asacha mineral resource estimate at april 30th, 2020€¦ · the previous mineral resource...

Asacha Mineral Resource Estimate

At April 30th, 2020

Report Prepared for

Trans-Siberian Gold

Report Prepared by

SRK Consulting (Russia) Ltd.

Project Number RU00749

June 2020

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SIMP/BATA RU00749 - Asacha MRE_Final report v2.docx 11-Jun-20

Asacha Mineral Resource Estimate

At April 30th, 2020

Trans-Siberian Gold

SRK Consulting (Russia) Ltd. 4/3 Kuznetsky Most Street, build.1, 3rd Floor, 125009, Moscow, Russia

e-mail: [email protected] website: www.srk.ru.com

Tel: +7 (495) 545-44-16 Fax: +7 (495) 545-44-18

SRK Project Number RU00749

June 2020

Compiled by: Peer Reviewed by:

Robin Simpson Principal Consultant (Resource Geology)

Alexander Batalov Senior Consultant (Resource Geology)

Email: [email protected]

Authors:

Robin Simpson, James Haythornthwaite, Alexander Batalov

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Executive Summary SRK has prepared an updated Mineral Resource estimate for the Asacha gold mine, as of April 30th,

2020. The previous Mineral Resource estimate, with an effective date of December 1st, 2019, was

prepared by Seequent.

The estimate is based on a database of diamond drill holes and underground channel samples. The

main additions to the database since the previous estimation are from drill holes targeting the North

Zone (along strike from the Main Zone, mined since 2011), and domain QV25 of the East Zone (where

mining has commenced in 2020, and is expected to replace the Main Zone as the principal source of

feed for the processing plant).

Table ES - 1: Summary of new drilling completed since the December 2019 Asacha MRE

Year Hole Type Area Number of Holes Total Meters

2019 East Zone Surface DDH 13 3,422


North Zone Surface DDH 11 2,011

TOTAL 60 15,661

For all Asacha mineralised vein domains, SRK prepared new wireframe interpretations, and revised

the geostatistical estimation methods and parameters. The volumes depleted by mining were

remodelled, based on outlines prepared by TSG showing the extents of mining up to March 31st, 2020.

SRK also recalculated the cut-off grade for reporting Mineral Resources, from parameters updated by

TSG in the first quarter of 2020, but the result did not change from the previous reporting threshold of

4 g/t.

The statement of Mineral Resources for Asacha is presented below, at a dual cut-off of 4 g/t Au and

4 m * g/t Au (product of vein thickness and grade). The grade-thickness component of the cut-off

ensures that the 4 g/t average is maintained across at least a 1m minimum mining thickness.

Table ES - 2: Asacha Mineral Resource Estimate as at April 30th, 2020, reported using a dual cut-off of 4 g/t Au and 4 m * g/t Au

Classification Zone Tonnes Au g/t Ag g/t Au

(koz) Ag

(koz) Au (kg) Ag (kg)

Measured Main 82,000 15 40 40 105 1,200 3,300

Indicated Main 162,000 9 46 49 242 1,500 7,500

Indicated North 54,000 11 19 20 32 600 1,000

Indicated V25N 291,000 18 63 173 591 5,400 18,400

Indicated V25S 84,000 20 29 53 78 1,600 2,400

Indicated V7 V8 4,000 23 24 3 3 100 100

INDICATED TOTAL 596,000 16 49 298 947 9,300 29,500

MEASURED AND INDICATED

TOTAL 677,000 15 48 337 1,052 10,500 32,700

Inferred Main 19,000 7 34 4 21 100 600

Inferred V25N 46,000 13 43 19 63 600 2,000

Inferred V25S 88,000 14 44 40 124 1,200 3,900

Inferred V7 V8 108,000 15 21 51 73 1,600 2,300

INFERRED TOTAL 261,000 14 34 115 282 3,600 8,800

Notes: Resources are reported after mining depletion Tonnage, grade and metal content have been rounded to reflect an appropriate level of precision

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The table below shows this updated estimate has substantially increased the Mineral Resources for

East Zone domain QV25, due to the 49 new holes (13,649m) targeting this domain.

Only a small increase in Mineral Resources occurred for the North Zone, even though 11 new holes

(2,011m) were added to the database. The volume of the North Zone increased in SRK’s new

interpretation, but much of the additional material is estimated to be below cut-off.

Table ES - 3: Metal content comparison to previous Mineral Resource estimate

Domain Group

SRK MRE (30/4/20)

Metal content of Mineral Resources (Measured, Indicated, Inferred), Au oz

Seequent MRE (1/12/19)


Main Zone 93,000 97,000

North Zone 20,000 16,000

East Zone - QV7 and QV8 55,000 66,000

East Zone - QV25 284,000 133,000

TOTAL 452,000 313,000

For the Main, North and East Zones, a consistent feature of both the overall shape of the mineralisation

domains, and the distribution of high Au and Ag grades within the veins, is a shallow north plunge,

within the overall steeply dipping structure. Based on this plunge, the main opportunities for defining

further mineralisation and adding to the Mineral Resource inventory appear to be from drilling to the

north (down-plunge) of the East Zone domains QV25 North and QV8B.

In May and June 2020, after the effective date of the Mineral Resource statement presented in this

report, TSG completed or commenced 18 drill holes (approximately 5,100m), for the purpose of infilling

and extending the nominal 50m x 50m drilling coverage of QV25 North to 55400N (along strike) and

0 elevation (down dip). TSG is also planning a further 30 holes (approximately 9,200m), later in 2020,

to:

• Test the extension of QV25 North down dip for a further 50m;

• Test the extension of QV25 North along strike to the north for a further 600m;

• Test the extension of QV25 South along strike to the south for a further 400m; and

• Infill the southern end of QV25 North.

The location of projected intersections from the completed or planned additional drilling in 2020 is

shown in Figure ES - 1.

Figure ES - 1: Location of projected QV25 intersections from further drilling completed or planned by TSG in 2020, in relation to SRK 30/4/20 estimation for QV25 and existing intersections. Holes commenced or completed in May and June 2020 are shown by red spheres, holes planned for later in 2020 are shown by green spheres.

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In addition to endorsing further exploration, SRK makes the following recommendations relating to

improving the quality of data future Mineral Resource estimates are based on:

• Density measurements should be taken routinely as part of drilling campaigns.

• The historical QAQC information should be compiled into one database that can be easily accessed by external reviewers. In late 2019, the Asacha site geologists began a program of improving the protocols for collecting, interpreting and acting on sampling quality control information. There are now strong quality assurance systems in place for the ongoing collection of sampling information, and these systems should be maintained.

• A specialist should be engaged to complete a metallurgical audit of the processing plant, and advise on establishing protocols for regular sampling of the tailings, so that information from the processing plant can be a high-confidence foundation for reconciling the Mineral Resource estimates against production.

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Table of Contents

Executive Summary ..................................................................................................................................... ii

Disclaimer .................................................................................................................................................... ix

1 Introduction .................................................................................................................. 1

1.1 Program objectives ............................................................................................................................. 1

1.2 Reporting Standard ............................................................................................................................. 1

1.3 Work program ..................................................................................................................................... 1

1.4 Project team ........................................................................................................................................ 1

1.4.1 Competent Person .................................................................................................................. 1

1.5 Statement of SRK Independence ....................................................................................................... 2

2 Database ....................................................................................................................... 3

2.1 Drilling ................................................................................................................................................. 3

2.2 Survey Control .................................................................................................................................... 4

2.2.1 Down Hole Surveys ................................................................................................................. 5

2.2.2 Topographical Control ............................................................................................................. 5

2.3 Core Recovery .................................................................................................................................... 5

2.4 Sample Preparation ............................................................................................................................ 6

2.4.1 Core Samples .......................................................................................................................... 6

2.4.2 Channel Samples .................................................................................................................... 7

2.5 Sample Analysis .................................................................................................................................. 7

2.5.1 Analytical Laboratories ............................................................................................................ 7

2.5.2 Assay Methods ........................................................................................................................ 8

2.6 QAQC .................................................................................................................................................. 8

2.6.1 QAQC since November 2019 .................................................................................................. 8

2.6.2 QAQC for previous campaigns ............................................................................................. 17

2.7 Bulk Density ...................................................................................................................................... 18

2.8 Data Exclusions ................................................................................................................................ 18

3 Geological Interpretation ........................................................................................... 19

3.1 Deposit Geology ................................................................................................................................ 19

3.2 Wireframe Modelling ......................................................................................................................... 19

3.2.1 Topography ........................................................................................................................... 19

3.2.2 Mineralisation Domains ......................................................................................................... 20

3.2.3 Changes in Modelling Approach Compared to Previous Mineral Resource estimates ........ 24

4 Statistical Analysis ..................................................................................................... 26

4.1 Compositing ...................................................................................................................................... 26

4.2 Outlier Restrictions ............................................................................................................................ 27

4.2.1 First Stage: Raw Samples before Compositing .................................................................... 27

4.2.2 Second Stage: Accumulation and Distance Constraint ........................................................ 30

4.2.3 Capping and Reconciliation .................................................................................................. 33

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4.3 Relationship between Au and Ag ...................................................................................................... 33

4.4 Relationship between Au grade and thickness ................................................................................. 35

4.5 Comparison of Core Samples to Channel Samples ......................................................................... 35

4.6 Variogram Modelling ......................................................................................................................... 36

5 Estimation ................................................................................................................... 40

5.1 Estimation Method ............................................................................................................................ 40

5.2 Estimation Parameters ...................................................................................................................... 40

5.3 Block Model ....................................................................................................................................... 42

5.4 Validation .......................................................................................................................................... 42

5.5 Classification ..................................................................................................................................... 45

5.5.1 Measured .............................................................................................................................. 45

5.5.2 Indicated ................................................................................................................................ 45

5.5.3 Inferred .................................................................................................................................. 45

5.6 Depletion ........................................................................................................................................... 46

5.7 Reconciliation .................................................................................................................................... 49

5.8 Cut-off Grade .................................................................................................................................... 50

6 Mineral Resource Statement ..................................................................................... 52

7 Conclusions ................................................................................................................ 53

7.1 Comparison to Previous Mineral Resource Estimate ....................................................................... 53

7.2 Potential for Defining Additional Mineral Resources ......................................................................... 53

7.2.1 QV25 ..................................................................................................................................... 53

7.2.2 QV18 ..................................................................................................................................... 54

7.3 Recommendations ............................................................................................................................ 54

8 References .................................................................................................................. 56

List of Tables Table 2-1: Total number of holes and drilled meters for the historic holes, by year and hole type. Note that

holes excluded from the Mineral Resource Study are not included in the totals documented. ... 3

Table 2-2: Summary of new drilling completed since the December 2019 Asacha MRE, and included in the current SRK Mineral Resource estimation. .................................................................................. 4

Table 2-3: Summary statistics for duplicates and check assays ................................................................... 9

Table 3-1: Lateral extent and thickness for each modelled vein ................................................................. 22

Table 3-2: SRK Main Zone veins and corresponding veins in the Seequent December 2019 model ........ 25

Table 4-1: Summary statistics for intersection composites ......................................................................... 26

Table 4-2: Summary of first stage Au capping statistics ............................................................................. 29

Table 4-3: Summary of first stage Ag capping statistics ............................................................................. 29

Table 4-4: Comparison of Drill and Channel estimations within the test area ............................................ 36

Table 4-5: Normalised variogram model parameters .................................................................................. 36

Table 5-1: 2D Kriging Search Neighbourhood Parameters ........................................................................ 41

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Table 5-2: Main and North Zone block model dimensions .......................................................................... 42

Table 5-3: East Zone block model dimensions ........................................................................................... 42

Table 5-4: Initial depletion approach for the Main Zone domains ............................................................... 47

Table 5-5: Asacha production, from beginning of mining (2011) to Q1 2020 ............................................. 50

Table 5-6: Cut-off grade calculation parameters ......................................................................................... 51

Table 6-1: Asacha Mineral Resource Estimate as at April 30th, 2020, reported using a dual cut-off of 4 g/t Au and 4 m * g/t Au (product of thickness and Au grade) .......................................................... 52

Table 7-1: Metal content comparison to previous Mineral Resource estimate ........................................... 53

List of Figures Figure 2-1: Drilling on the Main, North and East Zones. Holes completed since the previous resource update

in December 2019 are displayed in red ....................................................................................... 4

Figure 2-2: Duplicate results for Au ................................................................................................................ 9

Figure 2-3: Duplicate results for Ag .............................................................................................................. 10

Figure 2-4: External laboratory check assay results for Au .......................................................................... 10

Figure 2-5: External laboratory check assay results for Ag .......................................................................... 11

Figure 2-6: Pulp duplicate results for Au ...................................................................................................... 11

Figure 2-7: Pulp duplicate results for Ag ...................................................................................................... 12

Figure 2-8: Coarse duplicate results for Au .................................................................................................. 12

Figure 2-9: Coarse duplicate results for Ag .................................................................................................. 13

Figure 2-10: Results from analysis of blanks, for Au and Ag ......................................................................... 14

Figure 2-11: Certified Reference Material results for Au ................................................................................ 17

Figure 3-1: The derived Asacha topography wireframe, coloured by elevation. The extent of the 1 m contour topography data is delineated by a dashed red line. ................................................................. 20

Figure 3-2: Inclined (22° towards 116°) view of the Main Zone mineralisation domains, with key veins annotated ................................................................................................................................... 23

Figure 3-3: East-facing view of the North Zone QV5 mineralisation domain, shown alongside the topography wireframe (in brown) .................................................................................................................. 23

Figure 3-4: Inclined (45° towards 119°) view of the East Zone mineralisation domains, with key veins annotated ................................................................................................................................... 24

Figure 3-5: Comparison between the Seequent (“1”) and SRK (“2”) models at 100 m RL. QV1 is shown in red and QV2 shown in green. .................................................................................................... 25

Figure 4-1: Histogram of QV1S raw sample Au grades ............................................................................... 27

Figure 4-2: Histogram of QV25 raw sample Au grades................................................................................ 28

Figure 4-3: Log probability plot of QV25 raw sample Au grades .................................................................. 28

Figure 4-4: Long section view of QV1S intersection accumulations for Au ................................................. 30

Figure 4-5: Long section view of QV25 intersection accumulations for Au .................................................. 31

Figure 4-6: Histogram of Au accumulations for lower part (below 150 mRL) of QV1S ................................ 31

Figure 4-7: Histogram of Au accumulations for QV25 .................................................................................. 32

Figure 4-8: Long section view of QV25 intersection accumulations for Au, red shading shows blocks where the estimates will proceed using at least one intersection uncapped by second stage capping;

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the blue shading shows blocks where the high Au values may still influence the estimates, but will be capped at 40 m * g/t ........................................................................................................ 33

Figure 4-9: Scatter plot of Ag vs Au for domain QV1S; coefficient of linear correlation is 0.70 ................... 34

Figure 4-10: Scatter plot of Ag vs Au for domain QV25; coefficient of linear correlation is 0.45 ................... 34

Figure 4-11: True thickness versus log (Au grade), for domain QV1S .......................................................... 35

Figure 4-12: View looking west of domain QV1 South ................................................................................... 36

Figure 4-13: Experimental and modelled variogram for Au accumulation, major direction of QV1 South domain........................................................................................................................................ 37

Figure 4-14: Experimental and modelled variogram for Au accumulation, intermediate direction of QV1 South domain........................................................................................................................................ 37

Figure 4-15: Experimental and modelled variogram for thickness, major direction of QV1 South domain .... 38

Figure 4-16: Experimental and modelled variogram for thickness, intermediate direction of QV1 South domain38

Figure 4-17: Experimental and modelled variogram for Ag accumulation, major direction of QV1 South domain........................................................................................................................................ 39

Figure 4-18: Experimental and modelled variogram for Ag accumulation, intermediate direction of QV1 South domain........................................................................................................................................ 39

Figure 5-1: Main Zone QV1 South and QV1 domains, Au grade estimates, and intersection Au grades ... 42

Figure 5-2: North Zone (QV5), Au grade estimates, and intersection Au grades ........................................ 43

Figure 5-3: Vein 25 (left to right - domains V25 Sth A, V25 Sth B, and V25 Nth A), Au grade estimates, and intersection Au grades ............................................................................................................... 43

Figure 5-4: Swath plot by 20m northing slice of Au accumulation in QV1, QV1S, and QV5 domains ......... 44

Figure 5-5: Swath plot by 20m elevation slice of Au accumulation in QV1 and QV1S domains ................. 44

Figure 5-6: QV1 South and QV1 classification and intersection locations, with depletion removed ............ 45

Figure 5-7: V25 classification and intersection locations.............................................................................. 46

Figure 5-8: East-facing view of the QV1 South domain, coloured by depletion category ............................ 48

Figure 5-9: East-facing view of the QV1 North domain, coloured by depletion category ............................. 48

Figure 5-10: East-facing view of the QV2 domain, coloured by depletion category ...................................... 49

Figure 5-11: East-facing view of the QV4 domain, coloured by depletion category ...................................... 49

Figure 7-1: Location of projected QV25 intersections from further drilling completed or planned by TSG in 2020, in relation to SRK 30/4/20 estimation for QV25 and existing intersections. Holes commenced or completed in May and June 2020 are shown by red spheres, holes planned for later in 2020 are shown by green spheres. ................................................................................ 54

Appendices Appendix A: Drill Holes and Channels excluded from Mineral Resource estimation

Appendix B: Channels excluded from 2D kriging, due to incomplete intersections

Appendix C: JORC Code Table 1

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Disclaimer The opinions expressed in this Report have been based on the information supplied to SRK Consulting

(Russia) Ltd. (SRK) by Trans-Siberian Gold PLC (TSG). The opinions in this Report are provided in

response to a specific request from TSG to do so. SRK has exercised all due care in reviewing the

supplied information. Whilst SRK has compared key supplied data with expected values, the accuracy

of the results and conclusions from the review are entirely reliant on the accuracy and completeness

of the supplied data. SRK does not accept responsibility for any errors or omissions in the supplied

information and does not accept any consequential liability arising from commercial decisions or

actions resulting from them. Opinions presented in this report apply to the site conditions and features

as they existed at the time of SRK’s investigations, and those reasonably foreseeable. These opinions

do not necessarily apply to conditions and features that may arise after the date of this Report, about

which SRK had no prior knowledge nor had the opportunity to evaluate.

