Pakrut Gold Mine Independent Technical Report

Pakrut Gold Mine Independent Technical Report

China Nonferrous Gold Limited

China Nonferrous Gold Limited 中

(“CNG” or the “Company”)

Pakrut Gold Mine Independent Technical Report

Mineral Resource Estimate Update

China Nonferrous Gold Limited 中 (AIM: CNG), the mineral exploration and mining company currently mining the Pakrut gold mine (“Pakrut”) in the Republic of Tajikistan, today announces the details of an updated Independent Technical Report (“ITR”) completed by SRK Consulting China Limited (“SRK”) and releases an update to Mineral Resource and Ore Reserve estimates for Pakrut in accordance with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (“JORC Code”, 2012 edition as current effective edition),. The update reflects a substantial reduction in the Mineral Resource Estimate released by the Company (under its previous name of Kryso Resources plc) on 17 June 2013, and reflects the Company’s increasing knowledge and access to the underground ore body as operational work has progressed.

Summary:

• Measured and Indicated Mineral Resources estimate as of 31 December 2022 at the Pakrut Gold Mine, now 6.7 million tonnes with an average grade of 2.1 g/t gold for about 14,000 kg (equivalent to 440,000 ounces) of contained gold, at a cut-off grade of 1.0g/t (previously 1.9 million ounces with an average grade of 3.16g/t reported at a cut-off grade of 0.5g/t, although 172,200 ounces of gold have been extracted since commencement of mining operations);
• Inferred Mineral Resource estimate as of 31 December 2022 now 7.8 million tonnes with an average grade of 2.2 g/t gold for about 17,000 kg (560,000 ounces) contained gold (previously 660,000 ounces at 2.05g/t at a cut-off grade of 0.5 g/t);
• Using a gold cut-off of 1.5 g/t, Proved Ore Reserves now estimated to 1.3 million tonnes at 2.0g/t gold for 2,700 kg contained gold (86,000 ounces) and Probable Ore Reserves now estimated about 2.9 million tonnes of Probable Ore Reserves averaging 1.9 g/t gold for 5,400kg of gold (180,000 ounces) (previously 1.55million oz gold at 3.1g/t at cut-off grade of 1.0g/t and 222,258 oz gold at 2.5g/t at cut-off grade of 1.0g/t for Proved and Probable ore reserves, respectively), although 172,200 oz of gold have been extracted since commencement of mining operations);
• Estimated remaining life of mine for the project based on current Ore Reserve estimates is now 6 years, producing on average 43,000 ounces from 700,000 tonnes of ores per annum until 2029.
• Forecasted production capacity remains at 2,000 tonnes per day.

Zhang Hui, CNG’s Managing Director, commented:

“SRK have produced an updated JORC Code compliant mineral resource estimate and ore reserves estimate. The Company will continue to progress work at site, carry out cost reductions and work to improve efficiencies. In addition, it will look to increase exploration activity at site with a view to extending the life of mine”.

Background

The substantial reduction in the Mineral Resource Estimate when compared with SRK’s previous mineral resource estimation has been impacted by the following factors:

• this new Mineral Resource Estimate, is exclusive of all mined-out materials since the Company commenced operations in 2015, whereas at the time of the previous resource estimated the materials were in-situ without depletion (mining at site had not commenced). 172,200 oz of gold have been extracted to date.
• a total of five gold mineralization zones (“GMZs”) are delineated at Pakrut. Namely GMZ 1, 3, 5, 6 and 7. The Measured and Indicated Mineral Resources are situated in GMZ 1 and GMZ 3. Previous resource estimates have included GMZ 3 (Eastern Pakrut), but operating practices indicate that the gold grade in this GMZ 3 is less than 1.5g/t and therefore not currently economic. Accordingly, this Mineral Resource Estimate only incorporates GMZ 1 (Pakrut) and LLC Pakrut intends to exploit just GMZ 1 in the future.
• the Cut-off grade of gold has increased from 0.5 g/t used in previous Mineral Resource Estimates to 1.0 g/t for this Mineral Resource Statement, reducing the amount of material that is included in the Mineral Resource Estimate because operational performance shows that mining dilution is higher than previously estimated.
• A considerable amount of data from new boreholes and channels has been added to the database originally used in previous Mineral Resource Estimates, following actual operational and further exploration activities, which has increased the awareness and knowledge of the geometry of the Pakrut Deposit.
• The Pakrut gold mineralisation is associated with structural alteration and is of vein type deposit, which can make the geological interpretation of the ore body more complicated when compared to other deposit types. This can be particularly challenging for the resource estimation at the exploration stage (the previous Mineral Resource Estimates were prepared at an exploration stage). However, the use of underground drilling and channeling activities during the construction and production stage has enabled a more comprehensive understanding and interpretation of local geology of the deposit.

