REG - Chaarat Gold Hlgs Ld - Kapan Ore Reserves
27/04/2023 07:00
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RNS Number : 6130X Chaarat Gold Holdings Ltd 27 April 2023
27 April 2023
Chaarat Gold Holdings Limited
("Chaarat" or "the Company")
Kapan Ore Reserves
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 updated JORC-compliant Ore Reserves Estimate
("ORE") for its Kapan polymetallic mine in the Republic of Armenia. The
full ORE report will be published on Chaarat's website.
Highlights
· AMC Consultants (UK) Limited ("AMC") were engaged by Chaarat Kapan
CJSC ("Chaarat") to undertake a review of the Kapan Mine ("Kapan") Ore
Reserves and to act as a competent person ("CP") as defined by the JORC (2012)
reporting code.
· Proven & Probable Ore Reserves effective 31 December 2022 were
confirmed totalling 3.14 Mt at an AuEq grade of 3.28 g/t consisting of 1.65
g/t Au, 32.47 g/t Ag, 0.36 % Cu, 1.33 % Zn, resulting in a 5-year mine life.
· This represents an increase of 25% in Ore Reserves, 2% in AuEq grade
and an additional 2 years of mine life versus the previous ORE.
· The 2022 resource definition drilling programme of over 60,000 metres
replaced depletion and added additional years to the life of mine plan.
· Ongoing resource definition drilling will continue to target the
conversion of inferred and unclassified mineralisation to allow for further
mine life extension.
· The 2022 constrained Mineral Resource Estimate published in November
2022 contained 722 thousand gold equivalent ounces ("koz AuEq")(1) in Measured
& Indicated ("M&I") compared to 583 koz AuEq M&I reported in June
2021, reflecting a 24% increase.
Michael Fraser, Chief Executive Officer, commented:
"We are pleased to report a 25% increase in reserves, and a corresponding
2-year increase in the mine life at Kapan. The MRE and ORE reports demonstrate
that there remains a large amount of inferred and unclassified mineralisation
at Kapan. The ongoing exploration programme at Kapan will continue to target
the conversion of this material to M&I, P&P and ongoing mine life
extensions over the coming years."
Updated ORE RESERVES STATEMENT
The following table summarises the recent Kapan ORE (effective 31 December
2022):
Grade Metal
Classification Tonnes (Mt) Au (g/t) Ag (g/t) Cu (%) Zn (%) AuEq (g/t) Au (Koz) Ag (Koz) Cu (Kt) Zn (Kt) AuEq (Koz)
Proven 0.21 2.40 42.07 0.51 1.85 4.64 16.2 284.5 1.1 3.9 31.4
Probable 2.93 1.59 31.78 0.35 1.29 3.18 150.0 2,991.1 10.1 37.8 299.0
Total Proven and Probable 3.14 1.65 32.47 0.36 1.33 3.28 166.3 3,275.6 11.2 41.7 330.4
Table 1 Kapan Mine, Ore reserves 2022
Notes:
· Ore Reserves are reported in accordance with the JORC Code (2012).
· Ore Reserves based on August 2022 consensus prices for LOM of
USD1,750/oz Au, USD21.8/oz Ag, USD8,300/t Cu, and USD2,950 Zn.
· Ore Reserves are based on a gold equivalent cut-off of 2.3g/t Au.
· Mineral Resources which are not Ore Reserves do not have
demonstrated economic viability.
· Table is subject to rounding errors.
· The average density of 2.64 t/m(3) was used for unmodelled diluting
waste material.
· Tonnes reported are in situ, dry tonnes.
The 2021 Ore Reserves statement contained 2.55 Mt at a grade of 1.66 g/t Au,
33.17 g/t Ag, 0.34% Cu, and 1.25% Zn, and 263.7 Koz of AuEq.
As previously announced, the 2022 MRE reflected a 24% increase in contained
ounces compared to 2021. As expected from historical conversion rates, this
increase has flowed through from the MRE into the ORE resulting in a 25%
increase in proven and probable AuEq ounces.
The increase in ORE replaces depletion and adds an additional 2 years of mine
life. The 5 years identified in the life of mine plan is consistent with the
stated reserve for the history of the Kapan mine. Given the deep dipping
nature of the ore body, M&I levels of certainty can only be obtained by
underground drilling, which limits how much of the inferred and unclassified
mineralisation is converted ahead of mining.
The 2022 MRE shows that there is still significant mineralisation within the
Shahyuman ore body. The ongoing exploration definition drilling program will
continue to target the conversion of inferred and unclassified mineralisation
into M&I. This conversion is expected to flow through into future ORE
updates as proven and probable to replace mining depletion and provide
additional mine life beyond that indicated in the current reserve.
The full report is available on Chaarat's website at this link
(https://www.chaarat.com/armenia/kapan/) .
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014 (which forms part of domestic UK law pursuant to the
European Union (Withdrawal) Act 2018).
Enquiries
Chaarat Gold Holdings Limited +44 (0)20 7499 2612
Mike Fraser, Chief Executive Officer IR@chaarat.com (mailto:IR@chaarat.com)
Canaccord Genuity Limited (NOMAD and Joint Broker) +44 (0)20 7523 8000
Henry Fitzgerald-O'Connor
James Asensio
Gordon Hamilton
finnCap Limited (Joint Broker) +44 (0)20 7220 0500
Christopher Raggett
Panmure Gordon (UK) Limited (Joint Broker) +44 (0)20 7886 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/
(http://www.chaarat.com/) .
Competent Person- Mineral Resource Estimate
The information in this announcement that relates to the mineral resource
estimate 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 part-time
employee of the company. Mr. Dimitrov consents to the publication of this new
release dated 27 April 2023 by Chaarat. Mr. Dimitrov certified that this news
release fairly and accurately represents the information for which he is
responsible.
