Chaarat Gold Hlgs Ld (AIM:CGH) Kapan Mineral Resource Update

Chaarat (AIM:CGH), the AIM-quoted gold mining Company with an operating mine in Armenia, and assets at various stages of development in the Kyrgyz Republic is pleased to announce the updated JORC Compliant Mineral Resource Estimate (“MRE”) for its Kapan polymetallic mine in the Republic of Armenia. The full MRE report will be published on Chaarat`s website. 


·   The 2022 constrained MRE contains 722 thousand gold equivalent ounces (“koz AuEq”)1 in the Measured & Indicated (“M&I”) categories. This compares to 584 koz AuEq M&I MRE reported in June 2021, reflecting a 25% increase in MRE. 

· M&I tonnes increased by 30% from 1.955 Mt to 2.602 Mt while grade dropped by 5% from 9.1 g/t AuEq to 8.6 g/t AuEq.

· Mined Shape Optimization (“MSO”) was performed on the mineral inventory to apply constraining factors to the Mineral Resource.

The updated MRE will be used as the basis for the updated 2022 Ore Reserves Estimate (“ORE”). As in prior years, Chaarat will employ the services of AMC Consulting to review the 2022 MRE and develop a revised 2022 ORE. 

1 Gold equivalent ounces for the 2022 MRE is defined in Note 1 of Table 1.

Michael Fraser, Chief Executive Officer, commented:  

“I am pleased to report the results of the 2022 Mineral Resource Estimate. The new MRE shows a 25% increase in Measured and Indicated ounces compared to 2021. New drilling converted mineralization to M&I to replace depletion during the period, and the improvements to the mining methods employed at Kapan have enabled an increase to the resource.”  


The following table summarizes the latest constrained 2022 MRE:



AuEq (g/t)

AuEq Metal (koz)









M & I








Table 1 Constrained Mineral Resources Estimate Sept 1,2022 

Note 1:   

· The effective date of the resource is 1st September 2022. The Mineral Resources that are not Mineral Reserve do not demonstrate economic viability.  Numbers may not sum due to rounding.  

· The gold equivalency (AuEq) formula is based on the following metal prices: Au 1750 USD/oz; Ag 21.8 USD/oz; Cu 8300 USD/t; Zn 2950 USD/t  

· The AuEq formula used is as follows: AuEq= Au+Ag*21.8/1750+Cu*8300/1750*31.1035*100+Zn*2950/1750*31.1035*100  

· Grade interpolation is done by Ordinary Kriging method.  

· The applied MSO assumes a COG = 2.1g/t AuEq and minimum mining widths of:  2.2m for the veins dipping < 70°; 1.8m for veins dipping 70° – 80° and 1.2m for veins dipping 80°-90°  

· Mineral Resources are with applied depletion and inclusive of Ore Reserves.  

· The resource estimate and classification are according the JORC Code (2012) reporting code.  

The previously reported June 2021 constrained MRE is shown below 



AuEq (g/t) 

AuEq (koz) 









M & I  








Table 2 Constrained Mineral Resources Estimate June 1, 2021 


· The effective date of the resource is 1st June 2021. The Mineral Resources that are not Mineral reserve do not demonstrate economic viability.  Numbers may not sum due to rounding. 

· The gold equivalency formula is Au Eq = Au + (Ag g/t * ($25 / $1,700) + (Cu % * ($8,000 * 31.1035 / $1,700) / 100) + (Zn % * ($2,500 * 31.1035 / $1,700) / 100 

· MSO applied assuming minimum width 2.2m; COG 2.0g/t Au Eq 

· Mineral Resources are with applied depletion and inclusive of Ore Reserves. 

· The resource estimate and classification are according the JORC Code (2012) reporting code. 

Mining depletion from June 1, 2021 to September 1, 2002, being the period between the 2021 MRE and the 2022 MRE, was 0.232Mt containing 81 koz AuEq. The results from the infill drilling program during 2021 and 2022 replaced depletion and added additional ounces to the MRE.

