REG - East Star Resources - Substantial Copper-Lead-Zinc Deposit Identified

East Star ResourcesAnnouncement

25/01/2023 07:00

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RNS Number : 7437N  East Star Resources PLC  25 January 2023

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF
REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET
ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE
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MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

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25 January 2023

East Star Resources Plc

("East Star" or the "Company")

Substantial copper-lead-zinc deposit identified on Rudny Altai, Kazakhstan

East Star Resources Plc (LSE:EST), the Kazakhstan-focused mineral explorer, is
pleased to announce that, as a result of a detailed literature review
following its successful 2022 helicopter electromagnetic ("HEM") survey, it
has identified a substantial copper-lead-zinc-deposit ("Cu-Pb-Zn") located
within its 100% owned 'RA3' licence, centrally located in the world-class
Rudny Altai VMS belt. The newly identified polymetallic volcanic and sediment
hosted exhalative sulphide ("VSHMS") deposit (the "Verkhuba Deposit") is
within the greater Verkhuba Ore District which includes the (previously
announced) four Priority 1 HEM anomalies, and has the potential to become a
deposit of regional significance.

Highlights:

·   The Verkhuba Ore District occurs over 10 km x 3 km and is comprised of
the polymetallic Verkhuba Deposit and several occurrences identified in
historic drilling results and the Company's 2022 HEM survey, implying a
long-lived system producing multiple high-grade ore bodies from several
hydrothermal vents related to the same metal source

·   The Verkhuba Deposit, delineated in 1990 by >45,000 m of drilling,
has up to seven parallel and several metre thick high-grade Cu-Pb-Zn layers of
massive sulphides in Devonian sediments formed around large-scale,
hydrothermal exhalative centres

·   Best intercepts include:

o Hole 14: 11.0 m @ 2.8% Cu from 32.9 m; and 6.3 m @ 3.7% Cu from 60.3 m

o Hole 25: 42.0 m @ 0.5% Cu and 1.3% Zn from 84.5 m (including 16.0 m @ 0.35 %
Cu and 2.52% Zn from 84.5 m)

o Hole 27: 9.0 m @ 1.2% Cu from 299.4 m

o Hole 54: 5.0 m @ 0.2% Cu, 1.8% Pb and 3.4% Zn from 221.5 m; and 7.6 m @
0.86% Cu and 2.44% Zn from 239.4

o Hole 63: 7.1 m @ 0.8% Cu and 2.6% Zn from 239.4 m; and 5.0 m @ 1.57% Cu and
5.48% Zn from 252.7 m

o Hole 245: 10.5 m @ 0.27% Cu, 1.7% Pb and 2.59% Zn from 687.5 m

o Hole 269: 15.0 m @ 0.9% Cu and 3.06% Zn from 155.0 m (including 4.0 m @
2.48% Cu and 2.59% Zn from 155.0 m and 2.2 m @ 0.7% Cu and 10.5% Zn from 166
m)

·   Historical flotation recovery rates of 94-96% Cu and 60-90% Zn into
concentrate

·   Au and Ag reported to concentrate in some metallurgical samples
allowing further upside potential from precious metals

·   Preparation of an independent Mineral Resource Estimate has commenced
and multiple drill-ready targets have been added to the 2023 exploration
programme which will aim to establish a JORC compliant resource

·   The Rudny Altai region is one of the largest VMS provinces in the world
with the Kazakhstan part of the belt hosting major producers including
Glencore and KAZ Minerals

 

Alex Walker, East Star CEO, commented:

"The Verkhuba Deposit is a game changer for East Star. It leapfrogs the
Company from being a greenfield explorer to a brownfield resource development
company. Part drilled and part buried beneath thin cover, the Cu-Pb-Zn deposit
has huge potential upside from ore zone extensions within the Verkhuba Ore
District as well as high-priority EM targets.

The Verkhuba Ore District contains volcanogenic-hosted massive sulphide
targets adjacent to sediment-hosted exhalative sulphide mineralisation,
implying a long-lived hydrothermal system generating multiple high-grade
deposits within the same area.

