13 May 2010 09:45
OXUS GOLD PLC
AGF Exploration Update
13 May 2010 - Oxus Gold plc ("Oxus" or the "Company") today announces that it has commenced a significant exploration programme within the licence area of its 50% owned Amantaytau Goldfields ("AGF") joint venture in Uzbekistan.
The objective of the five year exploration programme is to accelerate the conversion of mineral resources to reserves and in so doing accelerate the preparation of deposits for production, as well as to define new resources. AGF is targeting an increase in JORC classified gold reserves from the current 2.4 million ounces to over 7 million ounces as a result of the drilling programme, after allowing for mining depletion. The total exploration potential (JORC and Soviet classified) at AGF is currently identified as approximately 24 million ounces of gold and 480 million ounces of silver.
The total budget for the five year programme is approximately $22 million, of which $2.5 million has been committed from current cash resources to be spent during the remainder of 2010.
Within the 192 sq km licence area of AGF the exploration work being proposed is:
·; 35,250 linear metres of trenching - including 8,250m in 2010;
·; 183,625 metres of inclined hole reverse circulation ("RC") drilling, using a new Explorac 220 drill rig purchased from Atlas Copco, to target both oxides and underlying sulphides - including 27,625m in 2010;
·; 52,425 metres of inclined surface deep hole core drilling, principally around Amantaytau Severny, utilising AGF's existing Atlas Copco CS14 drill rig, plus the planned acquisition of a second CS14 drill rig in 2011 - including 4,575m in 2010;
·; 30,713 metres of underground core drilling starting in 2011 from the proposed access development into the Amantaytau Severny underground mine, utilising AGF's existing Atlas Copco U6 underground drill rig, and with the acquisition of a second U6 underground drill rig planned in 2012.
Trenching programme
About 1,000 linear metres per month of trenching are proposed, which commenced earlier this month with infill trenching at Sarybatyr to redefine on surface the hangwall and footwall contacts prior to the start of open pit mining operations. The next priority will be to carry out further trenching in the Nukrakon (formerly Vysokovoltnoye), Yasaul and Taskazgan areas, before resuming and completing work started in 2008 in the Asaukak and North Daugystau areas.
Exploration drilling
AGF's drilling strategies are as follows:
·; inclined hole RC drilling, both within and around AGF's open pit mining operations for short hole 'orebody definition drilling' and in-pit grade control, and drilling of the transition and primary sulphides immediately below the oxide open pits, as well as deeper RC exploration drilling of both oxides and sulphides;
·; deep hole core drilling to intersect mineralisation below and adjacent to the Amantaytau Severny underground mine, initially targeting the interval between 500m and 900m below surface, below the existing Amantaytau Severny reserves. Some of this drilling is expected to be carried out from underground, once progress is made with the proposed decline.
The new Atlas Copco Explorac 220 RC drill rig is scheduled to be delivered to the AGF mine during June 2010. This rig is capable of drilling 4.5" (114mm) diameter to 300m depth, and initially will carry out all AGF's RC drilling. Oxus is further considering the purchase of a crawler mounted Explorac R50 RC rig which will work within and around AGF's open pit mining operations for short hole 'orebody definition drilling' and in-pit grade control.
Additional drilling equipment is being purchased for AGF's existing CS14 surface core drill rig, principally enabling the rig to start a deep sulphide core drilling programme around the Amantaytau Severny underground mine, and to confirm the continuity of sulphide gold resources at depth.
Discussions are being carried out with international drilling contractors with regard to the supply of drilling supervision and lead drillers, training and technical support.
The Company is planning 150m per day RC drilling with the Explorac 220 drill rig and 540m per month core drilling with the CS14 drill.
A diesel power pack is being purchased for AGF's existing U6 underground drill rig to enable this rig to be used on surface prior to going underground, and for carrying out geotechnical and metallurgical core drilling.
GIS and Database Management System
Oxus and AGF have also taken the decision to establish a Geological Information System ("GIS") together with a comprehensive mineral resource database for AGF's exploration area and contained deposits and occurrences. In cooperation with specialist advisers, Oxus will be placing experienced GIS geologists and technicians in the exploration geology department to work alongside and train local AGF staff.
Richard Shead, Executive Chairman, commented: "The exploration potential at AGF is substantial. I am delighted that we are now able to allocate the funds to commence this programme, which we believe should add significant value to the investment in AGF. Over the next 3 to 5 years we also plan to increase gold production at AGF to 300,000 ounces per annum, which, together with the targeted increase in gold reserves, should transform Oxus' standing as a gold producer and explorer".
Contacts:
| Oxus Gold plc Richard Shead (Chairman) Richard Wilkins (Executive Director)
|
Tel: +44 (0) 207 907 2000
|
| Fairfax I.S. PLC Ewan Leggat / Laura Littley
|
Tel: +44 (0) 207 598 5368 |
| Conduit PR Ltd Ed Portman
|
Tel: +44 (0) 207 429 6607 |