Gold Price USD 1257.50 /oz (AIM:CGH)21.13p

Kyzyltash

The Kyzyltash sulphide ore body represents the long term development potential of the Chaarat project. Over 80,000m of drilling has been carried out to date, which has defined a large high grade resource (6,131koz: 62.1Mt at 3.07g/t). The Kyzyltash ore body is open along strike and down dip, with significant exploration potential within the Chaarat licence areas.

The Kyzyltash development will be more complex than the simple, low cost, heap leach process used for the Tulkubash ore. The Kyzyltash ore-body is suitable for both open pit and underground mining, with an existing adit driven into high grade mineralisation in the heart of the deposit. The resources suitable for underground mining have a cut-off grade of 1.8g/t and an average grade of 3.6g/t.

The Kyzyltash orebody is refractory in nature, requiring oxidation of the ore to recover gold. The refractory nature is due solely to sulphide mineralization. There is no carboniferous material associated with the ore body. There are a number of proven technologies available to extract gold economically from refractory ore-bodies, with over 40% of annual world gold production coming from refractory ores. Typically, production from a refractory ore body requires a higher grade than for oxide ore, and the processing plant will have a higher capital expenditure requirement.

Fortunately, the Kyzyltash ore has significant scale at high grades, which will allow an economic mine plan to be generated. Power is an important part of the costs associated with processing of refractory ores. The Kyrgyz Republic has good availability of low cost power generated through hydro-electric schemes, which will allow the long term processing costs for Kyzyltash to be competitive.

In 2015 a Bankable Feasibility Study was completed for the development of the Kyzyltash orebody, which demonstrated robust economics. However, due to the scale of investment required to deliver the project, and the additional risks associated with both underground mining and refractory ore processing, a phased development approach starting with the Tulkubash oxide heap leach development has been adopted.