Rudny Altai is a significant copper producing region with excess processing
capacity from both Glencore and KAZ Minerals. The identification of the
Verkhuba Deposit is yet another validation our exploration thesis and we are
excited to commence resource delineation drilling with additional updates to
be delivered as digitisation of historic drilling continues and the 2023
exploration programme commences."

 

Figure 1: Verkhuba Deposit with highlighted intersections

 

 Figure 2: The Verkhuba Ore District incorporating EM targets from East
Star's 2022 HEM survey

 

Introduction

The Verkhuba Ore District is situated in an anticlinal structure (Luninskaya
Anticline) composed of Devonian volcanogenic and sedimentary formations. The
Verkhuba Ore District hosts more than 24 occurrences of Cu-Pb-Zn
mineralisations, including four VMS/VSHMS deposits where mineral resources
have been estimated in the Kazakhstan GKZ system in the C2 and P1 resource
categories. The Company also delineated several untested EM targets during the
2022 HEM survey programme.

The Verkhuba Ore District covers an area of 10 km x 3 km elongated principally
in an E-W direction. East Star's licence, 1795-EL, covers the eastern and the
western part of the Verkhuba ore field and includes the old Pokrovskoye-2 VMS
mine and the Verkhuba Deposit.

 

Verkhuba Deposit

Surface outcrops of sulphide ore within the Verkhuba Ore District have been
known since the bronze age with the first geological description and
small-scale mining in the 17(th) century. The systematic geological study of
the area started in the 1920s. The Verkhuba Deposit was delineated between
1970 and 1990 (completing just prior to the dissolution of the Soviet Union)
as part of a greater Verkhuba Ore District exploration programme which
included 9,104.5 m of shallow non-core holes and 142 diamond holes totalling
67,581.5 m of drilling.

Diamond drilling was conducted across the area on a 200 m x 400 m grid, with
infill drilling on 100 m x 200 m grids and 75 m x 100 m grids on the Deposit.
Core recoveries were between 40-80% with average core recovery in
mineralisation of 72%.

Mineralisation occurs as stratabound sheet- and ribbon-like bodies principally
striking E-W. Ore bodies pinch and swell, probably related to paleogeographic
controls by the basin architecture and remobilisation by post-depositional
tectonics.

Up to seven parallel high-grade Cu-Pb-Zn sulphide horizons occur in two
lithological units and are mapped on surface over 10 km strike length.
Mineralisation in the lower level is hosted by carbonaceous siltstone and
limestone, while the upper level is tied to the contact of clayey siltstones
and sandstones with felsic volcanic rocks. High-grade and thick mineralised
zones occur within the ore deposit which are related to Middle Devonian
volcanic centres. Cu-Zn zonation appears to have a spatial control inferred to
be related to proximity to the hydrothermal source of sulphide brines. Au
mineralisation may be related to later stage fluids infiltrating along
post-depositional faults.

East Star is continuing to digitise all available historic drilling data over
the Verkhuba Deposit to build a 3D model. This model will allow better
interpretation of controls on ore distribution, including structure and
paleogeography of the volcano-sedimentary basin, location of the main
lithological boundaries and faults controlling mineralisation. Results of the
3D model will also be used to generate a Mineral Resource Estimate and
Exploration Target for the Verkhuba Deposit and guide future drilling.

 

Metallurgical test work

According to a historical resource drilling report, 10 bulk sulphide ore
samples from the Verkhuba Deposit were tested in several metallurgical
laboratories of Kazakhstan between 1988-1989, including by the Institute of
Non-Ferrous Metals in Ust-Kamenogorsk and the processing metallurgical plant
of the Berezovskoe VMS deposit. The studied ores had different mineral
composition and varied in weight from 9.7 kg to 1,500 kg.

Four mineralogical ore types (Cu-Zn, Zn-pyrite, Cu-Pb-Zn, and Pb-Zn) were
defined based on grades of copper, zinc and lead and content of pyrite. The
sulphide mineralisation is simple with a mineral composition of pyrite,
chalcopyrite, galena and sphalerite.

