REG - Chaarat Gold Hlgs Ld - Tulkubash Reserve and Resource Update
24/05/2022 07:16
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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
(https://www.chaarat.com/wp-content/uploads/2021/11/211116-Tulkubash-exploration-release-FINAL-Web.pdf)
.
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")
Classification Tonnes (Mt) Au (g/t) Metal (Oz)
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 Au) Contained 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
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
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 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 2.55
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 % 14.0*
* Sliding scale royalty appropriate at Au prices of $1,501-$1,600/oz
Gold recovery for the updated Reserve averaged 73%. Recovery was estimated on
a block-by-block basis using oxidation state and extractions derived from
metallurgical test work. The improvement in recovery from the 2021 FS was due
to the inclusion of more, highly oxidized material from the Mid and East Zones
in the reserve.
Optimisation Results
The results of the pit optimization indicated that a gold price of $1,350/oz
produced the highest value shell with the lowest risk. The shell was composed
of seven separate entities, collectively containing 21.8 Mt ore at a grade of
0.97 g/t Au and a strip ratio of 2.9:1. This pit shell was selected as the
basis for developing minable pit designs.
Mine Design
The shell for each separate pit was used to guide a computer-aided, manual
design process. Constructible features such as ramps and safety benches were
designed within the optimised pit limits to turn the three-dimensional surface
into a minable pit design. The result of the pit design process was an ore
reserve within 5% of the optimised minable resource.
The tonnage and grade in the minable pits, was adjusted for mining dilution
and ore losses expected from the mining process. Mining dilution was
calculated directly from the block model along the ore/waste contacts. Average
dilution was estimated at 10% and varied from zone to zone. Ore losses from
mining were applied at 2.5%.
Glossary of Technical Terms
"Ag" chemical symbol for silver
"Au" chemical symbol for gold
"AuEq" the value of a tonne of mineralised material calculated by summing the value
of each contained payable metal and expressing it as an equivalent gold
content at a given set of metals prices
"Cu" the chemical symbol for copper
"cut-off" the lowest grade value that is included in a Resource statement. It must
comply with JORC requirement 19: "reasonable prospects for eventual economic
extraction" the lowest grade, or quality, of mineralised material that
qualifies as economically mineable and available in a given deposit. It may be
defined on the basis of economic evaluation, or on physical or chemical
attributes that define an acceptable product specification
"g/t" grammes per tonne, equivalent to parts per million
"Inferred Resource" that part of a Mineral Resource for which tonnage, grade and mineral content
can be estimated with a low level of confidence. It is inferred from
geological evidence and assumed but not verified geological and/or grade
continuity. It is based on information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drill holes
which may be limited or of uncertain quality and reliability
"Indicated Resource" that part of a Mineral Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a reasonable
level of confidence. It is based on exploration, sampling and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drill holes. The locations are too
widely or inappropriately spaced to confirm geological and/or grade continuity
but are spaced closely enough for continuity to be assumed
"JORC" The Australasian Joint Ore Reserves Committee Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves 2012 (the "JORC Code"
or "the Code"). The Code sets out minimum standards, recommendations and
guidelines for Public Reporting in Australasia of Exploration Results, Mineral
Resources and Ore Reserves
"koz" thousand troy ounces of gold
"Measured Resource" that part of a Mineral Resource for which tonnage, densities, shape, physical
characteristics, grade and mineral content can be estimated with a high level
of confidence. It is based on detailed and reliable exploration, sampling and
testing information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes. The locations are
spaced closely enough to confirm geological and grade continuity
"Mineral Resource" a concentration or occurrence of material of intrinsic economic interest in or
on the Earth's crust in such form, quality and quantity that there are
reasonable prospects for eventual economic extraction. The location, quantity,
grade, geological characteristics and continuity of a Mineral Resource are
known, estimated or interpreted from specific geological evidence and
knowledge. Mineral Resources are sub-divided, in order of increasing
geological confidence, into Inferred, Indicated and Measured categories when
reporting under JORC
"Mt" million tonnes
"oz" troy ounce (= 31.103477 grammes)
"Pb" the chemical symbol for lead
"Probable Reserve" the part of Indicated and in some cases Measured Resource that can be mined at
a profit. It includes diluting materials and allowances for losses that may
occur during mining.
"Proven Reserve" the part of Indicated Measured Resource that can be mined at a profit. It
includes diluting materials and allowances for losses that may occur during
mining.
"Ore Reserves" the part of a Measured and/or Indicated Mineral Resource that can be mined at
a profit. Ore Reserves are subdivided in order of increasing confidence into
Probable and Proven categories when reporting under JORC.
"t" tonne (= 1 million grammes)
"Zn" the chemical symbol for zinc
Appendix 1: JORC_Table
JORC Code, 2012 Edition - Table 1 report template
Section 1 Sampling Techniques and Data
Criteria JORC Code explanation Commentary
Sampling techniques · Nature and quality of sampling (eg cut channels, random chips, or · Sampling comprises predominantly wireline diamond drilling core,
specific specialized industry standard measurement tools appropriate to the along with channel sampling from trenches, road cuts and underground adit.
minerals under investigation, such as down hole gamma sondes, or handheld XRF Limited RC drilling program was completed in 2020 as well
instruments, etc). These examples should not be taken as limiting the broad
meaning of sampling. · Data from the surface trenches, road cuts and underground adit has
been used during the interpretation of the mineralization, but was excluded
· Include reference to measures taken to ensure sample representivity from interpolation process
and the appropriate calibration of any measurement tools or systems used.
· Core was drilled through the full expected mineralization
· Aspects of the determination of mineralization that are Material to intersection, as normal to the strike and dip as possible
the Public Report.
