TIDMALTN
15th October 2019
Altyn Plc
("Altyn" or the "Company")
CPR Results Teren-Sai (Area #2)
The Teren-Sai Project is an exploration and development project
of Altyn Plc. It is located in the East of Kazakhstan and is
adjacent to Altyn's operating Sekisovskoye Mine. While covering a
total of 15 targets, Altyn's initial focus has been solely on Area
No.2 in particular two of its four breccia bodies.
As such, Altyn Plc is pleased to announce the results for
Teren-Sai's Area #2 first Independent Competent Person's Report
("CPR") while continuing exploratory and development work on the
remaining targets.
Highlights
The CPR includes JORC Mineral Resources and Ore Reserves
estimates totaling:
-- Proved Ore Reserves of 0.80 million ounces ("Moz") - 10.20 million tonnes ("Mt") at an average gold grade of 2.43 grams/ tonne ("g/t");
-- Probable Ore Reserves of 0.65Moz - 6.23Mt at an average gold grade of 3.25g/t;
-- Measured and Indicated Mineral Resources of 1.48Moz - 15.84Mt at an average gold grade of 2.91g/t;
-- An Exploration Target of 1.03Moz- 9.28Mt at an average gold grade of 3.46g/t.
The Subsoil Use Contract for the Teren- Sai Project is held by
MMC Altyn MM LLP ("MMC Altyn") a wholly owned subsidiary of Altyn.
The Teren- Sai Project was granted Subsoil Use Contract No.
48-40-TPI, effective from 27 May 2016. The Subsoil Use Contract is
an Exploration Contract, valid for gold ore, which covers an area
of 221.25km2 but excludes an area of 0.56km2, resulting in a total
area of 220.69km2. The excluded area forms the boundary for the
Subsoil Use Contract for the Sekisovskoye Mine. The contract is
valid for a period of 6 years with the option to extend for a
further 4 years.
The maiden Mineral Resource and Ore Reserve estimates are based
on exploration drilling conducted since acquisition of the subsoil
use contract in 2016 and 31 May 2019 as well as historical drilling
data. There have been important changes to the regulatory
requirements in Kazakhstan resulting in a detailed discussion of
these matters in the report. EY has compiled the CPR in accordance
with the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves, 2012 edition ("the JORC Code").
At all stages, the technical teams ensured, that all technical
parameters and economic assumptions were consistent with the
requirements of JORC Table 1.
Altyn's independent consultant, Ernst and Young Advisory
Services (Pty) Ltd ("EY"), has prepared a CPR for the 100% owned
Teren-Sai Project located in Kazakhstan. The CPR includes the
maiden Mineral Resources and Ore Reserves estimate for the
Teren-Sai Project.
EY has reviewed the data used in the orebody modelling and
estimation procedures and the approach is considered reasonable for
the style of mineralisation and considers the items and guidelines
outlined in the JORC Code.
The CPR summarises the technical and economic aspects of the
Teren- Sai Project, in order to identify factors that would
influence the future performance of the project. The CPR has been
compiled in order to incorporate the currently available and
material information that would enable potential investors to make
an informed and reasoned judgement regarding the technical and
economic merits of the project.
Mineral Resources and Ore Reserves
Mineral Resources have been estimated based on the level of
geoscientific confidence in the data available and primarily based
on drilling density. Due to the nature of the deposit, drilling is
denser near surface and becomes less dense with depth. Based on
these factors, Measured Resources from surface (approximately
+490masl) to a depth of +260masl and Indicated Resources from
+260masl to a depth of +25masl. Gold cut-off grades of 0.5g/t and
1.5g/t have been used for the open pit and the underground,
respectively. No Inferred Mineral Resources have been estimated.
The open pit to underground boundary is at +350masl.
Mineral Resource estimate for the Teren-Sai Project as at 31 May
2019
Resource Mining Area Level Tonnage (Mt) Cut-off Grade Average Gold Contained Gold (Moz) Average Silver Contained Silver
Classification (Gold g/t) Grade (g/t) Grade (g/t) (Moz)
Measured Open Pit +490masl to +350masl 5.99 0.50 1.89 0.36 3.25 0.63
Underground +350masl to +25masl 3.80 1.50 3.75 0.46 6.13 0.75
Total 9.79 2.61 0.82 4.37 1.37
Measured
Resources
Indicated Underground +350masl to +25masl 6.06 1.50 3.38 0.66 5.52 1.07
Total 6.06 3.38 0.66 5.52 1.07
Indicated
Resources
TOTAL 15.84 2.91 1.48 4.81 2.45
MINERAL
RESOURCES
Mineral Resources are reported inclusive of Ore Reserves and as
in-situ estimates.All figures are rounded to reflect the accuracy
of estimates, apparent computational errors due to rounding.Mineral
Resources are reported on a 100% basis.No geological losses
applied.Density = 2.83.