Competent Person- Ore Reserves
The CP for the Ore Reserves declared under the JORC Code (2012) in this report
is James Town, Chartered Engineer (CEng), Member of the Institute of
Materials, Minerals & Mining (MIMMM). IOM3 membership number: 0478326. Mr
Town is 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 Town has
reviewed this news release and has consented to its publication with the
inclusion of the information for which he is responsible in the form and
context in which it appears.
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-grade" the lowest grade value that is included in a Resource or Reserves 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 each 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
"Indicated Mineral 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 Mineral Resource' A Measured Mineral Resource has a higher level of confidence than that
applying to either an Indicated Mineral Resource or an Inferred Mineral
Resource. A 'Measured Mineral Resource' is that part of a Mineral Resource for
which quantity, grade (or quality), densities, shape, and physical
characteristics are estimated with confidence sufficient to allow the
application of Modifying Factors to support detailed mine planning and final
evaluation of the economic viability of the deposit
"Mineral Resource" concentration or occurrence of solid material of economic interest in or on
the Earth's crust in such form, grade (or quality), and quantity that there
are reasonable prospects for eventual economic extraction. The location,
quantity, grade (or quality), continuity and other geological characteristics
of a Mineral Resource are known, estimated or interpreted from specific
geological evidence and knowledge, including sampling. Mineral Resources are
sub-divided, in order of increasing geological confidence, into Inferred,
Indicated and Measured categories
"Mt" million tonnes
"Ore Reserves" represents the economically mineable part of a Measured and/or Indicated
Mineral Resource. It includes diluting materials and allowances for losses,
which may occur when the material is mined or extracted and is defined by
studies at Pre-Feasibility or Feasibility level as appropriate that include
application of Modifying Factors. Such studies demonstrate that, at the time
of reporting, extraction could reasonably be justified
"oz" troy ounce (= 31.103477 grammes)
"Pb" the chemical symbol for lead
"Probable Ore Reserve" represents the economically mineable part of an Indicated, and in some
circumstances, a Measured Mineral Resource. The confidence in the Modifying
Factors applying to a Probable Ore Reserve is lower than that applying to a
Proved Ore Reserve
"Proved Ore Reserve" represents the highest confidence category of reserve estimate and implies a
high degree of confidence in geological and grade continuity, and the
consideration of the Modifying Factors
"t" tonne (= 1 million grammes)
"Zn" the chemical symbol for zinc
12.0 JORC Code, 2012 Edition - Table 1 report
Section 1 Sampling Techniques and Data
Criteria JORC Code explanation Commentary
Sampling techniques Nature and quality of sampling (e.g., cut channels, random chips, or specific Sampling comprises historical surface drilling, historical and current
specialized industry standard measurement tools appropriate to the minerals underground drilling, and channel sampling.
under investigation, such as down hole gamma sondes, or handheld XRF
instruments, etc.). These examples should not be taken as limiting the broad Predominantly diamond drilling, and channel cut from the face, with a chisel
meaning of sampling. saw, according to a marked channel boundary.
Include reference to measures taken to ensure sample representativity and the Core was drilled along the full mineralization intersection, as normal to the
appropriate calibration of any measurement tools or systems used. mineralization strike as possible.
Aspects of the determination of mineralization that are Material to the Public Channel rock chips are providing representative data collection of the sampled
Report. face.
In cases where 'industry standard' work has been done this would be relatively All sampling practices are meeting the industry standards.
simple (e.g., 'reverse circulation drilling was used to obtain 1 m samples
from which 3 kg was pulverized to produce a 30 g charge for fire assay'). In
other cases, more explanation may be required, such as where there is coarse
gold that has inherent sampling problems. Unusual commodities or
mineralization types (eg submarine nodules) may warrant disclosure of detailed
information.
Drilling techniques Drill type (e.g., core, reverse circulation, open-hole hammer, rotary air DH sampling: approximately 717 000 samples (1024km).
blast, auger, Bangka, sonic, etc.) and details (e.g., core diameter, triple or
standard tube, depth of diamond tails, face-sampling bit, or other type, Channel sampling: approx. 122 000 samples (123.1 km).
whether core is oriented and if so, by what method, etc.)
Total sampling: approx. 840 000 samples (1147km).
Core is predominantly HQ and NQ diameter, singe barrel drilled.
Channel samples are chipped along the marked face with a pneumatic hammer and
collected by the sampler in one-meter intervals. All channel samples are taken
from south to north, in a horizontal fashion, rather than perpendicular to the
mineralized dip angle. The results from the channel sampling are used for
grade control, modelling, mine design, resource estimation, and for mine
reconciliation data.
The samples are contoured along all major lithological breaks.
Drill sample recovery Method of recording and assessing core and chip sample recoveries and results The core recovery is assessed by regular measurements of each drill run and
assessed. generally excess 95 %. Core recovery is based on recovered core length vs
drill run length, and RC material is assessed by the recovered weights.
Measures taken to maximize sample recovery and ensure representative nature of
the samples. There does not appear to be a relationship bias between grade and length, or
sample weight or recovery.
Whether a relationship exists between sample recovery and grade and whether
sample bias may have occurred due to preferential loss/gain of fine/coarse The average grade of the channel samples is higher compared to the drilling.
material. This is primarily attributed to the frequency of channel samples in high grade
open areas of the mine, compared to drilling
Logging Whether core and chip samples have been geologically and geotechnically logged Once the hole is finished, the core is transported to the core storage area
to a level of detail to support appropriate Mineral Resource estimation, for logging. The core trays are plastic, and are covered with a plastic cover
mining studies and metallurgical studies. as well, to prevent core losses or extra moving.
Whether logging is qualitative or quantitative in nature. Core (or costean, The key procedures are including core recovery measuring; sample interval
channel, etc) photography. marking; geological and geotechnical logging; photo documentation; sampling
and later destruction of non-mineralized part.
