8th Jan 2020 09:34
(Alliance News) - Shares in Trans-Siberian Gold PLC fell sharply on Wednesday after analysis showed the resource at the Asacha gold mine in Russia has been overestimated.
Shares in Trans-Siberian, which has its headquarters in Cambridgeshire, were down 21% in London at 65.25 pence in morning trade.
The total measured, indicated, and inferred mineral resource for the Kamchatka-located mine has fallen to 313,000 ounces of gold and 675,000 ounces of silver as at the start of December 2019.
The previous mineral estimate, as reported at the end of December 2018, was 553,000 ounces of gold and 1.3 million ounces of silver, representing a 43% and 93% drop respectively.
The Asacha mineral resource is in two zones, being the currently mined Main zone and the yet to be mined East zone, with the majority of the Main zone's resource contained within the QV1 and QV2 veins, with thee veins defined in the East zone.
The goal of the most recent mineral resource estimate was to incorporate the new resource drilling on QV1 and QV2 of the Main zone, plus vein QV25 in the East zone.
As Trans-Siberian Gold reported in September and October, preliminary internal estimates of Asacha "indicated the existing in-situ resource may have been overestimated".
As such, a complete re-analysis of the mineral resource model inputs was conducted and has resulted in a reduction in the mineral resource estimate.
This reduction was due to a combination of factors, including the collapse of older workings on the Main zone which mean there is no realistic prospect of safely recovering any mineralisation. Further drilling and data interpretation and changes to estimation parameters also played a role in reducing the estimate.
Chief Executive Alexander Dorogov said: "I am pleased with the work the team at Asacha has done to update the mineral resource estimate. We have invested heavily in improving our understanding of the ore body through a significant drilling campaign which confirms our expectations and provides the basis for better mine planning out to 2024.
"The resource will be supplemented by additional ounces targeted in an accelerated exploration programme as well as existing stockpiles. A new drilling campaign of approximately 8,000 metres around Vein 25 in the East zone is already underway. We are confident we have the time, capital and skills to upgrade the mineral resource at Asacha. Formal guidance for 2020 will follow shortly, but at this stage we anticipate annual gold production to be in line with recent years."
By Anna Farley; [email protected]
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