Mineral recoveries in the tested ore types were good with preliminary
flotation tests indicating high recoveries from polymetallic ore:

·    Type 1 (Cu-Zn):Recoveries of Cu 84-87%, Zn 84-93%, pyrite (FeS)
27-81%

·    Type 2 (Zn-pyrite): Recoveries of Cu 71-94%, Pb 76%, Zn 61-68%,
pyrite 48%

·    Type 3 (Cu-Pb-Zn): Recoveries of Cu 93-97%, Pb 83% and Zn 47-68%,
pyrite 41-60%

·    Type 4 (Pb-Zn): Recoveries of Cu 75%, Pb 84%, Zn 92%, pyrite 23-62%

Au grade in nine of those ore samples was reported within 0.1-0.4 g/t, and Ag
grade as 4.2-22.9 g/t, however, no information of Au and Ag grade in
concentrates and recovery of precious metals was provided. In previous
metallurgical studies Au and Ag grades in polymetallic concentrates reported
from 6-20 g/t and 46-496 g/t respectively with best Ag grades associated with
high grade Pb. Additional data is required to understand grade distribution
and potential upside of byproduct Au and Ag within a precious-metal
mineralised system.

 

EM Targets within the Verkhuba Ore District

East Star conducted a HEM survey between May and July 2022. In total, 50
anomalies were identified across the Rudny Altai licence areas, with priority
targets defined by size, continuity, and association with known geochemical
anomalies, magnetic or IP anomalies, and association with favourable
structural or lithological indicators such as the presence of rhyolite, which
is a common footwall indicator for the region.

A region of untested priority targets were identified in the NE of the Rudny
Altai area.  Based on additional geological information, these untested HEM
targets are now interpreted to be spatially related to the Verkhuba Ore
District. These include:

·    HeliTEM _A_11 target is a strong, narrow, double peak, strike
extensive and very shallow anomaly (from about 25 m) coinciding with a very
strong magnetic anomaly.

·    HeliTEM_A_12 target is a strong single peak late time response,
coinciding with a strong magnetic anomaly, at about 100 m deep and associated
with phyllic alteration zone in granite porphyries, rhyolitic lava and
siltstones mapped at surface.

Two anomalies are adjacent to the historic Pokrovskoye Mine. The massive
sulphide ore body was reported as 150 m long by 200 m wide and up to 22 m
thick with average ore grades of 11.5% Cu, 3.3% Pb and 12% Zn. The ore body
was mined in open pit to 70 m depth until 1979.

·    HeliTEM_AA_9 target is a large, shallow, highly conductive,
strike-extensive, strong north-east striking and moderately dipping
conductor, coinciding with a moderate magnetic anomaly and big enough to
represent a large ore zone, with no known prior exploration history.

·    HeliTEM_A_9 target is a large, shallow, strike-extensive, double peak
anomaly dipping towards the east, also with no known prior exploration
history.

A site visit in October 2022 found these targets to be expressed as
depressions with river systems, with the lack of geological surface expression
making a discovery by mapping very difficult.

 

Verkhuba Ore District

The presence of multiple anomalies within a 10 km x 3 km area including; a
historic high-grade VMS open pit deposit (Pokrovskoye), the drilled Verkhuba
Deposit, and several untested EM, IP and magnetic anomalies, implies a
long-lived system producing multiple high-grade ore bodies from several
hydrothermal vents related to the same metal source.

VMS deposits form in subaqueous environments from circulating hydrothermal
fluids heated by volcanic activity. These deposits form as sulphide mounds,
stratiform exhalative and/or replacive bodies and commonly have stockwork/vein
mineralisation in their immediate footwall. These various styles are
essentially facies of mineralisation, each one being the product of a
particular set of conditions that control the ore-forming processes and the
consequent geometry and architecture of the deposits. Long lived VMS systems
therefore typically contain a number of deposit styles as vent conditions and
location changes over time.

The style of exhalative deposits is controlled by the salinity of the vented
fluids and the redox state at the seafloor. Hydrothermal fluids with
salinities less than twice that of seawater that vented into open, oxidic
oceanic environments, typically formed small mound and chimney complexes. The
massive sulphides were rapidly oxidised and partly dissolved by seawater. In
contrast, stratiform sheet-like deposits are typically formed in anoxic bottom
waters, ponded in depressions such as second- or third-order basins to form a
sulphide brine pool. Deposits formed in anoxic environments can be
significantly larger than those in oxidic settings. This is attributed to
several factors that include longer-lived hydrothermal circulation, more
efficient sulphide precipitation and reduced or inhibited oxidation thereof.

