LONDON--(BUSINESS WIRE)--
China Nonferrous Gold Limited 中国有色黄金有限公司
(“CNG” or the “Company”)
Pakrut Gold Mine Independent Technical Report
Mineral Resource Estimate Update
China Nonferrous Gold Limited 中国有色黄金有限公司 (AIM: CNG), the mineral exploration and mining company currently mining the Pakrut gold mine (“Pakrut”) in the Republic of Tajikistan, today announces the details of an updated Independent Technical Report (“ITR”) completed by SRK Consulting China Limited (“SRK”) and releases an update to Mineral Resource and Ore Reserve estimates for Pakrut in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”, 2012 edition as current effective edition),. The update reflects a substantial reduction in the Mineral Resource Estimate released by the Company (under its previous name of Kryso Resources plc) on 17 June 2013, and reflects the Company’s increasing knowledge and access to the underground ore body as operational work has progressed.
Summary:
- Measured and Indicated Mineral Resources estimate as of 31 December 2022 at the Pakrut Gold Mine, now 6.7 million tonnes with an average grade of 2.1 g/t gold for about 14,000 kg (equivalent to 440,000 ounces) of contained gold, at a cut-off grade of 1.0g/t (previously 1.9 million ounces with an average grade of 3.16g/t reported at a cut-off grade of 0.5g/t, although 172,200 ounces of gold have been extracted since commencement of mining operations);
- Inferred Mineral Resource estimate as of 31 December 2022 now 7.8 million tonnes with an average grade of 2.2 g/t gold for about 17,000 kg (560,000 ounces) contained gold (previously 660,000 ounces at 2.05g/t at a cut-off grade of 0.5 g/t);
- Using a gold cut-off of 1.5 g/t, Proved Ore Reserves now estimated to 1.3 million tonnes at 2.0g/t gold for 2,700 kg contained gold (86,000 ounces) and Probable Ore Reserves now estimated about 2.9 million tonnes of Probable Ore Reserves averaging 1.9 g/t gold for 5,400kg of gold (180,000 ounces) (previously 1.55million oz gold at 3.1g/t at cut-off grade of 1.0g/t and 222,258 oz gold at 2.5g/t at cut-off grade of 1.0g/t for Proved and Probable ore reserves, respectively), although 172,200 oz of gold have been extracted since commencement of mining operations);
- Estimated remaining life of mine for the project based on current Ore Reserve estimates is now 6 years, producing on average 43,000 ounces from 700,000 tonnes of ores per annum until 2029.
- Forecasted production capacity remains at 2,000 tonnes per day.
Zhang Hui, CNG’s Managing Director, commented:
“SRK have produced an updated JORC Code compliant mineral resource estimate and ore reserves estimate. The Company will continue to progress work at site, carry out cost reductions and work to improve efficiencies. In addition, it will look to increase exploration activity at site with a view to extending the life of mine”.
Background
The substantial reduction in the Mineral Resource Estimate when compared with SRK’s previous mineral resource estimation has been impacted by the following factors:
- this new Mineral Resource Estimate, is exclusive of all mined-out materials since the Company commenced operations in 2015, whereas at the time of the previous resource estimated the materials were in-situ without depletion (mining at site had not commenced). 172,200 oz of gold have been extracted to date.
- a total of five gold mineralization zones (“GMZs”) are delineated at Pakrut. Namely GMZ 1, 3, 5, 6 and 7. The Measured and Indicated Mineral Resources are situated in GMZ 1 and GMZ 3. Previous resource estimates have included GMZ 3 (Eastern Pakrut), but operating practices indicate that the gold grade in this GMZ 3 is less than 1.5g/t and therefore not currently economic. Accordingly, this Mineral Resource Estimate only incorporates GMZ 1 (Pakrut) and LLC Pakrut intends to exploit just GMZ 1 in the future.
