Chesser Resources Limited ('Chesser' or 'the Company' (ASX:CHZ)) is pleased to report on its maiden Mineral Resource estimate ('Resource') over Karakara at the Diamba Sud Gold Project in Senegal, West Africa. The Diamba Sud Gold Project covers an area of 53.2km2 and is located in eastern Senegal within the highly prospective Senegal Mali Shear Zone orogenic belt. The Project is located 12km southwest of Barrick's Loulo mine (12.5 million ounces) and only 7km west of Barrick's Gounkoto mine (5.5 million ounces), both across the border in Mali.
Karakara is located 1.2km southwest of Area D (Figure 1) and over a geochemical anomaly coincident with the interpreted trend of the Northern Arc structure. Mineralisation is predominantly associated with quartz-carbonate-hematite-albite-pyrite alteration within hydrothermally altered brecciated sedimentary rocks. Drilling has defined shallow, high-grade mineralisation over at least ~250m of strike. The Karakara maiden Mineral Resource estimate was undertaken by Mr. Brenton McWhirter Member of Australian Institute of Geoscientists ('MAIG') and Mr. Andrew Grove (MAIG) and includes all drilling up to 1 September 2022 using Ordinary Kriging estimation methodology. The Karakara Resource has been reported in accordance with the JORC Code (2012) and is effective as of 26 October 2022 and shown in Table 1. The Mineral Resources were reported within a pit shell using metal price assumptions of US$1,800/oz gold, input parameters from the updated Scoping Study (Table 6) and were reported above a 0.5g/t gold cut-off grade ('COG')d of this report.
The key attributes of the maiden Mineral Resource at Karakara are as follows:
High-grade ounces: 116koz @ 2.1g/t gold which is relatively insensitive to changes in COG (Table 2)
High-value ounces: for future processing plant located on the Diamba Sud tenement, ~1.5km to the northeast
Continuous mineralisation: mineralised structures continuous over +250m strike
Exploration upside: opportunities to extend mineralisation along strike and on margins of defined mineralisation * High confidence Resource: 59% of the ounces falling within the Indicated classification (Table 1)
SCOPING STUDY MODEL UPDATE
In preparation for updating the Diamba Sud Scoping Study reported by the Company on 15 March 2022 ('Original SS') with the maiden Karakara resource and the impending update of the Area D resource, Chesser became aware of an issue with the mining schedule used in the Original SS model. The mining schedule used was not derived from the Original SS pit designs but a larger optimisation shell. A revised mining schedule generated from the Original SS pit designs resulted in a 13% reduction in recovered gold and a 9% reduction in economics compared to the Original SS. Whilst this error is disappointing, the project remains robust with very strong economics and rapid payback, and the Mineral Resources remain valid. We expect the reduced production will be recovered, and the economics will be improved with the inclusion of the Karakara maiden resource (reported in this announcement) and a pending update to the Area D resource in an updated Scoping Study expected to be completed during the December 2022 quarter. The updated mining schedule now agrees with the pit design (Table 4) . The use of the updated mining schedule resulted in a 3% reduction in total material mined, a 20% reduction in ore tonnage, a 6% increase in grade and a 13% reduction in contained gold (Table 6)
The SS financial model was re-run using the correct mining schedule keeping all other parameters consistent with the SS published on 15th March 2022 (Table 6). The variances in mining and processing costs are due to the change in portions of oxide and fresh materials in the new mining schedule only as no change to the basis of the costs has been made. The updated schedule resulted in a negative 9% impact on the Project post tax NPVCF5% using a gold price of US$1600/oz, reducing it from US$224M to US$203M. With the addition of Karakara Mineral Resources and the updated Area D resources the Company expects to see a significant uplift in the Project economics. The economics from the updated SS model continue to clearly demonstrate a robust highly economic project, NPVCF5% US$203M IRR 47% with a 17-month payback (Table 6). The updated mining schedule has condensed gold production with and average of 100koz pa produced from the project over 6 years at a low AISC of US$784/oz (Figure 5). The lower AISC compared to the previous model is a result of higher annual gold production, shorter mine life reducing the carrying costs and a larger portion of the overall ore feed being oxide: Previous oxide 35% tonnes and 41% ounces and Updated schedule oxide 43% tonnes and 47% ounces which have a significantly lower operating cost profile
Work on the updating of the Mineral Resource estimate for Area D has commenced and will be released once completed in Q4 2022 followed by an update to the Scoping Study including both the Karakara maiden mineral resource and the Area D updated mineral resource. The Phase 9 drilling campaign aimed at adding additional resources, testing exploration targets and providing inputs into DFS at Diamba Sud is expected to commence in the December quarter following a detailed review and planning exercise. . Baseline environmental and ESIA studies are ongoing over the Project area with the wet season field survey to be undertaken in November. Definitive Feasibility Studies to support future development at Diamba Sud are ongoing with initial metallurgical testwork results expected to be delivered during the quarter. Initial reconnaissance exploration activities to commence over the new tenements, Bondala and Morichou will be undertaken.