Replacement of volcanic and sedimentary strata by sulphide typically occurs
within the feeder zones beneath the exhalative mineralisation. However,
successions with abundant porous, permeable and/or reactive rocks such as
glassy and/or pumiceous volcaniclastic rocks, and in some cases limestone,
favoured the development of large replacive deposits.

Additional studies are required to identify and test different mineralisation
styles and exhalation centres and determine a genetic model to benefit
interpretation of geophysical data and direct future drilling.

 

Rudny Altai region

 

The Rudny Altai region is one of the largest VMS provinces in the world, part
of the Central Asian Orogenic Belt. The Company's newest 1794-EL, 1795-EL and
1799-EL licences are located adjacent to the Company's existing 847-EL and
914-EL licences (together, the "Licences"). Administratively, the Licences are
within the Shemonaikha District and are extraordinarily well connected to
infrastructure. The regional centre of Ust-Kamenogorsk is located 45 km, and
its international airport is located 35 km, southeast of the Licences. The
railway connecting Ridder (Kazzinc Mine) and Tomsk cities crosses the Licences
from the south to the northwest with two railway stations located on the
territory of the Licences. There is a network of dirt roads within the
Licences that are suitable for driving all year round. A hard-surfaced road
from Ust-Kamenogorsk to Shemonaikha crosses the western part of the
Licences.

The area is characterised by moderately hilly terrain with elevations ranging
between 270 m and 630 m above the mean sea level.

 

For further information visit the Company's website at www.eaststarplc.com
(http://www.eaststarplc.com) , or contact:

 

East Star Resources Plc

Alex Walker, Chief Executive Officer

Tel: +44 (0)20 7390 0234 (via Vigo Consulting)

 

Peterhouse Capital Limited (Corporate Broker and Placing Agent)

Duncan Vasey / Lucy Williams

Tel: +44 (0) 20 7469 0930

 

Vigo Consulting (Investor Relations)

Ben Simons / Peter Jacob

Tel: +44 (0)20 7390 0234

 

About East Star Resources Plc

 

East Star Resources is focused on the discovery and development of gold, rare
earth, and copper deposits in Kazakhstan. With an initial nine licences
covering 1,687 sq km in three mineral rich Ore Districts, East Star is
undertaking an intensive exploration programme, applying modern geophysics to
discover minerals in levels that were not previously explored. The Company
also intends to further expand its licence portfolio in Kazakhstan. East
Star's management are based permanently on the ground, supported by local
expertise, and joint ventures with the state mining company on certain
projects.

www.eaststarplc.com (http://www.eaststarplc.com)

Follow us on social media:

LinkedIn: https://www.linkedin.com/company/east-star-resources/
(https://www.linkedin.com/company/east-star-resources/)

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The person who arranged for the release of this announcement was Alex Walker,
CEO of the Company.

Competent Persons Statement

The information in this release that relates to Exploration Results has been
reviewed by Mr. Mikhail Tsypukov. Mr. Tsypukov is a Fellow of the Institute of
Materials, Minerals and Mining (FIMMM, Reg. No 459707). He has a PhD in
geology from A.P. Vinogradov Institute of Geochemistry Siberian Branch Russian
Academy of Sciences with over 30 years of experience of gold and base metal
exploration in Russia, Kazakhstan, Mongolia, Rwanda and Islamic Republic of
Mauritania.

Mikhai Tsypukov has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and the activity being
undertaken to qualify as a Competent Person as defined in 2012 Edition of the
"Australasian Code for Reporting of Exploration targets, Exploration Results,
Mineral Resources and Ore Reserves", also known as the JORC code. The JORC
code is a national reporting organisation that is aligned with CRIRSCO. Mr
Tsypukov consents to the inclusion in the announcement of the matters based on
his information in the form and context in which they appear.

 

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