Exploration at the Sekisovskoye gold mine has turned up 22% more reserves than expected

To date, 29 drill holes have been completed and the results have confirmed the geometry of the resource and validity of the current resource model. The analytical work was carried out in the Altai Ken-Bayitu laboratory with independent assay verification undertaken by the Alex Stewart Group in Karabalta, Kyrgyzstan.

The Sekisovskoye deposit comprises approximately ten large mineralised zones intermingled with an additional 190 narrow and sinuous mineralised zones. The zones of mineralisation show wide variation in thickness from 0.35 metres to 30 metres with a new revised average of 5.5 metres and localised pinch and swell structure, with variable gold and silver content. This increase in average width of mineralisation is significant as it is greater than assay results received from drilling undertaken in the 1990s and historically by the Soviet exploration programmes. These width extensions hence lead to an increased volume of economic mineral resources, and enhance mine-ability and extraction.

Key assay results from the programme carried out during May and June 2011 are as follows:

• 29 drill holes completed to date, all have intersected gold mineralisation
• 150% increase in the average thickness of gold mineralisation
• Over 4,800 metres drilled of planned 25,000 metre programme
• Significant intersections include:
  • Hole D132 – 10m at 9.8 g/t Au, 11m at 2.61 g/t Au,
  • Hole D128 – 29m at 2.6 g/t Au, 11m at 4.5 g/t Au, 8.7m at 2.6 g/t Au
  • Hole D128.1 – 22m at 2.82 g/t Au, 34m at 2.71 g/t Au, 24m at 2.87 g/t Au, 5.4m at 9.6 g/t Au,
  • Hole D129 – 5.6m at 5.26 g/t Au, 12m at 2.2 g/t Au
  • Hole D126.1 – 10.3m at 5 g/t Au

The recent drilling has been aligned to the mine planning work for stope definition. This information is to be used by Golders Associates in their current geological modelling of Sekisovskoye at 1.0 g/t Au cut of grade boundary. This modelling forms the basis for the detailed mine engineering that is also being undertaken by Golders. The Board expect to be able to update shareholders of the result of both studies together with its mineable underground reserve statement in Q4 2011.

Tim Daffern, CEO, commented: “Following on from the early encouraging results of the first 17 drill holes, we are pleased to report additional assay results from a further 12 holes of our underground drill programme. It is particularly pleasing to see an increase in the average thickness of gold mineralisation which, if continued along the orebody, would increase the volume of economic mineral resources. The latest set of results are in line with, and in some cases better than, our expectations.

Central Asia is rich in gold deposits, as it contains the Tien Shan gold belt which extends from Uzbekistan to Mongolia. Kyrgyzstan’s largest gold mine, Kumtor, sits on the belt and is developed by the Canadian company Centerra Gold.