· All drilling is diamond core, standard or triple-tube, predominantly
· In cases where 'industry standard' work has been done this would be at HQ diameter. Half core, cut along the core axis, has been used for sampling
relatively simple (eg 'reverse circulation drilling was used to obtain 1 m
samples from which 3 kg was pulverised to produce a 30 g charge for fire · All the trench and road cut sampling were done with ordinary hammer,
assay'). In other cases more explanation may be required, such as where there following marked sample boundaries
is coarse gold that has inherent sampling problems. Unusual commodities or
mineralisation types (eg submarine nodules) may warrant disclosure of detailed · The average down-hole sample length is 1.5m, the average trench and
information. road cut sample length is 2.0m
· The average sample weight is approx. between 4-6 kg
· 1.0 m samples were collected from a cyclone, using a riffle splitter,
during the RC drilling process
· Samples were split along the major lithological breaks
· All the sampling practices are meeting the industry standards
· Handled XRF instrument was also available, and certain data from core
and road cut measurements made through the exploration activities is available
as well, although this data is not used directly for the current mineral
assessment
Drilling techniques · Drill type (e.g. core, reverse circulation, open-hole hammer, rotary · Almost, only diamond core drilling was conducted in Tulkubash
air blast, auger, Bangka, sonic, etc.) and details (e.g. core diameter, triple project, except 2020 campaign, when limited RC drilling was completed
or standard tube, depth of diamond tails, face-sampling bit or other type,
whether core is oriented and if so, by what method, etc.). · All the available drilling is included in MRE_update_21, 729 holes
with total length of 102,406.2m (incl. 24 holes / 2,760.3m at 2021 and 21 RC
holes - 2,434.3m at 2020)
· Additional 13 orientated, geotechnical holes (completed at 2021),
with a total length of 1,549.9m are providing structural and lithological
data, but were not included in the current Resource modelling
· HQ was used as a major drilling diameter, PQ (at the hole upper
levels and NQ at the hole deeper zones) were also sporadically used, aiming to
guarantee best drilling performance in fractured host rock
· 124mm drilling diameter was used in the RC drilling
· For better core recovery triple - tube was used in the critical areas
· The majority of the drilling is inclined, SE or NW orientated, aiming
to intercept the expected mineralization strike as normal as possible
· Overall, no orientation was applied in the drilling campaigns,
although more than 3,300 orientated structural measurements are available
after the geotechnical drilling, in Main Pit area
· The used drilling equipment was in good condition, provided and
operated by local subcontractor with wide experience in central Asia region
· All drilling procedures are meeting the industry standards
Drill sample recovery · Method of recording and assessing core and chip sample recoveries and · Core recovery is logged as percent of the core recovery length VS
results assessed. drill run length, and it is measured by company's geologists and technicians,
directly in the core boxes, immediately after the core is transported to the
· Measures taken to maximize sample recovery and ensure representative field core shed
nature of the samples.
· Through the drilling process, in an attempt to maximize the core
· Whether a relationship exists between sample recovery and grade and recovery were used triple - core tube and additive drilling muds
whether sample bias may have occurred due to preferential loss/gain of
fine/coarse material. · Overall diamond core recovery is above 90%
· RC drilling recovery is approx. 80% (based on the recovery weights)
· The average down-hole sample length is 1.5m (1m for RC)
· The average trench / road cut sample length is 2.0m
· All samples were split along the observed major lithological breaks
· There doesn't appear to be a relationship bias between grade and
length, or sample weight and recovery
· All sampling practices are meeting the industry standards
Logging · Whether core and chip samples have been geologically and · The implemented core logging protocol is documented: lithology,
geotechnically logged to a level of detail to support appropriate Mineral hydrothermal alteration, oxidation stage, degree of fracturing,
Resource estimation, mining studies and metallurgical studies. mineralization, structures, RQD, core recovery, and RMR based logging for the
geotechnical holes. Entire core is regularly photographed.
· Whether logging is qualitative or quantitative in nature. Core (or
costean, channel, etc) photography. · Total length of the logged drill holes is 103, 956.2m (including
geotechnical)
· The total length and percentage of 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 preparation · If core, whether cut or sawn and whether quarter, half or all core · All of the drilled core is sampled, except the initial diluvium /
taken. alluvium zones
· If non-core, whether riffled, tube sampled, rotary split, etc and · All intact core samples are cut along its long axis, using core saw,
whether sampled wet or dry. half core is packed in a labelled polyethylene bag, weighted, and further
transported to laboratory for sample preparation and assaying. In case of
· For all sample types, the nature, quality and appropriateness of the intensively fractured zones, samples are taken with trowel
sample preparation technique.
· All in situ bedrock, outcropped in trenches and new road cuts were
· Quality control procedures adopted for all sub-sampling stages to sampled as well
maximize representivity of samples.
· Rock density measurements are using field Archimedes' principle,
· Measures taken to ensure that the sampling is representative of the approach with wax. Density sampling was designed as per 1 sample (approx. 10
in situ material collected, including for instance results for field cm) for each 5 meters (at 2021) and 1 sample per each 20m in the historical
duplicate/second-half sampling. 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
· Whether sample sizes are appropriate to the grain size of the drilling is not providing intact material
material being sampled.
· The collection of geological data meets the industrial standards
Quality of assay data and laboratory tests · The nature, quality and appropriateness of the assaying and · Samples collected from 2007 to 2014 were prepared and assayed at IRC
laboratory procedures used and whether the technique is considered partial or Laboratory in Karla Balta, Kyrgyzstan.
total.
· Sample collected from 2017 to 2019 were prepared and analysed at ALS
· For geophysical tools, spectrometers, handheld XRF instruments, etc, Global (Karla Balta), and referee check samples were sent to SGS Vostok
the parameters used in determining the analysis including instrument make and Limited (Chita, Russa)
model, reading times, calibrations factors applied and their derivation, etc.
· 2020 (RC drilling) and 2021 campaigns were used Steward Assay and
· Nature of quality control procedures adopted (eg standards, blanks, Environmental Laboratories LLC (Karla Balta, Kyrgyzstan). SGS (Chita, Russia)
duplicates, external laboratory checks) and whether acceptable levels of was used for an external control laboratory at 2021 campaign
accuracy (ie lack of bias) and precision have been established.
· Through the sample preparation process, the entire sample is crushed
to passing 90% at 2mm. Two pulps are made by pulverizing to 85% passing 0.075
mm. One pulp is return to the company as duplicate, the second one is
analysed, including:
- Fire assay - lead collection with AA
- Aqua Regia digestion with following ICP-OES reading
- Analyses of Stotal, Ssulphide, Ssulphate, by chemical treatment and LECO,
for certain selected samples (above 0.25 ppm Au)
- LeachWELL analysis for certain selected samples (above 0.25 ppm Au)
· Lower detection limit for Au is 0.05ppm and for Ag is 1ppm
· Assay quality control was achieved using, reference material
(standards, provided by RockLab), blank material (barren sediments), coarse
and pulp duplicates, along with field duplicates (applied in for first time at
2021 campaign), and external laboratory control sampling
· The QA/QC design and results are adequate to support estimation of
Mineral Resource
Verification of sampling and assaying · The verification of significant intersections by either independent · No twin holes have been conducted at Tulkubash area
or alternative company personnel.
· All the assay results are received electronically as an Excel
· The use of twinned holes. spreadsheet, and further incorporated in the database by company's database
manager
· Documentation of primary data, data entry procedures, data
verification, data storage (physical and electronic) protocols. · The access to the database is limited, and only authorized employees
can make corrections in it
· Discuss any adjustment to assay data.
· Prior to data interpretation, the lower detection limits of Au (0.05
ppm) are changed to half of the detection limit (0.025 ppm). In regard to Ag
same formula (half of the lower detection limit) was applied. For the elements
with results restricted by upper detection limit, a conservative formula y =
x*1.01 was applied
· Data entry procedures and QA/QC verification meet the industrial
standards and adequate to support MRE
Location of data points · Accuracy and quality of surveys used to locate drill holes (collar · All collar locations are reported at Gauss Kruger Pulkovo 1942 Zone
and down-hole surveys), trenches, mine workings and other locations used in 12
Mineral Resource estimation.