- the Cut-off grade of gold has increased from 0.5 g/t used in previous Mineral Resource Estimates to 1.0 g/t for this Mineral Resource Statement, reducing the amount of material that is included in the Mineral Resource Estimate because operational performance shows that mining dilution is higher than previously estimated.
- A considerable amount of data from new boreholes and channels has been added to the database originally used in previous Mineral Resource Estimates, following actual operational and further exploration activities, which has increased the awareness and knowledge of the geometry of the Pakrut Deposit.
- The Pakrut gold mineralisation is associated with structural alteration and is of vein type deposit, which can make the geological interpretation of the ore body more complicated when compared to other deposit types. This can be particularly challenging for the resource estimation at the exploration stage (the previous Mineral Resource Estimates were prepared at an exploration stage). However, the use of underground drilling and channeling activities during the construction and production stage has enabled a more comprehensive understanding and interpretation of local geology of the deposit.
Mineral Resource Statement
SRK’s assumptions for the cut-off grade calculation for the Mineral Resource Statement were selected based on experience, benchmarking against similar projects in line with an industry standard commonly used by external experts, as well as a general scoping study of the Pakrut Project and the Company’s past operational performance. SRK has applied a gold grade of 1.0 g/t as an appropriate cut-off grade for the Mineral Resource statement for the Pakrut Project. The resource statement is based on a gold price of 1,860 USD/oz. Operating costs of 50 USD/t of ore mined and processing recovery rate of 80% applied to the resource statement are based on historical mine performance.
The Mineral Resource statement is shown in Table 1. The in-situ mineral resources were estimated as of 31 December 2022.
Table 1: Mineral Resource Statement for Pakrut Project, as of 31 December 2022 (Project is owned 100% by Pakrut LLC so the table below includes both gross and net attributable figures)
GMZ |
Category |
Cut-off (g/t Au) |
Tonnage (kt) |
Au Grade (g/t) |
Au Content (kg) |
Au Content (koz) |
Operator |
1 |
Measured |
1.0 |
1,600 |
2.2 |
3,500 |
110 |
Pakrut LLC |
- |
Indicated |
1.0 |
3,600 |
2.2 |
8,000 |
260 |
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- |
Inferred |
1.0 |
5,900 |
2.4 |
14,000 |
450 |
|
3 |
Measured |
1.0 |
490 |
1.4 |
680 |
22 |
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- |
Indicated |
1.0 |
1,000 |
1.6 |
1,600 |
52 |
|
- |
Inferred |
1.0 |
1,500 |
1.8 |
2,600 |
84 |
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5 |
Inferred |
1.0 |
24 |
1.3 |
31 |
1 |
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6 |
Inferred |
1.0 |
320 |
1.5 |
460 |
15 |
|
7 |
Inferred |
1.0 |
100 |
1.7 |
180 |
6 |
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Total |
Measured |
1.0 |
2,100 |
2.0 |
4,200 |
140 |
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- |
Indicated |
1.0 |
4,600 |
2.1 |
9,600 |
310 |
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- |
Measured + Indicated |
1.0 |
6,700 |
2.1 |
14,000 |
440 |
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- |
Inferred |
1.0 |
7,800 |
2.2 |
17,000 |
560 |
|
Source: SRK
Notes:
1 Both the tonnage and gold contents are rounded to the second significant digit. Gold grade was rounded to the first digit after the decimal point. The totals may not add due to rounding discrepancies.
2 Numbers of the contained Au metal in this table are estimated based on the resource tonnages and grades, and do not represent the exact amount of extractable metal for this Project. They should be treated differently from the expected production of gold ingot. The conversion between ounce and gram is 1: 31.1035 in this Report.
3 The information in the Report which relates to Mineral Resource is based on information compiled by Mr. Yonggang Wu and Mr. Pengfei Xiao, full time employees of SRK China, and members of the Australasian Institute of Mining and Metallurgy (AusIMM). Both Mr. Yonggang Wu and Mr. Pengfei Xiao have sufficient experiences which are relevant to the style of mineralisation and the type of deposits under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the JORC Code. Mr. Yonggang Wu and Mr. Pengfei Xiao consent to the reporting of this information in the form and context in which it appears.
