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

Tulkubash

The Tulkubash ore is suitable for open pit mining and low cost heap leach extraction – a low capital, low operating cost, technically straightforward and proven technology. Chaarat’s management team has experience building and operating heap leach plants across the world including developing countries and high altitude locations. A bankable feasibility study for the Tulkubash heap leach project is due for completion in March 2018.

Exploration up to 2016 has defined 912,000 ounces of gold through approximately 35,000m of drilling. This is constrained within 1.5km of strike in the southern portion of Chaarat’s 6km long mining licence. In 2017 a further 17,000m of drilling was completed to in-fill areas of the deposit and extend the area of exploration to approximately 2.2km of strike. Mineralisation was found to be continuous along strike, extending the proposed open pit to include previously identified along strike satellite deposits. In addition, additional mineralised zones adjacent to the primary Tulkubash zone were intersected.

An updated resource statement, including the additional drilling, is due for completion in January 2018. The mineralisation is open to the north-east with along strike continuity indicated by substantial soil geochemical anomalies.

The Tulkubash development is expected to have an initial processing capacity of 8kt of ore per day, but is being designed to be readily expandable at a low capital cost to allow for production of 120koz+ per annum once along strike exploration has been completed. This will ensure that the Tulkubash heap leach facility will be a meaningful gold producer on a standalone basis.

Tulkubash Heap Leach Basic Design

Heap Leach Basic Design schematic

Oxide ore from the Tulkubash zone will be crushed at the processing plant to a 12.5mm size. Due to the nature of the ore no agglomeration will be required, and the crushed ore will be stacked directly on the leach pad. The lack of agglomeration removes a potential bottle neck from the plant for future expansion.

Through a simple chemical process gold will be extracted from the zero discharge heap leach pad into a solution. The pregnant solution will be passed through carbon columns to extract the gold, from where it will be further refined at site through elution, electro-winning and smelting, to deliver a doré bar of gold and silver with minor impurities. Doré will be shipped to gold refineries for final production of fine gold and fine silver bullion for sale. Overall gold recovery defined through metallurgical testwork is expected to be 70%.

Tulkubash site layout

The proposed site layout provides sufficient space to safely operate and expand the Tulkubash facilities. Ore will be trucked from the open pit to the leach pads over a distance of approximately 5km. The leach pads are in an area known as the ‘dry valley’, away from natural water courses with ample space for long term increases in production.

Expected site layout

Site Layout

Infrastructure upgrades to prepare the site for development are underway and will be completed in H1 2018 ahead of development. This includes upgrades to the site access road, communications infrastructure and a bridge across the Sandalash river. Due to the simple nature of the heap leach process there are no significant infrastructure requirements to bring the mine into production.