Operations

Reserves, exploration and development

Reserves and Exploration

1. Mineral reserves

Mineral resources and ore reserves

Key to the future development of the Gedabek site is our knowledge of the mineral resources and ore reserves within our contract areas. The Group’s most recent mineral resources and ore reserves estimates for the Gedabek open pit were published as of 18 September 2018. Full JORC (2012) reporting with unchanged mineral resources and ore reserves estimates was subsequently released on 14 March 2019. The mineral resource showed a total mineral resource (at a cut-off grade of 0.3 grammes per tonne of gold) of approximately 986 thousand ounces of gold, 63.4 thousand tonnes of copper and 8,172 thousand ounces of silver. The economically mineable ore reserves are over 343,000 ounces of gold and more than 36,000 tonnes of copper, which has extended the current life of the Gedabek open pit until 2024. Table 1 shows the Gedabek open pit mineral resources estimate at 14 March 2019 and Table 2 shows the Gedabek open pit ore reserves estimate at 14 March 2019.

Table 1 – Gedabek open pit mineral resources estimate at 14 March 2019
Gold (+ Copper) Mineral Resources (cut-off grade ≥ 0.3 g/t gold)
Mineral Resources Tonnage Gold Grade Copper Grade Silver Grade Gold Copper Silver
(Mt) (g/t) (%) (g/t) (koz) (kt) (koz)
Measured 18.0 0.9 0.2 8.3 532 38.0 4,800
Indicated 11.1 0.7 0.1 5.6 264 15.7 2,011
Measured+Indicated 29.1 0.9 0.2 7.3 796 53.7 6,811
Inferred 8.5 0.7 0.1 5.0 189 9.7 1,361
Total 37.6 0.8 0.2 6.8 986 63.4 8,172
Copper Mineral Resource (Additional to Gold Mineral Resource) (cut-off grade copper ≥0.3% and gold <0.3 g/t)
Mineral Resources Tonnage Gold Grade Copper Grade Silver Grade Gold Copper Silver
(Mt) (g/t) (%) (g/t) (koz) (kt) (koz)
Measured 5.3 0.1 0.5 2.1 21 26.3 356
Indicated 0.9 0.1 0.5 1.6 3 4.4 48
Measured+Indicated 6.2 0.1 0.5 2.0 24 30.7 404
Inferred 0.5 0.1 0.4 1.5 1 1.9 23
Total 6.7 0.1 0.5 2.0 25 32.6 426
Note that due to rounding, numbers presented may not add up precisely to totals.
Table 2 - Gedabek open pit ore reserves estimate at 14 March 2019
Ore Reserves Tonnage Gold Grade Copper Grade Silver Grade Gold Copper Silver
(Mt) (g/t) (%) (g/t) (koz) (kt) (koz)
Proved 10.9 0.89 0.29 8.83 311 31.9 3,084
Probable 1.2 0.82 0.34 9.52 32 4.1 373
Proved and Probable 12.1 0.88 0.30 8.90 343 36.0 3,457
Note that due to rounding, numbers presented may not add up precisely to totals.

The above proved and probable ore reserves estimate is based on that portion of the Measured and Indicated Mineral Resource of the deposit within the scheduled mine designs that may be economically extracted, considering all "Modifying Factors" in accordance with the JORC (2012) Code.

The Gedabek Open Pit Mineral Resources report can be download here. The Gedabek Open Pit Ore Reserves report can be download here.

The latest JORC (2012) mineral resources and ore reserves statements for the Ugur deposit were completed in 2017. Table 3 shows the Ugur open pit mineral resources estimate and Table 4 shows the Ugur open pit ore reserves estimate.

Table 3 – Ugur open pit mineral resources estimate at 1 August 2017
Mineral Resources
(cut-off grade ≥ 0.2 g/t gold)
Tonnage Gold Grade Silver Grade Gold Silver
(Mt) (g/t) (g/t) (oz) (oz)
Measured 4.12 1.2 6.3 164,000 841,000
Indicated 0.34 0.8 3.9 8,000 44,000
Measured+Indicated 4.46 1.2 6.2 172,000 884,000
Inferred 2.50 0.3 2.1 27,000 165,000
Total 6.96 0.9 4.7 199,000 1,049,000
Note that due to rounding, numbers presented may not add up precisely to totals.
Table 4 – Ugur open pit ore reserves estimate at 1 August 2017
Ore Reserves Tonnage Gold Grade Silver Grade Gold Silver
(Mt) (g/t) (g/t) (oz) (oz)
Proved 3.37 1.3 7.2 142,000 779,000
Probable 0.22 0.8 4.1 5,000 29,000
Proved and Probable 3.59 1.3 7.0 147,000 808,000
Note that due to rounding, numbers presented may not add up precisely to totals.

