REG - East Star Resources - Verkhuba Copper Deposit Drilling Contract

East Star ResourcesAnnouncement

10/07/2023 07:00

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RNS Number : 3972F  East Star Resources PLC  10 July 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
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK
MAR) IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN.

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR
INDIRECTLY IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, THE
REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION.

 

10 July 2023

East Star Resources Plc

("East Star" or the "Company")

Verkhuba Copper Deposit Drilling Contract & Timetable

 

East Star Resources Plc (LSE:EST), which is defining mineral resources in
Kazakhstan for the energy revolution, is pleased to provide updates regarding
its forthcoming drilling programme at the Verkhuba Copper Deposit in the Rudny
Altai volcanogenic massive sulphide ("VMS") belt in Kazakhstan.

 

Highlights

 

·    Initial site works to prepare access and drill locations will begin
this week with drilling commencing by late July / early August

·    Fully funded 3,000m+ drilling campaign, including twinning existing
boreholes with identified strong copper mineralisation

·    Copper deposit with a JORC exploration target of 19-23Mt @ 1-4% -
1.9% CuEq, close to infrastructure and existing processing capacity

·    Drilling will also test potential of gold and silver mineralisation
which was not assayed for in historical drilling but is known to be present in
metallurgical samples taken from within the deposit

 

East Star announces it has entered into a drilling rig contract for 3,000m+ of
oriented diamond core drilling, to commence late July / early August,
primarily focusing on the Verkhuba Copper Deposit ("Verkhuba Deposit"). The
Verkhuba Deposit contains a significant JORC compliant exploration target of
19-23 Mt at 1.0-1.4% copper and 1.0-1.4% zinc (1.4-1.9% copper equivalent)
("Exploration Target"), derived from over 42,000m of historical drilling, as
announced on 21 March 2023. The Exploration Target estimate, including a
conceptual open pit optimisation and analysis, was undertaken by AMC
Consultants Pty Ltd ("AMC"). Shareholders are encouraged to view the AMC
report which has been made available on East Star's website at
www.eaststarplc.com/presentations (http://www.eaststarplc.com/presentations) .

 

The drilling contract has been awarded to Everest Sondaj LLP, a Turkish-owned
and locally operated drilling contractor with extensive experience drilling
oriented diamond core in mountainous areas such as the prolific Rudny Altai
VMS belt.

 

Alex Walker, East Star CEO, commented:

 

"We are extremely excited to commence drilling this potentially game-changing
copper deposit in a prolific copper region with established processing
infrastructure. We have undertaken an extensive geological traverse over the
project area in preparation, mapping more than 70 historical collar locations
from the more than 42,000m of drilling which make up the Verkhuba Deposit, as
well as a number of copper outcrops.

 

"It is important to note that historical drilling had often poor core recovery
and did not assay for precious metals such as gold, which we know to be
present based on historical metallurgical test work from within the deposit.
This offers further upside potential in addition to the multiple drill targets
generated from our helicopter electromagnetic (HEM) survey in 2022.

 

"If East Star is successful in confirming historical results and progressing
towards a JORC resource, the Company will be in a prime position to become a
supplier of ore to processing plants with excess capacity within a short
trucking distance of this deposit."

 

The programme will focus primarily on the Verkhuba Deposit around historical
intersections including:

 

·    Hole_ID 1: 4m @ 3.53% CuEq from 72m

·    Hole_ID 14: 11m @ 2.83% Cu from 32.9m and 6.25m @ 3.66% Cu from
60.25m

·    Hole_ID 16: 5.8m @ 2.87% CuEq from 187.2m and 12.55m @ 2.73% CuEq
from 192.5m

·    Hole_ID 38: 12m @ 1.54% CuEq from 229.4m and 14m @ 1.17% Cu from
260.4m

·    Hole_ID 269: 15m @ 1.98% CuEq from 155m

 

*CuEq = Cu(%) + Zn(%) x 0.33889 + Pb(%) x 0.250000

 

Optimised open pits, shown below in blue, have potential to allow low-cost
development and early cash flow using one of several existing ore processing
facilities within trucking distance of the project on a toll treatment basis.

Figure 1 Micromine model of ore bodies including modelled open pit scenario

 

Figure 2 Verkhuba Deposit area with highlighted intersections

 

Exploration Target

East Star announced a JORC Exploration Target over the Verkhuba Deposit on 21
March 2023. The Exploration Target is based on a block model developed from
42,000m of historical drilling and includes an open pit and underground
component.

 Mining method  Tonnes           Zn         Cu         Pb
                (kt)             (%)        (%)        (%)
 Open pit       5,000 - 6,000    0.5 - 0.8  1.4 - 1.8  0.1 - 0.2
 Underground    14,000 - 17,000  1.2 - 1.6  0.8 - 1.2  0.1 - 0.2
 Total          19,000 - 23,000  1.0 - 1.4  1.0 - 1.4  0.1 - 0.2

Table 1 Exploration Target Summary Table

Notes:

·      This is an Exploration Target and should not be considered to be
a Mineral Resource

·      The Exploration Target assumes an open pit mining method with
marginal cut-off of 0.38% Cu equivalent and underground mining method with
the marginal cut-off of 0.86% Cu equivalent

·      A nominal dry density values of 3.0 t/m(3) was assumed to be
appropriate for the style of mineralisation

·      Cu equivalent was calculated using the following metal prices:
3,050 US$/t for Zn, 9,000 US$/t for Cu, 2,250 US$/t for Pb

·      Tonnage is reported on dry basis

 

Further background on the Verkhuba Deposit including a summary of the
Exploration Target and Rudny Altai belt follows in the appendix below.