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1 Introduction

1.1 Program objectives

TSG engaged SRK to prepare an updated Mineral Resource estimate for the Asacha Gold Mine. The

previous Mineral Resource estimate, with an effective date of December 1, 2019, was prepared by

Seequent. Since then, TSG’s program of diamond drilling has intersected additional mineralisation at

zones QV25 (east of the main mining area) and V5 (north of the main mining area). SRK’s estimate

includes this new mineralisation, and SRK also prepared a revised domain model and geostatistical

estimate of all previously defined mineralised zones at Asacha. The effective date of the Mineral

Resource estimate presented in this report is April 30th, 2020.

1.2 Reporting Standard

Mineral Resources presented in this report follow the definitions and standards of The Australasian

Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (edition of 2012)

published by the Joint Ore Reserves Committee of the Australasian Institute of Mining and metallurgy,

Australian Institute of Geoscientists, and The Minerals Council of Australia (JORC Code).

1.3 Work program

TSG transferred the initial data for the project to SRK in March 2020, and SRK prepared the estimation

during April and May 2020.

SRK’s Competent Person did not visit site, due to the travel restrictions imposed by the COVID-19

pandemic. Colleagues of the Competent Person (Geotechnical specialists from SRK’s Moscow office)

have previously visited Asacha, in 2019. Those visits included inspections of underground workings

and core. Since 2012, Asacha has also been visited by independent Competent Persons from

Seequent, the authors of previous Mineral Resource estimates for Asacha.

1.4 Project team

The main author of this report is Mr Robin Simpson, a Principal Geologist, employed by SRK (Russia).

Mr Alexander Batalov, Senior Geologist, also employed by SRK (Russia), was the project manager.

Mr James Haythornthwaite, Senior Geologist, employed by SRK (UK), assisted with the 3D domain

modelling and geostatistical analysis.

1.4.1 Competent Person

The Competent Person for the Mineral Resource estimates is Mr Robin Simpson, a full-time employee

of SRK Consulting (Russia) Ltd. Mr Simpson:

• Has read and understood the requirements of the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code, 2012 Edition);

• Is a Competent Person as defined by the JORC Code, 2012 Edition, having over five years’ experience that is relevant to the style of mineralisation and type of deposit described in this Report, and to the activity of Mineral Resource estimation; and

• Is a Member of the Australian Institute of Geoscientists.



1.5 Statement of SRK Independence

Neither SRK nor any of the authors of this Report have any material present or contingent interest in

the outcome of this Report, nor do they have any pecuniary or other interest that could be reasonably

regarded as being capable of affecting their independence or that of SRK.

SRK’s fee for completing this Report is based on its normal professional daily rates plus

reimbursement of incidental expenses. The payment of that professional fee is not contingent upon

the outcome of the Report.



2 Database

2.1 Drilling

Table 2-1 and Table 2-2 summarize the various generations of sampling and assaying data in the

Asacha drill hole database. This includes surface and underground channel sampling as well as

diamond drill hole data. The first phase of data collection was by the State organisation CKGE, who

undertook exploration work between 1986 and 1990, with later phases of drilling by Canadian

Company TVX Gold Inc, and then TSG.

The last database update SRK included in the Mineral Resource estimation was received from TSG

on April 20th, 2020.

Table 2-1: Total number of holes and drilled meters for the historic holes, by year and hole type. Note that holes excluded from the Mineral Resource Study are not included in the totals documented.

Company Year Hole Type Number of Holes Total Meters

CKGE 1998

Surface DDH 139 30,311

Surface Channel 257 2,355

UG Channel 568 3,141

UG Raise 67 349

TVX 1996 Surface DDH 139 13,480

TSG

2012 Surface DDH 47 11,583


2013 UG Channel 85 456

2014 UG Channel 603 1,444

2015 UG Channel 547 1,553

2016 Surface DDH 16 4,707


2017 Surface DDH 34 6,866


2018 UG Channel 309 800

2019


UG DDH 98 7,322

UG Channel 1,692 3,543

TOTAL


UG DDH 98 7,322

UG Raise 67 349

UG Channel 5,665 16,448

Surface Channel 257 3,255

TOTAL 6,463 93,489



Table 2-2: Summary of new drilling completed since the December 2019 Asacha MRE, and included in the current SRK Mineral Resource estimation.

Year Hole Type Area Number of Holes Total Meters



North Zone Surface DDH 11 2,011

TOTAL 60 15,661

Figure 2-1: Drilling on the Main, North and East Zones. Holes completed since the previous

resource update in December 2019 are displayed in red

2.2 Survey Control

The following description of survey control is compiled from Stewart and Nicholls, 2019:

Hatch (2006) reported that CKGE holes were originally surveyed in an unrecorded local coordinate

system. Forty-one of these holes were re-surveyed for TVX by an independent contractor

(KamchatTISIZ), which allowed them to establish a transformation to migrate most CKGE holes

coordinates into the local grid currently in use. All TVX and TSG diamond drill holes were picked up

by KamchatTISIZ in this grid system with a reported accuracy of 3cm. The definition of the grid could

not be provided, as this information is still restricted in Kamchatka.

Since commencement of mining, surveying of development openings is carried out by the registered

mine surveyor. Geology staff locate channel collar and path relative to the surveyed outline. It is



considered that underground channel sample locations will be generally located with +/- 25cm of true

location.

The collar positions of the drilling carried on the eastern zone during 2016 and main zone 2017 were

captured using a tachymeter Nikon Nivo 5 MW.

In the database of drill holes provided by TSG a total of 37 drill holes are flagged to be excluded from

estimates due to uncertainty about location.

2.2.1 Down Hole Surveys

In the historic database, no information regarding the method of down hole surveying was attached to

drill hole data provided to Seequent. Soviet era holes were apparently surveyed using the MIR 36

magnetic survey tool, TVX era holes were surveyed with a Wel Nav single shot magnetic survey, and

TSG holes with a Reflex single shot magnetic tool. The interval of down hole surveying varies but is

routinely between 10 and 60m.

TSG survey the hole during drilling to track the deviation and it is stipulated in the contract for the

drilling contractor that the hole must not deviate by more than 5°. The hole is then surveyed every 20m

as final measurements for the database when the hole is complete.

The 2019 drilling of QV25 South shows a slight mis-match in the vein positions between drilling in the

easterly versus westerly directions. Whilst this could be the true nature of the vein, it is recommended

that it is investigated. The holes have been cemented, but the collars could be re-surveyed. Apart from

this minor inconsistency (which is unlikely to have a material affect on the overall Mineral Resource

estimation), review of the drilling in 3D revealed no un-realistic orientation changes or unusual hole

traces.

There are no strongly magnetic mineral species present.

Since November 2019, TSG’s protocol has been to take one orientation measurement near the start

of the hole (but clear of any casing) and then a second one, 50 m deeper. If there is a deviation of

more than 2 degrees than the expected value, the drillers have to restart a new hole. Subsequent

surveys are spaced 20 meters on average.

2.2.2 Topographical Control

The topographic survey was carried out by by KamchatTISIZ JSC in 1997 and digitized in 2004 by

GEOSEIS Ltd on a scale of 1:1000 (Pulkovo 1942, Gauss-Kruger projection, Area 27).

2.3 Core Recovery

For the 2019 and 2020 drill holes added to the database as part of this estimation update, the core

recovery protocols and performance are summarised as follows:

Core recovery is monitored during drilling by measuring the length of the core, versus the length of

each drilling run. In general, for all holes, the core yield is above 95%. SRK has reviewed core photos

to verify this estimate.

Rarely, in local intervals of more intense fracturing, the recovery drops to 80-90%. Under the terms of

TSG’s contract with the drilling company, holes with an average recovery below 90% are not accepted.

Particular attention is paid to core output over mineralised intervals. In addition to length

measurements, samples are weighed and compared to theoretical weights (based on length), and

significant differences are investigated.

In regard to core recovery from previous campaigns, the following description is compiled from Stewart

and Nicholls, 2019:



The issue of diamond drill core sample recovery was discussed in some detail in previous reports

(Hatch, 2006), and was considered a possible source of bias in early generation data. This issue

remains un-resolved (and is unresolvable), although as mining progresses the risk of any gross bias

due to core loss diminishes.

Core photographs of TSG drill holes for the campaigns in 2016 and 2019 from the East zone show

that whilst core is generally quite broken, the volume recovered does not appear to be significantly

compromised, and vein recoveries are relatively high. Drill core recovery for the 2016 drilling campaign

averages 99%. The poorest recoveries within the 2016 dataset (<90%) were found to be more than

50m from the intersected mineralisation and therefore of no risk.

Core recovery is routinely measured, and it is stipulated in the contract with the drilling contractor

(2017) that core recovery of not less than 95% within the mineralised zones and not less than 85% in

the host rock is acceptable. For the 2019 drilling campaigns, core recovery is excellent at and 97%

and 99% respectively for the mineralised Main and East Zones. Examination of core photographs on

the East Zone shows that while core can be somewhat broken, there is not systematic core loss

occurring within ore zones. TSG are actively trying to ensure that high core recovery rates are

achieved.

2.4 Sample Preparation

The following description of sample preparation is compiled from Stewart and Nicholls, 2019:

2.4.1 Core Samples

Diamond core sampling is either of full core or diamond saw cut half core. During 2012 to 2016 whole

core was analysed.

For the 2019 drilling campaign, a larger drill sized diamond bit, HQ, was used. This core was sawed

in half, with half submitted for assaying, and the other half retained in the core box. The core sample

was assayed in 1m intervals, or parts of 1m to honour vein contacts.

CKGE drill hole samples were assayed at the Geological Survey Laboratory in Milkovo, Kamchatka,

while TVX drill holes sample were assayed at KamchatGeologia Laboratories in Petropavlovsk.

Core drilled by TSG was analysed by KamchatGeologia Laboratories until 2016 with check assaying

at a laboratory in Irkutsk. Since 2016, when the on-site laboratory was accredited, exploration samples

have been submitted to the on-site TSG laboratory.

The sample preparation flow chart used by GSL and KamchatGeologia was discussed in previous

reports (Hatch, 2006) and was considered to be appropriate and conform to normal industry practice.

The sample preparation facility at Asacha was inspected by Seequent in 2013, when only TSG channel

samples were being processed there. Seequent found the facility to be clean and well equipped.

Seequent did not directly observe any sample preparation, as at the time of the laboratory visit, sample

preparation was not underway. Since 2016, all TSG diamond core has been processed at this facility,

following essentially the same sample preparation as that used on channel samples.

Samples are:

• Dried at 105°C;

• Crushed to approximately 3mm in a Boyd Crusher;

• 5.5kg sample is reduced to 2 x ~0.5kg samples using a rotary splitter. One sample is retained for reference;

• Pulverised in a Continuous Ring Mill to ~90% passing 75μm.



To avoid contamination in the continuous ring mill, the mill is air cleaned between every sample, and

barren flush material is introduced after every 5 samples. The pulverised product is approximately

90% passing 75µm.

The main risk from the sample preparation process is use of a continuous ring mill for high grade gold

preparation, as there is significant potential for sample cross contamination.

During 2014, TSG began checks on contamination, by introducing blank samples into the sample

stream adjacent to high grade samples. The contamination check samples submitted did not highlight

any presence of contamination.

SRK notes that more recently, among the 6,397 primary samples submitted to the laboratory since

November 2019, were 317 control samples of blank material, usually inserted just after primary

samples from mineralised zones. Six of these control samples returned above detection-threshold

results, ranging from 0.15 g/t Au to 0.72 g/t Au. The laboratory was notified of these results and agreed

to more frequent and rigorous cleaning of equipment.

2.4.2 Channel Samples

An initial phase of surface trenching and exploration adit sampling was undertaken by CKGE in 1986-

1990. TVX reportedly repeated some of the surface channel sampling in 1997 (Hatch 2006), but there

are no surface samples of this date in the data provided. Most the surface trench sampling is now

inaccessible due to stoping from beneath.

The underground sampling conducted by CKGE is of unknown quality, but this is immaterial as all

areas defined by this sampling have been subsequently mined.

Since commencing mining in 2010, TSG have collected over 12,200m of underground channel

sampling from the face and walls of development drives. Competent Persons from Seequent visited

the underground developments in both 2012 and 2017 and observed the practice of face sampling.

Samples are collected by chipping along a marked line, with attention paid to ensuring that the volume

collected is even along the axis of sampling to minimise bias.

Face samples are processed by the on-site laboratory. The sample preparation process is the same

as described above for the diamond core.

2.5 Sample Analysis

The following description of sample analysis is compiled from Stewart and Nicholls, 2019:

2.5.1 Analytical Laboratories

All mine samples are sent to the on-site laboratory, which includes exploration, channel samples, grab

samples, plant samples and bullion. The laboratory has been in operation since late 2011 and was

certified in accordance with Russian standards on the 12th August 2016. The expiration of the

certificate is the 5th November 2021. The certificate confirms that the laboratory has met the necessary

standards to provide analyses, including those in water and air, as well as metal assays in Dore bars,

analysis of gold in activated carbon, ore and pulp.

Check samples have been sent to various laboratories over the years (refer to mineral resource report

for 2016 (Nicholls, 2017)). During 2017 and 2018 check samples were sent to IRGIREDMET

Laboratory (Irkutsk Scientific-Research Institute of Precious and Rare Metals and Diamonds) in

Irkutsk.



2.5.2 Assay Methods

Core Samples

The bulk of assays in the resource estimate are fire assays with gravimetric finish. CKGE samples

were assayed at the Geological Survey Laboratory in Milkovo, Kamchatka (precision of 0.1g/t), while

TVX and TSG samples have largely been processed at KamchatGeologia Laboratories in

Petropavlovsk. Since 2012 samples have been analysed at the on-site laboratory using 50g fire assay

with gravimetric finish.

The samples added in current Mineral Resource estimation update were analysed by two 50g fire

assays, and the result reported is the average of the two.

Channel Samples

Historic CKGE and TVX surface and underground samples were analysed for Au and Ag. A two-stage

approach was used in this sampling:

• All veins and visually identified prospective mineralised zones were fully sampled on 0.5 to 1.0m intervals and the samples sent for Fire Assay at KamchatGeologia Laboratories. The detection limit on Au in this assaying is 0.2-0.5g/t while the precision of determination is 0.1g/t;

• Waste zones were chip sampled on intervals of 3-5m and the samples sent for X-ray spectral analysis. If the spectral analysis returned a grade of more than 0.5g/t Au, the interval represented was re-sampled at intervals of 0.5-1.0m and the samples sent for fire assay as above.

Underground channel samples from the current mining operation have been processed in one of two

ways.

Until 4th quarter 2011, all samples were analysed by X-ray spectral analysis in the Asacha laboratory.

Quality control of these spectral analyses was by fire assay at KamchatGeologia Laboratories. These

analyses may be identified in the database by the absence of a silver assay. These are mostly located

at the northern end of development at the Main Zone.

In 4th quarter 2011, the fire assay facility at Asacha laboratory was completed. Since this date, all

samples have been analysed on site by 50g fire assay. Au and Ag analysis is by conventional fire

assay, with a gravimetric finish.

2.6 QAQC

2.6.1 QAQC since November 2019

From November 2019, 6,397 primary core samples were analysed in the mine laboratory. With these

primary samples, control samples were inserted at the rate of approximately 5% for each of the

following types:

• Pulp duplicates;

• Coarse duplicates from crushed material;

• Blanks; and

• Certified Reference Material.

In addition to the samples submitted to the primary laboratory, check assays were carried out by

IRGIREDMET Laboratory in Irkutsk on pulps from 76 channel samples and 71 core samples.

Periodic particle size analysis checks are also made, to ensure that the sample preparation protocols

are delivering the intended results.

Results for the various types of controls are presented and discussed below. SRK’s overall conclusion

is that the scope and frequency of the quality control sampling program recently implemented is in



accordance with best international practises, and the results do not show evidence of any risks that

would materially reduce confidence in the data supporting the Mineral Resource estimate.

Check assays on pulp duplicates

Duplicates were analysed at the TSG on-site laboratory, and check assays from the same pulps were

analysed by the IRGIREDMET Laboratory in Irkutsk.

The results are shown in Table 2-3 and Figure 2-2 to Figure 2-5. The scatterplots (with log scale axes)

have some dispersion at lower grades, but in general the results show good reproducibility above the

key thresholds used for modelling the mineralisation (nominal 4 g/t Au) and reporting the Mineral

Resources (4 g/t Au), both for the same laboratory duplicates and the external laboratory check

assays.

Table 2-3: Summary statistics for duplicates and check assays

Primary Samples Au

Primary Samples Ag

Duplicates Au

Duplicates Ag

Check Assays Au

Check Assays Ag

Count 148 148 148 148 147 147

Mean 30.47 77.40 30.82 75.59 32.27 80.60

CV 4.00 1.90 3.98 1.95 4.26 1.99

Figure 2-2: Duplicate results for Au



Figure 2-3: Duplicate results for Ag

Figure 2-4: External laboratory check assay results for Au



Figure 2-5: External laboratory check assay results for Ag

Pulp Duplicates

Results from pulp duplicates resubmitted to the site laboratory are shown as scatter plots and HARD

plots in Figure 2-6 for gold and Figure 2-7 for silver. Overall, the results show good repeatability for all

key grade ranges, and the variability is within acceptable limits.