4 The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources converted to Ore Reserves.
Ore Reserve Estimates
A bankable feasibility study report (“BFS”) was prepared by the BGRIMM Technology Group (“BGRIMM”) based on the mineral resource estimate validated in 2014. The forecasts from the report suggests that mining recovery and dilution are about 88% and 10% respectively. SRK is satisfied that these values fairly reflect operation performance and apply the same values in this update.
For information, the economically mineable parts of the Measured Mineral Resources, which includes diluting materials and allowances for losses, are classified as Proved Ore Reserves and the economically mineable parts of the Indicated Mineral Resources, which includes diluting materials and allowances for losses, are classified as Probable Ore Reserves.
Cut Off Grade
The Ore Reserves of the Pakrut Project are reported at a gold cut-off grade of 1.5 g/t as of 31 December 2022 using industrial standard and technical assumptions. Whilst these assumptions were true at the time of calculation, they can change over time. The parameters used by SRK to calculate cut-off grade are as follows:
- The long-term gold price of Consensus Market Forecasts (“CMF”) is 1,430 USD/oz in March 2023. The price was adopted by SRK to calculate cut-off grade (“COG”).
- The proposed recovery rate is 82.99% in the BFS for combined processing and metallurgical operations to process feed ores with a gold grade of about 3.1 g/t. The actual recovery rate varied from 80.02% to 81.88% in last three years to process feed ores with gold grade varied from 2.16 g/t to 2.08 g/t. Considering that the feed grade in future (about 1.9 g/t) is expected to be less than that of BFS and production records, SRK has adopted a recovery rate of 80% to calculate COG.
- The Company’s operating costs varied between 46.14 USD/t ore and 59.14 USD/t ore in the last three years operating. The ore tonnage weighted average costs are about 52.60 USD/t ore. SRK adopted the Company’s current actual operating costs (“Opex”) of 53 USD/t to calculate COG.
A summary of Ore Reserves is shown in Table 2.
Table 2: Summary of Proved Ore Reserves on Each Level as of 31 December 2022 (Project is owned 100% by Pakrut LLC so the table below includes gross and net attributable figures)
GMZ |
Category |
Cut-off (g/t Au) |
Tonnage (kt) |
Au (g/t) |
Au(kg) |
Au (koz) |
Operator |
1 |
Proved |
1.5 |
1,300 |
2.0 |
2,700 |
86 |
Pakrut LLC |
|
Probable |
1.5 |
2,900 |
1.9 |
5,400 |
180 |
|
|
Total |
1.5 |
4,200 |
1.9 |
8,100 |
260 |
|
Sources: SRK
Notes:
1 All figures are rounded to reflect the relative accuracy of the estimate.
2 The mining dilution rate is 10%. The mining recovery rate is 88%.
3 The Ore Reserves are included in the Mineral Resources. They shouldn’t be added to the Mineral Resources.
4 The information in the Report which relates to Ore Reserve is based on information compiled by Mr. Yonggang Wu, a full time employee of SRK China and a member of the AusIMM. Mr. Yonggang Wu has sufficient experience which is relevant to the style of mineralisation and the type of deposits under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined in the JORC Code. Mr. Wu consents to the reporting of this information in the form and context in which it appears.
The ore reserve estimate conducted by SRK was based on the assumptions proposed in the BFS and actual operating status.