· The survey is conducted, using Lecia Total Station (centimetre
· Specification of the grid system used. accuracy)
· Quality and adequacy of topographic control. · All the holes have been downhole surveyed, measurements taken between
25 - 50m interval, using REFLEX EZ SHOT tool
· The topographic model is based on satellite data
· Roads, drill sites and other topographic details have been added
after on-the-ground survey made by field survey team
· The quality of the topographic control is adequate for MRE and meet
the industrial standards
Data spacing and distribution · Data spacing for reporting of Exploration Results. · The hole collars are in accordance with existing profiles, designed
perpendicular to the mineralised zones
· Whether the data spacing and distribution is sufficient to establish
the degree of geological and grade continuity appropriate for the Mineral · Main Pit area achieves average distance between the drilling profiles
Resource and Ore Reserve estimation procedure(s) and classifications applied. of 40m
· Whether sample compositing has been applied. · At 2021 campaign, additional infill holes were located in several
most promising clusters at Tulkubash Middle Zone and East Zone, aiming to
upgrade the existing data, and to decrees the average drilling space of these
clusters up to 40m (sufficient to upgrade the Inferred Resource to Indicated)
· Database from trenches, road cuts and adits were used only for the
interpretation process, but excluded from the grade interpolation
· The drilling grid allows to establish grade continuity and estimation
parameters such as average grade and mineralization volume
· Sample compositing of 1.5m was applied prior to interpolation process
(1.0m for the RC drilling)
Orientation of data in relation to geological structure · Whether the orientation of sampling achieves unbiased sampling of · All the exploration holes were designed in attempt to intercept the
possible structures and the extent to which this is known, considering the expected NE strike of the mineralization as normal as possible, and to avoid
deposit type. any sampling biases. The average bearing is SE or NW, with drilling angle
approx. 50 degrees
· If the relationship between the drilling orientation and the
orientation of key mineralised structures is considered to have introduced a
sampling bias, this should be assessed and reported if material.
Sample security · The measures taken to ensure sample security. · The samples are sufficiently secure, with security guards in the
entry, on both - field camp and Malovodnoye core shed
Audits or reviews · The results of any audits or reviews of sampling techniques and data. · The following independent audit was completed out during the entire
period of exploration works at Tulkubsh project:
· SRK consulting (Update of Mineral Resource Estimates, for Chaarat
Gold Project, Kyrgyzstan, Feb. 2010)
· Wardell Armstrong (Tulkubash Resource Modelling, Apr.2011)
· Gustavson Associates (Chaarat Gold Project Resource Estimation, June
2014)
· GeoSystems International (Mineral Resource Update, Jan.2018)
· Tetra Tech (Competent Person Report for Chaarat Gold Project, Kyzrgyz
Republic, Dec.2018)
· Sound Mining (Competent Person's Report on Tulkubash Gold Project,
for Chaarat Gold Holdings Limited, Jan 2019)
· LogiProc (Tulkubash Gold Project Bankable Feasibility Study Update
Report, Aug.2019)
· Wardell Armstrong (Review of Modelling Estimation and Classification,
based on Resource Model, provided by IGT up to June 2020)
· Roscoe Postle Associates Inc. (RPA), part of SLR Consulting (RPA Due
Diligence of Tulkubash Resource Model, based on Resource Model provided by IGT
up to June 2020)
· Institute of Geotechnologies (IGT) (The Tulkubash Gold Project
Mineral Resource Estimate, for Chaarat ZAAV SJSC, Dec. 2020)
Section 2 Reporting of Exploration Results
Criteria JORC Code explanation Commentary
Mineral tenement and land tenure status · Type, reference name/number, location and ownership including · Chaarat ZAAV CJSC (CZ) is established in Kyrgyz Republic, and is
agreements or material issues with third parties such as joint ventures, wholly - owned subsidiary of Chaarat Gold Holding Ltd (Chaarat).
partnerships, overriding royalties, native title interests, historical sites,
wilderness or national park and environmental settings. · CZ is developing Tulkubash Gold Project (Project) located in the
Sandalash Range of the Alatau Mountains in the Chatkal district of the Jalal
· The security of the tenure held at the time of reporting along with Abad region (province) of north-western Kyrgyzstan
any known impediments to obtaining a licence to operate in the area.
· The Property is located at latitude 42°1'6.91" N and longitude
71°9'39.04" E and is close to the border with Uzbekistan. The Project site is
located approximately 300 km southwest of the capital Bishkek, 60 km northeast
of the regional administrative center of Kanysh-Kiya in the Chatkal Valley,
and 300 km by road from the nearest railway station in Shamaldy-Say
· CZ sole holds two licenses, controlling the Property.
· Mining (production) license: #3117AE of 700.03ha, valid to 2032 is
covering defined Mineral Resources of SW part of the Property, which
comprising Main Pit / Middle Zone and East Zone areas.
· Exploration license # 3319AP, valid till October 2023 (including
retain option), with area of 6776 ha is covering prospective ground in NE
direction.
· CZ is obtaining consent of the local state administration and the
local governments of Chatkal Region, required to conduct exploration work
· As per Kyrgyz Republic legislation, land allocation is granted for
subsoil use (e.g. road construction, industrial sites, or other infrastructure
facilities) for the term of license validity
· CZ bear a full legal responsibility for compliance with environmental
requirements under Kyrgyz Republic legislation. CZ is required to obtain
relevant environmental permits, make quarterly payments for environmental
pollution as per Kyrgyz Laws and submit reports on compliance with
environmental requirements
Exploration done by other parties · Acknowledgment and appraisal of exploration by other parties. · Initial reconnaissance commences in Soviet era, in regard with
identified antimony mineralization. Following the breakup of Soviet Union,
Apex Asia in joint venture of Newmont Overseas Ltd complete approx. 1800m
drilling and conduct geophysical survey. After 2002 CZ was formed and have
acquired what is now known as Chaarat Mining License. Till 2021 CZ manage to
confirm the presence of economic gold mineralization in the SW area of the
Property and to opened room for further exploration in NE direction
Geology · Deposit type, geological setting and style of mineralisation. · Chaarat Gold Project (Project) is located within Tien Shan
Metallogenic Belt, a Hercynian fold and thrust belt, with length more than
2,500 km. Tien Shan belt consists of three tectono-stratigraphic units, each
divided by major structural zones, and is thought to represent accretionary
prisms, on the margin of proto-Eurasian continent. The Project is located in
the middle Tien Shan province, made of Ordovician - Carboniferous fragments.
Structurally, the terrain is intensively deformed by pre and post
mineralization structural activities, dominated by SE and NW verging fore /
back thrusts and steep N-NE strike-slip faults. Genetically, the
mineralization system could be reference to "Orogenic" and "Intrusion Related"
types. It has NE strike and is thought to be closely related with structurally
controlled Permian aged magmatism.