The total length and percentage of the relevant intersections logged.
Core logging is including lithology; alteration; mineralization; structures;
obtaining geotechnical data for assess RMR and Q-index.
Sampling is primarily based on the visible mineralization, and minimum 2
meters are taken from either side of the sampled interval.
The maximum sampling interval is 1 meter, the minimum is 0.2m
Once the sampling intervals are outlined, currently a full core diameter is
used for assaying. Areas with non-visible mineralization, outside of the
expected mineralization zone are not sampled.
In absence of visible mineralization, but in areas where mineralization
interception is expected the material is sampled depending on the field
geologist's decision, considering all the available information.
The collection of geological data is meeting the industrial standards.
The core logging protocol keeps a high standard, and the involved geologists
have sufficient knowledge for Shahumyan mineralization system.
Sub-sampling techniques and sample preparation If core, whether cut or sawn and whether quarter, half or all core taken. Prior to July 2017 core was halved with a diamond saw and half was sent for
analysis and the other half was retained. Since then, the whole core is
If non-core, whether riffled, tube sampled, rotary split, etc and whether processed and only the pulps are retained for future analysis.
sampled wet or dry.
The laboratory prepares samples according to industry standard of drying
For all sample types, the nature, quality, and appropriateness of the sample crushing, pulverizing, splitting and analysis.
preparation technique.
All samples are analysed in the local Kapan's mine laboratory
Quality control procedures adopted for all sub-sampling stages to maximise
representativity of samples. The laboratory is providing Fire Assay with AAS for gold (0.2 g/t-1000g/t),
and AAS for Ag (0.2 g/t -20000g/t), Cu (0.005%-9.9%), Pb (0.005%-19.9%) and Zn
Measures taken to ensure that the sampling is representative of the in situ (0.005%-29.9%).
material collected, including for instance results for field
duplicate/second-half sampling.
Whether sample sizes are appropriate to the grain size of the material being
sampled.
Quality of assay data and laboratory tests The nature, quality and appropriateness of the assaying and laboratory The assaying is meeting the industry standards and it is suitable to support
procedures used and whether the technique is considered partial or total. Mineral Resource estimate.
For geophysical tools, spectrometers, handheld XRF instruments, etc, the The current QA/QC scheme is including blank samples and certified reference
parameters used in determining the analysis including instrument make and material (CRM). As core is no longer halved, no field duplicates are assessed,
model, reading times, calibrations factors applied and their derivation, etc. and historically these results were no good due to highly variable nature of
mineralization.
Nature of quality control procedures adopted (eg standards, blanks,
duplicates, external laboratory checks) and whether acceptable levels of QA/QC achieves acceptable levels of accuracy and precision.
accuracy (ie lack of bias) and precision have been established.
Verification of sampling and assaying The verification of significant intersections by either independent or Yearly, in each quarter, between 3 and 5 percent of the pulps are sent to
alternative company personnel. Yerevan state laboratory for reference the results.
The use of twinned holes. A twin analysis has been conducted during 2017-2018 by local geology team for
channel and diamond drilling (DD) holes and shows potential bias that could be
Documentation of primary data, data entry procedures, data verification, data attributed to highly variable nature of mineralization
storage (physical and electronic) protocols.
Discuss any adjustment to assay data.
Location of data points Accuracy and quality of surveys used to locate drill holes (collar and Grid system is Pulkovo 1942 /Gauss -Kruger zone 8, ( with reduced first 2
down-hole surveys), trenches, mine workings and other locations used in digits in the BM and wireframes encoding).
Mineral Resource estimation.
Survey is completed underground, with high precision tools which meets the
Specification of the grid system used. industrial standards: Leica TS16 (3'' accuracy), Ranger Explorer II R2231,
IMMN_32A.
Quality and adequacy of topographic control.
The available digital elevation model of the area topography is used in the
Mineral Resource estimation process (surveyed via GPS by expatriate and local
surveyors in 2013)
Data spacing and distribution Data spacing for reporting of Exploration Results. Along the drive advancing, a channel sampling is taken every blast.
Whether the data spacing, and distribution is sufficient to establish the Typically, the space between two blasts is 4 -6m
degree of geological and grade continuity appropriate for the Mineral Resource
and Ore Reserve estimation procedure(s) and classifications applied. The grade control drilling net is 20 X 20 m, adjusted to denser grid, where
required
Whether sample compositing has been applied.
The geostatistical analysis and trial blast unit drilling data have shown that
thicker data spacing, and distribution do not add any sufficient value in
accuracy of geological and grade continuity.
As majority of samples have 1m in length, the 1m composite is being applied.
Orientation of data in relation to geological structure Whether the orientation of sampling achieves unbiased sampling of possible Geometry is derived and interpreted from underground mapping and sampling.
structures and the extent to which this is known, considering the deposit True thickness is calculated from apparent thickness, during the
type. interpretation.
If the relationship between the drilling orientation and the orientation of No bias has been introduced through the geometry of the sampling and
key mineralised structures is considered to have introduced a sampling bias, subsequent geological interpretation
this should be assessed and reported if material.
Sample security The measures taken to ensure sample security. The mine process plant and laboratory are sufficiently secured, with security
guards and entry, requiring personal ID cards
Audits or reviews The results of any audits or reviews of sampling techniques and data. Independent reviews have considered the sampling process to meet industry best
practices: NI 43-101 Technical Report in 2014 (Galen White - QP, Julian
Bennett- QP, Simon Meik - QP) and Global Report (Galen White - QP) in 2018 by
CSA, report by AMC (Alan Turner, Bryan Pullman) in 2019. At 2021 AMC
consulting completed a high-level review of MRE 21.
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to
this section.)