The above proved and probable ore reserves estimate is based on that portion of the Measured and Indicated Mineral Resource of the deposit within the scheduled mine designs that may be economically extracted, considering all "Modifying Factors" in accordance with the JORC (2012) Code.

The Ugur Open Pit Mineral Resources report can be downloaded here. The Ugur Open Pit Ore Reserves report can be downloaded here.

In March 2019, the Group published the JORC (2012) mineral resources statement and ore reserves estimate for its Gadir underground mine. The mineral resources statement showed measured plus indicated mineral resources (at a cut-off grade of 0.5 grammes per tonne of gold) of 1,775,000 tonnes containing 145,200 ounces of gold, 736,100 ounces of silver, 3,295 tonnes of copper and 14,470 tonnes of zinc. Table 5 shows the Gadir underground mine mineral resources estimate as at 20 August 2018. Table 6 shows the Gadir underground mine ore reserves estimate as at 20 August 2018.

Table 5 – Gadir underground mine mineral resources estimate at 20 August 2018
Mineral Resources
(cut-off grade ≥ 0.5 g/t gold)
Tonnage Gold Silver Copper Zinc
(kt) (g/t) (koz) (g/t) (koz) (%) (t) (%) (t)
Measured 540 3.70 64.2 17.49 303.6 0.29 1,566 1.01 5,454
Indicated 1,235 2.04 81.0 10.89 432.4 0.14 1,729 0.73 9,016
Measured+Indicated 1,775 2.54 145.2 12.90 736.1 0.21 3,295 0.84 14,470
Inferred 571 1.48 27.2 5.68 104.4 0.10 571 0.52 2,972
Total 2,347 2.29 172.4 11.14 840.4 0.19 3,866 0.78 17,442
Note that due to rounding, numbers presented may not add up precisely to totals.
Table 6 – Gadir underground mine ore reserves estimate at 20 August 2018
Ore Reserves Tonnage Gold Silver Copper
(kt) (g/t) (koz) (g/t) (koz) (%) (t)
Proved 222 2.81 25 14.13 101 0.24 535
Probable 575 2.41 45 10.99 203 0.15 852
Proved and Probable 797 2.73 70 11.86 304 0.17 1,387
Note that due to rounding, numbers presented may not add up precisely to totals.

The above proved and probable ore reserves estimate is based on that portion of the Measured and Indicated Mineral Resource of the deposit within the scheduled mine designs that may be economically extracted, considering all "Modifying Factors" in accordance with the JORC (2012) Code. Zinc was not estimated as part of this reserve as it is under study at resource level currently.

The Gadir Underground Mineral Resources report can be downloaded here. The Gadir Underground Ore Reserves report can be downloaded here.

2. Exploration

2.1 Gedabek

The Group’s geological programme at Gedabek in 2018 formed part of a rolling three-year exploration plan and was designed to achieve the following main objectives:

The major results of geological exploration for the year ended 31 December 2018 are as follows:

The detailed work carried out at Gedabek in 2018 by location is as follows:

Gedabek regional Gedabek open pit (and underground) Gadir Ugur Sӧydülü

The Airborne ZTEM/Magnetic Survey Highlights report can be download here.

2.2 Gosha

A new discovery of polymetallic mineralisation was made at the Asrikchay target area, 7 kilometres north from the Gosha underground mine. A significant polymetallic drill-hole intersection was found with weighted grade averages from 228.70 metres to 233.00 meters (4.30 metre downhole thickness) of 4.11 grammes per tonne of gold, 112.23 grammes per tonne of silver, 3.07 per cent. copper and 3.02 per cent. zinc. Preliminary follow-up surface geophysics has been completed over Asrikchay to identify the deposit geometry and the results are awaited.

2.3 Ordubad

The 462 square kilometre Ordubad contract area is located in Nakhchivan, South West Azerbaijan and contains numerous targets including Shakardara, Piyazbashi, Misdag, Agyurt, Shalala and Diakchay, all of which are located within a five-kilometre radius of each other.

The presence of gold was first discovered at Shakardara around 1956 to 1958. Soviet geologists estimated resources for the main vein zone of 2.6 million tonnes of ore containing approximately 120,000 ounces of gold, 280,000 ounces of silver and 4.01 tonnes of copper, but these estimates have never been substantiated.

The geological exploration programme at Ordubad was significantly expanded in 2018, compared to previous years. The work was to assess the extent of the copper, gold and associated mineralisation and to verify the Soviet-era data which indicate extensive potential mineralisation.

A summary of the work carried out in 2018 is as follows:

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