Mineral Resource Statement

SRK’s assumptions for the cut-off grade calculation for the Mineral Resource Statement were selected based on experience, benchmarking against similar projects in line with an industry standard commonly used by external experts, as well as a general scoping study of the Pakrut Project and the Company’s past operational performance. SRK has applied a gold grade of 1.0 g/t as an appropriate cut-off grade for the Mineral Resource statement for the Pakrut Project. The resource statement is based on a gold price of 1,860 USD/oz. Operating costs of 50 USD/t of ore mined and processing recovery rate of 80% applied to the resource statement are based on historical mine performance.

The Mineral Resource statement is shown in Table 1. The in-situ mineral resources were estimated as of 31 December 2022.

Table 1: Mineral Resource Statement for Pakrut Project, as of 31 December 2022 (Project is owned 100% by Pakrut LLC so the table below includes both gross and net attributable figures)

GMZ	Category	Cut-off (g/t Au)	Tonnage (kt)	Au Grade (g/t)	Au Content (kg)	Au Content (koz)	Operator
1	Measured	1.0	1,600	2.2	3,500	110	Pakrut LLC
-	Indicated	1.0	3,600	2.2	8,000	260
-	Inferred	1.0	5,900	2.4	14,000	450
3	Measured	1.0	490	1.4	680	22
-	Indicated	1.0	1,000	1.6	1,600	52
-	Inferred	1.0	1,500	1.8	2,600	84
5	Inferred	1.0	24	1.3	31	1
6	Inferred	1.0	320	1.5	460	15
7	Inferred	1.0	100	1.7	180	6
Total	Measured	1.0	2,100	2.0	4,200	140
-	Indicated	1.0	4,600	2.1	9,600	310
-	Measured + Indicated	1.0	6,700	2.1	14,000	440
-	Inferred	1.0	7,800	2.2	17,000	560

Source: SRK

Notes:

1 Both the tonnage and gold contents are rounded to the second significant digit. Gold grade was rounded to the first digit after the decimal point. The totals may not add due to rounding discrepancies.

2 Numbers of the contained Au metal in this table are estimated based on the resource tonnages and grades, and do not represent the exact amount of extractable metal for this Project. They should be treated differently from the expected production of gold ingot. The conversion between ounce and gram is 1: 31.1035 in this Report.

3 The information in the Report which relates to Mineral Resource is based on information compiled by Mr. Yonggang Wu and Mr. Pengfei Xiao, full time employees of SRK China, and members of the Australasian Institute of Mining and Metallurgy (AusIMM). Both Mr. Yonggang Wu and Mr. Pengfei Xiao have sufficient experiences which are relevant to the style of mineralisation and the type of deposits under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the JORC Code. Mr. Yonggang Wu and Mr. Pengfei Xiao consent to the reporting of this information in the form and context in which it appears.

4 The Measured and Indicated Mineral Resources are inclusive of those Mineral Resources converted to Ore Reserves.

Ore Reserve Estimates

A bankable feasibility study report (“BFS”) was prepared by the BGRIMM Technology Group (“BGRIMM”) based on the mineral resource estimate validated in 2014. The forecasts from the report suggests that mining recovery and dilution are about 88% and 10% respectively. SRK is satisfied that these values fairly reflect operation performance and apply the same values in this update.