At a gold cut-off of 1.5 g/t, the Pakrut Project contains 1,300 kt of Proved Ore Reserves averaging 2.0 g/t gold and 2,900 kt of Probable Ore Reserves averaging 1.9 g/t gold. The ore reserve estimate is also supported by SRK’s estimate of a mining and processing production schedule, which is detailed as follows: Table 3: Production Schedule
Item |
Unit |
Total |
2023 |
2024 |
2025 |
2026 |
2027 |
2028 |
2029 |
Ore Tonnage |
kt |
4,237 |
700 |
700 |
700 |
700 |
700 |
527 |
211 |
Gold grade |
g/t |
1.9 |
1.9 |
2.0 |
1.8 |
1.8 |
2.0 |
2.0 |
1.7 |
Gold contained |
Kg |
8,119 |
1,363 |
1,381 |
1,288 |
1,288 |
1,384 |
1,058 |
356 |
Recovery rate |
% |
81.90 |
81.90 |
81.90 |
81.90 |
81.90 |
81.90 |
81.90 |
81.90 |
Recovered gold |
kg |
6,650 |
1,116 |
1,131 |
1,055 |
1,055 |
1,134 |
867 |
292 |
Net Present Value:
NPVs at various discount rates, which are shown in Table 3, provide an indication that it is economically viable for Pakrut Project to report Ore Reserves.
Table 4: NPVs at Various Discount Rates
It should be emphasized that the economic analysis presented in this section is based purely on the results of the technical review provided in previous sections, on the BFS, and on SRK’s own study and assumptions, and is provided for ore reserve conversion and project evaluation purposes.
Discount Rate (%) |
NPV |
9 |
64,020,000 |
10 |
62,416,000 |
11 |
60,881,000 |
Sources: SRK
The assumptions behind these NPVs are as follows:
- The discounted cash flow method (the “DCF”) is selected as the foundation of economic analysis.
- A 10% discount rate was adopted by SRK to calculate net present values (“NPV”).
- The base date is assumed to be 31 December 2022, and all the assumptions are subject to conditions obtained at the base date.
- All the ore mined is assumed to be feed to the processing plant and gold bullion It’s anticipated that the life of mine (“LOM”) is about 6.3 years, and that the mine is producing until 2029. The Opex forecasts which were estimated based on last three years (2020 - 2022) actual Opex, remain true and correct. Note: depreciation and amortization have been excluded in the operating coast estimates. Sunken capital costs are based on the balance sheet date as at 31 December 2022 of US$152m.
- As there is no significant expansion for the Pakrut project planned, and underground expenditure and equipment is already taken into account, the sustaining capital expenditure relates only to mine closure estimated by SRK to be which is about USD 5,180, 000 (2.5% of total Opex). The added cost will be expended in year 2029, that is the end of mine life. While SRK has identified there is a need to consider the residual assets including plants and smelters, it is assumed that the residual assets are able to cover the expenditures for mine closure in 2029. Therefore, there is no additional cost or reclaimed cash balance used for the NPV calculation. The royalty tax is about 6% of sale revenues. The corporate income tax is the maximum of 18% of taxable revenues and 1% of sales revenues. Other taxes are minor.
The NPV is particularly sensitive to gold price, at a gold price of US1,250/oz the NPV is estimated to be US$49,538,000 and at a gold price of US$2,050/oz the NPV is estimated to be US$122,311,000
Note: JORC Table 1, Section 1 (Sampling Techniques and Data), Section 2 (Reporting of Exploration Results), Section 3 (Estimation and Reporting of Mineral Resources) and Section 4 (Estimation and Reporting of Ore Reserves), are attached in Appendix 1 of this Announcement.
Competent Person Statement:
Resource:
1 The information in this Report which relates to Mineral Resource is based on information compiled by Mr. Yonggang Wu and Mr. Pengfei Xiao, full time employees of SRK China, and members of the Australasian Institute of Mining and Metallurgy (AusIMM). Both Mr. Yonggang Wu and Mr. Pengfei Xiao have sufficient experiences which are relevant to the style of mineralisation and the type of deposits under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the JORC Code. Mr. Yonggang Wu and Mr. Pengfei Xiao have reviewed the information contained in this announcement and consent to the reporting of this information in the form and context in which it appears.