Criteria JORC Code explanation Commentary
Database integrity Measures taken to ensure that data has not been corrupted by, for example, Data is logged and digitized by trained geologists.
transcription or keying errors, between its initial collection and its use for
Mineral Resource estimation purposes. The used software is providing several stages of cross validation, initial
through the logging process, second when the logging data is imported to main
Data validation procedures used. database platform (acQuire) and one more time prior the Mineral Resource
estimation.
Site visits Comment on any site visits undertaken by the Competent Person and the outcome The last site visit of competent person (Dimitar Dimitrov) for the Mineral
of those visits. Resource was from 17th to 28th of May 2022
If no site visits have been undertaken indicate why this is the case. Mr.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', is a SVP
-Exploration of Chaarat Gold Holdings, and part-time employee of the company.
Geological interpretation Confidence in (or conversely, the uncertainty of) the geological Based on lithological evidence (drill core logging and underground mapping
interpretation of the mineral deposit. data) the veins and veinlets are being interpreted.
Nature of the data used and of any assumptions made. The Mineral Resource is controlled by hard boundaries of the interpreted
geological structures, including faults and post mineralization barren dykes.
The effect, if any, of alternative interpretations on Mineral Resource
estimation. The geological continuity is reasonable, but grade variability is high, often
within the mineralized structure.
The use of geology in guiding and controlling Mineral Resource estimation.
The factors affecting continuity both of grade and geology.
Dimensions The extent and variability of the Mineral Resource expressed as length (along The Resource includes a series of E-W striking orebodies (veins), dipping from
strike or otherwise), plan width, and depth below surface to the upper and 45(o) to 90(o) (mainly in South direction). Vein strike lengths reach up to
lower limits of the Mineral Resource. 0.5km, and the true thickness ranges from several cm to 2m.
The Resources goes near the surface (~950masl) to average of 500 - 600 m asl
deep.
Further mineralization potential exists below 600msal, and to the flanks of
current Resource, explored historically.
Estimation and modelling techniques The nature and appropriateness of the estimation technique(s) applied and key The Mineral Resource estimation was completed in Datamine Studio by Kapan's
assumptions, including treatment of extreme grade values, domaining, geological department
interpolation parameters and maximum distance of extrapolation from data
points. If a computer assisted estimation method was chosen include a The wireframes were prepared in Leapfrog Geo
description of computer software and parameters used.
The grades were interpolated by Ordinary Kriging
The availability of check estimates, previous estimates and/or mine production
records and whether the Mineral Resource estimate takes appropriate account of Top-cuts were applied for each vein (based on statistical analysis).
such data.
The search radii were defined by variogram modelling of veins
The assumptions made regarding recovery of by-products.
The estimate was constrained into the hard boundary of the mineralization
Estimation of deleterious elements or other non-grade variables of economic interpretation
significance (eg sulphur for acid mine drainage characterisation).
Parent cell dimensions are 4m*4m*4m, with minimum sub-celling dimensions
In the case of block model interpolation, the block size in relation to the 0.1m*0.1m*0.1m
average sample spacing and the search employed.
The composite length is 1m
Any assumptions behind modelling of selective mining units.
The validation methods currently show high level of correspondence between
Any assumptions about correlation between variables. resource model and the actual data, and are done via visual inspection,
preparation of Q-Q and swath plots.
Description of how the geological interpretation was used to control the
resource estimates. Comparison with previous Mineral Resource estimates
Discussion of basis for using or not using grade cutting or capping. Reconciliation that includes comparing forecasted data and measurements in
different phases of mining process
The process of validation, the checking process used, the comparison of model
data to drill hole data, and use of reconciliation data if available.
Mineral Inventory (depleted) up to 09-2022:
Class Mt SG (g/cm(3) ) AuEq (g/t) AuEq (koz)
Meas 0.646 2.75 8.9 185
Ind 5.627 2.76 5.3 958
M& I 6.273 2.76 5.7 1 143
Inf 6.790 2.78 4.5 975
Total 13.063 2.77 5.0 2 118
AuEq=Au+Ag*21.8/1750+Cu*8300*31.1035/175000+Zn*2950*31.1035/17500
Moisture Whether the tonnages are estimated on a dry basis or with natural moisture, Tonnage is reported on dry basis
and the method of determination of the moisture content.
Cut-off parameters The basis of the adopted cut-off grade(s) or quality parameters applied.
The Reasonable Prospects for Eventual Economic Extraction of the Mineral
Inventory was conducted via Mine Shape Optimization (MSO) run. Cut-off grade
of 2.1 g/t AuEq was applied.
Mining factors or assumptions Assumptions made regarding possible mining methods, minimum mining dimensions The Resource model is based on geology.
and internal (or, if applicable, external) mining dilution. It is always
necessary as part of the process of determining reasonable prospects for The reasonable prospects for eventual economic extraction were achieved by
eventual economic extraction to consider potential mining methods, but the running Mineable Stope Optimization (MSO) and reported is Resource is
assumptions made regarding mining methods and parameters when estimating constrained by the MSO. The MSO parameters are in accordance with the
Mineral Resources may not always be rigorous. Where this is the case, this selective mining method planned to be implemented.
should be reported with an explanation of the basis of the mining assumptions
made.