Figure 2-6: Pulp duplicate results for Au



Figure 2-7: Pulp duplicate results for Ag

Coarse Duplicates

Results from coarse duplicates prepared from crushed material, and resubmitted to the site laboratory,

are shown as scatter plots and HARD plots in Figure 2-8 for gold and Figure 2-9 for silver. As was the

case for the pulp duplicates, the results show good repeatability for all key grade ranges, and variability

is within acceptable limits.

Figure 2-8: Coarse duplicate results for Au



Figure 2-9: Coarse duplicate results for Ag

Blanks

Of 317 blank control samples analysed, six (2%) returned Au results above the detection threshold.

These results range from 0.15-0.72 g / t (Figure 2-10), and show that the TSG laboratory needs to

carefully manage potential contamination sources during sample preparation and analysis. The overall

frequency and magnitude of the above-threshold values does not materially detract from confidence

in the current Mineral Resource estimate.



Figure 2-10: Results from analysis of blanks, for Au and Ag

Certified Reference Material

TSG initially used three CRMs from Australian supplier OREAS (602, 228b, 611), selected to

correspond to low grade, medium grade, and high grade Asacha mineralisation. The TSG laboratory

analyses of OREAS standard 602 are, in general, consistently lower than the certified value. TSG

geologists consider this difference may be related to the preparation of the CRM itself. As a result,

TSG switched to using three CRMs from another Australian supplier, Geostats Pty Ltd (G318-2, G914-

7, G916-5).

Overall, the Au results from all six CRMs are within acceptable limits of analytical accuracy and

precision for the Mineral Resource classifications assigned to the deposit (Figure 2-8). SRK notes

though that in addition to the results from OREAS 602, the results from CRMs OREAS 611, G914-7,

and G916-5 are also consistently lower than the certified mean grades, in the order of 0.2 to 0.8 g/t.



Figure 2-11: Certified Reference Material results for Au

2.6.2 QAQC for previous campaigns

TSG’s QAQC protocols and results for previous sampling campaigns are described in the annual

Mineral Resource reports listed in the References section of this report. The work done prior to the

commencement of mining in 2011 is reviewed in Hatch (2006). The various phases of QAQC work are

also summarised in Section 1 of Appendix C.

SRK’s overall assessment of the pre-2019 QAQC information available for Asacha is that the work

has been sporadic, results have not been consistently documented, and the scope and frequency of



QAQC sampling historically has not met international best practices. The risks posed by QAQC

deficiencies to the confidence in the database have diminished since mining began in 2011 though,

because information from production provides an alternative and stronger verification check on the

database.

2.7 Bulk Density

The density information and assumptions for the current Mineral Resource estimate have not changed

since the previous estimation. The following comments are compiled from Steward and Nicholls, 2019,

and SRK endorses the recommendation that more information should be collected:

Bulk density values to apply to the model were provided by TSG who advised that a value of 2.48 t/m3

should be applied to all mineralised domains regardless of oxidation state or elevation. This

measurement is based on around 160 core samples taken in the 1990’s. It was the recommendation

at the end of 2017 resource report (Nicholls, 2017) that a new density programme be undertaken given

that the southern end of the deposit is much more altered with an abundance of clay minerals. Density

measurements should also be taken routinely as part of drilling campaigns. No measurements have

been taken on QV25.

2.8 Data Exclusions

Holes and channel excluded from the database used for the domain modelling and geostatistical

estimation are listed in Appendix A. These exclusions are mostly carried over from previous Mineral

Resource estimations, after TSG and Seequent identified reasons to doubt data quality or location.



3 Geological Interpretation

3.1 Deposit Geology

The following description is compiled from Stewart and Nicholls (2019):

The Asacha deposit is of Pliocene age, and is classified as a low-sulphidation, quartz, sericite, adularia

epithermal Au/Ag deposit. The deposit has formed in a collapsed caldera complex that consists of

volcaniclastic tuffs, overlain by coarse grained dacites-andesites and tuffs.

Two zones of mineralisation have been identified, comprising concentrations of north-south striking

vein structures – Main Zone which hosts the largest and most continuous veins, and East Zone where

the veins are generally narrower and less continuous.

The veins are primarily hosted by two lithologies:

• The upper volcanics - which are dominantly coarse-grained dacite andesite tuff units; and

• The lower volcanics – which are dominantly volcaniclastic tuffs.

The vein systems are banded accumulations of quartz, adularia, chalcedony, saccharoidal quartz,

carbonate and ginguro (smoky black bands of fine grained mixed base metal sulphides). The banded

habit of the veining suggests a typical cyclic crack-seal formation mechanism.

The veins generally display hard contacts with the surrounding host rock but in some areas, the

mineralisation extends as stockworks into the host rock within the hanging wall and footwall and also

within clayey-brecciated zones.

The site geologists have observed a trend of decreasing grade, a more erratic distribution of gold

mineralisation and an increase in presence of base-metal mineral species with increasing depth. No

base metal assaying is available, but this vertical zonation is typical of epithermal systems.

Examination of gold grades with depth clearly shows a sharp decrease in average grade (an elevation

swath plot is presented in Figure 5-5). This observation has been taken into consideration both in

extension of vein domains beyond drilling intersections, and in estimation parameters.

3.2 Wireframe Modelling

3.2.1 Topography

The mineralisation domain models for Asacha were constructed below a topographic surface,

generated from two topography datasets provided to SRK by TSG. Namely these are the following:

• A detailed point set comprising nodes along 1 m topographic contours, covering an area of approximately 500 mX * 2,000 mY, over the full extent of the current area of underground mining operations;

• A coarser topography wireframe, representing 5 m topographic contours, covering a much larger area of approximately 3,500 m * 4,500 m.

The source of the 1 m topography contours is a 1:2,000 scale instrumental survey made by Geoseis LLC in 2002. The source of the coarser topography is a survey was performed by JSC Kamchattisiz in 1996-1997, and transferred to digital form by Geoseis LLC.

Visual checks completed by SRK indicate that, in the areas of overlap between the 1 m contour

topography and 5 m contour topography data, there exists a discrepancy between the elevation of the

two datasets, with the 5 m contour topography survey being positively offset from the 1 m contour

topography survey in the region of between 5 m and 15 m. Similarly, the 5 m contour topography

survey is consistently positively offset from the surface drill hole collars, typically in the order of 5 to

10 m, but up to 25 m in places. No such offset exists between the 1 m contour topography survey and



the surface drill hole collars, the elevations of which are highly consistent. For these reasons, it was

decided to generate a composite topography surface based upon the following data:

• In the area covered by the 1 m contour topography survey, the topography surface is based directly upon both the 1 m contour topography survey points and the surface drill hole collar points;

• Outside of the area covered by the 1 m contour topography survey, the topography surface is based upon the surface drill hole collar points, in addition to an adjusted version of the 5 m contour topography surface, which has been variably offset in the Z, to be locally consistent with the elevation of the surface drill hole collars.

The final topography surface used in limiting the mineralisation domain wireframes is displayed in

Figure 3-1, coloured by elevation. The extent of the 1 m contour topography survey data is indicated

by the dashed red line.

Figure 3-1: The derived Asacha topography wireframe, coloured by elevation. The extent of the 1 m contour topography data is delineated by a dashed red line.

3.2.2 Mineralisation Domains

As described in Section 3.1, mineralisation at the Asacha Project is generally vein hosted, within vein

systems of banded accumulations of quartz, adularia, chalcedony, saccharoidal quartz, carbonate and

mixed base metal sulphides. Typically, the quartz veins are tabular planar structures that have

predictable continuity and can be traced along-strike by up to a kilometre or more. Less continuous

splays and branches are observed off the main vein structures, with strike extents of up to a few

hundred meters.



The veins generally display hard contacts with the surrounding host rock, but in some areas the

mineralisation extends as stockworks into the host rock within the hanging wall and footwall and also

within clayey-brecciated zones. This stockwork mineralisation outside of the vein walls is quite

erratically developed and less continuous than the veins, but can often be traced across multiple

intersections immediately adjacent to the vein material.

TSG provided SRK with a table of coded drill hole intervals that represent intersections of vein material,

with coding to delineate individual veins. The coded intervals cover both drill holes and underground

channel samples. SRK utilised this vein interpretation table as the primary basis for defining

mineralisation domains for grade and tonnage estimation. Initially, the coded vein intersections were

reviewed in 3D and in plans and sections, and the coding adjusted where applicable to re-assign

intervals to different veins where considered appropriate. Subsequently the vein interpretation

intervals were adjusted to incorporate high grade Au assays immediately adjacent to the coded veins,

thought to represent high grade stockwork material in contact with the tabular quartz veins. A nominal

cut-off of 4 g/t Au was used to define which assayed intervals should be added to the coded veins,

although this was relaxed in places where a clear step change in downhole Au grade is evident that

does not quite meet the 4 g/t cut-off criteria. The 4 g/t Au cut-off was defined on the basis of statistical

analysis of the raw Au assay data, including log histogram plots and probability plots, both of which

indicate a population break at approximately 4 g/t Au.

It is noted that along-strike, down-dip and also within the lateral extent of individual veins, drill holes

and channels that pass through the trace of the vein do not include either coded vein intersections in

the TSG file, or high grade assay intervals > 4 g/t Au at the anticipated intersection depth of the vein.

In such cases, to improve the continuity of the vein models, lower grade intersections that represent a

clear elevation in grade profile relative to the adjacent assays were coded as part of the relevant vein.

Note that the vein coding was not adjusted to remove assay intervals < 4 g/t Au at the margins of (but

within) the coded vein intervals provided by TSG. Although low grade, these are still regarded to form

part of the mineralised vein and thus geologically are considered to be part of the same population as

the higher grade intervals within the vein.

The adjusted vein coding was used to define discrete volumetric wireframes using the Leapfrog vein

modelling tool. The vein modelling tool works by extracting footwall and hanging wall points from the

manual selections, which are then used to create automatically interpolated footwall and hanging wall

surfaces to define mineralisation shapes and volumes.

Note that, in the case of channel samples, where the full channel is coded as a specific vein, the end

and start of the channel were assumed to represent the outer contacts of the vein, unless there is a

clear contradiction with a nearby channel or drill hole, in which case the footwall or hanging wall

contacts (or both) were ignored where relevant and the vein model allowed to extend beyond the start

/ end of the channel.

In total, 25 individual veins have been modelled across the Project area. The veins have been

modelled within 3 distinct areas, namely the “Main Zone”, which is the area of current underground

mining operations, the “North Zone”, which is directly along-strike and north of the Main Zone, and the

“East Zone”, which sits approximately 1 km to the east of the Main Zone. In all three areas, the

modelled mineralised veins are broadly N-S striking and subvertical.

The Main Zone is interpreted to comprise a single laterally continuous vein (“QV1”), which has a strike

extent of approximately 1.5 km. Multiple smaller veins, with along-strike extents of up to 350 m, form

splays and branches off QV1. During 2018 substantial mine development was made at the 100m level

by TSG. At a northing of 55 180, towards the northern end of the Main Zone, a fault was encountered

which offset QV1 by approximately 20m to the west. To reflect this observation in the mineralisation

domains, a vertical NE-SW striking fault surface is incorporated in the Main Zone model. All



mineralised vein wireframes terminate on this surface, with QV1 being modelled as two separate

volumes offset either side of the fault, namely QV1 North and QV1 South.

The North Zone comprises a single vein (“QV5”), with an along-strike extent of approximately 370 m,

which plunges shallowly to the north.

The East Zone comprises two N-S striking vein systems approximately 250 m (E-W) apart, both made

up of multiple relatively discontinuous veins. Within the East Zone, the western of the two vein systems

has a total along-strike extent of approximately 560 m, with the largest individual vein having a strike

extent in the region of 250 m. The eastern of the two vein systems has a total along-strike extent of

approximately 930 m and comprises a single large vein (“V25 North”) with a strike extent of

approximately 690 m and multiple smaller veins along- and across-strike. It is noted that the vein

coding table provided to SRK by TSG includes additional interpreted veins to the east of QV25,

however these have not been modelled by SRK, because continuity of economically significant Au

and Ag grades is not apparent across multiple intersections

The thickness and lateral extents of each of the modelled veins is provided in Table 3-1, Figure 3-2,

Figure 3-3 and Figure 3-4, show the mineralised veins for the Main Zone, North Zone and East Zone

respectively, with key veins highlighted.

Table 3-1: Lateral extent and thickness for each modelled vein

Area Vein

Max Along-Strike Extent

(m) (as modelled)

Max Down-Dip Extent

(m) (as modelled)

Min Thickness

(m)

Max Thickness

(m)

Average Thickness

(m)

Main Zone

QV1 N 380 170 0.2 5.4 2

QV1 S 1130 350 0.1 8.5 2.2

QV2 180 200 0.1 5.2 1.7

QV2A 100 140 0.4 3.3 1.3

QV3 350 120 0.1 4 1.2

QV4 120 90 0.3 1.6 0.8

QV6 110 60 0.1 3.3 1.4

QV9 70 50 0.4 1.9 1.1

QV10 190 90 0.2 5.8 2.1

QV11 40 40 0.2 0.5 0.4

QV12 80 30 0.2 1.8 1.1

QV13 80 40 0.3 2.7 1.6

QV14 30 40 0.5 2.1 1.1

QV15 20 20 0.4 1.7 1.2

QV21 70 90 0.1 1.5 0.8

QV32 30 40 0.2 1.6 1

North Zone QV5 230 130 0.1 2.3 1.3

East Zone

QV7 50 30 0.4 3.3 1.9

QV8 190 180 0.2 1.2 0.7

QV8 B 250 130 0.2 3.1 2.1

V25 North A 680 250 0.1 4.4 2.1

V25 South A 150 230 0.3 3.4 2.3

V25 South B 110 230 0.6 7.3 4.3



Area Vein

Max Along-Strike Extent

(m) (as modelled)

Max Down-Dip Extent

(m) (as modelled)

Min Thickness

(m)

Max Thickness

(m)

Average Thickness

(m)

V25 North B 80 120 0.2 1.2 1

V25 North C 150 100 0.2 1 0.7

Figure 3-2: Inclined (22° towards 116°) view of the Main Zone mineralisation domains, with key veins annotated

Figure 3-3: East-facing view of the North Zone QV5 mineralisation domain, shown alongside the topography wireframe (in brown)



Figure 3-4: Inclined (45° towards 119°) view of the East Zone mineralisation domains, with key veins annotated

3.2.3 Changes in Modelling Approach Compared to Previous Mineral Resource estimates

SRK’s approach in constructing the mineralisation domains for the Asacha Project is largely similar to

that applied by Seequent for the previous iteration of the Asacha Mineral Resource Estimate in

December 2020, with the following key exceptions:

• The Seequent vein models were restricted to be only based upon intervals coded as vein by TSG. High grade assays adjacent to the veins were excluded from the model. As described in Section 3.2.2, SRK have incorporated high grade intervals >4 g/t immediately adjacent to coded vein intervals and also along strike / down-dip of the trace of veins into the vein coding. Visual observations show that high grade intervals can often be traced across multiple intersections immediately adjacent to the vein material. SRK consider that, whilst not necessarily representing tabular quartz vein material, this mineralisation in immediate contact with the veins is likely to have the same structural control as the vein mineralisation and as such it is acceptable to group these intervals with the vein intersections for resource domain definition.

• Within the Main Zone, the correlation and extent of specific veins differs somewhat between the Seequent and SRK models. Namely, the SRK model comprises one principal vein (QV1), with multiple smaller splays. In the Seequent Main Zone model there are two principal veins, namely QV1 and QV2. SRK have retained the Seequent QV1 as QV1 whilst adding the majority of Seequent’s QV2 to QV1, such that QV1 forms a continuous vein across the Main Zone, whilst only a small portion of QV2 is retained as a separate vein, which now forms a small splay off QV1. To achieve this, it was necessary to re-attribute a small portion of Seequent’s QV2 to a new vein, QV10, which again forms a small splay off QV1. SRK consider this approach more appropriate, is as it achieves greater continuity in the principal vein and also avoids an irregular kink in the QV2 vein, which was present in the Seequent model, as displayed in Figure 3-5. Table 3-2 documents the veins modelled by SRK in the Main Zone and how the SRK names correlate with the veins in the Seequent Main Zone model.

• The addition of a substantial number of new drill holes in both the East and North Zones has resulted in significant re-interpretation of and extensions to the vein models in these areas.



Figure 3-5: Comparison between the Seequent (“1”) and SRK (“2”) models at 100 m RL. QV1 is shown in red and QV2 shown in green.

Table 3-2: SRK Main Zone veins and corresponding veins in the Seequent December 2019 model

SRK Veins Corresponding Vein in Seequent Model

QV1 North QV1 North

QV1 South QV1 South, QV2 (partial)

QV2 QV2 (partial)

QV2A QV2A

QV3 QV3

QV4 QV4

QV6 QV6

QV9 No corresponding vein

QV10 QV2 (partial)



QV13 QV1 South (partial)


QV15 QV31

QV21 QV21

QV32 QV32



4 Statistical Analysis

4.1 Compositing

The 2D estimation approach used by SRK requires full intersection composites as the input values.

Compositing was done in Leapfrog Geo software, for the intersections within each of the mineralised

domain wireframes. For each domain, SRK fitted an overall orientation plane, and based on these

planes the downhole intersection lengths were converted to true thicknesses.