Reserve:
2 The information in this Report which relates to Ore Reserve is based on information compiled by Mr. Yonggang Wu, a full-time employee of SRK China and a member of the AusIMM. Mr. Yonggang Wu has sufficient experience which is relevant to the style of mineralization and the type of deposits under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined in the JORC Code. Mr. Wu has reviewed the information contained in this announcement and consents to the reporting of this information in the form and context in which it appears.
Glossary of abbreviations
Au |
the chemical symbol of gold |
BGRIMM |
Beijing General Research Institute of Mining and Metallurgy |
CNGL(CNG) |
China Nonferrous Gold Limited, formerly as Kryso Resources Corporation Limited, which was reformed from Kryso Resource Plc |
ITR |
Independent Technical Review |
JORC Code |
The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC), December 2012. |
Kt |
thousand tonnes |
Mt |
million tonnes |
Mtpa |
million tonnes per annum |
SRK |
SRK Consulting China Ltd |
Tpa |
tonnes per annum |
Glossary of Technical Terms
Category C1 |
A mineral resource/reserve category in accordance with Russian resource/reserve classification system; the overall level of its geological control and studies is higher than Category C2 and lower than Category B |
Category C2 |
A mineral resource/reserve category in accordance with Russian resource/reserve classification system; the overall level of its geological control and studies is higher than Category P1 and lower than Category C1 |
Category P1 |
A mineral resource/reserve category in accordance with Russian resource/reserve classification system; the overall level of its geological control and studies is higher than Category P2 and lower than Category C2 |
GMZ |
gold mineralised zone; GMZs are used for describing generally the zones and/or bodies with gold mineral resources defined in the Pakrut Project and the Eastern Pakrut Project |
g/t |
gram per tonne, equal to part per million |
Indicated Mineral Resource |
That part of a resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed |
Inferred Mineral Resource |
That part of a resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes which may be limited or of uncertain quality and reliability |
LOM |
life of mine, same as ROM |
Measured Mineral Resource |
That part of a resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes |
Mt |
million tonnes |
Probable Ore Reserve |
The economically mineable part of an indicated, and in some circumstances measured, resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and government factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. |
Proved Ore Reserve |
The economically mineable part of a measured resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and government factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. |
QA/QC |
quality assurance/quality control |
For further information please visit the Company’s website (www.cnfgold.com) or contact:
China Nonferrous Gold Limited
Zhang Hui, Managing Director
Tel: +86 10 8442 6627
WH Ireland Limited (NOMAD & Broker)
Katy Mitchell, Andrew de Andrade
Tel: +44 (0)207 220 1666
BlytheRay (PR)
Tim Blythe, Megan Ray
Tel: +44 (0)20 7138 3224
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014
Appendix 1 JORC Code, 2012 Edition - Table 1 (Pakrut Project)
Section 1 Sampling Techniques and Data
Criteria |
JORC Code explanation |
Commentary - Assessment of the Pakrut Project |
Sampling techniques |
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Drilling techniques |
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Drill sample recovery |
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Logging |
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Sub-sampling techniques and sample preparation |
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Quality of assay data and laboratory tests |
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Verification of sampling and assaying |
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Location of data points |
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Data spacing and distribution |
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Orientation of data in relation to geological structure |
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Sample security |
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Audits or reviews |
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Section 2 Reporting of Exploration Results
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Section 3 Estimation and Reporting of Mineral Resources
Criteria |
JORC Code explanation |
Commentary - Assessment of the Pakrut Project |
Database integrity |
Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes. |
The original exploration data was provided by LLC Pakrut Diamond drilling, reverse circulation drilling, trenching and underground channelling sample data were integrated and compiled for Mineral Resource estimation. Prior to using the data for Mineral Resource estimation, SRK performed due cross check of the digital data and constructed the database. An independent sampling verification programme was performed in 2011, and continued in 2012 and 2014. SRK is satisfied with performance of duplicate sample checks. |
Data validation procedures used. |
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Site visits |
Comment on any site visits undertaken by the Competent Person and the outcome of those visits. |
SRK Competent Persons visited the projects in 2011, 2012 and 2013. Data verification was performed by SRK field geologists were approved and closely supervised by SRK team leader (Competent Person) Dr Anshun Xu FAusIMM (Director, Principal Geologist). |