 

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)

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 strategic
minerals required for the energy revolution. With an initial nine licenses
covering 1,321.5 km² in three mineral rich districts of Kazakhstan, 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.

 

Follow us on social media:

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

 

Twitter: https://twitter.com/EastStar_PLC (https://twitter.com/EastStar_PLC)

 

Subscribe to our email alert service to be notified whenever East Star
releases news:

 

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

 

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

 

APPENDIX

Background on the Verkhuba Deposit

East Star commissioned AMC Consultants Pty Ltd ("AMC") to prepare a Mineral
Resource Estimate ("MRE") and a conceptual pit optimisation and analysis for
the Verkhuba Deposit located in eastern Kazakhstan. For reporting purposes,
the MRE was converted to an Exploration Target range under JORC reporting
standards.

Exploration of the project area was carried out in the 1950s through to the
1990s, mostly by surface core drilling. Exploration adits and drives were also
developed at the Verkhuba Deposit, but the database for underground channel
sampling was not available. Mineralised bodies are represented by VMS shallow
dipping sheet-like bodies and lenses.

A total of 97 diamond drillholes define the Verkhuba Deposit with a total of
42,178 m of drilling. 62 drillholes were used for the grade estimate. The
deposit area was sampled using diamond drillholes at variable spacings - from
200 m x 200 m to 100 m x 100 m spacing.

To establish the Exploration Target, AMC completed the following phases of
work:

·           Database import and validation

·           Classical statistical analysis

·           Interpretation and wireframing of mineralised zones
using metal equivalent grades available in the database

·           Data selection and compositing

·           Block model development

·           Grade interpolation and model validation

·           Preliminary pit optimisation study using a base case
scenario

·           Pit analysis and a preliminary scoping estimate of the
deposit's economic potential

·           Development of verification and an infill drilling
programme

Geological modelling was completed by AMC which resulted in 59 interpreted and
wireframed mineralised bodies. A block model constrained by the interpreted
mineralised bodies was constructed with the parent cell size of 5 mE x 5 mN x
2 mRL with standard sub-celling five times in all directions to maintain the
volume resolution of the mineralised bodies. Drillhole sample intervals have
been composited to 1 m length and were used to interpolate all main modelled
grades (Zn, Pb, Cu) into the block model using ordinary kriging (OK)
interpolation techniques. Block grades were validated both visually and
statistically and all modelling was completed using Micromine software.

Constant average bulk density values of 3.0 t/m(3) were applied to each model
cell, which was assumed from the historical reports.

Exploration Target

The grade estimate and subsequent Exploration Target allowed an assessment of
the integrity of the input data. It was also used to confirm estimation and
reporting of exploration potential ranges of tonnage and grades for the
Verkhuba Deposit. The Exploration Target is to be reported in accordance with
the JORC Code*.

Table 1 (in the announcement above) shows the Exploration Target for the
Verkhuba Deposit for both open pit and underground mining methods. The
Exploration Target is based on actual Exploration Results that were obtained
during several historical exploration programmes completed between 1950 and
1990 when a total number of 97 diamond holes were drilled totaling 42,178 m.
The estimated potential quantity of tonnes and grades are conceptual in nature
as there has been insufficient data and evaluation to support estimation of a
Mineral Resource. Tonnages and grades are expressed as ranges that are
considered appropriate for the Exploration Target. There is no certainty that
further exploration, verification drilling, or twinned drilling will result in
the estimation of a Mineral Resource. The Exploration Target is not to be
considered in any way to represent a Mineral Resource or Ore Reserve.

Following the Exploration Target, AMC made the following findings:

·           The quality of procedures for the historical data
collection used for the Exploration Target estimate is believed to be of
sufficient standard

·           The Exploration Target for the Verkhuba Deposit was
prepared using data, geological interpretation and understanding, and
estimation practices that are appropriate for the style of mineralisation

·           The cut-off grades which have been calculated for
reporting open pit and underground Exploration Target are considered
reasonable and based on justifiable assumptions and parameters

·           The Exploration Target has potential to be developed
via open pit and underground mining methods, and it has been delineated and
reported in accordance with the JORC Code

·           Further verification and infill drilling are required
to upgrade the current Exploration Target to a Mineral Resource

*Note: Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. The JORC Code, 2012 Edition. Prepared by: The
Joint Ore Reserves Committee of The Australasian Institute of Mining and
Metallurgy, Australian Institute of Geoscientists and Minerals Council of
Australia (JORC).

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
(containing the Verkhuba Deposit) 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.

 

 

 

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