RCS - Scythian Mining Grp - Shareholder Update
22/01/2024 08:15
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RNS Number : 3134A Scythian Mining Group Ltd 22 January 2024
Scythian Mining Group Limited
("Scythian" or the
"Company")
22nd January 2024
Shareholder update - January 2024
Dear Shareholder
We would like to wish all our stakeholders a Happy New Year.
We wish to take this opportunity to update you on the progress of Scythian
since the last shareholder update in February 2023.
It has been a challenging year for Kokkus, our flagship project in Kazakhstan,
after the success achieved in 2022. The business has been constrained by a
lack of funding which we had originally expected in early 2023 from Canadian
investors failing to materialise. We were thus not able to conduct any
drilling on the project during the year, as planned.
1.0 Kokkus Au Project
We have, however, been successful in extending the licence over Kokkus until
the end of 2024, when we will convert it into a Mining Licence, together with
permission to carry out a 12,000m drilling program plus other work during
2024. This program is expected to increase the resource of Kokkus to from a
current 0.5m oz Au to +1.5m oz Au and to test the other mineralised structures
at K5 and K10 which are parallel to K1,2 &3 (see Figures 1,2,3 & 4
below).
We continue to move ahead with plans for a stock market listing and remain
confident of this potential opportunity. We have now formally engaged a London
broker, Tavira Securities, to assist in specific plans for a pre-IPO
fundraising of a staged $10m, to cover the drilling and exploration costs, as
well as other costs before IPO. This funding will be sufficient to fund Kokkus
through to production stage, including a BFS (Bankable Feasibility Study), as
well as complete the ownership to 100%. It is planned to complete the
pre-feasibility study which is a key step towards the issue of a Mining
Licence, expected to be completed during late 2024. The conversations are
progressing well, and we have received a preliminary term sheet for investment
that your Board is now considering.
We have reached agreement with one of our original shareholders to divest our
current 100% interest in the East Balkhash licence, in exchange for
cancellation of the debt due to the investor (c.$7.2m) plus the return to
Scythian of their shareholding (3.8m shares). These shares will remain in
Treasury and may be cancelled in due course. This has the effect of providing
an incremental % ownership to all remaining shareholders. We believe this to
be in the best interests of all shareholders, and will provide a strengthened
balance sheet, to help fund future growth. Kazakhstan continues to offer
interesting acquisition opportunities, and we are also actively evaluating a
number of potential projects, that will enhance shareholder value.
Kokkus Au Deposit
The Kokkus resource has not changed since February 2023, but our understanding
of the controlling structures has changed substantially.
Figure 1: New Kokkus Structural Model- Kokkus is a Triplicate Fold-Thrust
system.
Currently drilling has been restricted to the small black circle where the ore
body outcrops over
500m. In 2024, drilling will increase along the strike where we have a zone
of high grade Au in soils (red /yellow dots) and there is no outcrop, over
2km, and at depth below the initial drilling. Also, we will target fold
hinges K5 and K10 to intersect the trust zones in these fold hinges at depth
as on the surface there is a barren silica cap which we need to drill below.
The K1 thrust zone was intersected a number of times in 2022 drilling giving a
best intersection of 56m @ 5.6g/t Au, with a high grade zone of 148g/t/m in
its core.
Figure 2: Photo of Kokkus high grade core in the K1 thrust zone which is a
mylonite zone containing a very high % of pyrite. True width of the K1 thrust
varies between 40-60m.
Figure 3: Photo of the Kokkus Outcrop and areas to be drilling in 2024, K10 is
600m behind the K5 ridge, see Figure 5 below.
Figure 4; Digital elevation model (DEM) map showing the Kokkus outcrop, and
the relationship between K1, K5 and K10
2.0 Scythian Copper
Scythian discovered a large Cu-Au porphyry system in Kazakhstan in late
2023. Scythian has negotiated a 50/50 joint venture with IG Global, a US
based company, and the joint venture company has applied for 2 new exploration
licences over the area. IG will fund and carry out exploration in the first
2 years, allowing Scythian to focus on exploring and developing of Kokkus and
IPO. A new company has been established "Scythian Copper Ltd" to hold
Scythian's interest in the project which will be a wholly owned subsidiary of
the Company.
Currently there are a number of smaller shareholders who are interested to
sell their shares at a reasonable price if other investors are interested to
increase their current stake. Should you have interest, please contact the
undersigned.
Once again we would like to thank you, as shareholders, for your support. The
year has not been without challenge, but with the expected closure of funding
we believe we are now well-positioned to progress the original intentions of
the company.
Yours faithfully
Barry Davis
President and Managing Director
Contact Via Flagstaff
Flagstaff Strategic and Investor Communications
Tim Thompson
Mark Edwards
Andrea Seymour
Anna Probert
Tel: +44 (0) 207 129 1474
scythian@flagstaffcomms.com (mailto:scythian@flagstaffcomms.com)
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