If no site visits have been undertaken indicate why this is the case. |
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Geological interpretation |
Confidence in (or conversely, the uncertainty of ) the geological interpretation of the mineral deposit. |
The geological interpretation was based on lithological, assay, and structure and geotechnical information. Drilling interceptions provided general confidence of the interpretation of gold mineralised veins. Ground geochemistry, geological mapping, lithological and geotechnical logging and channel (trenching) sample assays provided additional confidence of the mineralisation and the interpretation of mineralised veins at the surface. Geological continuity has been assessed by reference of cross sections interpreted by chief and senior geologists form LLC Pakrut and SRK. SRK’s interpretation of mineralised veins/bodies was produced as a 3D wireframe model, which was supported by a similar interpretation from CNG. |
Nature of the data used and of any assumptions made. |
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The effect, if any, of alternative interpretations on Mineral Resource estimation. |
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The use of geology in guiding and controlling Mineral Resource estimation. |
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The factors affecting continuity both of grade and geology. |
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Dimensions |
The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource. |
Wireframe and block dimensions are discussed in Section 12. The wireframes are used to constrain the block estimation. |
Estimation and modelling techniques |
The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used. The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data. |
The Mineral Resource estimation presented in SRK’s report was completed using MineSight and Surpac software. Prior to modelling and estimation, the database was verified by SRK and both geological interpretations (including the interpretations disclosed previously) made by SRK and CNG have been reviewed. Wireframes of mineralised zones were modelled according to the interpretation made based on lithological, assay, and structure and geotechnical information. Resource domains (wireframe of mineralisation) in the Pakrut Project were modelled using a cut-off grade of 0.5 g/t Au. Sample assays were composited to uniform 1 m length in the mineralised domains (wireframe of mineralised zones) according to statistics of sample assays. Outliers of extreme high grades were assessed according to basic statistics of the composite assays and grade capping has been applied to the assays in each mineralised zone/vein. Geostatistical analysis has been performed and variography was modelled with nugget effect and spherical structure(s). Kriging method with its variations such as Multiple Indicator Kriging has been employed for the grade estimation where possible, and an inverse distance weighted (“IDW”) method was applied to the mineralised zones accordingly, where the ordinary kriging was not applicable. Detailed parameters for grade estimation are described in this report. Visual validation of block grades against drillhole grades; and global statistical validation of the mean composite grades versus block estimates have been applied. SRK is satisfied that the estimation was performed generally honoured to the drilling data. |
The assumptions made regarding recovery of by-products. |
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Estimation of deleterious elements or other non-grade variables of economic significance (e.g. sulphur for acid mine drainage characterisation). |
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In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed. |
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Any assumptions behind modelling of selective mining units. |
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Any assumptions about correlation between variables. |
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Description of how the geological interpretation was used to control the resource estimates. |
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Discussion of basis for using or not using grade cutting or capping. |
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The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available. |
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Moisture |
Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content. |
Specific gravity analysis and grade assaying were conducted on a dry basis; therefore the tonnages were estimated on a dry basis. Moisture factor has not been considered into Mineral Resource estimation. |
Cut-off parameters |
The basis of the adopted cut-off grade(s) or quality parameters applied. |
A cut-off grade of 0.75 g/t Au has been applied for the resource estimation with assumptions as below. Gold price: 1,250 United States dollars (USD) per ounce, A combined direct cash cost for mining and processing (excluding Administrative and General Costs) at approximately USD 30 per tonne ore feed. The parameters assumed by SRK are used to test for “reasonable prospects for eventual economic extraction”. This is showing marginal economic potential of the Pakrut Project’s resource. In SRK’s opinion a cut-off grade of 0.75 g/t Au is suitable for the Mineral Resource reporting for the CNG Gold Project. |
Mining factors or assumptions |
Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made. |
