CGH.L Share News (CGH)

(Sharecast News) - Armenia and Kyrgyz Republic-focussed Chaarat Gold announced the completion of the bio-oxidation first phase metallurgical test programme performed by SGS Lakefield on its Kyzyltash gold project on Wednesday.

The AIM-traded firm said the project has an unconstrained JORC-compliant measured, indicated and inferred sulphide resource of 5.4 million ounces of gold at 3.8 grams per tonne.

Management estimated that the project had the potential to produce around 300,000 ounces of gold per annum, subject to the project meeting its feasibility, permitting and development milestones.

The bio-oxidation (biox) test results complemented the metallurgical test results for pressure oxidation and Albion processing methods, which were released on 23 August.

It said leach recovery for biox averaged 84% to 96% using flotation, biox and carbon-in-leaching.

The board said that compared "favourably" to the leach recovery for Albion and pressure oxidation, which averaged 80% to 90%.

Chaarat said the biox process oxidises sulphide minerals and exposes gold to recovery by cyanidation, thus increasing the achievable gold recovery.

The highest overall recoveries, under the conditions tested in the programme, were achieved with flotation followed by biox and carbon-in-leaching flow sheet, which were up to 6% higher than the previously-reported first stage recoveries from both pressure oxidation and Albion technologies.

It said the next steps included further investigation and variability testing, to be performed on all three processing options to confirm the first-stage results.

Final test results would be used to conduct an economic trade-off study to determine the preferred processing option.

Chaarat said the study would include an assessment on flotation and full ore processing options, before proceeding with other workstreams required towards an updated feasibility study.

"The results from the biox test work confirm that the Kyzyltash ore is recoverable through all three potential processing routes," said chief executive officer Mike Fraser.

"It is furthermore encouraging that the biox results are significantly higher compared to the 2016 study results - 77% biox sulphide recovery.

"The economic trade-off study will allow us to understand the economic impact of these strong results and confirm the preferred processing route."

At 1217 BST, shares in Chaarat Gold Holdings were up 2.88% at 11.6p.

Reporting by Josh White at Sharecast.com.