· Two main host rock / mineralization types can be outlined in the
deposit. Oxidized type of gold mineralization, hosted in Devonian silicified
sandstones of Tulkubash formation, represented by relatively steep, NE
striking lenses, controlled by series of dilatational jogs.
The second type of mineralization is unoxidized Au zone, containing refractory
gold, hosted in Ordovician flysch complex, dominated by fine-grained black
shales, locally appeared in green-schist facies, and with features of
comprehensive structural deformations and contact metasomatism. Both ore types
are thought to relate to one hydrothermal system, developed in different
facies due to difference in the host rock and the stratigraphic position
· 2021 infill drilling (and Mineral Resource update) was conducted in
Middle Zone and East Zone, which along with Main Pit area are part of the
oxidized Tulkubash mineralization type
Drill hole Information · A summary of all information material to the understanding of the · Appproximately 105 km drilling have been carried out in the Tulkubash
exploration results including a tabulation of the following information for area after 2000, including RC and Geotechnical drilling.
all Material drill holes:
· The 2021 drilling campaign is including approx. 2,760m (shown in the
o easting and northing of the drill hole collar table below), aiming to update the available Resource Model, particularly in
its Middle Zone and East Zone:
o elevation or RL (Reduced Level - elevation above sea level in metres) of
BHID Az DIP East North RL Depth
the drill hole collar DH21T587 140 -55 12680050 4657226 2853 134.6
DH21T588 140 -55 12680084 4657241 2855 163.1
o dip and azimuth of the hole DH21T589 140 -47 12679982 4657121 2781 80.1
DH21T590 140 -50 12680458 4657549 2722 80.7
o down hole length and interception depth DH21T591 140 -55 12680481 4657579 2725 80
DH21T592 135 -55 12680602 4657748 2821 140
o hole length. DH21T593 135 -60 12680894 4658292 3084 175.2
DH21T594 136 -70 12681103 4658543 3117 149.8
· If the exclusion of this information is justified on the basis that DH21T595 135 -50 12680948 4658294 3063 110.2
the information is not Material and this exclusion does not detract from the DH21T597 136 -50 12681105 4658543 3117 71.5
understanding of the report, the Competent Person should clearly explain why DH21T599 135 -60 12680739 4658062 2997 90.5
this is the case. DH21T600 135 -65 12680706 4658090 3021 150.4
DH21T602 135 -50 12680771 4658146 3034 150
DH21T606 95 -55 12681281 4658537 3037 100.2
DH21T609 135 -55 12681179 4658588 3132 80.5
DH21T610 135 -50 12681182 4658740 3129 85
DH21T611 135 -58 12681146 4658608 3146 150.4
DH21T612 135 -60 12681226 4658634 3120 85
DH21T613 135 -50 12680097 4657281 2857 130.2
DH21T614 135 -65 12680042 4657176 2819 120.4
DH21T616 135 -50 12681190 4658682 3139 160
DH21T617 135 -60 12681151 4658663 3156 85.1
DH21T618 136 -50 12681231 4658755 3140 60.2
DH21T619 135 -58 12679996 4657168 2817 127.2
Data aggregation methods · In reporting Exploration Results, weighting averaging techniques, · Middle Zone and East Zone holes done in 2021 were incorporated into
maximum and/or minimum grade truncations (eg cutting of high grades) and existing block model from 2020, aiming to upgrade the Inferred Resources in
cut-off grades are usually Material and should be stated. these areas.
· Where aggregate intercepts incorporate short lengths of high grade · Overall, the results from 2021 exploration campaign, have available
results and longer lengths of low grade results, the procedure used for such grade intercepts, with COG of 0.21g/t, accepted for Tulkubash style
aggregation should be stated and some typical examples of such aggregations mineralization, certain rules are applied. For a maximum length of interval
should be shown in detail. below the COG, but included in the calculations, is considered 6.0m. Each
interval should start and end with sample >= COG. For top cap grade is
· The assumptions used for any reporting of metal equivalent values considered 20 ppm, weighted averaging (length X grades) techniques are used
should be clearly stated. for mean grades calculations
· No Au equivalent was used
Relationship between mineralization widths and intercept lengths · These relationships are particularly important in the reporting of · Middle Zone / East Zone collars are supported by sufficient amount of
Exploration Results. historical data, aiming to avoid any significant fluctuation between the
intercepts and the true width
· If the geometry of the mineralization with respect to the drill hole
angle is known, its nature should be reported.
· If it is not known and only the down hole lengths are reported, there
should be a clear statement to this effect (e.g. 'down hole length, true width
not known').
Diagrams · Appropriate maps and sections (with scales) and tabulations of · Wide variety of 2D and 3D graphics, maps, plots and wireframes are
intercepts should be included for any significant discovery being reported available, the combination of which is fully sufficient to visual description
These should include, but not be limited to a plan view of drill hole collar of the reported data
locations and appropriate sectional views.
Balanced reporting · Where comprehensive reporting of all Exploration Results is not · Middle Zone and East Zone results from 2021 will be used for updating
practicable, representative reporting of both low and high grades and/or the last available Mineral Resource model for Tulkubash area, prepared by
widths should be practiced to avoid misleading reporting of Exploration Institute of Geotechnologies (IGT) in Dec. 2020
Results.
Other substantive exploration data · Other exploration data, if meaningful and material, should be · Along with the Resource update made 2021, several other technical
reported including (but not limited to): geological observations; geophysical assessments for Tulkubash area were also done, including geotechnical /
survey results; geochemical survey results; bulk samples - size and method of hydrogeological drilling in Main Pit area based on 13 holes (approx. 1,550m)
treatment; metallurgical test results; bulk density, groundwater, geotechnical
and rock characteristics; potential deleterious or contaminating substances. · Acid Rock Drainage (ARD) survey for Tulkubash's Main Pit area is in
progress
Further work · The nature and scale of planned further work (eg tests for lateral · Magnetic drone-based geophysics in the whole Property area, including
extensions or depth extensions or large-scale step-out drilling). Tulkubash area, is planned to define additional exploration targets.
· Diagrams clearly highlighting the areas of possible extensions, · The Karator and Ishakuldy exploration targets of Tulkubash stile,
including the main geological interpretations and future drilling areas, outlined on 2 and 5 km to northeast are planned for further resource
provided this information is not commercially sensitive. definition drilling.
Data aggregation methods
· In reporting Exploration Results, weighting averaging techniques,
maximum and/or minimum grade truncations (eg cutting of high grades) and
cut-off grades are usually Material and should be stated.
· Where aggregate intercepts incorporate short lengths of high grade
results and longer lengths of low grade results, the procedure used for such
aggregation should be stated and some typical examples of such aggregations
should be shown in detail.