An underground mining with cut and fill method was considered for the Pakrut Project, as designed by the FS. They are detailed in Section 14. The direct mining cost is estimated at approximately USD 20 - USD 22 per tonne ore mined, including the costs of the administrative and general costs of the mine. |
Metallurgical factors or assumptions |
The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made. |
The FS competed by BGRIMM has designed the metallurgical flowsheet and is detailed in Section 15. A combined processing and metallurgical cost at approximately USD 12 - USD 15 per tonne of ore feed was assumed (including the costs of the administrative and general costs of the plants) when considering the mine economics for determining the resource cut-off grade. |
Environmental factors or assumptions |
Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfield project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made. |
Environment costs were considered in the costs of mining, processing and general & administrative costs. No other substantial environmental risks were identified or assumed during the Mineral Resource estimation. Environmental factors and assumptions are disclosed in Section 18. |
Bulk density |
Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples. |
The density of ore was determined according to sample data that collected at the project area. Instead of bulk samples, small volumetric samples weighing about 5 - 10 kg were collected representing both fresh ores and oxidised ores. The density information is detailed in Section 12.7 “Specific Gravity”. Average ore density calculated from the known sample results is about 2.62 g/cm3. |
The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit. |
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Discuss assumptions for bulk density estimates used in the evaluation process of the different materials. |
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Classification |
The basis for the classification of the Mineral Resources into varying confidence categories. |
The classification of Mineral Resource reflects confidence of the estimation basing on both geological continuity and geostatistical analysis. Therefore SRK considered both the nature of drilling controls (interceptions) and distance and numbers of informing samples (drillholes). The classification of each mineralised zones at Pakrut Project is detailed in Section 12.11. The Competent Person is satisfied that the result appropriately reflects the Competent Person’s view of the deposit. |
Whether appropriate account has been taken of all relevant factors (i.e. relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data). |
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Whether the result appropriately reflects the Competent Person’s view of the deposit. |
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Audits or reviews |
The results of any audits or reviews of Mineral Resource estimates. |
This Mineral Resource estimate is an update of the Mineral Resource statement in a Resource and Reserve Report prepared by SRK in 2012. Both internal and external peer reviews have been applied to that estimation Peer reviews of this resource estimation addressed in this Report have been performed within SRK internally. SRK is not aware of any other audits or reviews that have been undertaken to this Mineral Resource estimation. |
Discussion of relative accuracy/ confidence |
Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate. |
Within certain parts of the deposit, the drill spacing and grade continuity is sufficiently detailed to allow for a local estimation of the gold grades. The on-going underground development, as well as previous underground tunnels have revealed that the gold mineralisation discovered are consistent with the grades and geometry reported in this Report. |
The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used. |
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These statements of relative accuracy and confidence of the estimate should be compared with production data, where available. |
Section 4 Estimation and Reporting of Ore Reserves
Criteria |
JORC Code explanation |
Commentary - Assessment of the Pakrut Project |
Mineral Resource estimate for conversion to Ore Reserves |
Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve. Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves. |
Detailed in section 13. The Mineral Resources are reported inclusive of the Ore Reserves. |
Site visits |
Comment on any site visits undertaken by the Competent Person and the outcome of those visits. If no site visits have been undertaken indicate why this is the case. |
Detailed in section 5.5. SRK has not conducted a site visit since September 2014. Image and video information were provided for a desktop review, while a physical site visit is planed to verify the new exploration data since 2014 in May 2023. |
Study status |
The type and level of study undertaken to enable Mineral Resources to be converted to Ore Reserves. The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered. |
Detailed in section 14.1. Overall, SRK converted ore reserves based on validated assumptions of Stage 1 in the FS, latest update of mineral resources and current mine plan. |
Cut-off parameters |
The basis of the cut-off grade(s) or quality parameters applied. |
Detailed in section 14.2. The cut-off grade estimation is based on a cost and revenue assumption, with inputs from mining and processing as well as metallurgical considerations. |
Mining factors or assumptions |