For information, the economically mineable parts of the Measured Mineral Resources, which includes diluting materials and allowances for losses, are classified as Proved Ore Reserves and the economically mineable parts of the Indicated Mineral Resources, which includes diluting materials and allowances for losses, are classified as Probable Ore Reserves.

Cut Off Grade

The Ore Reserves of the Pakrut Project are reported at a gold cut-off grade of 1.5 g/t as of 31 December 2022 using industrial standard and technical assumptions. Whilst these assumptions were true at the time of calculation, they can change over time. The parameters used by SRK to calculate cut-off grade are as follows:

• The long-term gold price of Consensus Market Forecasts (“CMF”) is 1,430 USD/oz in March 2023. The price was adopted by SRK to calculate cut-off grade (“COG”).
• The proposed recovery rate is 82.99% in the BFS for combined processing and metallurgical operations to process feed ores with a gold grade of about 3.1 g/t. The actual recovery rate varied from 80.02% to 81.88% in last three years to process feed ores with gold grade varied from 2.16 g/t to 2.08 g/t. Considering that the feed grade in future (about 1.9 g/t) is expected to be less than that of BFS and production records, SRK has adopted a recovery rate of 80% to calculate COG.
• The Company’s operating costs varied between 46.14 USD/t ore and 59.14 USD/t ore in the last three years operating. The ore tonnage weighted average costs are about 52.60 USD/t ore. SRK adopted the Company’s current actual operating costs (“Opex”) of 53 USD/t to calculate COG.

A summary of Ore Reserves is shown in Table 2.

Table 2: Summary of Proved Ore Reserves on Each Level as of 31 December 2022 (Project is owned 100% by Pakrut LLC so the table below includes gross and net attributable figures)

GMZ	Category	Cut-off (g/t Au)	Tonnage (kt)	Au (g/t)	Au(kg)	Au (koz)	Operator
1	Proved	1.5	1,300	2.0	2,700	86	Pakrut LLC
	Probable	1.5	2,900	1.9	5,400	180
	Total	1.5	4,200	1.9	8,100	260

Sources: SRK

Notes:

1 All figures are rounded to reflect the relative accuracy of the estimate.

2 The mining dilution rate is 10%. The mining recovery rate is 88%.

3 The Ore Reserves are included in the Mineral Resources. They shouldn’t be added to the Mineral Resources.

4 The information in the Report which relates to Ore Reserve is based on information compiled by Mr. Yonggang Wu, a full time employee of SRK China and a member of the AusIMM. Mr. Yonggang Wu has sufficient experience which is relevant to the style of mineralisation and the type of deposits under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined in the JORC Code. Mr. Wu consents to the reporting of this information in the form and context in which it appears.

The ore reserve estimate conducted by SRK was based on the assumptions proposed in the BFS and actual operating status.

At a gold cut-off of 1.5 g/t, the Pakrut Project contains 1,300 kt of Proved Ore Reserves averaging 2.0 g/t gold and 2,900 kt of Probable Ore Reserves averaging 1.9 g/t gold.The ore reserve estimate is also supported by SRK’s estimate of a mining and processing production schedule, which is detailed as follows: Table 3: Production Schedule

Item	Unit	Total	2023	2024	2025	2026	2027	2028	2029
Ore Tonnage	kt	4,237	700	700	700	700	700	527	211
Gold grade	g/t	1.9	1.9	2.0	1.8	1.8	2.0	2.0	1.7
Gold contained	Kg	8,119	1,363	1,381	1,288	1,288	1,384	1,058	356
Recovery rate	%	81.90	81.90	81.90	81.90	81.90	81.90	81.90	81.90
Recovered gold	kg	6,650	1,116	1,131	1,055	1,055	1,134	867	292

Net Present Value:

NPVs at various discount rates, which are shown in Table 3, provide an indication that it is economically viable for Pakrut Project to report Ore Reserves.