Ore Reserves have been estimated per level to a depth of
+25masl, as this is the area of the deposit for which Measured and
Indicated Mineral Resources have been estimated. All the Mineral
Resource blocks that are above the cut-off grade of 1.5g/t were
included in the Ore Reserve, as no selective mining has been
incorporated for the Ore Reserves estimate and Life of Mine ("LoM")
plan.
The Ore Reserves are estimated using by applying the modifying
factors detailed below and a detailed LoM plan and schedule was
developed. The mine has an estimated LoM of 16 years assuming a
steady state of 1.3Mtpa at full production as defined in the June
2018 feasibility study. The financial model yields a positive NPV
under the financial assumptions identified below.
Ore Reserve estimate for the Teren- Sai Project as at 31 May
2019
Reserve Mining Area Tonnage Average Gold Grade Contained Gold (Moz) Average Silver Grade Contained Silver
Classification (Mt) (g/t) (g/t) (Moz)
Proved Open Pit 6.29 1.71 0.35 2.94 0.59
(+490masl to +350masl)
Proved Underground 3.91 3.60 0.45 5.87 0.74
(+350masl to +260masl)
Total 10.20 2.43 0.80 4.06 1.33
Proved
Reserves
Probable Underground 6.23 3.25 0.65 5.33 1.07
(260masl to +25masl)
Total 6.23 3.25 0.65 5.33 1.07
Probable
Reserves
TOTAL ORE 16.43 2.74 1.45 4.54 2.40
RESERVES
Apparent computational errors due to rounding.Ore Reserves are
reported as RoM tonnes.Mineral Resources are reported inclusive of
Ore Reserves.No Inferred Mineral Resources have been converted to
Ore Reserves.
The key modifying factors used by Altyn for the estimation of
Ore Reserves are as follows: -
-- long term prices for gold and silver of USD1,250/oz and USD16.50/oz, respectively;
-- a processing recovery of 83% for gold and 73% for silver;
-- an average underground mining cost of USD35/RoMt;
-- mining dilution of 10% for the open pit and 5% for the underground;
-- mining losses of 5% for the open pit and 2% for the underground; and
-- 90% mining extraction factor.
The difference between the gold price used to estimate Ore
Reserves and the price used for the valuation is simply a
reflection of the difference in timing of the Ore Reserve
estimation and the valuation date.
Mineral Resources and Ore Reserves have been estimated and
signed off by Mr V. Redozubov-Gorskiy, the chief geologist at the
Teren- Sai Project. As per the Kazakhstan State Commission on
Mineral Reserves system for classification of reserves ("the GKZ
system"), the geologist is responsible for the estimation of
reserves. Mr V. Redozubov-Gorskiy relies on a team of technical and
mining experts to provide the various inputs for Mineral Resource
and Ore Reserve estimation. Mr V. Redozubov-Gorskiy is a Competent
Person who is a Member of the Australasian Institute of Mining and
Metallurgy.
Exploration Target
The Exploration Target was estimated using the same estimation
methodology as the Mineral Resources; however, they are estimated
for the depth extension of the orebody. The Exploration Target is
estimated for the depths - +25masl to -375masl, an extension of
400m below the deepest drillhole intersection.
The potential quantity and grade of the Exploration Target is
conceptual in nature. There has been insufficient exploration
results to estimate a Mineral Resource and it is uncertain whether
further exploration will allow for portions of the Exploration
Target to be converted to a Mineral Resource.
Exploration Target estimate for the Teren-Sai Project as at 31
May 2019
Resource Level Tonnage (Mt) Cut-off Grade Average Gold Contained Gold Average Silver Contained Silver
Classification (Gold g/t) Grade (g/t) (Moz) Grade (g/t) (Moz)
Exploration +25masl to -375masl 9.28 1.50 3.46 1.03 No estimation
Result
TOTAL 9.28 1.50 3.46 1.03 No estimation
EXPLORATION
RESULTS
The Exploration Target are reported exclusive of Mineral
Resources and Ore Reserves.All figures are rounded to reflect the
accuracy of estimates, apparent computational errors due to
rounding.Exploration Targets are reported on a 100% basis.No
geological losses applied.Density = 2.83.