· The assumptions used for any reporting of metal equivalent values
should be clearly stated.
· Middle Zone and East Zone holes done in 2021 were incorporated into
existing block model from 2020, aiming to upgrade the Inferred Resources in
these areas.
· Overall, the results from 2021 exploration campaign, have available
grade intercepts, with COG of 0.21g/t, accepted for Tulkubash style
mineralization, certain rules are applied. For a maximum length of interval
below the COG, but included in the calculations, is considered 6.0m. Each
interval should start and end with sample >= COG. For top cap grade is
considered 20 ppm, weighted averaging (length X grades) techniques are used
for mean grades calculations
· No Au equivalent was used
Relationship between mineralization widths and intercept lengths
· These relationships are particularly important in the reporting of
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').
· Middle Zone / East Zone collars are supported by sufficient amount of
historical data, aiming to avoid any significant fluctuation between the
intercepts and the true width
Diagrams
· Appropriate maps and sections (with scales) and tabulations of
intercepts should be included for any significant discovery being reported
These should include, but not be limited to a plan view of drill hole collar
locations and appropriate sectional views.
· Wide variety of 2D and 3D graphics, maps, plots and wireframes are
available, the combination of which is fully sufficient to visual description
of the reported data
Balanced reporting
· Where comprehensive reporting of all Exploration Results is not
practicable, representative reporting of both low and high grades and/or
widths should be practiced to avoid misleading reporting of Exploration
Results.
· Middle Zone and East Zone results from 2021 will be used for updating
the last available Mineral Resource model for Tulkubash area, prepared by
Institute of Geotechnologies (IGT) in Dec. 2020
Other substantive exploration data
· Other exploration data, if meaningful and material, should be
reported including (but not limited to): geological observations; geophysical
survey results; geochemical survey results; bulk samples - size and method of
treatment; metallurgical test results; bulk density, groundwater, geotechnical
and rock characteristics; potential deleterious or contaminating substances.
· Along with the Resource update made 2021, several other technical
assessments for Tulkubash area were also done, including geotechnical /
hydrogeological drilling in Main Pit area based on 13 holes (approx. 1,550m)
· Acid Rock Drainage (ARD) survey for Tulkubash's Main Pit area is in
progress
Further work
· The nature and scale of planned further work (eg tests for lateral
extensions or depth extensions or large-scale step-out drilling).
· Diagrams clearly highlighting the areas of possible extensions,
including the main geological interpretations and future drilling areas,
provided this information is not commercially sensitive.
· Magnetic drone-based geophysics in the whole Property area, including
Tulkubash area, is planned to define additional exploration targets.
· The Karator and Ishakuldy exploration targets of Tulkubash stile,
outlined on 2 and 5 km to northeast are planned for further resource
definition drilling.
Section 3 Estimation and Reporting of Mineral Resources
Criteria JORC Code explanation Commentary
Database integrity · Measures taken to ensure that data has not been corrupted by, for · The field data is compiled on the site and further combined, verified
example, transcription or keying errors, between its initial collection and and stored in AGR 4.0 database platform, and in Excel spread sheets as well.
its use for Mineral Resource estimation purposes.
· Prior the process of the Resource Modelling, the historic data and
· Data validation procedures used. the new available one, were verified one more time, using Micromine software
· The database used for the Mineral Resource update report has been
previously audited by Gustavson and Associates (2014), by GeoSystems
International (2018), by Sound Mining (2019), by IGT (2020)
Site visits · Comment on any site visits undertaken by the Competent Person and the · Last field visit by Competent Person was made between 25.08.2021 to
outcome of those visits. 02.09.2021 by Dimitar Dimitrov
· 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 full-time
employee of the company.
Geological interpretation · Confidence in (or conversely, the uncertainty of ) the geological · Mineralization and associated hydrothermal alteration, developed
interpretation of the mineral deposit. along a system of regional structural deformations, is genetically associated
with Permian magmatism
· Nature of the data used and of any assumptions made.
· Tulkubash mineralization zones are presented by series of
· The effect, if any, of alternative interpretations on Mineral dilatational jogs, hosted in silicified sandstones
Resource estimation.
· No hard borders can be outlined, as all Tulkubash mineralization is
· The use of geology in guiding and controlling Mineral Resource host rock has similar facies
estimation.
· The interpretation is based on gold distribution, using actual
· The factors affecting continuity both of grade and geology. drilling, trenches and underground adits
· Overall, there is a good level of confidence in the geological
continuity, although detailed drilling is required to advance the
interpretation of the different mineralization lenses
· The wireframing process is using 0.2 ppm and 0.7 ppm Au to contour
high and low grade domains.
· The low grade domains are considered as Resource outer shell, while
the high grades are incorporated within it
Dimensions · The extent and variability of the Mineral Resource expressed as · The Mineral Resource extends approx. 4, 900m along strike, with
length (along strike or otherwise), plan width, and depth below surface to the maximum plan width of 500m, maximum depth below surface of approx. 300m
upper and lower limits of the Mineral Resource.
Estimation and modelling techniques · The nature and appropriateness of the estimation technique(s) applied · The 2021 Mineral Resource update, was made internally, by Chaarat
and key assumptions, including treatment of extreme grade values, domaining, geological department, and it was completed at March. 2022
interpolation parameters and maximum distance of extrapolation from data
points. If a computer assisted estimation method was chosen include a · The 2021 Mineral resource update is using only drill hole data for
description of computer software and parameters used. the Resource interpolation, although assays from surface workings are used
only in the interpretation process.
· The availability of check estimates, previous estimates and/or mine
production records and whether the Mineral Resource estimate takes appropriate · Micromine Software (under the license of Chaarat) was used for the
account of such data. block modelling
· The assumptions made regarding recovery of by-products. · The Mineral Resource was estimated into block model, using ordinary
kriging for Au, Ag is also estimated via IDW2 although it was not reported.
· Estimation of deleterious elements or other non-grade variables of IDW2 was used for density and recovery interpolation as well
economic significance (e.g. sulphur for acid mine drainage characterisation).
· Block model with parent block size of 5*5*5 m was generated within
· In the case of block model interpolation, the block size in relation the wireframe domains, with 1m minimum sub-selling applied
to the average sample spacing and the search employed.
· Grade estimates was done by 1.5m composite sampling
· Any assumptions behind modelling of selective mining units.