Table 4: NPVs at Various Discount Rates

It should be emphasized that the economic analysis presented in this section is based purely on the results of the technical review provided in previous sections, on the BFS, and on SRK’s own study and assumptions, and is provided for ore reserve conversion and project evaluation purposes.

Discount Rate (%)	NPV
9	64,020,000
10	62,416,000
11	60,881,000

Sources: SRK

The assumptions behind these NPVs are as follows:

• The discounted cash flow method (the “DCF”) is selected as the foundation of economic analysis.
• A 10% discount rate was adopted by SRK to calculate net present values (“NPV”).
• The base date is assumed to be 31 December 2022, and all the assumptions are subject to conditions obtained at the base date.
• All the ore mined is assumed to be feed to the processing plant and gold bullion It’s anticipated that the life of mine (“LOM”) is about 6.3 years, and that the mine is producing until 2029. The Opex forecasts which were estimated based on last three years (2020 - 2022) actual Opex, remain true and correct. Note: depreciation and amortization have been excluded in the operating coast estimates. Sunken capital costs are based on the balance sheet date as at 31 December 2022 of US$152m.
• As there is no significant expansion for the Pakrut project planned, and underground expenditure and equipment is already taken into account, the sustaining capital expenditure relates only to mine closure estimated by SRK to be which is about USD 5,180, 000 (2.5% of total Opex). The added cost will be expended in year 2029, that is the end of mine life. While SRK has identified there is a need to consider the residual assets including plants and smelters, it is assumed that the residual assets are able to cover the expenditures for mine closure in 2029. Therefore, there is no additional cost or reclaimed cash balance used for the NPV calculation. The royalty tax is about 6% of sale revenues. The corporate income tax is the maximum of 18% of taxable revenues and 1% of sales revenues. Other taxes are minor.

The NPV is particularly sensitive to gold price, at a gold price of US1,250/oz the NPV is estimated to be US$49,538,000 and at a gold price of US$2,050/oz the NPV is estimated to be US$122,311,000

Note: JORC Table 1, Section 1 (Sampling Techniques and Data), Section 2 (Reporting of Exploration Results), Section 3 (Estimation and Reporting of Mineral Resources) and Section 4 (Estimation and Reporting of Ore Reserves), are attached in Appendix 1 of this Announcement.

Competent Person Statement:

Resource:

1 The information in this Report which relates to Mineral Resource is based on information compiled by Mr. Yonggang Wu and Mr. Pengfei Xiao, full time employees of SRK China, and members of the Australasian Institute of Mining and Metallurgy (AusIMM). Both Mr. Yonggang Wu and Mr. Pengfei Xiao have sufficient experiences which are relevant to the style of mineralisation and the type of deposits under consideration and to the activity which they are undertaking to qualify as Competent Persons as defined in the JORC Code. Mr. Yonggang Wu and Mr. Pengfei Xiao have reviewed the information contained in this announcement and consent to the reporting of this information in the form and context in which it appears.

Reserve:

2 The information in this Report which relates to Ore Reserve is based on information compiled by Mr. Yonggang Wu, a full-time employee of SRK China and a member of the AusIMM. Mr. Yonggang Wu has sufficient experience which is relevant to the style of mineralization and the type of deposits under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined in the JORC Code. Mr. Wu has reviewed the information contained in this announcement and consents to the reporting of this information in the form and context in which it appears.