The Exploration Target has not been reported as a range due to
the conversion from estimation based on the GKZ requirements, which
does not require a range to be reported. Creating an artificial
range around the results of the estimation could be misleading.
Mineral Asset Valuation
The results of the mineral asset valuation are presented in the
table below. EY estimated the preferred value for Teren-Sai Project
as the average value between the Income-based approach and the
Market-based approach for both Scenario 1 and 2, resulting in a
preferred value of USD98.33m. The preferred valuation range for the
Teren- Sai Project is estimated as USD101m under Scenario 1 and
USD89m under Scenario 2.
Mineral Asset Valuation Summary of Teren- Sai Project, 31 May
2019
Scenario Units Income-Based Market-Based Preferred Value
Approach Approach
- Mean Value* - Mean Value*
Scenario 1: Forecast USDm 162.78 45.78 104.28
Scenario 2: Spot USDm 138.98 45.78 92.38
Source: EY analysis* Mean values are derived from high and low
value ranges for the respective valuation approaches.Notes: Real
discount rate of 12.84%.Scenario 1: Consensus analyst long term
gold price of USD1,321/oz.Scenario 2: Spot gold price of
USD1,300/oz at valuation date.
Altyn CEO Aidar Assaubayev commented:
"Following the updated CPR on Sekisovskoye released last week we
are pleased to announce the company's first CPR on Area # 2 of the
Teren-Sai exploration and development project. The momentum from
this initial step in Teren-Sai will be maintained as we intend to
continue the exploration of the project, by analysing the 15
remaining targets of this significant project."
Competent Persons Statement
The information in this statement relates to Exploration
Targets, Exploration Results, Mineral Resources or Ore Reserves is
based on information compiled by Mr V. Redozubov-Gorskiy and other
technical experts at the Teren-Sai Project. Mr V.
Redozubov-Gorskiy, the chief geologist for the Teren-Sai Project,
is responsible for estimation of Mineral Resources and Ore
Reserves. Mr V. Redozubov-Gorskiy has more than 20 years' relevant
experience in the assessment of the types of gold exploration and
mining properties discussed in this statement. Mr V.
Redozubov-Gorskiy is a Competent Person who is a Member of the
Australasian Institute of Mining and Metallurgy.
Mr A. Clay, Principal Consultant employed by EY, is the
Competent Person that supervised preparation of the CPR. Mr A. Clay
has more than 40 years' relevant experience in the evaluation of
the types of gold exploration and mining properties discussed in
this statement. Mr A. Clay is a Competent Person who is a Fellow of
the Australasian Institute of Mining and Metallurgy. Mr Clay is
also the Competent Valuator. Mr A. Clay is independent of Altyn
does not have any material interest in either Altyn or in any of
the properties described herein.
Mr V. Redozubov-Gorskiy and Mr A. Clay consent to the inclusion
in this statement of this information in the form and context in
which it appears.
Cautionary Statement on Forward Looking Information
EY have relied on and challenged the forecasts as provided by
Altyn management. The forecasts for Altyn relate to future events
and are based on assumptions that may or may not remain valid for
the whole of the forecast period. Consequently, such information
cannot be relied upon to the same extent as that derived from
audited financial statements for completed accounting periods. EY
express no opinion as to how closely the actual future results for
the business will correspond to those projected. Therefore,
conclusions arrived at in this document should be interpreted in
this light. EY also do not express an opinion on the commercial
merits of any aspects of the business.
EY have reviewed the explanations provided by Altyn management
during the compilation of the CPR. EY have assessed such comments
and explanations for reasonableness within the context of our
knowledge and understanding of the business and the industry within
which it operates.
EY's CPR contains forward-looking statements. These
forward-looking statements are based upon the technical and
economic parameters identified by Altyn and EY. The statements are
subject to a number of known and unknown risks, uncertainties and
other factors that may cause actual results to differ materially
from those forward-looking statements identified by Altyn and EY.
Factors that could cause such differences include changes in the
global gold and silver markets, equity markets, costs and supply of
materials and regulatory changes. Although Altyn and EY considers
the expectations reflected in the forward-looking statements to be
reasonable EY will not be held liable for any deviations from these
statements.
Further Information:
For further information please contact:
Altyn PlcRajinder Basra+44 (0) 207 932 2455
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014.
Information on the Company
Altyn Plc (LSE:ALTN) is an exploration and development company,
which is listed on the standard segment of the London Stock
Exchange.
To read more about Altyn Plc please visit our website
www.altyn.uk
View source version on businesswire.com:
https://www.businesswire.com/news/home/20191014005697/en/
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