COG_AuEq_ppm 2.1 ppm
Used AuEq_formula AUEQV=AU+AG/80+CU/0.6779+ZN/1.9072
Ore body dip MMU (MSO)
80(o)-90(o) 1.2m
70(o)-80(o) 1.8m
< 70(o) 2.2m
Development overbreak 0%
Production Stope overbreak:
First mining sublevel 5%
Middle sublevel 10%
Bottom sublevel 15%
Kapan's 2022 Mineral Resource is:
Class Mt SG (g/cm3 ) AuEq (g/t) AuEq (koz)
Meas 0.341 2.76 12.1 132
Ind 2.261 2.77 8.1 590
M& I 2.602 2.77 8.6 722
Inf 1.864 2.77 6.5 389
AuEq=AU+AG*21.8/1750+CU*8300*31.1035/175000+ZN*2950*31.1035/17500
Metallurgical factors or assumptions The basis for assumptions or predictions regarding metallurgical amenability. The metal recovery data is as follows:
It is always necessary as part of the process of determining reasonable
Process recovery Units 2017 2018 2019 2020 2021
prospects for eventual economic extraction to consider potential metallurgical Au recovery (all con) % 83.6 76.2 79.7 73.1 75.5
methods, but the assumptions regarding metallurgical treatment processes and Ag recovery (all con) % 83 80.9 82.4 82.2 82.5
parameters made when reporting Mineral Resources may not always be rigorous. Cu recovery (Cu con) % 86.4 83.6 86.4 87 85.2
Where this is the case, this should be reported with an explanation of the Zn recovery (Zn con) % 81.9 77.4 80.2 76.4 71.1
basis of the metallurgical assumptions made.
Extraction of Au at refining % 91
Extraction of Ag at refining % 84
Extraction of Cu at refining % 94
Extraction of Zn at refining % 85
Metal recovery is not directly applied in the reported Resource.
Environmental factors or assumptions Assumptions made regarding possible waste and process residue disposal There are no known factors which may inhibit the extraction of the Resource
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 determined. If assumed, the basis for the assumptions. If Currently the density estimation is using polynomial regression model based on
determined, the method used, whether wet or dry, the frequency of the modelled sulphur grade:
measurements, the nature, size and representativeness of the samples.
If S >= 19.8 %, Density == exp [0.2587x + 0.4835], for x = ln (S grades)
The bulk density for bulk material must have been measured by methods that
adequately account for void spaces (vugs, porosity, etc), moisture and If S > 1 and S <19.8%, Density == exp [0.0114169x6 - 0.0891652x5 +
differences between rock and alteration zones within the deposit. 0.26951043x4 + 0.38060004x3 + 0.23832052x2 + 0.0052027x + 0.9070334], for x =
ln (S grades)
Discuss assumptions for bulk density estimates used in the evaluation process
of the different materials. If S<1, Density = 2.65 g/cm3
In dykes Density = 2.65 g/cm3
This approach is considered as slightly conservative scenario for density
assessment.
Classification The basis for the classification of the Mineral Resources into varying The model is classified according to the quantity and quality of the data.
confidence categories.
The Measured Mineral Resource category was assigned to portions of the ore
Whether appropriate account has been taken of all relevant factors (ie bodies in the following cases:
relative confidence in tonnage/grade estimations, reliability of input data,
confidence in continuity of geology and metal values, quality, quantity and In the areas of current mine development workings, informed by both channel
distribution of the data). sampling data and drilling data and where the data spacing is less than 20x20
m.
Whether the result appropriately reflects the Competent Person's view of the
deposit.
The Indicated category was assigned to the portions of the ore bodies in the
following cases:
- In the areas with the exploration grid spacing
up to 20×20 m, provided there was enough confidence in the continuity of the
ore body mineralization between the drill holes.
- In the areas of extrapolation to up to 30 m
distance from the last sublevel drift in down-dip/up-dip direction of the ore
body, provided there was enough confidence in the continuity of its
mineralization. The intersections of extrapolation areas by exploration drill
holes are not required in this case.
- In the areas of extrapolation to up to 30 m
distance from the last sublevel drift in the downdip /up-dip direction of the
ore body. In case of any doubts in continuity of this ore body mineralization,
the exploration grid spacing of not more than 20-30 m is required to classify
the mineralization as an Indicated Mineral Resource.
The Inferred category was assigned to the portions of the ore bodies if they
could not be classified as an Indicated Mineral Resource.
Audits or reviews The results of any audits or reviews of Mineral Resource estimates. No external audits or reviews were conducted for MRE 2022
Discussion of relative accuracy/ confidence Where appropriate a statement of the relative accuracy and confidence level in The effective date of the Resource is 01.09.2022
the Mineral Resource estimate using an approach or procedure deemed
appropriate by the Competent Person. For example, the application of Model estimates were checked by QQ plots, swath plots, and by comparing the
statistical or geostatistical procedures to quantify the relative accuracy of volumes of the wireframes and the block model, statistically and visually.
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.
AuEq=Au+Ag*21.8/1750+Cu*8300*31.1035/175000+Zn*2950*31.1035/17500
Moisture
Whether the tonnages are estimated on a dry basis or with natural moisture,
and the method of determination of the moisture content.
Tonnage is reported on dry basis
Cut-off parameters
The basis of the adopted cut-off grade(s) or quality parameters applied.
The Reasonable Prospects for Eventual Economic Extraction of the Mineral
Inventory was conducted via Mine Shape Optimization (MSO) run. Cut-off grade
of 2.1 g/t AuEq was applied.
Mining factors or assumptions
Assumptions made regarding possible mining methods, minimum mining dimensions
and internal (or, if applicable, external) mining dilution. It is always
necessary as part of the process of determining reasonable prospects for
eventual economic extraction to consider potential mining methods, but the
assumptions made regarding mining methods and parameters when estimating
Mineral Resources may not always be rigorous. Where this is the case, this
should be reported with an explanation of the basis of the mining assumptions
made.
The Resource model is based on geology.
The reasonable prospects for eventual economic extraction were achieved by
running Mineable Stope Optimization (MSO) and reported is Resource is
constrained by the MSO. The MSO parameters are in accordance with the
selective mining method planned to be implemented.
