
-- Discussion of basis
for using or not using
grade cutting or
capping.
-- The process of
validation, the
checking process used,
the comparison of model
data to drill
hole data, and use of
reconciliation dta if
available.
Moisture -- Whether the tonnages -- All Mineral Resource is estimated and reported on a dry basis
are estimated on a dry
basis or with natural
moisture, and the
method
of determination of the
moisture content.
Cut-off -- The basis of the -- Mineral Resources have been reported at cut-off grade of 0.21 ppm Au
parameters adopted cut-off -- Cut-off grade determined using appropriate economic and technical parameters for open pit
grade(s) or quality mining operations and heap leach gold extraction
parameters applied.
Mining factors -- Assumptions made The applied open pit optimisation parameters are including: c Item Unit Resource_update_2021 Open pit
or assumptions regarding possible optimization
mining methods, minimum Econ. Initial Capital Cost $'000 99016.42
mining dimensions and Selling Cost $/oz 9.89
internal Royalty % 18
(or, if applicable, Discount Rate % 5
external) mining Metal Price Au $/oz 1800
dilution. It is always Ag $/oz 21.7
necessary as part of OP. Costs Mining $/t mined 1.89
the process Extra Ore Mining /Haulage $/t ore 0.84
of determining Processing $/t ore 4.25
reasonable prospects Stacking $/t ore 0.54
for eventual economic Owner's Mining Cost $/t ore 0.34
extraction to consider G/A $/t ore 1.27
potential Other Par. Recovery Au % Variable by block
mining methods, but the Refining Recovery-Au % 99.8
assumptions made Refining Recovery-Ag % 60
regarding mining Internal Cut-off g/t 0.21
methods and parameters Pit Slopes Variable by location
when estimating Op. Limits Mining t/year 27000000
Mineral Resources may Processing t/year 5000000
not always be rigorous.
Where this is the case,
this should be reported
with an explanation of
the basis of the mining
assumptions made.
Metallurgical -- The basis for -- Recovery model, based on the stage of oxidation, was prepared in attempt to adjust the
factors or assumptions or designing of the reported Resource shell. An unoxidized cluster, containing refractory gold
assumptions predictions regarding mineralization, with low recovery was outlined beneath the Main Pit area, and accordingly
metallurgical excluded in the process of pit optimization. The average recovery in the constrained Resource,
amenability. It is estimated per zones is 72-76 %Recovery_Au (%) Class Zone
always 71.91 Indicated Main_Pit
necessary as part of 75.97 Indicated East_zone
the process of 75.01 Indicated Mid_zone
determining reasonable 74.47 Inferred Main_Pit
prospects for eventual 75.49 Inferred East_one
economic 76.14 Inferred Mid_zone
extraction to consider
potential metallurgical
methods, but the
assumptions regarding
metallurgical
treatment processes and
parameters made when
reporting Mineral
Resources may not
always be
rigorous. Where this is
the case, this should
be reported with an
explanation of the
basis
of the metallurgical
assumptions made.
Environmental -- Assumptions made -- There are not considered to be any environmental factors likely to affect the assumption
factors or regarding possible that the deposit has reasonable prospects for eventual economic extraction
assumptions waste and process
residue disposal
options. It is always
necessary as part of
the process of
determining reasonable
prospects for eventual
economic
extraction to 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 -- Dry bulk density is measured using paraffin -coated immersion (Archimedes) method to evaluate
determined. If assumed, the specific gravity (SG)
the basis for the -- Density (SG) values have been interpolated into the block model, using Inverse Distance
assumptions. If Weighting (IDW) method
determined, -- The density data are comprising total of 1,623 dry specimens, measured by Chaarat
the method used, -- In 2020 no density measurements were done, as RC drilling is not providing proper material
whether wet or dry, the
frequency of the
measurements, the
nature, size and
representativeness of
the samples.
-- The bulk density for
bulk material must have
been measured by
methods that adequately
account
for void spaces (vugs,
porosity, etc),
moisture and
differences between
rock and alteration
zones within the
deposit.
-- Discuss assumptions
for bulk density
estimates used in the
evaluation process of
the different
materials.