Partial intersections are not valid inputs for 2D estimation, therefore any intersections that did not have

both a hanging wall and a footwall contact were removed from the set of composites (although these

intersections were still used as inputs for the domain modelling described in Section 3.2.2). The partial

intersections removed are listed in APPENDIX B; these are mostly channel samples, in areas where

there is good coverage from many other full-length runs of channel sampling.

Before compositing, missing assay intervals, and assay intervals without grades were not assigned an

assumed low value. Long intervals of unsampled core, outside the mineralisation domains, were

excluded by the wireframing interpretation described in Section 3.2.2. For the rare cases where an

interval within an interpreted mineralised zone did not have a grade value, the intersection composite

grade was calculated based on assigning the average of the enclosing intervals.

Au and Ag accumulation values were calculated from the product of the mean intersection grade and

the true thickness. The statistics of the composited assay intervals from each domain are summarised

in Table 4-1. For calculating the grade and metal accumulation of each intersection composite, capping

was applied to the raw samples, as described in the following section.

Table 4-1: Summary statistics for intersection composites

Zone Domain Count

Mean Thicknes

s (m)

Mean Au Grade (g/t)

Mean Au Accum (m * g/t)

Mean Ag Grade (g/t)

Mean Ag Accum (m * g/t)

Best Fit Dip

Best Fit Dip Direction

Main QV1_S 2929 1.6 16.2 27.0 30.0 49.0 80 85

Main QV1 194 1.4 14.4 21.0 55.9 73.7 88 86

Main QV2 373 0.9 19.1 17.1 21.9 16.1 89 72

Main QV2A 19 0.8 5.9 5.1 12.8 10.9 78 109

Main QV3 535 1.0 12.5 11.3 16.5 14.7 79 261

Main QV4 41 0.6 13.7 9.3 105.7 67.3 83 88

Main QV6 43 0.9 12.3 11.1 4.0 1.8 82 264

Main QV9 8 0.8 13.7 7.3 25.8 14.9 89 93

Main QV10 282 1.5 21.8 29.2 22.5 30.6 85 275

Main QV11 4 0.4 21.7 6.2 18.5 5.5 83 264

Main QV12 10 0.9 12.7 10.4 6.6 5.0 88 80

Main QV13 31 1.3 21.7 27.0 28.0 38.4 89 276

Main QV14 14 0.9 14.8 11.7 18.7 12.5 88 84

Main QV15 4 1.0 8.0 9.9 12.8 16.0 89 71

Main QV21 74 0.6 16.0 8.7 13.9 8.0 82 237

Main QV32 11 0.7 5.7 5.3 11.0 10.6 83 74

North QV5 23 1.0 9.2 9.7 14.6 17.2 86 276

East QV7 19 1.5 27.9 41.5 23.8 36.4 88 81



Zone Domain Count

Mean Thicknes

s (m)

Mean Au Grade (g/t)

Mean Au Accum (m * g/t)

Mean Ag Grade (g/t)

Mean Ag Accum (m * g/t)

Best Fit Dip

Best Fit Dip Direction

East QV8 7 0.5 18.4 8.1 31.1 11.5 78 89

East QV8_B 6 1.0 20.9 17.4 36.4 22.8 82 102

East V25 Sth A 8 1.7 12.9 23.2 56.1 80.4 89 70

East V25 Sth B 13 2.8 21.9 52.6 39.1 90.7 89 70

East V25 Nth A 45 1.2 14.7 24.8 60.9 92.1 85 92

East V25 Nth B 4 0.7 26.2 10.0 92.8 76.2 85 92

East V25 Nth C

4 0.6 10.5 9.6 14.6 12.3 85 92

4.2 Outlier Restrictions

4.2.1 First Stage: Raw Samples before Compositing

SRK used two stages of capping to constrain outlier grades. The first stage is capping on the raw

samples, before compositing these into full intersection composites for 2D estimation. The caps

applied vary for each domain. A threshold of 110 g/t Au was used for domain QV1S, but Au capping

thresholds of 80 or 90 g/t are typical for most other domains. The thresholds were chosen based on

analysis of histograms and log probability plots (examples for the QV1S and QV25 domains are shown

in Figure 4-1 to Figure 4-3).

Figure 4-1: Histogram of QV1S raw sample Au grades



Figure 4-2: Histogram of QV25 raw sample Au grades

Figure 4-3: Log probability plot of QV25 raw sample Au grades



Table 4-2: Summary of first stage Au capping statistics

Zone Domain Au Cap (g/t)

Length-weighted mean of samples before capping (g/t)

Length-weighted mean of samples after capping (g/t)

Metal reduction due to capping

Main QV1_S 110 18.89 17.20 8.9%

Main QV1 80 19.06 15.29 19.8%

Main QV2 80 19.25 18.24 5.2%

Main QV2A 6.63 6.63 0.0%

Main QV3 42 12.85 11.93 7.2%

Main QV4 60 27.24 15.99 41.3%

Main QV6 60 15.84 13.01 17.9%

Main QV9 9.66 9.66 0.0%

Main QV10 80 21.31 20.01 6.1%

Main QV11 60 26.58 21.74 18.2%

Main QV12 60 12.18 11.43 6.2%

Main QV13 70 21.80 20.47 6.1%

Main QV14 13.66 13.66 0.0%

Main QV15 10.24 10.24 0.0%

Main QV21 15.37 15.37 0.0%

Main QV32 7.90 7.90 0.0%

North QV5 50 9.69 9.05 6.6%

East QV7 90 42.37 27.51 35.1%

East QV8 90 17.49 17.38 0.6%

East QV8_B 90 19.53 18.61 4.7%

East V25 Sth A 12.26 12.26 0.0%

East V25 Sth B 90 22.61 19.63 13.2%

East V25 Nth A 90 25.72 19.98 22.3%

East V25 Nth B 14.30 14.30 0.0%

East V25 Nth C 16.40 16.40 0.0%

Table 4-3: Summary of first stage Ag capping statistics

Zone Domain Ag Cap (g/t)

Length-weighted mean of samples

before capping (g/t)



Main QV1_S 220 36.11 31.49 12.8%

Main QV1 150 58.87 52.25 11.2%

Main QV2 130 18.71 17.35 7.1%

Main QV2A

13.64 13.64 0.0%

Main QV3 75 16.72 15.36 8.1%

Main QV4 230 129.75 104.72 19.3%

Main QV6

4.90 4.90 0.0%



Zone Domain Ag Cap (g/t)

Length-weighted mean of samples

before capping (g/t)



Main QV9

18.61 18.61 0.0%

Main QV10 150 22.41 20.63 8.0%

Main QV11

18.34 18.34 0.0%

Main QV12

4.78 4.78 0.0%

Main QV13 115 30.17 28.63 5.1%

Main QV14

15.17 15.17 0.0%

Main QV15

16.40 16.40 0.0%

Main QV21 130 14.75 14.02 5.0%

Main QV32

15.12 15.12 0.0%

North QV5

15.94 15.94 0.0%

East QV7

24.08 24.08 0.0%

East QV8

23.07 23.07 0.0%

East QV8_B

24.00 24.00 0.0%

East V25 Sth A 46.26 46.26 0.0%

East V25 Sth B 250 33.78 32.23 4.6%

East V25 Nth A 250 114.78 78.22 31.8%

East V25 Nth B 250 110.46 107.71 2.5%

East V25 Nth C

21.04 21.04 0.0%

4.2.2 Second Stage: Accumulation and Distance Constraint

The second stage of constraining is done on the full intersection accumulations (product of grade and

thickness). Distance and accumulation thresholds were applied to some domains: if the composite is

more than a certain distance from the block being estimated, then the accumulation is capped.

SRK used this second stage of capping because, within the vein domains, there are clearly zones of

higher grade (see long sections in Figure 4-4 and Figure 4-5 of accumulations for QV1S and QV25),

which have too few intersections to make it practical to define a separate domain. The highest-grade

intersections from these zones, however, should be controlled, to avoid projecting too far into sparsely

drilled areas and excessively influencing the estimates of lower grade zones.

Figure 4-4: Long section view of QV1S intersection accumulations for Au



Figure 4-5: Long section view of QV25 intersection accumulations for Au

For QV1S, the second stage cap on accumulation was set at 60 m * g/t. For all other domains where

this second stage of constraining was applied, the second stage cap on accumulation was set at 40

m * g/t. The choice of these thresholds was made from analysis of histograms, for example Figure 4-6

and Figure 4-7.

Figure 4-6: Histogram of Au accumulations for lower part (below 150 mRL) of QV1S



Figure 4-7: Histogram of Au accumulations for QV25

The Main Zone is not sensitive to the choice of distance threshold, because, in the areas of extensive

underground channel sampling, blocks are generally estimated from samples within the distance limit

of influence. At greater depths, below the current channel sampling coverage, the overall grade of the

QV1S decreases, and outliers of high accumulation values are rare.

For QV25 though, the estimates are based on wider-spaced sampling, and the global results are

sensitive to the distance threshold.

As discussed above, the accumulation threshold of the second stage capping for V25 was set at

40 m * g/t, based on the histogram. Setting the distance threshold is more of a spatial than a statistical

decision: the appropriate distance should be based on a 3D assessment of the distribution of high

values, particularly the dimensions of high grade (or high accumulation) clusters in relation to the hole

spacing.

In practice, the software used by SRK for the estimation sets the distance threshold based on a

percentage of the full search ellipse dimensions. Based on testing several options and visualising the

extent of influence of the above-threshold accumulations, SRK chose to use a 72m x 24m ellipse for

the second-stage distance constraint (QV25 example shown in Figure 4-8).



Figure 4-8: Long section view of QV25 intersection accumulations for Au, red shading shows blocks where the estimates will proceed using at least one intersection uncapped by second stage capping; the blue shading shows blocks where the high Au values may still influence the estimates, but will be capped at 40 m * g/t

4.2.3 Capping and Reconciliation

In relation to capping, SRK’s high-level reconciliation for the Main Zone, as described in Section 5.7,

can be considered as a check on the first stage of SRK’s capping approach. The close spacing of

grade control samples in the mined areas of the Main Zone means that the second stage of capping

has almost no effect (blocks are usually estimated from samples much closer than the distance

threshold set for the second stage).

4.3 Relationship between Au and Ag

Analysis of the intersection grades shows a moderately strong correlation between Au and Ag (Figure

4-9 and Figure 4-10). The estimation approach described in Section 5 did not make use of this

correlation; Au and Ag were estimated separately. The coverage of Ag assays is almost as complete

as the coverage of Au assays (approximately 99% of intervals analysed for Au also have an Ag result),

and much of the missing Ag information is located in the mined-out areas, so there would be no

significant benefit from using a more complicated estimation method (such as co-kriging) that relies

on modelling the correlation between variables.

For some of the Main Zone domains in particular, there are intervals with high Au grades (for example,

along the x-axis of Figure 4-6), but with Ag grades set to the detection limit (1 g/t). These intervals

were found to be mostly from older channel sampling in mined out areas, and therefore very unlikely

to materially influence the Mineral Resource estimation, so were not investigated further nor corrected.



Figure 4-9: Scatter plot of Ag vs Au for domain QV1S; coefficient of linear correlation is 0.70

Figure 4-10: Scatter plot of Ag vs Au for domain QV25; coefficient of linear correlation is 0.45



4.4 Relationship between Au grade and thickness

For all domains, the correlation between Au grade, and the true thickness of the mineralised

intersection, is poor (for example, Figure 4-11).

The only obvious feature from the scatterplots is that low grade, high thickness intervals are rare. This

feature may be a result of the dominantly grade-based interpretation of the mineralisation contacts:

thin, low-grade intervals will sometimes be interpreted, in order to maintain continuity of the

mineralised structures, whereas thick, low-grade intervals are likely to be trimmed according to the

nominal grade threshold applied for defining mineralisation limits.

Figure 4-11: True thickness versus log (Au grade), for domain QV1S

4.5 Comparison of Core Samples to Channel Samples

For Asacha, there is limited potential to make meaningful comparisons of the results from various

sampling campaigns against each other, because the area covered by each campaign generally has

little overlap with areas covered by other campaigns. Therefore, separating statistical differences due

to variations of geology and mineralisation, from differences due to sampling and assaying methods,

will not be possible.

One comparison that SRK considered could produce robust results was of the drilling and the channel

sampling intersections within Main Zone domain QV1 South. For this comparison, SRK defined a test

volume, representing the portion of the QV1 South domain that is both within 25m of a drill hole

intersection, and within 25m of a channel sample intersection (Figure 4-12).

Within this test volume, SRK prepared two estimates of Au, one using only the channel sample

intersections, and a second using only the drill intersections. Both estimates otherwise followed the

same methodology described in Section 5.1 of this report. The results of the estimates are summarised

in Table 4-4.



The overall results of the two estimates are closely matched, and give no reason to suspect that the

channel sample results are biased relative to the drilling. Note though that, for the most part, this test

only provides a comparison of the 1996 drilling campaign against the channel sampling (as shown in

Figure 4-12). Intersections from the more recent drilling are mainly located below the portion of QV1S

covered by the channel sampling.

Grey shading shows test volume use for Drill versus Channel sampling comparison. Red points are channel sample intersections; black points are drill intersections (1988 campaign); blue points are drill intersections (1996 campaign); green points are drill intersections (2004/2005 campaign); orange points are drill intersections (2017 campaign)

Figure 4-12: View looking west of domain QV1 South

Table 4-4: Comparison of Drill and Channel estimations within the test area

Sample type Thickness estimate (m) Au grade (g/t) Au accumulation (m * g/t)

Drilling 1.66 15.61 27.8

Channel Sampling 1.70 16.43 28.8

4.6 Variogram Modelling

Leapfrog EDGE software was used to fit variogram models for the 2D variables of Au accumulation,

Ag accumulation, and thickness.

Domain QV1 South, intersected by many closely-spaced channel samples, had the greatest

abundance of data.

The normalised variogram model fitted to Au accumulation for QV1 South (Figure 4-13, Figure 4-14)

was found to also be an adequate representation of the variability of thickness (Figure 4-15, Figure

4-16) and Ag accumulation (Figure 4-17, Figure 4-18). Therefore, this model (Table 4-5) was used as

a proportional model for estimating all three variables. Small deviations from the optimal separate

model fitting of thickness and Ag accumulation were tolerated, in order to ensure that independent

kriging of accumulations and thickness would not lead to inconsistencies when the mean grades were

calculated from the accumulation and thickness estimates.

Table 4-5: Normalised variogram model parameters

Nugget Structure 1 Sill

Structure 2 Sill

Structure 1 Range Major

Structure 1 Range Intermediate

Structure 2 Range Major

Structure 2 Range Intermediate

0.25 0.44 0.31 30m 24m 160m 50m

For other domains, there were too few points to generate well-structured experimental variograms,

therefore the QV1 South models were assigned to all other domains, but rotated to match the overall



anisotropy of each domain (ie. the same dip and dip direction as the best fit plane specified in Table

4-1). The consistent shallow north-plunging trend of mineralisation continuity, shown by Main, North,

and East Zones, was represented by orientating the variogram anisotropy with a 15 degree pitch angle

for all domains.

Figure 4-13: Experimental and modelled variogram for Au accumulation, major direction of QV1 South domain

Figure 4-14: Experimental and modelled variogram for Au accumulation, intermediate direction of QV1 South domain



Figure 4-15: Experimental and modelled variogram for thickness, major direction of QV1 South domain

Figure 4-16: Experimental and modelled variogram for thickness, intermediate direction of QV1 South domain



Figure 4-17: Experimental and modelled variogram for Ag accumulation, major direction of QV1 South domain

Figure 4-18: Experimental and modelled variogram for Ag accumulation, intermediate direction of QV1 South domain



5 Estimation The geostatistical estimation of Au and Ag was prepared using Leapfrog GEO and EDGE software.

5.1 Estimation Method

For deposits with narrow vein geometry and reasonably sharp contacts, two-dimensional estimation

approaches have significant advantages over three-dimensional approaches. The main motivation for

2D estimation is that bias due to non-additivity of grade is avoided (Bertoli et al, 2003). For a narrow

vein, grade is usually not a suitable input for direct kriging, because grade is defined on samples of

varying lengths, and it will be impossible to find a regular composite length that is both significantly

shorter than most intersection lengths, and longer than most sample lengths. The 2D solution to this

problem utilizes the relationship that mean grade over the full intersection thickness can be defined as

the ratio of two variables which are amenable to direct kriging of full intersection composites, namely

the thickness and accumulation (product of grade and thickness).

As well as removing the problem of choosing an appropriate composite length, 2D estimation also

reduces several practical difficulties that are likely to arise from applying 3D approaches to narrow

vein geometry: 2D estimation simplifies the choice of block size, search neighbourhood and anisotropy

to use for estimation.

The set of intersection composites described in Section 4.1 was used as the input for 2D Ordinary

Kriging of Au accumulation, Ag accumulation and thickness. Grade estimates of Au and Ag were

defined from the ratio of the accumulation estimates to the thickness estimates.

5.2 Estimation Parameters

The 2D kriging estimates were made using the capping approach described in Section 4.2, the

variogram models described in Section 4.6, and the search neighbourhood parameters listed in Table

5-1.

The general approach to defining the search neighbourhood was to use a large, single pass ellipse,

and restrict the neighbourhood using a maximum number of composites, in preference to a distance

restriction. The maximum number of composites per estimate was set at 6 for all domains, based on

testing various settings, and making statistical assessments of kriging quality (in particular the slope

of regression parameter) and visual assessments of the extent to which the influence of relatively

higher and lower input values were being spread.

A minimum of 1 composite was set, but apart from a few blocks at the deeper edges of the Main Zone,

and of QV8 in the East Zone, all blocks were estimated using at least 2 composites, and >90% of

blocks were estimated using 4 or more composites.

