Last checked at 1 Sep 2011 12:16
KRYSO RESOURCES PLC
"Kryso" or "the Company"
Operational Update
Kryso Resources plc (AIM: KYS), the mineral exploration and development company with gold and nickel-copper projects in Tajikistan, provides the following progress update.
New Mining Licence Application
In October 2010 LLC Pakrut, the Company's 100% owned Tajik subsidiary, applied for a mining licence for the Pakrut gold deposit. LLC Pakrut's current exploration and trial mining licence allows it to explore the Pakrut licensed area and to mine at the rate of 300,000 tonnes per annum until April 2014. LLC Pakrut has applied for a licence that will allow it to mine up to a maximum rate of 660,000 tonnes per annum for 20 years. All environmental, geological, reserve and ministerial approvals for the application have been obtained and the application is currently awaiting final Tajik government approval at presidential level.
Commencement of Mine Construction at Pakrut
The Beijing General Research Institute of Mining & Metallurgy ("BGRIMM") is in the process of finalising detailed designs for construction of the Pakrut mine and Kryso is ready to begin mobilising further equipment to site and upgrading the road to the project. In addition, the Company has issued a tender for the construction of the mine and received in response proposals from four large Chinese construction companies. We are now in the process of negotiating the terms of the bids with each of the four construction companies.
The Company had anticipated that construction would commence at Pakrut during the second half of 2011 and that production would begin by the end of 2012, however this timetable has been impacted by the fact that it is taking longer than expected to receive the Pakrut mining licence from the Tajik government. Issue of the mining licence is required before the finalisation of mine finance and commencement of construction can occur. Further updates in this regard will be provided in due course.
Finance
Further to the Company's announcement of 8 March, the Export-Import Bank of China ("China EXIM Bank") is currently carrying out due diligence on the Pakrut project and representatives from China EXIM Bank are due to arrive in London in September to meet with the Company and it's advisers; they will then to travel to Tajikistan for a site visit.
Drilling Programme
A total of 18 drill holes have been completed within Kryso's Pakrut licensed area so far this year, and five core drill rigs are currently operating. Two holes have been drilled at Pakrut, six holes at Eastern Pakrut, four holes at Central Rufigar and six at Upper Rufigar. Currently three drill rigs are operating at Pakrut, one at Eastern Pakrut and one at Central Rufigar.
This is the first drilling carried out by Kryso at the Rufigar prospects, which are located approximately 6km north of Pakrut. Exploration in Soviet times outlined several interesting mineralised occurrences in the Rufigar area through geological mapping and trench sampling. Kryso has encountered four ore zones at Upper Rufigar, of which only one was discovered by Soviet trenching. The Company is very encouraged by internal assay results to date from drilling of Ore Zone 2 in Central Rufigar. The results of this drilling will be announced once the Company's internal results have been confirmed by an external laboratory. In addition to drilling, Kryso has completed 1,250m of bulldozer trenches across the projected Rufigar ore zones.
As announced on 24 March, two new drill rigs were purchased by the Company from China and arrived in Tajikistan in late June. Drilling using the new rigs commenced in August. These rigs are currently drilling the deeper levels of the Pakrut deposit where the grade is believed to be increasing at depth with the thickness of the ore body widening to the east.
With the addition of the new drill rigs, Kryso's drilling programme for 2011 at Pakrut is larger than in previous years. During 2011 so far 4,390m have been drilled and Kryso believes that the results of this drilling will in due course generate an increase in the total resources of the Pakrut gold project.
SRK Consulting China Appointed
In August Kryso appointed SRK Consulting China Ltd ("SRK") to carry out the following work with respect to the Company's Pakrut project:
Review and assess the ore body resource models and provide an updated JORC compliant resource estimate; Use mining design software to simulate the mining models and convert qualified resources into JORC ore reserves using the existing resource model and feasibility study; and Complete a resource and reserve assessment to review and assess all other technical aspects of the project, such as mine assessment, mining methods, ore dressing experiments, ore processing plant scheme, design of tailings storage facility, environmental and production safety issues, and mine economy amongst others.SRK completed a site visit in August and the results of the resource assessment and JORC ore reserve estimation are expected to be available before the end of the calender year.
Metallurgical Testwork
In June Kryso engaged BGRIMM to complete additional column leaching metallurgical testwork on low grade ores at the Pakrut deposit to ascertain whether these ores are amenable to processing using a heap or dump leach pad. The results of this testwork are also expected before the end of the calender year.
For further information please visit the Company's website (www.kryso.com) or contact:
| Kryso Resources PLC Craig Brown Anthony Schindler, Investor Relations | Tel: +44 (0)20 7349 9160 Mobile: +44 (0)7710 178 928 | ||
| Evolution Securities Jeremy Ellis/Romil Patel | Tel:+44 (0)20 7071 4300 | ||
| Optiva Securities Limited Christian Dennis/Jeremy King | Tel: +44 (0)20 3137 1902 | ||
| Walbrook PR |
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| Louise Mason | Tel: +44 (0)20 7933 8792 | ||
| Mobile: +44 (0)7557 285 676 | |||
| Paul Cornelius | Tel: +44 (0)20 7933 8794 | ||
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| Mobile: 07827 879 460 |
About the Pakrut Gold Project
The Pakrut gold project, of which Kryso has 100% ownership, is situated in Tajikistan approximately 112km northeast of the capital city Dushanbe.
Pakrut has estimated total JORC compliant resources of 3,578,000oz Au (assuming a cut-off grade of 0.0 g/t Au) and is located within the Tien Shan gold belt, which extends from Uzbekistan into Tajikistan, Kyrgyzstan and western China, and which hosts a number of multi-million ounce gold deposits.
Drilling at Pakrut has previously returned numerous encouraging intersections, including the following results released in March 2011:
Ore Zone 1: 21m (\* TW-15.3m) at 7.28 g/t, 24m (TW-17.98m) at 5.39 g/t and 16.5m (TW-12.36m) at 5.57 g/t Au Ore Zone 2: 30m (TW-22.62m) at 4.37 g/t and 42.9m (TW-32.89m)at 2.57 g/t Au Ore Zone 3: 16.5m (TW-13.28m) at 4.48 g/t and 6m (TW-4.92m) at 6.58 g/t Au Ore Zone 6: 4.5m (TW-3.44m) at 18.2 g/t\* TW - True width/true thickness of ore zone
About Tajikistan
Tajikistan is a secular republic located in Central Asia. The country is a member of the Commonwealth of Independent States (CIS) and the Shanghai Cooperation Organisation. Tajikistan hosts numerous operating precious metal mines as well as the largest aluminium smelter in Central Asia. Kryso's management team has extensive experience in the mining industry in Tajikistan.
Copyright Business Wire 2011