COG_AuEq_ppm 2.1 ppm
Used AuEq_formula AUEQV=AU+AG/80+CU/0.6779+ZN/1.9072
Ore body dip MMU (MSO)
80(o)-90(o) 1.2m
70(o)-80(o) 1.8m
< 70(o) 2.2m
Development overbreak 0%
Production Stope overbreak:
First mining sublevel 5%
Middle sublevel 10%
Bottom sublevel 15%
Kapan's 2022 Mineral Resource is:
Class Mt SG (g/cm3 ) AuEq (g/t) AuEq (koz)
Meas 0.341 2.76 12.1 132
Ind 2.261 2.77 8.1 590
M & I 2.602 2.77 8.6 722
Inf 1.864 2.77 6.5 389
AuEq=AU+AG*21.8/1750+CU*8300*31.1035/175000+ZN*2950*31.1035/17500
Metallurgical factors or assumptions
The basis for assumptions or predictions regarding metallurgical amenability.
It is always necessary as part of the process of determining reasonable
prospects for eventual economic 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.
The metal recovery data is as follows:
Process recovery Units 2017 2018 2019 2020 2021
Au recovery (all con) % 83.6 76.2 79.7 73.1 75.5
Ag recovery (all con) % 83 80.9 82.4 82.2 82.5
Cu recovery (Cu con) % 86.4 83.6 86.4 87 85.2
Zn recovery (Zn con) % 81.9 77.4 80.2 76.4 71.1
Extraction of Au at refining % 91
Extraction of Ag at refining % 84
Extraction of Cu at refining % 94
Extraction of Zn at refining % 85
Metal recovery is not directly applied in the reported Resource.
Environmental factors or assumptions
Assumptions made regarding possible 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.
There are no known factors which may inhibit the extraction of the Resource
Bulk density
Whether assumed or determined. If assumed, the basis for the assumptions. If
determined, the method used, 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.
Currently the density estimation is using polynomial regression model based on
modelled sulphur grade:
If S >= 19.8 %, Density == exp [0.2587x + 0.4835], for x = ln (S grades)
If S > 1 and S <19.8%, Density == exp [0.0114169x6 - 0.0891652x5 +
0.26951043x4 + 0.38060004x3 + 0.23832052x2 + 0.0052027x + 0.9070334], for x =
ln (S grades)
If S<1, Density = 2.65 g/cm3
In dykes Density = 2.65 g/cm3
This approach is considered as slightly conservative scenario for density
assessment.
Classification
The basis for the classification of the Mineral Resources into varying
confidence categories.
Whether appropriate account has been taken of all relevant factors (ie
relative confidence in tonnage/grade estimations, reliability of input data,
confidence in continuity of geology and metal values, quality, quantity and
distribution of the data).
Whether the result appropriately reflects the Competent Person's view of the
deposit.
The model is classified according to the quantity and quality of the data.
The Measured Mineral Resource category was assigned to portions of the ore
bodies in the following cases:
In the areas of current mine development workings, informed by both channel
sampling data and drilling data and where the data spacing is less than 20x20
m.
The Indicated category was assigned to the portions of the ore bodies in the
following cases:
- In the areas with the exploration grid spacing
up to 20×20 m, provided there was enough confidence in the continuity of the
ore body mineralization between the drill holes.
- In the areas of extrapolation to up to 30 m
distance from the last sublevel drift in down-dip/up-dip direction of the ore
body, provided there was enough confidence in the continuity of its
mineralization. The intersections of extrapolation areas by exploration drill
holes are not required in this case.
- In the areas of extrapolation to up to 30 m
distance from the last sublevel drift in the downdip /up-dip direction of the
ore body. In case of any doubts in continuity of this ore body mineralization,
the exploration grid spacing of not more than 20-30 m is required to classify
the mineralization as an Indicated Mineral Resource.
The Inferred category was assigned to the portions of the ore bodies if they
could not be classified as an Indicated Mineral Resource.
Audits or reviews
The results of any audits or reviews of Mineral Resource estimates.
No external audits or reviews were conducted for MRE 2022
Discussion of relative accuracy/ confidence
Where appropriate a statement of the relative accuracy and confidence level in
the Mineral Resource estimate using an approach or procedure deemed
appropriate by the Competent Person. For example, the application of
statistical or 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.
The effective date of the Resource is 01.09.2022
Model estimates were checked by QQ plots, swath plots, and by comparing the
volumes of the wireframes and the block model, statistically and visually.
JORC CODE, 2012 EDITION - TABLE 1 REPORT
Section 4 Estimation and Reporting of Ore Reserves
Criteria JORC Code explanation Commentary
Mineral Resource estimate for conversion to Ore Reserves · Description of the Mineral Resource estimate used as a basis · The Mineral Resource Estimate was produced by Mr Dimitar
for the conversion to an Ore Reserve. Dimitrov, Senior VP Exploration of Chaarat, with an effective date of 1
September 2022 as described in Section 3.
· Clear statement as to whether the Mineral Resources are
reported additional to, or inclusive of, the Ore Reserves. · The Mineral Resources are reported inclusive of the Ore
Reserves.
Site visits · Comment on any site visits undertaken by the Competent Person · A site visit, of four days, was undertaken by the Ore
and the outcome of those visits. Reserves Competent Person (CP), Mr James Town of AMC Consultants (UK) Limited,
in July 2019.
· If no site visits have been undertaken indicate why this is
the case. · No recent site visits have been undertaken due to
security-related travel restrictions.
Study status · The type and level of study undertaken to enable Mineral · Kapan Mine has been operating since 1994 and at full
Resources to be converted to Ore Reserves. production for more than 15 years. Information gathered during the production
period has been used to update and inform the current Ore Reserve. Production,
· The Code requires that a study to at least Pre-Feasibility sales, and other data from the previous five years were used as a basis for
Study level has been undertaken to convert Mineral Resources to Ore Reserves. assessing the ore reserve calculation.
Such studies will have been carried out and will have determined a mine plan
that is technically achievable and economically viable, and that material · The Ore Reserve is based on the life-of-mine design generated
Modifying Factors have been considered. by the Mine Technical Services Department (effective date of 1 January 2023),
which has been reviewed by AMC.
· AMC produced a schedule and cost model based on the data
provided by Chaarat.