· Log probability plots and coefficient of variation were analysed for
· Any assumptions about correlation between variables. each domain for top cuts determination, including Au, Ag and Density
· Description of how the geological interpretation was used to control · Two different variogram models were applied for low and high-grade
the resource estimates. domains
· Discussion of basis for using or not using grade cutting or capping. · Block model was checked visually by sections, and geostatistical,
using Q-Q and swath plots
· The process of validation, the checking process used, the comparison
of model data to drill hole data, and use of reconciliation dta if available. · The grade distribution in the block model is sufficiently matching
the assay results
· No estimation of deleterious elements was made
· The Reported results are giving reasonable prospects for eventual
economic extraction, taking in to account the estimated gold recovery
· The updated at 2021 constrained Mineral Resource is:
Density (g/cm(3)) Mt Au (g/t) Au (koz) Class
2.66 25.11 0.98 789 Indicated
2.56 11.226 0.62 222 Inferred
Moisture · Whether the tonnages are estimated on a dry basis or with natural · All Mineral Resource is estimated and reported on a dry basis
moisture, and the method of determination of the moisture content.
Cut-off parameters · The basis of the adopted cut-off grade(s) or quality parameters · Mineral Resources have been reported at cut-off grade of 0.21 ppm Au
applied.
· Cut-off grade determined using appropriate economic and technical
parameters for open pit mining operations and heap leach gold extraction
Mining factors or assumptions · Assumptions made regarding possible mining methods, minimum mining The applied open pit optimisation parameters are including:
dimensions and internal (or, if applicable, external) mining dilution. It is
c Item Unit Resource_update_2021 Open pit optimization
always necessary as part of the process of determining reasonable prospects Econ. Initial Capital Cost $'000 99016.42
for eventual economic extraction to consider potential mining methods, but the Selling Cost $/oz 9.89
assumptions made regarding mining methods and parameters when estimating Royalty % 18
Mineral Resources may not always be rigorous. Where this is the case, this Discount Rate % 5
should be reported with an explanation of the basis of the mining assumptions Metal Price Au $/oz 1800
made. Ag $/oz 21.7
OP. Costs Mining $/t mined 1.89
Extra Ore Mining /Haulage $/t ore 0.84
Processing $/t ore 4.25
Stacking $/t ore 0.54
Owner's Mining Cost $/t ore 0.34
G/A $/t ore 1.27
Other Par. Recovery Au % Variable by block
Refining Recovery-Au % 99.8
Refining Recovery-Ag % 60
Internal Cut-off g/t 0.21
Pit Slopes Variable by location
Op. Limits Mining t/year 27000000
Processing t/year 5000000
Metallurgical factors or assumptions · The basis for assumptions or predictions regarding metallurgical · Recovery model, based on the stage of oxidation, was prepared in
amenability. It is always necessary as part of the process of determining attempt to adjust the designing of the reported Resource shell. An unoxidized
reasonable prospects for eventual economic extraction to consider potential cluster, containing refractory gold mineralization, with low recovery was
metallurgical methods, but the assumptions regarding metallurgical treatment outlined beneath the Main Pit area, and accordingly excluded in the process of
processes and parameters made when reporting Mineral Resources may not always pit optimization. The average recovery in the constrained Resource, estimated
be rigorous. Where this is the case, this should be reported with an per zones is 72-76 %
explanation of the basis of the metallurgical assumptions made.
Recovery_Au (%) Class Zone
71.91 Indicated Main_Pit
75.97 Indicated East_zone
75.01 Indicated Mid_zone
74.47 Inferred Main_Pit
75.49 Inferred East_one
76.14 Inferred Mid_zone
Environmental factors or assumptions · Assumptions made regarding possible waste and process residue · There are not considered to be any environmental factors likely to
disposal options. It is always necessary as part of the process of determining affect the assumption that the deposit has reasonable prospects for eventual
reasonable prospects for eventual economic extraction to consider the economic extraction
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 · Dry bulk density is measured using paraffin -coated immersion
assumptions. If determined, the method used, whether wet or dry, the frequency (Archimedes) method to evaluate the specific gravity (SG)
of the measurements, the nature, size and representativeness of the samples.
· Density (SG) values have been interpolated into the block model,
· The bulk density for bulk material must have been measured by methods using Inverse Distance Weighting (IDW) method
that adequately account for void spaces (vugs, porosity, etc), moisture and
differences between rock and alteration zones within the deposit. · The density data are comprising total of 1,623 dry specimens,
measured by Chaarat
· Discuss assumptions for bulk density estimates used in the evaluation
process of the different materials. · In 2020 no density measurements were done, as RC drilling is not
providing proper material
Classification · The basis for the classification of the Mineral Resources into · Classification of Mineral Resources is based upon a review of
varying confidence categories. geological continuity, quality of supporting data, spatial grade continuity
and quality of a block model
· Whether appropriate account has been taken of all relevant factors
(ie relative confidence in tonnage/grade estimations, reliability of input · Mineral Resource Classification was made manually, from section to
data, confidence in continuity of geology and metal values, quality, quantity section
and distribution of the data).
· Following criteria has been taken in account during the Resource
· Whether the result appropriately reflects the Competent Person's view Classification:
of the deposit.
-The model has been classified only into two categories of Indicated and
Inferred, as it is considered that the available data is not sufficient for
Measured category
-Drill hole spacing in plan: for Indicated was used average 30-40m drilling
grid, for Inferred 40-80m
-Total depth of mineral Resource classification: Inferred was restricted up to
80m from the last hole, for Indicated the restriction is 40-60m
· The results of the validation of the block model shows acceptable
correlation in the input data to the estimated grades
· The Competent Person is confident that all relevant factors have been
considered and the results reflects these views.
Audits or reviews · The results of any audits or reviews of Mineral Resource estimates. · No external reviews have been made for 2021 Mineral Resource Update
Discussion of relative accuracy/ confidence · Where appropriate a statement of the relative accuracy and confidence · The Mineral Resource is appropriate for the Tulkubash style of
level in the Mineral Resource estimate using an approach or procedure deemed mineralization, and it is adequate to the available data. It is considered
appropriate by the Competent Person. For example, the application of that the current drill hole spacing is sufficient to demonstrate geological
statistical or geostatistical procedures to quantify the relative accuracy of continuity of the mineralization
the resource within stated confidence limits, or, if such an approach is not
deemed appropriate, a qualitative discussion of the factors that could affect · Accuracy of the Mineral Resource is sufficient to permit economic
the relative accuracy and confidence of the estimate. development of the deposit
· The statement should specify whether it relates to global or local · The Mineral Resource relates to global estimate
estimates, and, if local, state the relevant tonnages, which should be
relevant to technical and economic evaluation. Documentation should include · The application of top cuts and compositing in the Mineral Resource
assumptions made and the procedures used. are considering as appropriate
· These statements of relative accuracy and confidence of the estimate · The Mineral Resource estimation methodology is deemed appropriate,
should be compared with production data, where available. based upon validation of the model, using visual, statistical and graphical
checks. Any alternative methods are likely to yield only minor changes to
global Mineral Resource
· The mineralization domains have been adhered to geostatistical and
grade estimation works, and the spatial distribution of grade in the Mineral
Resource model is representative of the sample data
Moisture
· Whether the tonnages are estimated on a dry basis or with natural
moisture, and the method of determination of the moisture content.