For each domain, the orientation of the search ellipse matched the orientation of the variogram model

anisotropy, including the shallow north plunge. The same search distances and Max/Min composite

restrictions were used for Au accumulation, Ag accumulation, and thickness.



Table 5-1: 2D Kriging Search Neighbourhood Parameters

Zone Domain Search Ellipse

Axis1 (m) Search Ellipse

Axis2 (m) Max

Comps Min

Comps Second Stage

Cap Au Second Stage

Cap Ag Search Ellipse

Dip Search Ellipse Dip Direction

Search Ellipse Pitch

Main QV1_S 240 80 6 1 60 120 80 85 15

Main QV1 90 30 6 1 60 120 88 86 15

Main QV2 120 40 6 1 40 100 89 72 15

Main QV2A 120 40 6 1 78 109 15

Main QV3 120 40 6 1 79 261 165

Main QV4 120 40 6 1 100 83 88 15

Main QV6 120 40 6 1 40 82 264 165

Main QV9 120 40 6 1 89 93 15

Main QV10 120 40 6 1 40 120 85 275 165

Main QV11 120 40 6 1 83 264 165

Main QV12 120 40 6 1 88 80 15

Main QV13 120 40 6 1 89 276 165

Main QV14 120 40 6 1 88 84 15

Main QV15 120 40 6 1 89 71 15

Main QV21 120 40 6 1 40 82 237 165

Main QV32 120 40 6 1 83 74 15

North QV5 180 60 6 1 13.7 86 276 165

East QV7 240 80 6 1 40 88 81 15

East QV8 240 80 6 1 78 89 15

East QV8_B 240 80 6 1 40 82 102 15

East V25 Sth A 240 80 6 1 40 100 89 70 15

East V25 Sth B 240 80 6 1 40 89 70 15

East V25 Nth A 240 80 6 1 40 100 85 92 15

East V25 Nth B 240 80 6 1 85 92 15

East V25 Nth C 240 80 6 1 85 92 15



5.3 Block Model

The spacing between intersections is highly variable for both the Main Zone and the East Zone. As a

compromise, to find a reasonable block size relative to most of the various spacings, a parent block

size of 10m (north) by 10m (elevation) was chosen for the Main Zone (Table 5-2), and 20m (north) by

10m (elevation) was used for the East Zone (Table 5-3).

Other block and sub-block dimensions were tested, but the grade-tonnage results for key cut-offs were

found not to be sensitive to the choice of block size. This result is as expected, since the mean grade

of mineralisation within the domains is generally much higher than the range of likely cut-off grades.

Table 5-2: Main and North Zone block model dimensions

East North Elevation

Min Corner 40560 53950 -70

Max Corner 40840 56150 350

Parent block size (m) 10 10 10

Sub-block size (m) Variable, to fit wireframe 1 1

Discretisation for kriging 1 6 6

Table 5-3: East Zone block model dimensions

East North Elevation

Min Corner 41640 54370 -150

Max Corner 42160 55470 310

Parent block size (m) 20 10 10

Sub-block size (m) Variable, to fit wireframe 1 1

Number of discretisation points for kriging

1 6 6

5.4 Validation

The block model was validated visually and statistically against the input assays, composites and

wireframes. Long sections of the block model Au grade estimates versus intersection grades are

shown in Figure 5-1, Figure 5-2 and Figure 5-3. From these validation checks, SRK concludes that

the estimation is acceptably aligned with the input information.

For the Main Zone domains with abundant intersections, swath plots were a useful tool for comparing

the input values against the block estimates (Figure 5-4 and Figure 5-5). The swath plot by elevation

for QV1 and QV1 South shows a clear trend of Au metal content decreasing with depth.

Figure 5-1: Main Zone QV1 South and QV1 domains, Au grade estimates, and intersection Au grades



Figure 5-2: North Zone (QV5), Au grade estimates, and intersection Au grades

Figure 5-3: Vein 25 (left to right - domains V25 Sth A, V25 Sth B, and V25 Nth A), Au grade estimates, and intersection Au grades



Figure 5-4: Swath plot by 20m northing slice of Au accumulation in QV1, QV1S, and QV5 domains

Figure 5-5: Swath plot by 20m elevation slice of Au accumulation in QV1 and QV1S domains



5.5 Classification

Mineral Resources were classified according to the definitions of the JORC Code. Classification took

account of data quality, confidence in the mineralisation domain model, and confidence in the

geostatistical block estimation.

After reviewing sample spacing and estimation confidence parameters in 3D, the classification

categories were assigned to the block model from manually digitized boundaries. Long section views

of the classification are shown in Figure 5-6 and Figure 5-7.

The overall classification approach is similar to the approach used by Seequent for preparing the

previous Mineral Resource estimation.

5.5.1 Measured

The Measured classification was applied to areas that have been developed, and are generally within

12m of channel sampling coverage. Slopes of regression from accumulation estimates are generally

greater than 0.90, and there is high confidence in the vein interpretation.

In order to simplify the overall Measured boundaries, some areas that were up to about 20m from

channel sampling, but bounded on two or three sides by development and channel sampling coverage,

were also grouped into the Measured category, resulting in a moderate increase in total Measured

compared to the previous Mineral Resource estimate.

Only the Main Zone domains QV1, QV1 South, QV2 and QV4 have a component classified as

Measured.

5.5.2 Indicated

The Indicated classification was applied to areas with diamond drill coverage of 50m x 50m spacing

or closer. Locally slightly wider spacings (up to about 60m x 60m) were also grouped into Indicated,

in order to avoid creating a patchwork of Indicated and Inferred. For the Inferred portion of the Mineral

Resource, slopes of regression from accumulation estimates are generally greater than 0.65.

5.5.3 Inferred

The remaining Mineral Resources inside the mineralisation domains were assigned an Inferred

classification.

The Inferred category was assigned to some deeper parts of domain QV1 South, East Zone domains

QV8 and QV8B, and parts of the East Zone domains that form QV25 North and QV25 South.

Figure 5-6: QV1 South and QV1 classification and intersection locations, with depletion removed



Figure 5-7: V25 classification and intersection locations

5.6 Depletion

Vein mineralisation in the Main Zone of the Asacha deposit has been subject to significant

underground mining since 2011. It is necessary to deplete the resource to account for this mining

depletion. SRK utilised two primary sources of data to deplete the Main Zone mineralisation domains:

• Extruded volumes used to deplete the previous Mineral Resource Estimate on the Asacha Project, completed by Seequent in December 2019;

• Long section strings for QV1 and QV2, outlining the mine layout as of 31st March 2020 for these veins.

The depletion volumes used to deplete the Seequent December 2019 Mineral Resource include

“Mined”, “Rockfall” and “Sterilisation” categories, with all other material being coded as “Remaining”.

The Mined volumes represent mined out stopes, or underground mining development. The Rockfall

volumes represent areas of collapse of older workings, whilst the Sterilisation volumes denote areas

that would not be mined due to stability issues and areas that are deemed uneconomic due to high

costs of access, where the contained metal does not justify capital expenditure. Additionally,

sterilisation coding has also been applied to the portions of QV1 North, QV2A, QV4 and the

northernmost 150 m of QV1 South, that are within 100m of surface, and directly below a river.

The depletion volumes used by Seequent include 4 “sets”, each used to deplete different domains, as

described below:

• QV1 N Depletion volumes – Used to deplete the Seequent QV1 North domain

• QV1 S Depletion volumes – Used to deplete the Seequent QV1 South domain

• QV2 Depletion Volumes – Used to deplete the Seequent QV2, QV2A and QV21 domains

• QV4 Depletion Volumes – Used to deplete the Seequent QV4 domain

Initially, SRK depleted the mineralisation domains according to the December 2019 depletion volumes

applied by Seequent, but with adjustments made in how the volumes were used to deplete specific

veins, to align with the changes to the model geometry described in Section 3.2.3, such that the final

depletion was applied in the same manner as completed by Seequent. This is outlined in Table 5-4. A

number of veins not reported by Seequent are assumed to be fully sterilized.



Table 5-4: Initial depletion approach for the Main Zone domains

Vein Depletion Approach

QV1 North Depleted according to the extruded volumes used to deplete Dec 2019 QV1 North

QV1 South Depleted according to the extruded volumes used to deplete Dec 2019 QV1 South. Beyond the extent of Dec 2019 QV1 South, depleted according to the extruded volumes used to depleted Dec 2019 QV2

QV2 Depleted according to the extruded volumes used to deplete Dec 2019 QV2

QV2A Depleted according to the extruded volumes used to deplete Dec 2019 QV2

QV3 Assumed fully sterilized



QV9 Not Depleted


QV11 Not Depleted


QV13 Depleted according to the extruded volumes used to deplete Dec 2019 QV1 South.





After completing the depletion coding according to the volumes used in the December 2019 Mineral

Resource, as described in Table 5-4, the depleted vein domains were compared with the long section

strings for QV1 and QV2, provided by TSG, outlining the mine layout as of 31st March 2020. Any areas

of new development or mined out stopes included in the TSG long sections, not outlined in the

December 2019 extruded depletion volumes were added to the “Mined” volumes for the relevant

domain. Again, as changes have been made to vein geometry and naming / correlation of individual

veins (as described in Section 3.2.3) since the long sections were developed, it was necessary to split

the QV1 and QV2 long sections according to the approach outlined in Table 5-4. Specifically, additional

mined out areas in the QV1 long section were used to deplete QV1 North, QV1 South and QV13,

whilst additional mined out areas in the QV2 long section were used to deplete QV2, QV2A, QV10,

QV21 and QV1 South beyond the extent of the December 2019 QV1 South Model. Long sections for

the QV1 South, QV1 North, QV2 and QV4 domains, coloured by mining depletion are provided in

Figure 5-8 to Figure 5-11.

At the estimation reporting date, no significant extraction from the East Zone or North Zone domains

had yet occurred, so it was not necessary to deplete these domains.

The reporting date of the Mineral Resource statement (30/4/20) is one month later than the date of the

depletion strings. To account for this additional depletion, SRK made the following adjustment:

1) Estimated the tonnage mined during April 2020 as 7,000 t. The estimate is based on one third of

the amount TSG reported as “ore extracted” during Q1 (34,000 t, from 23/4/20 press release), and

then converting the “ore extracted” to in situ mineralisation, by assuming dilution fraction of 36%

(average dilution factor for 2019, based on surveyed volumes).

2) The location of mining in April is assumed to be the Measured portion of the Main Zone.

3) The in situ grade of the material mined in April is assumed to be the same as the average Au and

Ag grade of the Measured component of SRK’s Mineral Resource estimate.



SRK has discussed with TSG the assumptions made for applying the April 2020 depletion, and

concluded that variation of the assumed amounts from the actual tonnes, grade and location of mining

is unlikely to significantly more than the rounding applied to the Mineral Resource statement.

Figure 5-8: East-facing view of the QV1 South domain, coloured by depletion category

Figure 5-9: East-facing view of the QV1 North domain, coloured by depletion category



Figure 5-10: East-facing view of the QV2 domain, coloured by depletion category

Figure 5-11: East-facing view of the QV4 domain, coloured by depletion category

5.7 Reconciliation

The Asacha mine has produced gold since 2011, and the production history can be used as a

verification check on the Mineral Resource estimate. After reviewing, the reconciliation information

available, SRK concluded that a robust verification would only possible at a high level (mine life to

date).

From TSG Annual Reports (and 23/4/20 Press Release for 2020 Q1 information), SRK compiled the

results in Table 5-5. SRK compared these results to the tonnage and grades of the “Mined” portion of

the block model, as coded from the outlines of depletion (up to 31/3/20) provided by TSG:

1) Total gold production (304,482) was converted to a “metal in material delivered to processing

plant” total of 320,507, by assuming 95% recovery.



2) In situ mineralisation coded as Mined in the block model is 674,153 t. Based on an assumption of

95% mining recovery, the total tonnes processed (1,399,527 t) are assumed to consist of 640,446

t of mineralisation, and 759,081 t of dilution.

3) Assuming a grade of 0.6 g/t Au for the dilution (SRK’s statistical analysis of mean grade outside,

and within 2m of mineralisation wireframe), the grade of the mineralisation (back-calculated from

the gold production) is 14.85 g/t Au.

4) The block model estimate of mean grade for the mineralisation coded as Mined is 17.45 g/t Au,

17% higher than the back-calculated grade.

Table 5-5: Asacha production, from beginning of mining (2011) to Q1 2020

Year Au Oz Produced Tonnes Processed Recovery (%)

2020 (Q1) 6,859 44,221 94.5

2019 43,479 179,373 95.3

2018 42,148 189,695 94.9

2017 36,714 184,000 94.4

2016 35,366 163,000 95.2

2015 37,984 161,000 95.4

2014 36,513 156,561 95.1

2013 29,666 155,215 94.4

2012 27,920 136,154 95.4

2011 7,833 30,308 94.2

TOTAL 304,482 1,399,527 95.0

SRK chose not to revise the estimation parameters to make the block model more closely align with

the back-calculated grade. Apart from potential inaccuracies from the methodology or data used to

prepare the block model estimate, there are other possible explanations for the grade difference:

• The 95% processing recovery assumption may be incorrect. SRK understands the processing recovery is mainly estimated based on sampling of the crushed feed, without additional confirmation from regular sampling of the tailings. A lower recovery percentage would reduce the difference between the back-calculated grade and block model grade.

• SRK’s 95% mining recovery assumption may be too high; a lower percentage would reduce the difference between the back-calculated grade and block model grade.

• The density in the mined areas (which include most of the mineralisation nearest to the surface) may be lower than the assumed constant density of 2.48 for all the deposit. A lower density would reduce the metal in the SRK estimate, and so reduce the difference between the back-calculated grade and block model grade.

• Some mined material remains in stockpiles. TSG’s estimate of stockpiles at end of March 2020 is 66,000 t at an average grade of 1.6 g/t Au. This amount is small compared to the total 1.4 Mt processed, but will also account for some of excess metal in the mined portion of the block model, compared to the total back-calculated from the processing results.

5.8 Cut-off Grade

The Mineral Resources for Asacha are reported above a dual cut-off of 4 g/t Au and 4 m * g/t Au

(product of vein thickness and grade). The grade-thickness component of the cut-off ensures that the

4 g/t average is maintained across at least a 1m minimum mining thickness.

SRK calculated the 4 g/t cut-off based on the parameters in Table 5-6.

The Mineral Resource statement is on an in situ basis, without dilution, but SRK considered that it was

appropriate to include an estimate of dilution in the cut-off calculation, because the reconciliation



analysis (Section 5.7) showed that dilution forms a significant component of material delivered to the

processing plant.

Over the mine life to date, more than 50% of the mined tonnes are dilution instead of mineralised vein

material. For 2019 though, TSG’s surveys from mining the Main Zone show that the dilution proportion

has reduced to an estimated 36%. SRK used this lower proportion in the cut-off calculation. The

assumed grade of dilution was based on SRK’s statistical analysis of the mean grade outside, but

within 2m of the mineralised domains.

The cut-off calculated by SRK is the same as used for the previous Mineral Resource estimate update

(Stewart and Nicholls, 2019).

SRK used mineable shape optimiser (MSO) software to process the block model and produce

approximate stope shapes to constrain Mineral Resource reporting. The output was not entirely

satisfactory, and the results excluded some thin but high-grade zones, which SRK judged could

reasonably be expected to be extracted by the current shrinkage stoping mining method. Therefore,

Mineral Resource reporting reverted to the simple grade and grade-thickness cut-off constraint.

Table 5-6: Cut-off grade calculation parameters

Parameter Unit Main and North Zones East Zone

Gold Price USD / oz 1400 1400

Royalty % 6 0.6

Refining Cost USD / g 0.14 0.14

Processing Recovery % 95 95

Mining Cost USD / t 74.5 52.7

Processing Cost USD / t 35.6 39.6

Component of each tonne extracted that is dilution

% 36 36

Grade of dilution g/t Au 0.6 0.2



6 Mineral Resource Statement

Table 6-1: Asacha Mineral Resource Estimate as at April 30th, 2020, reported using a dual cut-off of 4 g/t Au and 4 m * g/t Au (product of thickness and Au grade)

Classification Zone Tonnes Au g/t Ag g/t Au

(koz) Ag

(koz) Au (kg) Ag (kg)

Measured Main 82,000 15 40 40 105 1,200 3,300

Indicated Main 162,000 9 46 49 242 1,500 7,500

Indicated North 54,000 11 19 20 32 600 1,000

Indicated V25N 291,000 18 63 173 591 5,400 18,400

Indicated V25S 84,000 20 29 53 78 1,600 2,400

Indicated V7 V8 4,000 23 24 3 3 100 100

INDICATED TOTAL 596,000 16 49 298 947 9,300 29,500

MEASURED AND INDICATED

TOTAL 677,000 15 48 337 1,052 10,500 32,700

Inferred Main 19,000 7 34 4 21 100 600

Inferred V25N 46,000 13 43 19 63 600 2,000

Inferred V25S 88,000 14 44 40 124 1,200 3,900

Inferred V7 V8 108,000 15 21 51 73 1,600 2,300

INFERRED TOTAL 261,000 14 34 115 282 3,600 8,800

Notes: Resources are reported after mining depletion

Tonnage, grade and metal content have been rounded to reflect an appropriate level of precision



7 Conclusions SRK has updated the Mineral Resource Estimate for Asacha, including preparing a new wireframe

interpretation of all vein domains, and revising the geostatistical estimation methods and parameters

for all domains. The volumes depleted by mining were remodelled, based on outlines prepared by

TSG showing the extents of mining up to March 1st, 2020. SRK also recalculated the cut-off grade for

reporting Mineral Resources, from parameters updated by TSG in the first quarter of 2020, but the

result did not change from the previous reporting threshold of 4 g/t.