Cut-off parameters · The basis of the cut-off grade(s) or quality parameters · Cut-off grades are calculated using a gold equivalent (AuEq)
applied. calculation using the revenue contributions of the four payable metals Au, Ag,
Cu, and Zn.
· The AuEq calculation includes all site operating costs
associated with the mine, process plant, and G&A along with royalties,
transport and concentrate treatment, and refining charges and penalties.
· Mining areas are considered for inclusion in the Ore Reserve
if the diluted AuEq is greater than, or equal to, 2.3 g/t AuEq.
Mining factors or assumptions · The method and assumptions used as reported in the · Ore Reserves are based on an operating mine design generated
Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore by the on-site technical staff, which has been reviewed by AMC.
Reserve (i.e. either by application of appropriate factors by optimisation or
by preliminary or detailed design). · The mining method used is long-hole open-stoping, which is an
appropriate method for the narrow-vein deposit. The mining method has been
· The choice, nature and appropriateness of the selected mining refined with operational experience.
method(s) and other mining parameters including associated design issues such
as pre-strip, access, etc. · Grade control consists of pre-development diamond drilling at
approximately 20 m spacing followed by mapping and face channel sampling at
· The assumptions made regarding geotechnical parameters (eg approximately 4 m spacing during vein drive development. All samples are
pit slopes, stope sizes, etc), grade control and pre-production drilling. processed at the on-site laboratory with 5% control samples sent to external
international laboratories.
· The major assumptions made and Mineral Resource model used
for pit and stope optimisation (if appropriate). · SRK completed a geotechnical study in 2013, from which site
geotechnical personnel have developed procedures with operational experience.
· The mining dilution factors used. All development headings and stopes are assessed before and during development
by the Geotechnical Engineer and have geotechnical specifications detailing
· The mining recovery factors used. support requirements.
· Any minimum mining widths used. · Individual stopes have a maximum length of 80 m and maximum
height of 18 m, with a maximum of three stopes forming a panel between a crown
· The manner in which Inferred Mineral Resources are utilised pillar, with surface and sill pillars between levels.
in mining studies and the sensitivity of the outcome to their inclusion.
· A minimum mining width of 2.2 m has been applied to the Ore
· The infrastructure requirements of the selected mining Reserve using Mineable Shape Optimizer™ (MSO).
methods.
· Current mining areas are accessed via portals located at the
south of the deposit and multiple declines located across the deposit.
· Dilution is accounted for in the Ore Reserve on a
vein-by-vein basis, based on geometry and historic production statistics. The
average dilution factors in the Ore Reserve are:
― Primary mining dilution (minimum mining width): 54%.
― Secondary mining dilution (unplanned in stope): 9%.
· Mining losses are estimated to be 2% of the Ore Reserve.
· Inferred and Unclassified Mineral Resources were treated as
waste dilution.
Metallurgical factors or assumptions · The metallurgical process proposed and the appropriateness of · Gold and zinc concentrates are produced through conventional
that process to the style of mineralisation. crushing, grinding, flotation, thickening, and filtration.
· Whether the metallurgical process is well-tested technology · The process is well-tested and has been in operation at Kapan
or novel in nature. for more than 15 years.
· The nature, amount and representativeness of metallurgical · The process plant has two primary jaw crushers capable of
test work undertaken, the nature of the metallurgical domaining applied and crushing 2 Mtpa. The grinding and flotation circuits have a maximum capacity
the corresponding metallurgical recovery factors applied. of approximately 900 ktpa.
· Any assumptions or allowances made for deleterious elements. · Metallurgical recoveries are based on historical plant
performance data.
· The existence of any bulk sample or pilot scale test work and
the degree to which such samples are considered representative of the orebody · The Ore Reserve is based on the Mineral Resource Estimate
as a whole. which includes individual estimation parameters for the payable metals Au, Ag,
Cu, and Zn; and as such, is appropriate to the mineralogy being processed.
· For minerals that are defined by a specification, has the ore
reserve estimation been based on the appropriate mineralogy to meet the · Operational metallurgical testwork is carried out daily at
specifications? the plant metallurgical test laboratory.
· Deleterious elements Pb and S are also modelled in the
Mineral resource model; however, with the current mining locations and for the
remainder of the mine plan, the grades are not high enough to warrant
corrective measures in the process plant.
Environmental · The status of studies of potential environmental impacts of · Chaarat possesses the required permits and planning
the mining and processing operation. Details of waste rock characterisation permissions to effectively operate the Kapan Mine, in accordance with Armenian
and the consideration of potential sites, status of design options considered environmental regulations.
and, where applicable, the status of approvals for process residue storage and
waste dumps should be reported. · To the best of the CP's knowledge, all sites for waste rock
and process tailings and their design and construction have complied with all
environmental regulations, permits, and recommendations.
Infrastructure · The existence of appropriate infrastructure: availability of · All infrastructure required for the processing and mining of
land for plant development, power, water, transportation (particularly for ore is in place and has been in place since exploration of the deposit in
bulk commodities), labour, accommodation; or the ease with which the Soviet times (1980s). The mine is located adjacent to the town of Kapan on the
infrastructure can be provided, or accessed. main trunk-road connecting southern Armenia to the capital city, Yerevan.
Costs · The derivation of, or assumptions made, regarding projected · Operating costs are based on site operating costs. AMC has
capital costs in the study. reviewed historical cost reports including copies of major contractor
invoices.
· The methodology used to estimate operating costs.
· Treatment and refining costs are based on current concentrate
· Allowances made for the content of deleterious elements. sales terms. AMC has reviewed historical gold and zinc concentrate sales
invoices to confirm the inputs used in the calculations.
· The source of exchange rates used in the study.
· Penalty elements are accounted for in the concentrate
· Derivation of transportation charges. treatment charges.