Classification -- The basis for the -- Classification of Mineral Resources is based upon a review of geological continuity, quality
classification of the of supporting data, spatial grade continuity and quality of a block model
Mineral Resources into -- Mineral Resource Classification was made manually, from section to section
varying confidence -- Following criteria has been t aken in account during the Resource Classification:
categories. -The model has been classified only into two categories of Indicated and Inferred, as it is
-- Whether appropriate considered that the available data is not sufficient for Measured category
account has been taken -Drill hole spacing in plan: for Indicated was used average 30-40m drilling grid, for Inferred
of all relevant factors 40-80m
(ie relative confidence -Total depth of mineral Resource classification: Inferred was restricted up to 80m from the
in tonnage/grade last hole, for Indicated the restriction is 40-60m
estimations, -- The results of the validation of the block model shows acceptable correlation in the input
reliability of input data to the estimated grades
data, confidence in -- The Competent Person is confident that all relevant factors have been considered and the
continuity of geology results reflects these views.
and metal values,
quality, quantity and
distribution of the
data).
-- Whether the result
appropriately reflects
the Competent Person's
view of the deposit.
Audits or -- The results of any -- No external reviews have been made for 2021 Mineral Resource Update
reviews audits or reviews of
Mineral Resource
estimates.
Discussion of -- Where appropriate a -- The Mineral Resource is appropriate for the Tulkubash style of mineralization, and it is
relative statement of the adequate to the available data. It is considered that the current drill hole spacing is sufficient
accuracy/ relative accuracy and to demonstrate geological continuity of the mineralization
confidence confidence level in the -- Accuracy of the Mineral Resource is sufficient to permit economic development of the deposit
Mineral -- The Mineral Resource relates to global estimate
Resource estimate using -- The application of top cuts and compositing in the Mineral Resource are considering as
an approach or appropriate
procedure deemed -- The Mineral Resource estimation methodology is deemed appropriate, based upon validation
appropriate by the of the model, using visual, statistical and graphical checks. Any alternative methods are
Competent Person. likely to yield only minor changes to global Mineral Resource
For example, the -- The mineralization domains have been adhered to geostatistical and grade estimation works,
application of and the spatial distribution of grade in the Mineral Resource model is representative of the
statistical or sample data
geostatistical
procedures to quantify
the relative
accuracy of the
resource within stated
confidence limits, or,
if such an approach is
not deemed
appropriate, a
qualitative discussion
of the factors that
could affect the
relative accuracy
and confidence of the
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
technical and economic
evaluation.
Documentation should
include assumptions
made and the procedures
used.
-- These statements of
relative accuracy and
confidence of the
estimate should be
compared
with production data,
where available.
Section 4 - Estimation and Reporting of Ore Reserves
Mineral Resource estimate for -- Description of the Mineral Resource -- Tulkubash April 2022, resource
conversion to Ore Reserves estimate used as a basis for the based on all DDH data inclusive of the
conversion to Ore 2021 exploration
Reserves program.
-- Clear statement as to whether the -- Grades estimated with Ordinary
Mineral Resources are reported Kriging into ore zones defined by
additional to, or inclusive wireframe modelling
of, the Ore 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 -- Peter C. Carter is qualified as a
undertaken by the Competent Person and CP under JORC code (2012)
the outcome of those visits -- 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 -- The basis for the conversion of the
undertaken to enable the Mineral Mineral Resource to an Ore Reserve is
Resource to be converted to the 2021 Updated
Ore Reserves Feasibility Study completed by
-- The code requires that a study, at LogiProc PLC and Sound Mining Inc of
least to Pre-feasibility Study level Johannesburg, RSA.
has been undertaken -- The study represents a Class 3
to convert Mineral Resources to Ore estimate of the project value with an
Reserves. Such studies will have been accuracy of -10% to
carried out and +15%.
will have determined a mine plan that -- The study determined the project to
is technically achievable and be both technically and economically
economically viable, and viable.
