Central Asia Metals has signed a framework agreement at the third UK-Kazakhstan Inter-Governmental Commission (IGC) to acquire an 80% effective interest in the subsoil use contract (SUC) for the Shuak copper exploration property in northern Kazakhstan.
Shuak is a copper and gold exploration project in the Akmola Oblast region of north Kazakhstan, approximately 300 kilometres north of the capital city, Astana, and 40 kilometres north east of the regional centre, Stepnogorsk.
The licence area is 197sq km and contains three target areas that warrant immediate and detailed exploration for copper and gold. The area hosts two mineralisation styles that are of particular interest to CAML. These are:
– saprolite hosted oxide and enriched copper, gold and molybdenum mineralisation that may be amenable to copper production by solvent extraction – electro winning (SX-EW) processing
– copper, molybdenum and gold bearing dissemination and stockwork mineralisation of a porphyry nature
In addition, there are widespread copper, gold, silver and molybdenum geochemical anomalies within the licence area.
The Shuak property was explored between 1973 and 1991, with historic work including geochemistry, geophysics, trenching and drilling at the site. During this time, over 45,000 metres of diamond holes were drilled and resource estimation to historic Soviet standards was undertaken.
This demonstrated a pre-GKZ resource at Mongol V, CAML’s priority copper oxide exploration target area, of c.49.5 million tonnes at a grade of 0.66% Cu for approximately 327,000 tonnes of contained copper in both C2 and P1 categories.
Around 8sq kmn of metalliferous saprolite has been identified within the licence area, with thicknesses varying from minimal to in excess of 60m in depth.
Most recently, former owners of the property undertook small scale mining at Mongol V and sampling of the stockpile generated from these mining activities demonstrated copper oxide grades in excess of 2% in several cases.
Column leach testing of this saprolitic material at CAML’s Kounrad facility has shown it to be amenable to processing by leaching with dilute sulphuric acid, with copper recoveries of over 90%.
CAML intends to commence field-based exploration work, predominantly at Mongol V, in Q2 2017. During the 2017 exploration season, the Company plans to design an approximately 1,800 metre trenching programme and to undertake approximately 8,000 metres of drilling at Mongol V and other priority areas. CAML’s 2017 exploration budget for Shuak is approximately US$1 million.
Under the terms of the framework agreement, CAML will hold an effective 80% interest in Ken Shuak LLP, the company which is to hold the Shuak SUC, with 20% effectively being held by local partners.
The consideration for this acquisition is an investment in exploration activities of US$2 million over five years, subject to continued positive results from exploration activities and the general economic outlook for commodity prices.
This agreement is conditional on the official transfer of the SUC by the Ministry for Investments and Development, Republic of Kazakhstan to Ken Shuak LLP.
Business development director Gavin Ferrar said: “We are delighted to have agreed terms to acquire a majority stake in Shuak, which we have identified as an attractive opportunity given its location and economic prospects. We believe the project can be rapidly appraised to ascertain its copper oxide resource potential. Given our success to date at Kounrad, our initial target would be to develop another similar SX-EW operation at Shuak. Longer term, we also plan to explore the primary copper porphyry target at depth.
“We have built our business around our successful copper production facilities at Kounrad and are very comfortable operating in Kazakhstan. We are pleased to have been able to extend our footprint in Kazakhstan with this acquisition, and to begin to progress the Shuak property.”
At 3:33pm: (LON:CAML) Central Asia Metals PLC share price was +2.75p at 219.25p
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