· The basis for forecasting or source of treatment and refining · Government royalties are included at 6% of NSR.
charges, penalties for failure to meet specification, etc.
· The allowances made for royalties payable, both Government
and private.
Revenue factors · The derivation of, or assumptions made regarding revenue · Head grades are based on the block model generated by Chaarat
factors including head grade, metal or commodity price(s) exchange rates, in September 2022.
transportation and treatment charges, penalties, net smelter returns, etc.
· Revenue has been based on metal prices of USD1,850/oz Au,
· The derivation of assumptions made of metal or commodity USD21.8/oz Ag, USD8,500/t Cu and USD3,000/t Zn applied to the concentrate
price(s), for the principal metals, minerals and co-products. sales terms. These figures are representative of economic forecasts for the
period.
· Transportation, treatment charges and penalties for both gold
and zinc concentrates are accounted for in the AuEq cut-off grade calculation.
Market assessment · The demand, supply and stock situation for the particular · Chaarat has agreements with long-term established customers
commodity, consumption trends and factors likely to affect supply and demand for concentrate sales.
into the future.
· Gold concentrate is sold to Industrial Minerals in Montreal,
· A customer and competitor analysis along with the Canada. Gold concentrate is bagged on-site, loaded into containers and
identification of likely market windows for the product. transported by road to Poti, Georgia. From Poti, the containers are
sea-freighted to Montreal, Canada.
· Price and volume forecasts and the basis for these forecasts.
· Zinc concentrate is sold to Trafigura in Antwerp, Belgium.
· For industrial minerals the customer specification, testing Zinc concentrate is bagged on-site, loaded into containers and transported by
and acceptance requirements prior to a supply contract. road to Poti, Georgia. From Poti, the containers are sea-freighted to Antwerp.
Economic · The inputs to the economic analysis to produce the net • No separate NPVs have been generated as part of the Ore Reserves
present value (NPV) in the study, the source and confidence of these economic determination; however, all material contained within the reserve is deemed to
inputs including estimated inflation, discount rate, etc. generate positive cashflow based on the economic input parameters.
· NPV ranges and sensitivity to variations in the significant • A life of mine plan (LOMP) has been generated from the December 2021
assumptions and inputs. mine design. Analysis of the LOMP physicals within the current Chaarat
financial model has been shown to yield a net positive cashflow and NPV.
Social · The status of agreements with key stakeholders and matters · To the best of the CP's knowledge, all agreements with the
leading to social licence to operate. local authorities are in place and are current with all key stakeholders.
Other · To the extent relevant, the impact of the following on the · To the best of the CP's knowledge, Chaarat is currently
project and/or on the estimation and classification of the Ore Reserves: compliant with all legal and regulatory requirements and there is no reason to
assume any further government or local council permits, licences, or statutory
· Any identified material naturally occurring risks. approvals will not be granted, if required.
· The status of material legal agreements and marketing
arrangements.
· The status of governmental agreements and approvals critical
to the viability of the project, such as mineral tenement status, and
government and statutory approvals. There must be reasonable grounds to expect
that all necessary Government approvals will be received within the timeframes
anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss
the materiality of any unresolved matter that is dependent on a third party on
which extraction of the reserve is contingent.
Classification · The basis for the classification of the Ore Reserves into · The Ore Reserves have been broken down into Proved and
varying confidence categories. Probable categories as per JORC Code (2012) guidelines.
· Whether the result appropriately reflects the Competent · It is the CP's opinion that the Ore Reserves reflect the
Person's view of the deposit. deposit accurately given the current level of geological and geotechnical
knowledge.
· The proportion of Probable Ore Reserves that have been
derived from Measured Mineral Resources (if any). · No Probable Ore Reserves have been derived from Measured
Mineral Resources.
· Inferred resources have not been included in the Ore Reserve.
Audits or reviews · The results of any audits or reviews of Ore Reserve · The Competent Person completed a "best practices" review of
estimates. the mine planning as part of the Ore Reserves.
· The Ore Reserve has been peer-reviewed internally and is in
line with current industry standards.
Discussion of relative accuracy/ confidence · Where appropriate a statement of the relative accuracy and • Kapan Mine is in production and has more than 15 years of historic
confidence level in the Ore Reserve estimate using an approach or procedure process production data and costs.
deemed appropriate by the Competent Person. For example, the application of
statistical or geostatistical procedures to quantify the relative accuracy of • The deposit is well-understood by the on-site technical team which
the reserve within stated confidence limits, or, if such an approach is not consists of locals with long-term experience of the deposit.
deemed appropriate, a qualitative discussion of the factors which could affect
the relative accuracy and confidence of the estimate. • Owner and contractor costs are based on current actual costs.
· The statement should specify whether it relates to global or • All modifying factors have been applied to the Ore Reserves with
local estimates, and, if local, state the relevant tonnages, which should be updated dilution parameters for each individual vein based on widths and
relevant to technical and economic evaluation. Documentation should include geotechnical assessments.
assumptions made and the procedures used.
• Work is ongoing on-site to reconcile and better-account for
· Accuracy and confidence discussions should extend to specific unplanned mining dilution.
discussions of any applied Modifying Factors that may have a material impact
on Ore Reserve viability, or for which there are remaining areas of • Geological mapping and survey of vein drives is supporting the
uncertainty at the current study stage. validity of the resource model to a level of confidence consistent with Ore
Reserve reporting.
· It is recognised that this may not be possible or appropriate
in all circumstances. These statements of relative accuracy and confidence of • Historical mine-to-mill reconciliation on an annual and quarterly
the estimate should be compared with production data, where available. basis supports the validity of the resource model to a level of confidence
consistent with Ore Reserve reporting.
• Current AuEq cut-off grade practice at the mine might have an impact
on mining areas where grade variations in different metals are encountered.
AMC recommends development of a net smelter return (NSR) based valuation and
cut-off grade calculation for use in future Ore Reserves.
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