that material Modifying Factors have -- Modifying Factors have been
been considered. 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 -- Owner's Mining = 0.34 $/t ore
grade -- 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 -- Mineral Resource model used a
reported in the PFS or FS to convert parent block size of 5 m x 5 m x 5 m
the Mineral Resource which respects the selective
to an Ore Reserve. mining 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 < 1 km from MZ Pit
with 70 M m3, (100 Mt) capacity
-- 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 assumptions -- Proposed metallurgical process and -- Heap leach (HL) processing selected
flowsheet -- 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 -- About 70% of the Au is readily CN
style of mineralization soluble
-- 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 -- Process is robust and widely used
well-tested or novel in 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 -- 93 composite samples tested in all
metallurgical test work three programs
-- 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 -- Recoveries derived from
applied 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 -- Ore is associated with arsenic and
deleterious elements antimony
-- Neither element is present in
amounts which affect the selected
process or create environmental
issues
-- Existence of bulk sample or pilot -- No bulk samples or pilot scale test
scale test work and the degree to work has been conducted
which such samples -- The samples tested are
are considered representative representative of the variability of
leach feed across the entire
known deposit
-- For minerals that are defined by -- The Ore Reserve is not defined by a
specification, has the ore reserve specification
estimate been based
on the appropriate mineralogy to meet
the specification?
Environmental -- The status of studies of potential -- ESIA completed by WAI in 2018,
environmental impacts of the mining updated in 2020
and processing operations. -- Kyrgyz EIA (OVOS) completed in 2015
-- OVOS being updated in support of
project permitting
-- Details of waste rock -- NAG testing in 2020 on 110 samples
characterization 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 -- Project site terrain is extremely
and status of design options rugged and constrained
considered -- 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 -- Dry Valley location for the heap
residue storage and waste dumps leach pad is 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 -- New site access road completed
infrastructure -- Exploration/Pioneer camps
established
-- Permanent camp under construction
-- All other infrastructure to be
provided during construction
-- Availability of land for -- Chaarat has been granted surface
development 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 -- All infrastructure will be
be provided installed during the 28-month
construction period
Costs -- Derivation and assumptions -- Capital costs from 2021 FS
regarding capital costs -- 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 -- Mining cost from quote by the
operating costs 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 -- Project does not incur any added
elements cost due to deleterious elements
-- Source of exchange rates used in -- Exchange rates for Rubles, Som, and
the study Euros to USD were as per prevailing
rates in H1 2021
-- Derivation of transportation -- Transportation costs were included
charges 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 -- Refining charges were based on
charges advice from the Kyrgyz gold refinery
at Kara-Balta
-- Allowances for royalties, both -- Kyrgyzstan has a sliding scale
government and private 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 -- Refining and transport costs from
charges Kyrgyz national gold refinery at
Kara-Balta and a bonded
carrier respectively
-- Refining penalties -- No penalties payable on Tulkubash
dore
-- Net Smelter Returns -- Dore, 45% Au and 55% Ag, payable
99.5% and 85% respectively
Market Assessment -- The demand, supply, and stock -- All producers of precious metals in
situation for the commodity, Kyrgyzstan are obliged to offer their
consumption trends and factors output for sale
likely to affect supply and demand in to the National Bank of the Kyrgyz
the future Republic at world spot prices
-- If NBKR declines to purchase metals
offered, the producer is free to
directly sell on world
markets
-- A customer/competitor analysis -- Not applicable
along with identification of likely
market windows for the
product
-- Price and volume forecasts and the -- The forecast gold price averages
basis of these forecasts $1,600/oz over LOM
-- Average annual production forecast
to be 106 Koz Au during 3 years of
full operation
-- For industrial minerals, the -- Not applicable
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
-- Capital Costs -- 2021 FS LOM capital of $131 M
-- 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 -- Chaarat has a standing agreement to
stakeholders and matters leading to fund annual "social package" for
social license to operate 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 -- Drillhole data density
reserve into various confidence -- Search for Probable reserves 40 m
categories -- Grade/thickness variability
-- Continuity along strike
-- Do the results reflect the CP's -- Yes. The absence of Measured
view of the deposit? 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
-- What proportion of Probable Ore -- None, there are no Measured
Reserves have been derived from Resources
Measured Mineral Resources?
Audits or Reviews -- Results of any audits or reviews of -- No third-party audits or reviews
the Ore Reserve estimate have been completed on the updated Ore
Reserve
Discussion of relative accuracy -- Qualitative discussion of the -- Mineral Resource Estimate based on
/confidence factors that would affect the accuracy an additional 2,760 m of drilling
and confidence of -- Variography and sample selection
the estimate criteria reviewed
-- State whether the -- Wireframe and sulfide contact
accuracy/confidence refers to the interpretation reviewed and updated
global or a local Ore Reserve estimate -- 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 mining plan employs a
the accuracy/confidence of the Ore conventional approach with achievable
Reserve estimate 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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