· All Mineral Resource is estimated and reported on a dry basis
Cut-off parameters
· The basis of the adopted cut-off grade(s) or quality parameters
applied.
· Mineral Resources have been reported at cut-off grade of 0.21 ppm Au
· Cut-off grade determined using appropriate economic and technical
parameters for open pit mining operations and heap leach gold extraction
Mining factors 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 applied open pit optimisation parameters are including:
c Item Unit Resource_update_2021 Open pit optimization
Econ. Initial Capital Cost $'000 99016.42
Selling Cost $/oz 9.89
Royalty % 18
Discount Rate % 5
Metal Price Au $/oz 1800
Ag $/oz 21.7
OP. Costs Mining $/t mined 1.89
Extra Ore Mining /Haulage $/t ore 0.84
Processing $/t ore 4.25
Stacking $/t ore 0.54
Owner's Mining Cost $/t ore 0.34
G/A $/t ore 1.27
Other Par. Recovery Au % Variable by block
Refining Recovery-Au % 99.8
Refining Recovery-Ag % 60
Internal Cut-off g/t 0.21
Pit Slopes Variable by location
Op. Limits Mining t/year 27000000
Processing t/year 5000000
Metallurgical factors or 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.
· Recovery model, based on the stage of oxidation, was prepared in
attempt to adjust the designing of the reported Resource shell. An unoxidized
cluster, containing refractory gold mineralization, with low recovery was
outlined beneath the Main Pit area, and accordingly excluded in the process of
pit optimization. The average recovery in the constrained Resource, estimated
per zones is 72-76 %
Recovery_Au (%) Class Zone
71.91 Indicated Main_Pit
75.97 Indicated East_zone
75.01 Indicated Mid_zone
74.47 Inferred Main_Pit
75.49 Inferred East_one
76.14 Inferred Mid_zone
Environmental factors or assumptions
· 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 not considered to be any environmental factors likely to
affect the assumption that the deposit has reasonable prospects for eventual
economic extraction
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.
· Dry bulk density is measured using paraffin -coated immersion
(Archimedes) method to evaluate the specific gravity (SG)
· Density (SG) values have been interpolated into the block model,
using Inverse Distance Weighting (IDW) method
· The density data are comprising total of 1,623 dry specimens,
measured by Chaarat
· In 2020 no density measurements were done, as RC drilling is not
providing proper material
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.
· Classification of Mineral Resources is based upon a review of
geological continuity, quality of supporting data, spatial grade continuity
and quality of a block model
· Mineral Resource Classification was made manually, from section to
section
· Following criteria has been taken in account during the Resource
Classification:
-The model has been classified only into two categories of Indicated and
Inferred, as it is considered that the available data is not sufficient for
Measured category
-Drill hole spacing in plan: for Indicated was used average 30-40m drilling
grid, for Inferred 40-80m
-Total depth of mineral Resource classification: Inferred was restricted up to
80m from the last hole, for Indicated the restriction is 40-60m
· The results of the validation of the block model shows acceptable
correlation in the input data to the estimated grades
· The Competent Person is confident that all relevant factors have been
considered and the results reflects these views.
Audits or reviews
· The results of any audits or reviews of Mineral Resource estimates.
· No external reviews have been made for 2021 Mineral Resource Update
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 Mineral Resource is appropriate for the Tulkubash style of
mineralization, and it is adequate to the available data. It is considered
that the current drill hole spacing is sufficient to demonstrate geological
continuity of the mineralization
· Accuracy of the Mineral Resource is sufficient to permit economic
development of the deposit
· The Mineral Resource relates to global estimate
· The application of top cuts and compositing in the Mineral Resource
are considering as appropriate
· The Mineral Resource estimation methodology is deemed appropriate,
based upon validation of the model, using visual, statistical and graphical
checks. Any alternative methods are likely to yield only minor changes to
global Mineral Resource
· The mineralization domains have been adhered to geostatistical and
grade estimation works, and the spatial distribution of grade in the Mineral
Resource model is representative of the sample data
Section 4 - Estimation and Reporting of Ore Reserves
Mineral Resource estimate for · Description of the Mineral Resource estimate used as a basis for the · Tulkubash April 2022, resource based on all DDH data inclusive of the
conversion to Ore Reserves 2021 exploration program.
conversion to Ore Reserves
· Clear statement as to whether the Mineral Resources are reported · Grades estimated with Ordinary Kriging into ore zones defined by
additional to, or inclusive of, the Ore Reserves wireframe modelling
· Total M&I; 25.2 Mt @ 0.98 g/t Au containing 798 Koz
· Inferred 11.2 Mt @ 0.62 g/t Au containing 222 Koz
· Resource defined by 0.21 g/t Au cutoff within an $1,800/oz pit shell
· Mineral Resource is inclusive of the Ore Reserve
Site Visits · Comment on any site visit undertaken by the Competent Person and the · Peter C. Carter is qualified as a CP under JORC code (2012)
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 undertaken to enable the Mineral Resource · The basis for the conversion of the Mineral Resource to an Ore
to be converted to Ore Reserves Reserve is the 2021 Updated Feasibility Study completed by LogiProc PLC and
Sound Mining Inc of Johannesburg, RSA.
· The code requires that a study, at least to Pre-feasibility Study
level has been undertaken to convert Mineral Resources to Ore Reserves. Such · The study represents a Class 3 estimate of the project value with an
studies will have been carried out and will have determined a mine plan that accuracy of -10% to +15%.
is technically achievable and economically viable, and that material Modifying
Factors have been considered. · The study determined the project to be both technically and
economically viable.