7.1 Comparison to Previous Mineral Resource Estimate

Although the interpretations and estimation methods and parameters were revised by SRK for all vein

domains, the differences between the results of this Mineral Resource estimate update, and the

previous Mineral Resource estimate (dated December 1st, 2019, prepared by Seequent) are primarily

due to new drill holes completed in late 2019 and early 2020.

This difference is apparent from Table 7-1. The substantial increased Mineral Resources for QV25 are

due to the 49 new holes and 13,649m of core targeting domain QV 25 North.

Only a small increase in Mineral Resources occurred for the North Zone, even though 11 new holes

and 2,011m of core were added to the database. The volume of the North Zone increased in SRK’s

new interpretation, but much of the additional material was estimated to have a gold grade below cut-

off.

Table 7-1: Metal content comparison to previous Mineral Resource estimate

Domain Group

SRK MRE (30/4/20)


Seequent MRE (1/12/19)


Main Zone 93,000 97,000

North Zone 20,000 16,000

East Zone - QV7 and QV8 55,000 66,000

East Zone - QV25 284,000 133,000

TOTAL 452,000 313,000

7.2 Potential for Defining Additional Mineral Resources

For the Main, North and East Zones, a consistent feature of both the overall shape of the mineralisation

domains, and the distribution of high Au and Ag grades within the veins, is a shallow north plunge,

within the overall steeply dipping structure. Based on this plunge, the main opportunities for defining

further mineralisation and adding to the Mineral Resource inventory appear to be from drilling to the

north and down-plunge of the East Zone domains QV25 North and QV8B, and to the south of QV25

South.

7.2.1 QV25

In May and June 2020, after the effective date of the Mineral Resource statement presented in this

report, TSG completed or commenced 18 drill holes (approximately 5,100m), for the purpose of infilling

and extending the nominal 50m x 50m drilling coverage of QV25 North to 55400N (along strike) and

0 elevation (down dip). TSG is also planning a further 30 holes (approximately 9,200m), later in 2020,

to:

• Test the extension of QV25 North down dip for a further 50m;



• Test the extension of QV25 North along strike to the north for a further 600m;

• Test the extension of QV25 South along strike to the south for a further 400m; and

• Infill the southern end of QV25 North.

The location of projected intersections from the completed or planned additional drilling in 2020 is shown in Figure 7-1.

Figure 7-1: Location of projected QV25 intersections from further drilling completed or planned by TSG in 2020, in relation to SRK 30/4/20 estimation for QV25 and existing intersections. Holes commenced or completed in May and June 2020 are shown by red spheres, holes planned for later in 2020 are shown by green spheres.

7.2.2 QV18

An Exploration Target (QV18), approximately 450m east of the Main Zone, has previously been

defined (Nicholls, 2018), based on 3 drill holes. From a mean thickness of 1.1m and a mean grade of

4.4 g/t Au, the tonnage range of this target was estimated at between 33 kt and 260 kt, wih a grade

range between 3.5 and 5.0 g/t Au. SRK endorses this assessment. The potential quantity and grade

are conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and

it is uncertain if further exploration will result in the estimation of a Mineral Resource. Two further holes

were drilled in 2019 to test the along-strike extent of this target, and did not intersect mineralisation,

but also do not change SRK’s target range assessment.

7.3 Recommendations

SRK makes the following recommendations relating to improving the quality of data future Mineral

Resource estimates are based on:

• Density measurements should also be taken routinely as part of drilling campaigns (Section 2.7).

• The historical QAQC information should be compiled into one database that can be easily accessed by external reviewers. In late 2019, the Asacha site geologists began a program of improving the protocols for collecting, interpreting and acting on sampling quality control information. There are now strong quality assurance systems in place for the ongoing collection of sampling information, and these systems should be maintained.

• A specialist should be engaged to complete a metallurgical audit of the processing plant, and advise on establishing protocols for regular sampling of the tailings, so that information from the processing plant can be a high-confidence foundation for reconciling the Mineral Resource estimates against production.



Prepared by

Robin Simpson

Principal Consultant, Resource Geology

Reviewed by

Alexander Batalov

Senior Geologist

All data used as source material plus the text, tables, figures, and attachments of this document have

been reviewed and prepared in accordance with generally accepted professional engineering and

environmental practices.



8 References AMC, 2001. Trans-Siberian Gold Ltd, Asachinskoye Gold Project Feasibility Study Interim Report.

AMC Report 401004, dated Aug 2001.

AMEC, 2003. Trans-Siberian Gold Ltd, Asachinskoye Resource Estimate 2002. Report by AMEC

dated January 2003

Bertoli, O., Job, M., Vann, J. and Dunham, S. 2003: Two-Dimensional Geostatistical Methods –

Theory, Practice and a Case Study from the 1A Shoot Nickel Deposit, Leinster, Western Australia, 5th

International Mining Geology Conference, Bendigo, Victoria, 17 – 19 November 2003.

Hatch, 2006. Trans-Siberian Gold – Asacha Project Technical Review Report. Internal report prepared

for Standard Bank PLC. Dated 1st Sep 2006. Filename: Hatch_60915 PD Final Report Oct2006.pdf

Jackson, S. 2011. Notes on QG Asacha estimate. Memorandum dated 3rd Oct 2011.

JORC, 2012. Joint Ore Reserves Committee of The Australasian Institute of Mining and Metallurgy,

Australian Institute of Geoscientists and Minerals Council of Australia (JORC) Effective December

2012 Mineral Resources and Ore Reserves Reporting of Exploration Results, ~ The JORC Code ~

2012 Edition.

Nicholls, C. 2017. Asacha Mineral Resource Estimate- Dec 31st 2016 Confidential AGL Client Report

dated June 2017.

Nicholls, C. 2017. Review of Asacha Gold Mine - Confidential AGL Client Report dated November

2017.

Nicholls, C. 2018. Asacha Mineral Resource Estimate- Dec 31st 2017 Confidential Seequent Client

Report dated May 2018.

Nicholls, C. 2019. Asacha Mineral Resource Estimate- Dec 31st 2018 Confidential Seequent Client

Report dated 30th May 2019.

O’Brien, M. 2006. Asacha Mineral Resource – June 2006. Internal memorandum.

Stewart, M. 2013. Asacha Mineral Resource Estimate- Dec 31st 2012. Confidential QG Client Report

dated July 2013.

Stewart, M. 2014. Asacha Mineral Resource Estimate- Dec 31st 2013 Confidential QG Client Report

dated July 2014.


dated July 2015.


dated May 2016.

Stewart, M. and Nicholls, C. 2019. Asacha Mineral Resource Estimate- Dec 1st 2019 Confidential

Seequent Client Report dated 20th December 2019.

SRK Consulting: Project No: RU00749 - BO Asacha_MRE Appendices


Appendices

SRK Consulting: Project No: RU00749 - BO Asacha_MRE Appendix A


Appendix A: Drill Holes and Channels excluded from Mineral Resource estimation



Hole ID Year Hole Type Reason for Exclusion

C11 1988 Surface DDH Excluded in previous resource model updates



C14A 1988 Surface DDH Un-sampled at anticipated depth of mineralisation based on adjacent holes / channels

C14B 1988 Surface DDH Excluded in previous resource model updates




C193 1988 Surface DDH Position of vein intersection inconsistent with nearby channels


C195A 1988 Surface DDH Un-sampled at anticipated depth of mineralisation based on adjacent holes / channels











C305 1988 Surface DDH Un-sampled at anticipated depth of mineralisation based on adjacent holes / channels









C7 1988 Surface DDH Position of vein intersection inconsistent with nearby holes


C71 1988 Surface DDH Un-sampled at anticipated depth of mineralisation based on adjacent holes / channels

A7403 1996 Surface DDH Excluded in previous resource model updates




A74110 1996 Surface DDH Position of vein intersection inconsistent with nearby holes

A74111 1996 Surface DDH Position of vein intersection inconsistent with nearby channels





































A7480 1996 Surface DDH Un-sampled at anticipated depth of mineralisation based on adjacent holes / channels



A7492 1996 Surface DDH Un-sampled at anticipated depth of mineralisation based on adjacent holes / channels


14A 2007 Surface DDH Excluded in previous resource model updates


25A-2 2007 Surface DDH Excluded in previous resource model updates



2TX 2007 Surface DDH Position of vein intersection inconsistent with nearby channels




39A-2 2007 Surface DDH Position of vein intersection inconsistent with nearby channels

55A 2007 Surface DDH Un-sampled at anticipated depth of mineralisation based on adjacent holes / channels

58A 2007 Surface DDH Position of vein intersection inconsistent with nearby channels

C-2054 2020 Surface DDH Unclear if hole has been sampled

C-2055 2020 Surface DDH Unclear if hole has been sampled

C-596A 2020 Surface DDH Unclear if hole has been sampled

S1N-2050 1988 UG Channel Excluded in previous resource model updates























S1S-2050 1988 UG Channel Excluded in previous resource model updates

































































S5N-2300 1988 UG Channel Position of vein intersection inconsistent with nearby channels

S5S-2300 1988 UG Channel Position of vein intersection inconsistent with nearby channels

T1-1813 1988 UG Channel Down-Channel survey appears to be incorrect


T1-300B 1988 UG Channel Position of vein intersection inconsistent with nearby channels



T1-973A 1988 UG Channel Down-Channel survey appears to be incorrect

B204-1-1-1L1002 2011 UG Channel Excluded in previous resource model updates




































BN204-1-3-1L126 2011 UG Channel Excluded in previous resource model updates

















O204MN 2011 UG Channel Excluded in previous resource model updates

O204MS 2011 UG Channel Excluded in previous resource model updates

ON200-4-1 2011 UG Channel Excluded in previous resource model updates























ON204-1-3-10 2011 UG Channel Excluded in previous resource model updates

















ONE204-1-2-3 2011 UG Channel Excluded in previous resource model updates





ONW204-1-1-4 2011 UG Channel Excluded in previous resource model updates










OS200-4-1 2011 UG Channel Excluded in previous resource model updates












OS204-1-3-10 2011 UG Channel Excluded in previous resource model updates

















OSE204-1-1-1 2011 UG Channel Excluded in previous resource model updates















OSW204-1-2-3 2011 UG Channel Excluded in previous resource model updates




RN204-1 2011 UG Channel Excluded in previous resource model updates






RS204-1 2011 UG Channel Excluded in previous resource model updates






B228-6-2L0 2012 UG Channel Down-Channel survey appears to be incorrect

ON268-6-2 2012 UG Channel Down-Channel survey appears to be incorrect

RS240-6-1 2012 UG Channel Down-Channel survey appears to be incorrect

BL 96-1L10Nz137 2019 UG Channel Excluded in previous resource model updates










BL 96-1L10Sz65 2019 UG Channel Excluded in previous resource model updates


































































BL 97-1L10z116 2019 UG Channel Excluded in previous resource model updates









































VBV 100-96NH111.8 2019 UG Channel Excluded in previous resource model updates

VBV 100-96SH111.8 2019 UG Channel Excluded in previous resource model updates

VBV 100-96SH119.7 2019 UG Channel Excluded in previous resource model updates

VHV 100/135-96NH112.4 2019 UG Channel Excluded in previous resource model updates




VHV 100/135-96SH108.2 2019 UG Channel Excluded in previous resource model updates