Modifying factors

Starting in 2021, Chaarat´s MRE is reported on a constrained basis by applying modifying factors. Each vein in the resource model is run through MSO software to determine the reasonable prospects for eventual economic extraction on a vein-by-vein basis.

Table 3 below shows the main modifying factors applied to the model via the use of the MSO software.


Metal prices 

2.1 ppm 

See Notes 1

Ore body dip 

Minimum mining width (MSO) 





  < 70o 


Development overbreak 


Production Stope overbreak: 

First mining sublevel 


Middle sublevel 


Bottom sublevel 


Table 3 MSO’s COG, Minimal mining width and working over breaks percentage 

Resource Estimation Assumptions and Methods  

The MRE was constrained over the polymetallic veins of the deposit, using wireframe solid models. The resource depletion zones were also encoded into the resource model. Grade estimates are based on 1.0m composited assay data, with applied top capping for all elements of interest. The interpolation of the metal grades was undertaken via Datamine software using ordinary kriging at parent blocks of 4x4x4m and minimal sub blocking of 0.1m. MSO software was used to determine the reasonable prospects for eventual economic extraction. The elements of interest interpolated in the resource model include gold, silver, copper, zinc, lead and sulphur. Density estimation is based on a sulphur regression formula. Full details can be found in the 2022 MRE report which will be available on the Company’s website.

Quality Assurance/Quality Control Procedures: Sampling Methodology and Quality Control  

Sampling comprises historical surface diamond and RC drilling, historical and recent underground diamond drilling, and channel sampling. Core drill holes were drilled along the full mineralization intersection, as normal to the mineralization strike and dip as possible, predominantly at NQ diameter. The maximum sampling interval was 1 metre, the minimum was 0.2 metres. In the recent drilling campaigns entire core was collected as regular core samples. Underground channel samples were chipped along the marked face with a pneumatic hammer.

The samples were pre-processed and analysed at the on-site mine laboratory. The laboratory conducts Fire Assay with atomic adsorption spectrometer (“AAS”) for gold (0.2 g/t-1000g/t), and atomic AAS for Ag (0.2 g/t -20000g/t), Cu (0.005%-9.9%), Pb (0.005%-19.9%) and Zn (0.005%-29.9%). The laboratory is accredited according to GOST ISO/IEC 17025-2019 standard. GOST refers to a set of international technical standards maintained by the Euro-Asian Council for Standardization, Metrology and Certification (“EASC”), a regional standards organization operating under the auspices of the Commonwealth of Independent States (“CIS”). Internal quality assurance and quality control (“QA/QC”) scheme includes certified reference materials (“CRM”) and blank material. Approximately 5% of the samples were sent to an accredited laboratory as a part of mandatory Armenian state control. Kapan’s on-site laboratory shows an acceptable level of sample precision and accuracy for both diamond drilling and channel sampling.

Geological Modelling Procedures  

Ore wireframing is done via LeapFrog™ software, using all available drill hole and channel data at 1.5 g/t AuEq as a base cut-off grade. The maximum width of barren intervals, included in ore solid, is 2.0m and the minimal interval width is 0.2m. Hard boundaries of the veins were used to outline the ore bodies. In case of available barren contouring hole, the wireframe was extrapolated on a half distance between the mineralized and barren holes, with reducing the width accordingly.

In case the closest barren intercept has reasonable zone of increased grades, these intercepts are used in the extrapolation process. In case of lack of contouring barren drill hole, the ore wireframe is extrapolated in a half distance between the last two holes, but not further than the half of the average exploration drilling grid (grade control drilling is within average grid of 20x20m).

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014 (which forms part of domestic UK law pursuant to the European Union (Withdrawal) Act 2018).



Chaarat Gold Holdings Limited

+44 (0)20 7499 2612

Mike Fraser, Chief Executive Officer

[email protected]

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