· Modifying Factors have been considered in the conversion of the
Mineral Resource to an Ore Reserve
· Some technical parameters have changed since completion of the FS and
have been updated
Cutoff Grade · Nature of cutoff grade · A cutoff grade for recovered Au was employed due to the variable
recovery in the geo-metallurgical model
· The cutoff grade parameters are based on those from the 2021 FS
updated
· Recovered Au cutoff = 0.16 g/t Au
· True marginal cutoff = 0.22 g/t Au at 74% recovery
· Parameters used to calculate cutoff grade · Owner's Mining = 0.34 $/t ore
· Ore Haul = 0.72 $/t ore
· Process = 4.79 $/t ore
· G&A = 1.25 $/t ore
· Refining = 9.78 $/oz
· Gold Price = 1,600 $/oz Au
· Royalty = 14%
Mining Factors or Assumptions · The methods and assumptions used as reported in the PFS or FS to · Mineral Resource model used a parent block size of 5 m x 5 m x 5 m
convert the Mineral Resource to an Ore Reserve. which respects the selective 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 flowsheet · Heap leach (HL) processing selected
· 3-stage crushing of ore to P100 12 mm
· Crushed ore stacked by trucks in 7 m lifts on valley-fill leach pad
· Au adsorbed onto activated carbon from PLS in CIC circuit
· Loaded carbon stripped in AARL-type elution circuit
· Electrowinning and smelting on site produce dore for shipment
· Appropriateness of process to the style of mineralization · About 70% of the Au is readily CN 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 well-tested or novel in nature? · Process is robust and widely used
· Practical for cold-weather conditions
· Heap leaching proven globally over last 40 years
· Nature of metallurgical test work · Process scoping test work conducted by Mintek, SGS, RDI, BGRIMM, and
Hazen
· HL test programs by WAI (2017), MLI (2018), SAEL (2019 & 2021)
· HL testing included bottle roll (BR), column leach (CL),
load-permeability, and agglomeration test work
· Amount and representativeness of metallurgical test work · 93 composite samples tested in all 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 applied · Recoveries derived from geo-metallurgical model
· Overall recovery for the Ore Reserve 74%
· Average recovery in Main Zone 73.8%, Mid Zone 75.9%, and 76.4% East
Zone
· Assumptions or allowances for deleterious elements · Ore is associated with arsenic and antimony
· Neither element is present in amounts which affect the selected
process or create environmental issues
· Existence of bulk sample or pilot scale test work and the degree to · No bulk samples or pilot scale test work has been conducted
which such samples are considered representative
· The samples tested are representative of the variability of leach
feed across the entire known deposit
· For minerals that are defined by specification, has the ore reserve · The Ore Reserve is not defined by a specification
estimate been based on the appropriate mineralogy to meet the specification?
Environmental · The status of studies of potential environmental impacts of the · ESIA completed by WAI in 2018, updated in 2020
mining and processing operations.
· Kyrgyz EIA (OVOS) completed in 2015
· OVOS being updated in support of project permitting
· Details of waste rock characterization · NAG testing in 2020 on 110 samples distributed throughout deposit
· Average NAG pH 5-6 indicating little or no acid generating potential
· ABA testing indicates 6% of samples PAG
· Consideration of potential sites and status of design options · Project site terrain is extremely 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 residue storage and waste dumps · Dry Valley location for the heap 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 infrastructure · New site access road completed
· Exploration/Pioneer camps established
· Permanent camp under construction
· All other infrastructure to be provided during construction
· Availability of land for development · Chaarat has been granted surface rights for the land required to
develop the project
· Power · A 4.5 MW diesel-fired power plant will supply the site with
electricity
· Water · Process water and raw water will be sourced from boreholes located
near the plant and camp respectively
· Raw water at the camp and ADR plant will be treated to generate
potable water
· Transportation · All personnel, goods, and materials will be transported to and from
site via road
· Bulk materials and equipment will arrive by rail in Bishkek, 750 km
from site, finishing the journey by truck
· Labor · The project workforce is estimated at 720
· On a 15-15 continuous shift schedule, half the workforce will be on
site at any given time
· 80% of the workforce is expected to be national with a target of 30%
coming from local villages
· Accommodation · The workforce will be housed on site in a 360-man permanent camp
· Ease with which infrastructure can be provided · All infrastructure will be installed during the 28-month construction
period
Costs · Derivation and assumptions regarding capital costs · Capital costs from 2021 FS
· LOM CAPEX estimated at $131 M
· Initial capital approximately $116 M
· Deferred and Closure costs = $15 M
· Contingency was applied at 10%
· AACE Class 3 estimate, -10% to +15%
· Methodology used to estimate operating costs · Mining cost from quote by the Contractor based on the detailed mine
plan
· Process, Owner Mining, and G&A were developed from first
principles based on detailed operating plans
· All other are based on the 2021 FS Update
· Allowances made for deleterious elements · Project does not incur any added cost due to deleterious elements
· Source of exchange rates used in the study · Exchange rates for Rubles, Som, and Euros to USD were as per
prevailing rates in H1 2021
· Derivation of transportation charges · Transportation costs were included in the price of all goods and
materials
· Cost of shipping was based on estimates a specialist logistics
service provider in the region
· Basis for forecasting refining charges · Refining charges were based on advice from the Kyrgyz gold refinery
at Kara-Balta
· Allowances for royalties, both government and private · Kyrgyzstan has a sliding scale royalty system pegged to gold price
· At a gold price of $1,600/oz Au the royalty payable is 14%
· No private royalty payable on the project
· Royalties are applied in lieu of corporate tax in Kyrgyzstan
Revenue Factors · Head grade and recovery · Average head grade 0.87 g/t Au from the block model, adjusted for
dilution
· Average Au recovery 74% from geo-metallurgical model
· Metal price · Commodity broker consensus forecast Feb 2022, $1,618/oz over
production period
· Gold price used $1,600/oz Au
· By-product silver priced at $20.00/oz Ag
· Exchange rates · Payment made in USD, foreign exchange not applicable to revenue
· Transportation and treatment charges · Refining and transport costs from Kyrgyz national gold refinery at
Kara-Balta and a bonded carrier respectively
· 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 situation for the commodity, · All producers of precious metals in Kyrgyzstan are obliged to offer
consumption trends and factors likely to affect supply and demand in the their output for sale to the National Bank of the Kyrgyz Republic at world
future spot prices
· If NBKR declines to purchase metals offered, the producer is free to
directly sell on world markets
· A customer/competitor analysis along with identification of likely · Not applicable
market windows for the product
· Price and volume forecasts and the basis of these forecasts · The forecast gold price averages $1,600/oz over LOM
· Average annual production forecast to be 106 Koz Au during 3 years of
full operation
· For industrial minerals, the customer specification, testing, and · Not applicable
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 stakeholders and matters leading to · Chaarat has a standing agreement 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 reserve into various confidence · Drillhole data density
categories
· Search for Probable reserves 40 m
· Grade/thickness variability
· Continuity along strike
· Do the results reflect the CP's view of the deposit? · Yes. The absence of Measured Resources precludes declaring Proven
Reserves
· The Probable Reserves are based on accepted standards for similar
deposits and appropriately reflect the quality of the geologic, technical, and
economic factors used to define them
· What proportion of Probable Ore Reserves have been derived from · None, there are no Measured Resources
Measured Mineral Resources?
Audits or Reviews · Results of any audits or reviews of the Ore Reserve estimate · No third-party audits or reviews have been completed on the updated
Ore Reserve
Discussion of relative accuracy /confidence · Qualitative discussion of the factors that would affect the accuracy · Mineral Resource Estimate based on an additional 2,760 m of drilling
and confidence of the estimate
· Variography and sample selection criteria reviewed
· State whether the accuracy/confidence refers to the global or a local
Ore Reserve estimate · Wireframe and sulfide contact interpretation reviewed and updated
· Previous MRE reviewed by external parties with no fatal flaws found
· Accuracy and confidence refer to the global Ore Reserve estimate
· Project design is flexible enough to accommodate local variations in
presentation of tonnage and grade
· Modifying Factors which may affect the accuracy/confidence of the Ore · The mining plan employs a 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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