The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design). The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc. The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes, etc), grade control and pre-production drilling. The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate). The mining dilution factors used. The mining recovery factors used. Any minimum mining widths used. The manner in which Inferred Mineral Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion. The infrastructure requirements of the selected mining methods. |
Detailed in section 15. The selected mining methods have been practised widely in the mining industry. It’s conventional method and technically feasible. The stope layout and size have been practised a long time since 2015. SRK considered these assumptions are technically feasible to support future mining. The mining recovery and dilution rates are detailed in section 14.3. The minimum mining width is 1.0 m. Inferred Mineral Resources were treated as waste rocks with a gold grade of zero. Pakrut Project has completed its infrastructure construction at the time of this reporting. There is no further renovation or expansion plan in place. It can be reasonably expected that the practises would guide future production well. |
Metallurgical factors or assumptions |
The metallurgical process proposed and the appropriateness of that process to the style of mineralisation. Whether the metallurgical process is well-tested technology or novel in nature. The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied. Any assumptions or allowances made for deleterious elements. The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole. For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications? |
Detailed in section 16. There is no further renovation or expansion plan in place. It can be reasonably expected that the practises would guide future production well. |
Environmental |
The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported. |
Detailed in section 19. There is no further renovation or expansion plan in place. It can be reasonably expected that the studies available now would guide future production well. |
Infrastructure |
The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided, or accessed. |
Detailed in section 17. There is no further renovation or expansion plan in place. It can be reasonably expected that the infrastructures would support future production well. |
Costs |
The derivation of, or assumptions made, regarding projected capital costs in the study. The methodology used to estimate operating costs. Allowances made for the content of deleterious elements. The source of exchange rates used in the study. Derivation of transportation charges. The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc. The allowances made for royalties payable, both Government and private. |
Detailed in section 20. Cost analysis is based on actual production data and records from LLC Pakrut. The forecast has considered the performance in recent three years, during which the operation has been seen stable. |
Revenue factors |
The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc. The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products. |
Production schedule is shown in section 15.6.3. Prices are detailed in section 18.3. Costs are detailed in section 20. |
Market assessment |
The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future. A customer and competitor analysis along with the identification of likely market windows for the product. Price and volume forecasts and the basis for these forecasts. For industrial minerals the customer specification, testing and acceptance requirements prior to a supply contract. |
Detailed in section 18. Overall, the gold bullion has been and will be mainly sold to National Bank of Tajikistan. |
Economic |
The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc. NPV ranges and sensitivity to variations in the significant assumptions and inputs. |
Detailed in section 21. The economic analysis is based on a forecasted production schedule considered by mining and processing (including metallurgical) sectors with high confidence according to recent production performance, and forecasted commodity price and costs. The variation of commodity price will impact on project economics which has been discussed in the report. |
Social |
The status of agreements with key stakeholders and matters leading to social licence to operate. |
Detailed in section 19.17. It is assumed no social issues to impact much on future operations. |
Other |
To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves: Any identified material naturally occurring risks. The status of material legal agreements and marketing arrangements. The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent. |
A risk analysis was detailed in section 24. In general, a production rate around 2,000 tpd is considered achievable with high confidence. |
Classification |
The basis for the classification of the Ore Reserves into varying confidence categories. Whether the result appropriately reflects the Competent Person’s view of the deposit. The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any). |
Detailed in section 14.4. Proved and Probable Reserves have been classified accordingly, based on modifying factors and Mineral Resource classifications. |
Audits or reviews |
The results of any audits or reviews of Ore Reserve estimates. |
The Report has been peer reviewed by other consultants. |
Discussion of relative accuracy/ confidence |
Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate. The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used. Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage. It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available. |
The Ore Reserve estimate of SRK was reviewed by technicians of Pakrut Project. SRK was told that both the tonnage and grade are close to those estimated by themselves. |