Kryso Resources investment talks with Chinese miner end without deal

Tajikistan operating gold miner Kryso Resources (AIM: KYS) said that the exclusivity period set out in an agreement with a Chinese mining company has today run out and the parties have not reached an investment deal.

The exclusivity agreement was extended from Friday last week. The exclusivity clause prevented Kryso from holding discussions regarding any investment in the company’s shares or from disposing of any of its assets. At the time when the talks were announced, on June 22, Kryso said there was no guarantee that an investment would be made.

The company is currently finalizing an expanded Bankable Feasibility Study (BFS) on its 2.8 Moz (million ounce) Pakrut gold project in Tajikistan. The study was supposed to be concluded sooner, but Kryso has decided to take more time in order to include the latest drilling results that turned out better than expected, indicating “excellent potential to expand the underground resource base".
At the end of March, Kryso told investors that high grade drill results from Ore Zone 1 had shown that the mineralization widens at depth, sparking a rethink from the company and BGRIMM. Kryso and the BGRIMM (Beijing General Research Institute of Mining and Metallurgy) now believe that a more robust mine development plan will be forthcoming if Pakrut is developed solely as an underground gold mine to exploit the widening underground gold structure.

The assay results reported by the company in late April included intercepts of 25.5 metres at 7.5 g/t (grams per tonne) gold, 42.4 metres at 5.4 g/t gold and 12 metres at 6.4 g/t gold from Ore Zone 1, while Ore Zone 3 assays included 9 metres at 7.5 g/t gold and 13.5 metres at 7.5 g/t gold containing 4.5 metres at a higher grade of 20.1 g/t gold.

With all other major elements of the study largely complete, Kryso now expects to complete a fully optimized BFS, including the new resource model, in August.

The Pakrut gold project, Kryso’s primary focus, is located within the southern portion of the Tien Shan Fold Belt, north-east of Tajikistan’s capital, Dushanbe. The Tien Shan Fold Belt, extends from near the Aral Sea in Uzbekistan through the northern part of Tajikistan into China and then into Mongolia.

On Monday, Kryso increased the Pakrut gold project’s measured & indicated JORC resource by 26%, with a further 353,300 ounces of gold, taking the total JORC resource to over 3.024m ounces of gold. The company anticipates further upgrades to Pakrut’s resource with the 210 drilling programme well underway.

The recent newsflow from Pakrut helped the company’s shares to an increase from below 9 pence in early June to the current 14 pence.