VHV 100/135-97S109.9 2019 UG Channel Excluded in previous resource model updates







ORT182-19-2SB 2015TZ UG Channel Excluded in previous resource model updates

ORT182-20-1S 2015TZ UG Channel Excluded in previous resource model updates




ORT182-20-1SB 2015TZ UG Channel Excluded in previous resource model updates

ORT182-20-2N 2015TZ UG Channel Excluded in previous resource model updates


ORT182-20-3N1 2015TZ UG Channel Excluded in previous resource model updates

ORT182-20-3S1 2015TZ UG Channel Excluded in previous resource model updates





RS182-1L952 2015TZ UG Channel Down-Channel survey appears to be incorrect

RS182-23-1L118 2015TZ UG Channel Excluded in previous resource model updates

RS210-10-1L936 2015TZ UG Channel Excluded in previous resource model updates

RS160-18L308 2017TZ UG Channel Down-Channel survey appears to be incorrect

SRK Consulting: Project No: RU00749 - BO Asacha_MRE Appendix B


Appendix B: Channels excluded from 2D kriging, due to incomplete intersections



Channel ID From To Vein

1TX 54.34 60 QV1S

A7401 87.348 92 QV1

B216-1-1-1L1538 3.263 3.4 QV1S

B216-1-1-1L1572 3 3.4 QV1S

B216-1-3-1L1025 2.1 3.7 QV1S

B216-1-3-1L1060 1.6 3.7 QV1S

B216-1-3-1L1093 1.3 3.5 QV1S

B216-1-3-1L1131 1.7 3.3 QV1S

B216-1-3-1L1149 1.7 3.3 QV1S

B216-1-3-1L1293 3 3.4 QV1S

B216-1-3-1L1311 2.6 3.4 QV1S

B216-1-3-1L133 0 2.6 QV1S

B216-1-3-1L1347 2.8 3.4 QV1S

B216-1-3-1L1369 2.7 3.5 QV1S

B216-1-3-1L1403 2.2 3.7 QV1S

B216-1-3-1L1435 2 2.9 QV1S

B216-1-3-1L1469 2.3 3 QV1S

B216-1-3-1L1504 1.9 3.3 QV1S

B216-1-3-1L532 2.4 3.9 QV1S

B216-1-3-1L556 0 3.6 QV2

B216-1-3-1L581 0 3.8 QV2

B216-1-3-1L625 0 3.7 QV2

B216-1-3-1L730 0 3.5 QV2

B216-1-3-1L768 0 2.9 QV2

B216-1-3-1L915 3.1 3.5 QV1S

B216-1-3-1L95 0 3.1 QV1S

B216-1-3-1L953 0 1 QV2

B216-1-3-1L953 2.8 3.3 QV1S

B216-1-3-1L991 0 0.155 QV2

B216-1-3-1L991 2.8 3.5 QV1S

B216-1L26 1.1 3.2 QV2

B216-4-1L172 0 2.7 QV10

B216-4-1L214 0 1.2 QV10

B228-1-3-1L124 0 0.1 QV12

B228-1-3-1L156 0 0.4 QV1S

B228-1-3-1L183 0 1.9 QV1S

B228-1-3-1L185 0 1.7 QV1S

B228-1-3-1L275 2.3 3.3 QV1S

B228-1-3-1L305 1 3 QV1S

B228-1-3-1L385 3.024 3.3 QV1S

B228-1-3-1L535 0 1 QV10




B228-1-3-2L1024 2.1 3.4 QV2

B228-1-3-2L1098 2.5 3.4 QV2

B228-1-3-2L1132 2.8 3.3 QV2

B228-1-3-2L1168 2.5 3.3 QV2

B228-1-3-2L609 2.284 3.1 QV2

B228-1-3-2L754 0 3.8 QV2

B228-1-3-2L793 1.7 3.6 QV2

B228-1-3-2L880 2.3 3.5 QV2

B228-1-3-2L916 3.2 3.4 QV2

B228-1-3-3L34 2.1 3.5 QV10

B228-1-3-4L190 0 0.5 QV1S

B228-2-3L455 2.4 3 QV1S

B228-2-3L46 2.547 2.8 QV6

B228-3-1L328 1 4.2 QV1S

B228-3-1L33 1.4 3 QV1S

B228-3-1L350 1.8 2.8 QV1S

B228-3-1L370 2.9 4.5 QV1S

B228-3-1L455 2.564 2.7 QV10

B228-3-1L519 0 1.2 QV1S

B228-3-1L602 0 3.6 QV1S

B228-3-1L75 1.2 2.8 QV1S

B228-6-1L194 0 0.1 QV1S

B228-6-1L20 0 2.2 QV1S

B228-6-1L222 0 1 QV1S

B228-6-1L36 0 1 QV1S

B228-6-1L52 0 1 QV1S

B228-6-1L73 0 0.191 QV1S

B228-6-1L99 0 1.1 QV1S

B228-6-2L240 2.492 2.9 QV1S

B228-6-2L504 0 2.5 QV1S

B240-1-3-1L48 1.5 3.3 QV1S

B240-1-3-4L803 0.5 3.6 QV2

B240-1-3-4L840 0 3.4 QV2

B240-1-3-5L13 0 0.4 QV1S

B240-1-3-5L33 0 0.9 QV1S

B240-3-1L24 1.2 2.9 QV1S

B240-3-2L352 3.1 3.7 QV1S

B240-3-2L385 1.7 3.5 QV1S

B240-3-2L425 0.5 3.8 QV1S

B240-3-2L547 0 3 QV10

B240-3-2NE 0 2.4 QV1S




B240-3-3L156 2 3.5 QV1S

B240-3-3L192 2.5 3.3 QV1S

B240-3-3L27 0 3.8 QV1S

B240-3-3L60 1.3 3.5 QV1S

B240-3-3L92 1.4 3.8 QV1S

B240-3-3NW 0 6.6 QV1S

B240-3-4L19 0 0.2 QV1S

B240-6-2L511 0 0.4 QV1S

B240-8-3L150 2 4.8 QV1S

B252-1-3-1L621 0 1.4 QV1S

B252-1-3-3L107 0 0.4 QV6

B252-1-3-3L126 0.4 1.5 QV6

B252-1-3-3L164 0.6 2 QV6

B252-1-3-3L37 0 1 QV6

B252-1-3-3L75 0.5 1.5 QV6

B252-2-1W 0 1.1 QV10

B252-2-3L154 2.9 3.2 QV1S

B252-2-3L576 0.5 3 QV1S

B252-2-3L610 0.5 3 QV1S

B252-2-3L831 0 1.5 QV1S

B252-2-3L831 3 3.5 QV10

B252-2-3L866 0 0.4 QV1S

B252-2-3L866 3.2 3.5 QV10

B252-2-3L905 2.6 3.4 QV10

B252-3-2 0 0.144 QV10

B252-3-2 0.144 3.5 QV1S

B252-3-2L164 3.5 3.9 QV1S

B252-3-2L203 3.1 3.8 QV1S

B252-3-2L221 2.6 3.9 QV1S

B252-3-2L253 1.1 3.6 QV1S

B252-3-2L298 1.3 4.1 QV1S

B252-3-2L336 1.3 3.1 QV1S

B252-3-2L372 0 2.4 QV1S

B252-3-2L418 1.9 3.5 QV1S

B268-2-3L0 3.804 4.1 QV1S

B268-3-1L174 0 3.1 QV1S

B268-3-1L202 0 2.5 QV1S

B268-3-1L237 0 2.1 QV1S

B268-3-1L292 0 3.4 QV1S

B268-3-1L318 0 1.4 QV1S

B268-3-1L41 2.624 3.2 QV1S




B268-3-2L242N 1 3 QV1S

B268-3-2L242S 2.962 3.2 QV14

B268-3-2L272 0 0.5 QV14

B268-3-2L272 0.8 3.6 QV1S

B268-3-2L303 1.513 5.5 QV1S

B268-3-2L303N 0 2.5 QV1S

B268-3-2L338N 0 1 QV1S

BE228-3-1 1.857 3.5 QV1S

BN228-1-3-1 0 1 QV2

BN240-1-3-1 0 0.8 QV2

BN240-8-2L87 0 0.3 QV1S

BS228-1-3-1 0 1 QV2

BS240-1-3-1 0 0.9 QV1S

BS240-1-3-1 4.8 5.2 QV2

BS240-2-2L204 0 2.1 QV10

BSS216-4-2L80 1.1 2.2 QV1S

K1121 1.366 5 QV1S

K216 4.044 5.872 QV1S

O240-8-5L238 0 1.5 QV1S

O240-8-5L258 0 1.2 QV1S

ON216-4-5 0 3.4 QV10

ON228-3-5 0 5.3 QV1S

ON244-2-11 33.5 33.7 QV1S

ON268-6-3 1 4 QV1S

ONC216-4-4 2.2 5.2 QV10

ONN252-1-3-1 0 1 QV6

ORT100-53-1N 1 2.6 QV1S

ORT175-21-1N 1 4.4 QV1S

OS216-4-5 0 5 QV10

OS228-3-3 0 5.4 QV1S

OS240-8-7 0 0.5 QV1S

OS244-2-11 0 1.1 QV1S

OS244-2-12 0 2.8 QV1S

OS268-6-3 0 4 QV1S

OSN252-1-3-1 0 1.1 QV6

R240-3L501 2.5 3.7 QV1S

R252-2-2L183 0 1.7 QV10

R252-2-2L233 0 0.3 QV10

R252-3-1 0 4.4 QV1S

RN216-1 6.9 7.9 QV1S

RN216-3 0 1.7 QV2




RN216-6 0 2.9 QV1S

RN216-8 0 3.7 QV1S

RN228-2 4.5 5.2 QV1S

RN228-3 5.3 6.9 QV10

RN228-6 5.7 6.7 QV2

RN228-6-2-2 0 1 QV1S

RN268-1-1 5.889 6.5 QV1S

RS100-45SL162 0 1.401 QV1S

RS135-34L192 0 1.39 QV1

RS135-34L239 0 1.685 QV1

RS160-18L261 2.22 2.5 QV2

RS160-20L123 1.411 2.1 QV1S

RS161-1L38 0 1.1 QV1S

RS175-25-2NL122 0 0.206 QV1S

RS180-24-1L120 0.3 2 QV1S

RS180-24-1L15 0 2.4 QV1S

RS180-24-1L30 0 2.5 QV1S

RS180-24-1L65 0 1.9 QV1S

RS182-19-1L467 1.5 5.2 QV1S

RS182-23-1L300 1.2 1.8 QV1S

RS182-2NL172 0 0.111 QV21

RS182-2NL198 0 0.123 QV21

RS184-15-1L170 2.7 4.5 QV1S

RS210-10-1LS237 0.5 1.4 QV1S

RS210-10-1LS48 0 1.2 QV1S

RS216-1 8 9.5 QV1S

RS216-10 0 1.2 QV1S

RS216-2 0 2.3 QV1S

RS216-3 0 0.5 QV2

RS216-5 0 2.4 QV2

RS216-6 0 3.4 QV1S

RS228-2 4 6.7 QV1S

RS228-5 4.725 5 QV2

RS228-6 6.8 7.3 QV2

RS228-7-2L217 0.3 1.4 QV1S

RS240-7-1 0.5 1.001 QV1S

RS252-2-5 0 2.1 QV1S

RSW228-6-2-1 6 7.2 QV1S

S5N-2450 0 0.417 QV1S

S5N-2475 0 1 QV1S

S5N-2525 0 2.4 QV1S




S5S-2475 1.9 2.4 QV1S

S5S-2525 1 2.4 QV1S

SS220-10-1NL41 0 1.1 QV1S

SS220-10-1SL111 0 1.8 QV1S

SS220-10-1SL124 0.9 1.8 QV1S

SS230-10-1L762 1.502 2.1 QV1S

SS230-10-1L784 0 2.1 QV1S

ST4 36.776 46.443 QV1

T1-1121X 0.75 2.83 QV1S

T1-1121Y 0 3.187 QV1S

T1-1149 0 2.94 QV1S

T1-1175 2 3.12 QV1S

T1-1175A 0 2.91 QV1S

T1-1175B 0 2.9 QV1S

T1-120 0.6 2.92 QV1S

T1-1220 2.2 3 QV1S

T1-1220A 0 6.4 QV1S

T1-1245A 0 4.6 QV1S

T1-1517X 2.035 3.18 QV10

T1-1517Y 0 2.28 QV10

T1-1570 1.5 4.2 QV10

T1-1570A 0 1.1 QV10

T1-1570A 1.6 2.94 QV1S

T1-1570B 0 2.6 QV1S

T1-1781 0 1 QV1S

T1-1796 0 1 QV1S

T1-1855 0 1.6 QV1S

T1-185A 0.5 2.5 QV1S

T1-185B 0 3.5 QV1S

T1-185D 0 3.7 QV1S

T1-1869X 10.5 11 QV1S

T1-1869Y 0 1.4 QV1S

T1-1882 0 1.5 QV1S

T1-1909 0 1.4 QV1S

T1-2099 0 1 QV1S

T1-2099A 2.3 3.1 QV1S

T1-2404 1.6 4 QV1S

T1-2404A 0 0.5 QV1S

T1-246 11.185 11.5 QV1S

T1-2465 1.8 2.5 QV1S

T1-246A 0 2.8 QV1S




T1-246B 0 3.8 QV1S

T1-300A 0.5 3.2 QV1S

T1-323 5.97 6.97 QV1S

T1-323A 0 2.5 QV1S

T1-323B 0 4.3 QV1S

T1-3476A 7.261 7.6 QV3

T1-372A 1.6 2.8 QV1S

T1-372B 0 2.4 QV1S

T1-4279 2.4 3 QV1S

T1-4279A 0 0.8 QV1S

T1-4631 0 0.8 QV1S

T1-49 0 4.3 QV1S

T1-563 13.74 15.45 QV1S

T1-5930 0 3.5 QV1S

T1-5955 0 2.89 QV1S

T1-5983 1 3.13 QV1S

T1-6010 1 2.97 QV1S

T1-6010A 0 4.1 QV1S

T1-6077 1 2.8 QV1S

T1-640 0.2 2.8 QV1S

T1-640A 0 3.6 QV1S

T1-6666 0.592 2 QV1S

T1-6697A 0 0.6 QV1S

T1-6727A 0 2.7 QV1S

T1-7256 0.5 4.3 QV1S

T1-7256A 0 0.81 QV1S

T1-7285 0.5 4.3 QV1S

T1-7285A 0 2.1 QV1S

T1-7285B 0 1.41 QV1S

T1-7316 0 2.2 QV1S

T1-7347 0 4 QV1S

T1-7347A 1.1 2.7 QV1S

T1-7377 1.2 2.7 QV1S

T1-7377A 0 2 QV1S

T1-7405 0 1.8 QV1S

T1-7472 2.3 2.6 QV1S

T1-7472A 0 1.51 QV1S

T1-7586 0.5 3 QV1S

T1-7806A 1.6 3.8 QV1S

T1-7904 2.4 2.7 QV1S

T1-803A 1.5 2.49 QV1S




T1-8367B 0 0.229 QV1S

T1-913X 1.822 5.39 QV1S

T1-913Y 0 3.172 QV1S

T1-95 1.9 2.7 QV1S

T2-P10 13.773 16 QV1S

T2-P11 15.969 16.6 QV1S

T2-P12 16.727 17.1 QV1S

T2-P13 16.872 18.35 QV1S

T2-P14 16.017 17.4 QV1S

T2-P15 15.728 17.1 QV1S

T2-P16 14.735 17 QV1S

T2-P17 16.858 17.5 QV1S

T2-P18 0.4 2.138 QV2

T2-P18A 5.527 5.7 QV1S

T2-P19A 5.551 5.8 QV1S

T2-P24B 0 1.8 QV1S

T2-P4 10.9 13.55 QV1S

T2-P5A 0.9 5.355 QV1S

T3-110X 7.348 10.3 QV1S

T3-110Y 0 0.794 QV1S

T3-1278 0 0.613 QV1S

T3-227 0.7 2.52 QV1S

T3-227A 0 1.3 QV1S

T3-285X 6.944 8.7 QV1S

T3-285Y 0 1.032 QV1S

T3-344 6.7 7.4 QV1S

T3-344B 0 0.5 QV1S

T3-413X 3.706 8 QV1S

T3-413Y 0 0.655 QV1S

T3-48A 1 2.6 QV1S

T3-48B 0 3.8 QV1S

T3-539X 1.38 2.71 QV1S

T3-539Y 0 0.466 QV1S

T3-866Y 0 0.127 QV1S

T7-P20 3.741 5 QV1S

T9-P10 22.18 24.35 QV1S

T9-P17 11.043 14.5 QV1S

T9-P18 11.061 13.05 QV1S

T9-P19 11.512 13 QV1S

T9-P21 9.8 10.251 QV1S

T9-P22 8.2 9.178 QV1S




T9-P23 8 9.186 QV1S

T9-P25 17 17.207 QV1S

T9-P27 10.47 11 QV10

T9-P36A 14.438 15 QV10

SRK Consulting: Project No: RU00749 - BO Asacha_MRE Appendix C


Appendix C: JORC Code Table 1



Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections)

Compiled and modified from Stewart and Nicholls, 2019

Criteria Commentary

Sampling techniques • The Asacha Mineral Resource estimate is based on diamond core drill sampling, as well as surface channel sampling and underground face samples.

• Diamond drill core sampling has been carried out by three different companies – CKGE in 1986-1990, TVX in 1994-1997, and TSG since 2004. All core was sampled to geological boundaries around logged vein intercepts and used a nominal 1m sample interval outside of this. CKGE analysed full core samples, while TVX and TSG submitted half core samples for analysis. Drilling campaigns during 2012 and 2016, TSG submitted to whole core sample analysis as using NQ core made it difficult to accurately saw the core in half. In 2019, they reverted to submitting half core as they are using the larger HQ drill bit diameter.

• Surface channel samples were collected by CKGE between 1986 and 1990. Trenches were excavated down to bedrock along the length of the vein exposure, and samples collected by rock-chipping along lines perpendicular to the vein. Sample intervals honour vein boundaries or are of nominal 1m length. Lines average 3m apart. The steps taken to ensure representativity of the sample along the sampled lines is not known.

• Underground samples are collected from development drives, raises and walls by manual chipping along lines. It is reported that earlier samples were collected from a channel of nominal 5cm depth and 10cm width. Sampling is to geological boundaries.

Drilling techniques All drill sampling is by diamond coring.

• Early diamond drill core sampling (1986-1990) by CKGE used conventional (non-wireline) single tube coring equipment. Core diameter ranged from 29 to 56mm. After logging full core samples were submitted for analysis. No photographs were taken.

• Diamond drilling between 1994 and 1997 by TVX used wireline twin tube equipment to retrieve samples of 47.6mm diameter. Core was sampled to vein boundaries or to 1m intervals. After logging, diamond saw cut half core samples were submitted for analysis.

• Drilling by TSG in 2004-2005, was done by AtlasCopco (DIamec-26 rig) and Boart Longyear (LM55 and LF70 rigs). During 2012 and 2016 was done by Boart Longyear LM75 rig.

• In 2017, the drilling was carried out by contractor Kolymageo using a Boart Longyear LF90 rig. All drilling was by wireline, using double tube barrels, and was of NQ diameter.

• In 2019, the contractor used was Russian Drilling Company using a Boart Longyear LF90 rig. Drill core diameters were mainly HQ with the exception of three drill holes (C1915 on QV25 and C1916 and C1917 on QV18) which were drilled using NQ bit diameters. The reason for the difference was that the decision to use HQ from NQ was made early on in the drilling campaign, and whilst the HQ coring equipment was being brought to site, initial holes were completed using NQ.

• Core is not orientated.



Criteria Commentary

Drill sample recovery • TSG monitors core recovery during drilling by measuring the length of the core, versus the length of each drilling run. In general, for all holes added in this Mineral Resource estimation update, the core yield is above 95%.

• Particular attention is paid to core output over mineralised intervals. In addition to length measurements, samples are weighed and compared to theoretical weights (based on length), and significant differences are investigated.

• The contractor is paid for metres drilled, but, in order to ensure quality over quantity, the contract stipulates core recovery of not less than 95% within the mineralised zones and not less than 85% in the host rock.

• The sample recovery is affected by the type of structure and alteration of the zone intercepted. Grades were much lower than expected from the underground drilling campaign carried out in 2017 (subsequently not used). The campaign targeted high grades shoots where the veins are locally thickened and argillic alteration is prevalent. It was observed in the core by TSG that the mineralisation had been mostly washed out by the drilling process. Therefore, the decision was made to increase the core diameter from NQ to HQ to help alleviate the problem for future drill programmes. By using an increased core diameter, it also produces a more representative sample for the deposit type consisting of high grade narrow veins.

• The issue of drill sample recovery was given considerable attention in reports by previous authors, as it was considered a possible source of bias, particularly for the early generation (pre 2011) data. This issue remains unresolvable, but the risk of any gross bias due to core loss has been diminished significantly by ongoing mining production and sampling, and is not considered a source of significant risk to resource estimates.

Logging • Geological logging consists primarily of identification of vein intersections.

• The logging is carried out on 1m intervals on pre-printed sheets for the hole length of the core. The following data is logged: core recovery, RQD, hardness (on Mohs hardness scale), mineral assemblages on a scale of 1-3, angle of veins, no. of veins, % of veins. All core is photographed (wet).

Sub-sampling techniques and sample preparation

• Half core samples are submitted to the laboratory, which are cut by saw. There was a period during 2012 to 2016 where whole core was submitted due to a change in core diameter to NQ and the loss of sample from the process of sawing. Since 2019, TSG used HQ core drill bits and have resumed sawing of half core. With exception of the 3 drill holes in the East Zone drilled by NQ, whole core samples were submitted to the laboratory and currently only the coarse duplicate remain.

• Mineralised intervals are sent for assay with 3m of host rock each side.

• The initial core sample weight is around 5-7kgs, after the first crush in the laboratory, a 1kg sample is taken for the assay. The remaining crushed core is sent back to the core shed where it is retained for 3-4 years.

• Sample preparation of all drilling samples reportedly conforms to a flowchart of drying, jaw crushing, splitting pulverizing, and pulp aliquot selection. Previous authors have examined the processes employed, and conclude that they are appropriate and conform to industry standard practices.



Criteria Commentary

• The surface and underground channel sampling undertaken by CKGE reportedly used the same procedure as for diamond drilling.

• Underground channel sampling conducted by TSG since mining commenced in 2010 has been processed at the on-site laboratory. The sample preparation flowchart is very similar to that used for diamond core:

o Drying at 105°C o Jaw crush to 3mm o Sample reduction to 2 x 0.5kg samples using rotary splitter o Pulverise to ~90% passing 75µm using a continuous ring mill

• Seequent inspected the on-site laboratory during 2017 and found it to be clean, well equipped and diligently operated.

• SRK note that there is potential for cross sample contamination in continuous ring mills.

Quality of assay data and laboratory tests

• All CKGE diamond drill samples were analysed for Au and Ag by the Geological Survey Laboratory in Milkovo, Kamchatka. Samples were first analysed for Au by X-ray spectral analysis, then all samples with concentrations above detection also analysed by Fire Assay (50g charge) with gravimetric finish.

• All TVX drill samples were analysed for Au and Ag by KamchatGeologia Laboratory in Petropavlovsk, Kamchatka, using the same procedure as for CKGE.

• TSG samples were also analysed for Au and Ag by 50g Fire Assay, with gravimetric finish. Before 2012, analyses were done at the KamchatGeologia Laboratory. Since 2012, samples are analysed at TSG’s on-site laboratory at Asacha. Current practise is to do two 50g Fire Assays from each sample pulp, and report the average.

• The Fire Assay technique is appropriate for the style of mineralisation at Asacha, and the purpose of obtaining grade information to support Mineral Resource estimation.

• In November 2019, TSG implemented an improved system of quality control procedures for Asacha. The range of sample types used (certified reference materials, blanks, pulp duplicates, coarse duplicates, and check assays on pulps by external laboratory IRGIREDMET), and the frequency of quality control insertion (approximately 5% for each main type) is in accordance with best international practices.