Contact:
Media
Andrew Grove
Managing Director and CEO
Michael Vaughan
E: andrewg@chesserresources.com.au
ABOUT CHESSER RESOURCES
Chesser Resources is an ASX listed gold exploration company with projects located in Senegal, West Africa. Chesser has discovered three high-grade gold Projects (Areas A and D and Karakara) at its flagship Diamba Sud Gold Project. The Company currently holds 872km2 of highly prospective ground in this underexplored world-class gold region. The Company has corporate offices located in Brisbane and Perth, Australia and a corporate and technical team based in Dakar, Senegal. Diamba Sud, covers an area of 53.2km2 and is located ~2km to the west of the Senegal Mali Shear Zone ('SMSZ'), a major regional structure that host numerous multimillion-ounce world class gold deposits including: B2Gold's 7.6Moz Fekola mine, Barrick's 18Moz Loulo-Gounkoto complex and Allied Gold's Sadiola and Yatela mines. Diamba Sud lies just 7km to the west of Barrick's 5.5Moz Gounkoto mine and to the immediate east of the privately owned 0.5Moz Karakaene mine
Forward looking statements
Statements relating to the estimated or expected future production, operating results, cash flows and costs and financial condition of Chesser Resources Limited's planned work at the Company's projects and the expected results of such work are forward-looking statements. Forwardlooking statements are statements that are not historical facts and are generally, but not always, identified by words such as the following: expects, plans, anticipates, forecasts, believes, intends, estimates, projects, assumes, potential and similar expressions. Forward-looking statements also include reference to events or conditions that will, would, may, could or should occur. Information concerning exploration results and mineral reserve and resource estimates may also be deemed to be forward-looking statements, as it constitutes a prediction of what might be found to be present when and if a project is developed. These forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable at the time they are made, are inherently subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward-looking statements, including, without limitation: uncertainties related to raising sufficient financing to fund the planned work in a timely manner and on acceptable terms; changes in planned work resulting from logistical, technical or other factors; the possibility that results of work will not fulfil projections/expectations and realize the perceived potential of the Company's projects; uncertainties involved in the interpretation of drilling results and other tests and the estimation of gold reserves and resources; risk of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of environmental issues at the Company's projects; the possibility of cost overruns or unanticipated expenses in work programs; the need to obtain permits and comply with environmental laws and regulations and other government requirements; fluctuations in the price of gold and other risks and uncertainties.
Competent Person's Declaration
The information in this report that relates to Exploration Results has been extracted from the referenced ASX Announcements filed by Chesser Resources Limited (Exploration Results Announcements) available to view at www.chesserresources.com.au and for which Competent Persons' consent were obtained. The Competent Persons' consents remain in place for subsequent releases by the Company of the same information in the same form and context, until the consent is withdrawn or replaced by a subsequent report and accompanying consent. The Company confirms that it is not aware of any new information or data that materially affects the information included in the Exploration Results Announcements. The Company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the Exploration Results Announcements. The Information in this report that relates to the Area A and Area D Mineral Resources and the Bougouda Mineral Resource has been extracted from the referenced ASX Announcements filed by Chesser Resources Limited (Mineral Resources Announcements ) available to view at www.chesserresources .com.au and for which Competent Person's Consents were obtained. The Competent Persons' consents remain in place for subsequent releases by the Company of the same information in the same form and context, until the consent is withdrawn or replaced by a subsequent report and accompanying consent. Chesser confirms that it is not aware of any new information or data that materially affects the information included in the Mineral Resources Announcements. All material assumptions and technical parameters underpinning the estimates in the Mineral Resources Announcements continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Persons' findings are presented have not been materially modified from the Mineral Resources Announcements. The Information in this report that relates to the Karakara Mineral Resources is based on information compiled by Mr. Brenton McWhirter Member of Australian Institute of Geoscientists ('MAIG')who is employed as Senior Geologist of Chesser Resources Limited and Mr. Andrew Grove (MAIG) who is employed as Managing Director and Chief Executive Officer of Chesser Resources Ltd. Each of Mr McWhirter and Mr. Grove has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr McWhirter and Mr. Grove consent to the inclusion in the announcement of the matters based on their information in the form and context that the information appears. The Information in this report that relates to Scoping Study was first reported in the announcement titled 'Chesser Scoping Study Confirms Robust, Low-Cost Gold Project' released to the Australian Securities Exchange (ASX) on 15 March 2022 (Scoping Study Announcement) and available to view at www.chesserresources.com.au and for which a Competent Persons' consent was obtained. Other than the adoption of a revised mining schedule and the consequential impact on the production targets and financial forecasts as disclosed in this announcement, the Company is not aware of any new information or data that materially affects the production targets and financial forecasts derived from the production targets in the referenced ASX announcement and confirms that other than the adoption of a revised mining schedule and the consequential impact on the production targets and financial forecasts as disclosed in this announcement, all material assumptions and technical parameters underpinning those production targets and financial forecasts continue to apply and have not materially changed.
Contact:
BRISBANE OFFICE
Suite 3, Level 7
100 Edward Street
Brisbane QLD 4000
P: +61 7 3854 2387
CHESSER R 