11th Nov 2014 10:47
LONDON (Alliance News) - Chaarat Gold Holdings Ltd Tuesday said the total JORC resource has increased for the Chaarat gold project in the Kyrgyz Republic, which has a higher than average grade to allow the project to generate substantial returns, even with a weak gold price.
The updated total JORC resource increased by 15.4% to 6.1 million ounces of gold at a grade of 3.2 grammes of gold per tonne, from the previous 5.3 million ounces.
The measured and indicated part of the total resource increased by 33% to 5.2 million ounces from the previous 3.9 million ounces.
During 2014, the company undertook 6,500 metres of diamond core drilling to better substantiate the resource of the standalone open pittable heap leachable Tulkubash project. The resource for the Tulkubash zone, which will underpin the first stage heap leach project, has been calculated to be 13.2 million tonnes at a grade of 1.7 grammes of gold per tonne to give a total content of 729,000 ounces of gold at a cut of grade of 1.0 gramme per tonne.
Chaarat are hoping to reduce the cut off grade from 1.0 gramme to 0.5 grammes of gold per tonne for the Tulkubash zone after completing the definitive feasibility study, when the company believes it will confirm the low cost of processing by the heap leach method allowing it to reduce the cut off grade.
Chaarat said the grade varies across the project, with the main and contact zones showing a high grade core surrounded by a lower grade.
The high grade core forms 85.9% of the resource for the main and contact zones of 4.6 million ounces with a grade of 3.8 grammes of gold per tonne, allowing the company to generate attractive returns despite the low gold prices, it said in a statement.
"It has now been established that the mineralisation consistently demonstrates a higher grade core and lower grade halo with most of the gold residing in the higher grade core," it said.
"A large heap leachable project with a grade of over 1.7 grammes of gold per tonne, as well as silver credits, which requires a relatively low upfront investment, is a very good way to start production. As I have previously pointed out the average grade of large discoveries today is 0.89 grammes of gold per tonne, and the average grade of producing mines is 1.18 grammes of gold per tonne, significantly lower than that of Chaarat," said Chief Executive Dekel Golan.
"We are focusing on the development effort now by completing the feasibility study and securing finance for the construction of the project," he added.
Chaarat shares were down 6.0% to 11.75 pence per share Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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