• SRK has reviewed the results from the quality control samples included with the new drilling for the current Mineral Resource update, and concludes that acceptable levels of accuracy and precision have been established.

• SRK’s overall assessment of the pre-2019 quality control information available for Asacha is that the work has been sporadic, results have not been consistently documented, and the scope and frequency of quality control sampling historically has not met international best practices. The risks posed by quality control deficiencies to the confidence in the database have diminished since mining began in 2011 though, because information from production provides an alternative and stronger verification check on the database.

Verification of sampling and assaying

• No independent verification of significant intersections was carried out by SRK. Given the status of Asacha as a producing mine this is not considered necessary. Reconciliation to date does not indicate any material problem with the accuracy of diamond drill sampling.

• Twinning of diamond drill holes is not considered necessary. Addition of successive generations of drilling which in-fills, and at times repeats, earlier holes, has not shown any major unexpected (i.e. not



Criteria Commentary

explicable by inherent variability) differences. In general holes separated by short distances are more similar than holes separated by larger distances. In addition, the grades indicated by diamond drilling are largely confirmed by channel sampling and mine production.

• All assay data provided by laboratories is provided by email and are also printed out.

Location of data points

• No information was provided on the survey datum used – this is still restricted information in Kamchatka. TVX and TSG holes have been surveyed by the same independent survey contractor (KamchatTISIZ), with a reported accuracy of 3cm. Based on information in previous reports, the CKGE holes were originally surveyed in a different local coordinate system, but KamchatTISIZ were able to resurvey 41 of the original CKGE holes and used these to establish a transformation to migrate all CKGE hole coordinates into the new coordinate system.

• Downhole surveying of CKGE reportedly used a MIR36 survey instrument at 20m intervals. TVX era holes were surveyed with a WelNav magnetic single shot instrument, and TSG holes with a Reflex magnetic single shot at intervals between 10 and 60m. No natural sources of magnetic interference are expected.

• Since commencement of mining, surveying of development openings is carried out by the registered mine surveyor. Geology staff locate channel collar and path relative to the surveyed outline. It is considered that underground channel sample locations will be generally located with +/- 25cm of true location.

• TSG measure the drill hole collar positions using tachymeter Nikon Nivo 5 MW. Downhole survey measurements were done using the REFLEX EZ-SHOT survey instrument. On average surveys were taken every 20m. Measurements are made at regular intervals whilst drilling to track the orientation and final measurements for the database are made when the hole is complete. The local magnetic declination is used to correct the azimuths measured.

• Since November 2019, at the start of the hole, one measurement is taken after the casing and a second one 50 m deeper. If there is a deviation of more than 2 degrees, then the drillers restart a new hole. Subsequent surveys are taken every 20 meters on average.

• Due to experience with the local brown bears, the collar locations are marked by approximately 2m metal tubes, hammered in vertically, with a metal identification tag. The tag includes the hole ID, drill hole depth and date.

• The topography used for preparing the Mineral Resource estimate was based on a combination of two surveys: a 1:2000 scale instrumental survey made by Geoseis LLC in 2002, and a 1:10,000 scale survey by KamchatTISIZ JSC in 1997 and digitized in 2004 by Geoseis.

• The grid system used is Pulkovo 1942, Gauss-Kruger projection, Area 27.

• The quality of the topographic information is adequate.

Data spacing and distribution

• Surface and underground channels are spaced at approximately 3m along drives.

• Diamond drill holes vary in spacing. Most of the remaining Main Zone body has been drill out to 20m to 30m intersections spacing. The deeper edges of the drilling coverage have gaps of up to 100m between intersections.



Criteria Commentary

• The North Zone has been drilled to approximately 50m intersection spacing.

• The ongoing drilling targeting QV25 aims to infill the intersection spacing to approximately 50m, although at the time of this estimation some gaps in the order of 100m between intersections remained.

• Intersection spacing in QV8 is irregular, and ranges from 30m to 150m.

Orientation of data in relation to geological structure

• The veins mined at Asacha are sub-vertical. Diamond drill data from surface is generally angled to intersect the veins at moderate angles. Holes are drilled from both east and west. Several intersections at acute angles have been excluded from estimation. The uncertainty in the lateral location of veins increases with depth below surface as holes become longer and intersection angles more acute.

Sample security • Underground channel and drill core samples are processed and assayed on site.

• The site is remote, and all handling and transport of bagged samples have been undertaken by company personnel.

Audits or reviews • Data quality has been discussed in detail by a number of previous authors. The most comprehensive treatment was a review of previous work by Hatch in 2006 for Standard Bank PLC (Hatch, 2006, Technical Review Report, September 2006, Hatch_60915 PD Final Report Oct2006.pdf) which draws on a number of earlier reports.

• Hatch conclude that the lack of systematically collected and presented data available to demonstrate the quality of sampling and assaying is a weak point in resource estimates. SRK concur with this view.

• Based on analysis of available historic data, and review of current QAQC practices, SRK is satisfied that the data supplied are of sufficient quality for the purposes of Mineral Resource estimation and support the level of classification applied to estimates. The commencement of mining and processing, and reasonable reconciliation between prediction and production, have significantly de-risked the issue of data quality in estimating, classifying and reporting the remaining Mineral Resources at Asacha.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section)

Compiled and modified from Stewart and Nicholls, 2019

Criteria Commentary

Mineral tenement and land tenure status

• TSG operates on the basis of the license PTR11626BE dated 07.08.2003 with amendments dated 06.04.2016 with the aim of exploration and mining, including the related processing and use of waste. The license area is 24 km2. The expiry date of the license is 31.12.2024.

• There are no known impediments to the operation of mining in this license area.

Exploration done by other parties

• The Asacha deposit was discovered in 1973, and exploration work was undertaken by the Central Kamchatka Geological Expedition (CKGE) between 1986 and 1990. In 1990 a mining licence was granted to Trevozhnoe Zarevo (TZ), and in 1994 TVX Gold Inc. (TVX) acquired a 50% stake in the company. Exploration work was carried out by TVX between 1996 and 1998. In 2001 TSG acquired TVX’s



Criteria Commentary

50% stake in TZ, and increased this to 90% in 2002. TSG acquired the remaining 10% interest in TZ in two tranches; 2007 and 2010. Mine development on the Main Zone commenced in 2008, and mining (extraction and stoping) started in the middle of 2011.

Geology • The Asacha gold deposit is located in the south-east region of the Kamchatka Peninsula, far east Russia. The Peninsula is a Tertiary volcanic arc that formed due to the subduction of the north-westerly moving Pacific plate. The morphology comprises a series of NNE arc parallel structures defined by the alignment of stratovolcanoes, many of which are still active. A number of transverse faults offset the arc-parallel structures, and in places these have been recognized as hosts for mineralisation.

• Although a number of parallel vein systems have been identified in the area, only two systems have been explored in detail. The first of them is referred to as the Main Zone and it has been defined over strike length of approximately 1500m and to depth of approximately 300m in places. The second is the East Zone, where the veins are generally narrower and less continuous. For modelling purposes, the Main Zone has been divided into several subsidiary veins that occur as splays or splits. The veins are steeply dipping and in places can be up to several meters thick.

• The Asacha deposit is classified as a low-sulphidation quartz-adularia-sericite Au-Ag epithermal vein system. The mineralisation is hosted with N-S trending fault hosted structures. High grade zones are usually associated with sulphide rich bands (referred to as Ginguro bands). The Asacha ore minerals are native gold and silver in the form of polybasite and pyrargyrite. The main gangue minerals include quartz and adularia, with significantly smaller quantities of hydromicas, kaolinite, montmorillonite, iron and manganese oxides and chalcophile minerals.

Drill hole Information • The Mineral Resource estimation reported here makes details of individual drill holes and trenches immaterial, therefore these results are excluded from this report.

Data aggregation methods

• Individual Exploration Results are not Material and are excluded from this report.

Relationship between mineralisation widths and intercept lengths

• Individual Exploration Results are not Material and are excluded from this report.

Diagrams • Plan view and section view diagrams of the drill hole layout and Mineral Resource interpretation are included in the main body of this report, in particular Figure 2-1, Figure 5-1, Figure 5-2 and Figure 5-3.

Balanced reporting • Individual Exploration Results are not Material and are excluded from this report.

Other substantive exploration data

• The results from a hydro-geological study which was carried out in 2016-2017 predicted that water inflows to the 150m, 100m and 50m levels at 1 587 m3/hour, 2 614 m3/hr and 3640 m3/hr. This affects the northern part of the Main Zone under the Semeyny stream and has since been removed from the resource due to the ground conditions.

Further work • Further to the effective date of the Mineral Resource estimate presented in this report (April 30th, 2020), TSG has completed, commenced or planned an additional 42 drill holes (approximately 14,300m) in 2020, to extend and infill QV25. The locations of the projected intersections from these holes are shown in Figure 7-1.



Section 3 Estimation and Reporting of Mineral Resources

(Criteria listed in section 1, and where relevant in section 2, also apply to this section)

Criteria Commentary

Database integrity • Drilling data is stored in an unsecured Microsoft Access database. Assay results are received electronically, whilst other data is entered manually.

• Data for use in estimates was provided in ASCII comma delimited files.

• SRK validated data using the internal consistency checks in Leapfrog software. Visual checking was also used to detect any anomalous hole collar locations, hole paths, inconsistent geology etc.

Site visits • SRK’s Competent Person did not visit site, due to the travel restrictions imposed by the COVID-19 pandemic. Colleagues of the Competent Person (Geotechnical specialists from SRK’s Moscow office) have previously visited Asacha, in 2019. Those visits included inspections of underground workings and core.

• Since 2012, Asacha has also been visited by independent Competent Persons from Seequent, the authors of previous Mineral Resource estimates for Asacha.

Geological interpretation

• The primary geological interpretation of Asacha was provided by TSG in the form of coded drill hole intercepts.

• Veins intercepts are based on logging of quartz combined with consideration of Au and Ag grades. Veins are typically banded accumulations of quartz, adularia, chalcedony, saccharoidal quartz, carbonate and ginguro (smokey black bands of fine grained mixed base metal sulphides). The banded habit of the veining suggests a typical cyclic crack-seal formation mechanism. The veins generally display hard contacts with the surrounding host rock but in some areas, the mineralisation extends as stockworks into the host rock within the hanging wall and footwall and also within clayey-brecciated zones. In this situation a nominal threshold of 4 g/t Au is used for defining veins.

• The vein system at Asacha is comprised of several main veins with a number of smaller splay structures. The confidence in interpretation of the main structures is generally high, although correlation may be complicated around splays and towards the margins of veins. In general, vein continuity was only assumed where intercepts could be confidently correlated.

• Alternative correlations of the vein mineralisation could lead to small to moderate differences in estimates of grade and tonnage locally, but are unlikely to materially affect the overall Mineral Resource estimate.

Dimensions • The defined extent of mineralisation on the Asacha vein system is a little over 1.5 km in strike and 270m in vertical extent. The largest individual vein defined within this system (QV1) has strike length of 1400m and outcrop at surface.

• In the East Zone, mineralisation is defined over 1km of strike extent, although individual veins have a maximum strike of 500m.

Estimation and modelling techniques

• Geometric modelling of vein structures was carried out using the implicit modelling software Leapfrog Geo. Modelling of Au and Ag grades was carried out for this update using Leapfrog Edge.

• All veins are modelled in 2D using Ordinary Kriging.



Criteria Commentary

• Extreme values were controlled by two stages of capping: the first stage was on raw Au and Ag grades, during preparation of the intersection composites; the second stage of capping was based on metal accumulation (product of grade and thickness) and distance thresholds, applied to Au and Ag during block estimation. The appropriate thresholds were set per vein domain. First the first stage of capping (and the accumulation threshold of the second stage), the thresholds we based primarily on analysis of subpopulations evident from histograms and log probability plots. For the second stage, the distance threshold was chosen from 3D review of the approximate dimensions of clusters of higher sample grades.

• No estimates or assumptions were made regarding recovery of by-products.

• No deleterious elements or non-grade variables of economic significance were estimated.

• The spacing between intersections is highly variable for both the Main Zone and the East Zone. As a compromise, to find a reasonable block size relative to most of the various spacings, a parent block size of 10m (north) by 10m (elevation) was chosen for the Main Zone, and 20m (north) by 10m (elevation) was used for the East Zone.

• Within the blocks estimated by Ordinary Kriging, the estimates were not further processed to account for likely selective mining units.

• The elements were estimated independently, and no methods based on correlations (eg. Co-kriging) were employed.

• The anisotropies of the variogram model and search neighbourhoods used for kriging were set according to the geological interpretation of steeply dipping veins, and a general grade trend of shallow north plunging within the veins. Vein contacts controlled the estimation as hard boundaries.

• The model was validated visually and statistically, by comparing the block estimates against the composites, and against the input grade and lithology database. The model was also compared against polygonal estimates prepared by TSG, and against the previous (December 1st, 2019) Mineral Resource estimate. SRK is satisfied that differences from these other estimates can be explained and defended.

• SRK prepared an overall comparison of production information since 2011, against the 674,000 t in the block model coded as “Mined” by depletion outlines. The SRK estimate of in situ gold grade exceeded the in situ grade back-calculated from production by 17%, but it is possible that this difference is due to uncertainties with the reconciliation assumptions (processing recovery, mining recovery, density, stockpile quantities), rather than problems with the Mineral Resource estimation approach or input data. The difference is noted, but no subsequent adjustment was made to the Mineral Resource estimate.

Moisture All tonnages are estimated on a dry basis.

Cut-off parameters • Mineral Resources are reported at a marginal cut-off grade of 4g/t Au. A minimum mining width of 1m also applies.

• The input assumptions for calculating the cut-off are:

o Gold price USD 1400 / oz

o Royalty 6% (Main Zone) and 0.6% (East Zone)

o Refining Cost USD 0.14 g/t

o Processing Recovery 95%



Criteria Commentary

o Mining Cost USD 74.5 / t (Main Zone) and USD 52.7 / t (East Zone)

o Processing Cost USD 35.6 / t (Main Zone) and USD 39.6 / t (East Zone)

o Dilution fraction of each tonne processed 36%

o Grade of dilution 0.6 g/t (Main Zone) and 0.2 g/t (East Zone)

• No account is taken of the contribution of Ag in consideration of cut-off.

Mining factors or assumptions

• The Asacha resource is currently mined by shrinkage stoping.

• The practical minimum mining width is approximately 1m. This is taken into account during reporting by application of a cut-off based on a linear grade of 4m*g/t (=1m * 4g/t), as well as a 4g/t Au cut-off.

• Based on the presence of the operating mine and mill, existing mine economics, the potential for incremental development access to deeper and more distal parts of the orebody, and the potential for further exploration success, it is considered that all of the vein resources defined at Asacha have a reasonable prospect of eventual economic extraction.

Metallurgical factors or assumptions

• Milling experience to date has not encountered any substantive variation in metallurgical recovery which would affect definition of resources. Asacha ore is free milling with an average life to date recovery consistently close to 95% for Au and 76% for Ag.

Environmental factors or assumptions

• For the purposes of reporting Mineral Resources, it is assumed that environmental constraints do not pose a material risk to the project proceeding, and that viable solutions will continue to be available for storing waste and process residue.

Bulk density • A global bulk density of 2.48 is applied to all ore. This measurement is based on around 160 core samples taken from the 1990’s.

• Due to the differing nature of the host rock and veins in the southern end of the deposit, compared to the north, it is recommended that check density measurements are made. The ground conditions in the south are of poorer quality due to extensive faulting and argillic alteration.

• It is also recommended that density measurements are taken on the core samples from the ongoing QV25 drilling program.

Classification • Classification takes account of data quality, confidence in geological interpretation and confidence in block estimations. These aspects are necessarily subjective.

• The Measured classification was applied to areas that have been developed, and are generally within 12m of channel sampling coverage. In addition, the slope of regression on accumulation estimates is greater than ~0.90. In order to simplify the overall Measured boundaries, some areas that were up to about 20m from channel sampling, but bounded on two or three sides by development and channel sampling coverage, were also grouped into the Measured category.

• The Indicated classification was applied to areas with diamond drill coverage of 50m x 50m spacing or closer. Locally slightly wider spacings (up to about 60m x 60m would also be grouped into Indiciated, in order to avoid creating a patchwork of Indicated and Inferred.

• The remaining Mineral Resources inside the mineralisation domains were assigned an Inferred classification.



Criteria Commentary

• Classifications were coded into the block model, based on outlines SRK digitized onto the veins in long section view.

Audits or reviews • This Mineral Resource has not been audited externally.

• A number of external reviews were undertaken of Mineral Resource estimates conducted prior to commencement of mining in 2011. The findings from these reviews are not considered relevant to the Mineral Resource estimate presented in this report.

Discussion of relative accuracy/ confidence

• Relative accuracy and confidence level in the Mineral Resource is sufficiently described by the classifications applied to the block model and resource statement for the deposit.

• The statements relate to global estimates of tonnes and grade.

• Comparison of reported production with the resource estimates is broadly in line with expectation.

SRK Consulting: Project No: RU00749 - BO Asacha_MRE Distribution Record


SRK Report Distribution Record

Report No. RU00749

Copy No. 1

Name/Title Company Copy Date Authorised by

Dorogov A.I., General Director Trans-Siberian Gold 1 June 2020 R. Simpson

Approval Signature:

This report is protected by copyright vested in SRK Consulting (Russia) Ltd. It may not be reproduced

or transmitted in any form or by any means whatsoever to any person without the written permission

of the copyright holder, SRK.

asacha mineral resource estimate at april 30th, 2020€¦ · the previous mineral resource...

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