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Kryso Resources' Pakrut resource now over five million ounces - UPDATE

Gold at Kryso Resources’ Pakrut project in Tajikistan now totals over 5 million ounces, according to the latest independent report published today.

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Gold at Kryso Resources’ (LON:KYS) Pakrut project in Tajikistan now totals over 5 million ounces, according to the latest independent report published today.

The new JORC compliant resource, which used a 0.5 g/t cut-off, is forty per cent higher than the previous estimate of 3.6 million ounces.

It included a 16 per cent increase in measured and indicated resources to 2.21 million ounces, with measured resources now at 1.76 million ounces.

Craig Brown, managing director of Kryso, said: “We are delighted with the overall increase in the total mineral resource at Pakrut and eastern Pakrut.

"The increase of 305,000 oz in the measured and indicated categories at Pakrut is particularly encouraging and the board is very positive that this resource will continue to increase with further drilling. 

"The updated resource estimate further supports our belief that Pakrut will develop into a significant underground gold mining operation.”

On AIM today Kryso shares gained 0.88p, around 3 per cent, in a tricky market to trade at 31p each.

Brown recently told Proactive Investors that he believes total resources over the whole area of the deposit at Pakrut could eventually exceed 10 million ounces. Grades were also increasing at depth, he said. 

The latest JORC estimate includes results from 13 new diamond drill holes in the main mineralised areas of Pakrut and an additional seven diamond drill holes at eastern Pakrut, five kilometres up the valley from Pakrut.

The inferred resource at Eastern Pakrut is 465,000oz gold (Au) at a cut-off grade of 0.5 g/t. 

In addition, 11 exploration drill holes were completed in the Rufigar area located approximately eight kilometres to the north of Pakrut.

At a gold cut-off grade of 0.5 g/t, consultant Snowden estimated the total Pakrut mineral resource at 58.1 mt averaging 2.44 g/t Au. 

This estimate included 25.8 mt of measured and indicated resources at an average grade of 2.66 g/t Au. 

Eastern Pakrut contains an estimated inferred mineral resource of 9.3 mt, averaging 1.55 g/t Au at a gold cut-off grade of 0.5 g/t, the report added.

Kryso received its mining licence for the project in January. 

The plan submitted by Kryso envisages an initial processing capacity of 660,000 tons of ore per annum, increasing to 1,320,000 tons per annum from 2017.

Kryso has already begun mine construction, with drilling on the access road as well as the tailings dam underway. Chinese bank China Exim Bank also approved project finance for the mine’s construction in March. 

Kryso owns 100 per cent of Pakrut, which is located approximately 112 km northeast of the Tajikistan capital, Dushanbe.

“With an estimated 5 million ounce resource Pakrut is rapidly developing into a world class gold deposit and this latest increase should provide further scope to not only expand the proposed mine but increase its life,” XCap Securities analyst Sam Brindle said in a note to clients.

Brindle says the latest resource upgrade underlines Pakrut’s economics and it highlights the potential for increasing the mine’s planned production rate and life of mine.

The analyst also highlights that Kryso plans to drill another 15,000 metres on the project this year, and based on the project’s track record, he thinks this could conceivably add a further 2 million ounces of gold to its tally.

“However we anticipate with 8,000 metres of drilling targeting the deeper levels at Pakrut the focus will be more towards upgrading the current resource towards the reserve categories as well as defining a maiden resource at the nearby Rufigar prospect.”

XCap Securities rates Kryso as a ‘buy’ with a 39p target price.

 

Meanwhile Investec analyst Hunter Hillcoat noted that almost half of Pakrut’s gold is now in the measured and indicated categories, which means it can be used in mine planning. 

“The increase provides a very encouraging indication of the potential for future resource growth,” he said in a note to clients.

Investec has a ‘buy’ recommendation on the stock targeting 48p a share.

 

 

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