Glossary of abbreviations

Au	the chemical symbol of gold
BGRIMM	Beijing General Research Institute of Mining and Metallurgy
CNGL(CNG)	China Nonferrous Gold Limited, formerly as Kryso Resources Corporation Limited, which was reformed from Kryso Resource Plc
ITR	Independent Technical Review
JORC Code	The Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia (JORC), December 2012.
Kt	thousand tonnes
Mt	million tonnes
Mtpa	million tonnes per annum
SRK	SRK Consulting China Ltd
Tpa	tonnes per annum

Glossary of Technical Terms

Category C1	A mineral resource/reserve category in accordance with Russian resource/reserve classification system; the overall level of its geological control and studies is higher than Category C2 and lower than Category B
Category C2	A mineral resource/reserve category in accordance with Russian resource/reserve classification system; the overall level of its geological control and studies is higher than Category P1 and lower than Category C1
Category P1	A mineral resource/reserve category in accordance with Russian resource/reserve classification system; the overall level of its geological control and studies is higher than Category P2 and lower than Category C2
GMZ	gold mineralised zone; GMZs are used for describing generally the zones and/or bodies with gold mineral resources defined in the Pakrut Project and the Eastern Pakrut Project
g/t	gram per tonne, equal to part per million
Indicated Mineral Resource	That part of a resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological and/or grade continuity but are spaced closely enough for continuity to be assumed
Inferred Mineral Resource	That part of a resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes which may be limited or of uncertain quality and reliability
LOM	life of mine, same as ROM
Measured Mineral Resource	That part of a resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes
Mt	million tonnes
Probable Ore Reserve	The economically mineable part of an indicated, and in some circumstances measured, resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and government factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified.
Proved Ore Reserve	The economically mineable part of a measured resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and government factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified.
QA/QC	quality assurance/quality control

For further information please visit the Company’s website (www.cnfgold.com) or contact:

China Nonferrous Gold Limited

Zhang Hui, Managing Director

Tel: [phone]

WH Ireland Limited (NOMAD & Broker)

Katy Mitchell, Andrew de Andrade

Tel: [phone]

BlytheRay (PR)

Tim Blythe, Megan Ray

Tel: [phone]

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014

Appendix 1 JORC Code, 2012 Edition - Table 1 (Pakrut Project)

Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	Commentary - Assessment of the Pakrut Project
Sampling techniques	Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.	Splitting drill cores and sampling of reverse circulation (“RC”) drill chips have been applied to the Pakrut Project. Channel sampling of trenches and underground crosscuts were also applied and addressed in this Report. The channel sampling of all types of trenches (shallow and deep) were conducted along one side at the contact with the floor. All channel samples were collected manually and/or using mechanical devices such as pneumatic hammers and diamond saws. Specific gravity samples were taken from oxidised outcrops and fresh zones (drill cores). The data used for Mineral Resource estimation was derived from drill holes (including RC drillholes and diamond drillholes), trenches and underground channels. There were sufficient underground channels and drill holes that had been sampled at the Pakrut Project for confident Mineral Resource estimates and resource classification (Measured and Indicated categories at the Pakrut Project). The drill core samples taken by LLC Pakrut (since 2004) at the Pakrut Project were about 1.5 m long and a few of them vary from 0.5 m up to 2 m. The average length of samples previously taken by former Soviet Union’s exploration team (prior to 2004) was about 1 m length. The RC chips were sampled with an interval of every 1 m. Sample representativity was guaranteed by drilling and trenching/underground channelling conducted in an exploration grid of 40 m by 40 m at Pakrut Project. On the surface, the Pakrut deposit was investigated with trenches of different lengths and depths excavated across the orientation of mineralisation zones and spaced in a 20 - 40 m grid. Underground, five adits were accompanied with drifts and crosscuts were driven along the strikes of mineralised zones to trace the continuity and changeability of the gold mineralisation with continuous channel sampling.
	Include reference to measures taken to ensure sample representativity and the appropriate calibration of any measurement tools or systems used.
	Aspects of the determination of mineralisation that are Material to the Public Report.
	In cases where ‘industry standard’ work has been done this would be relatively simple (e.g. reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.
Drilling techniques	Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).	Core diameters were HQ-size (63.5 mm) or NQ-size (47.6 mm). The drilling started from HQ-size diameter on surface and changed to NQ-size at a depth of about 100 m. Most underground drill holes were completed with NQ-size diameter. The split of drill cores was determined by core diameters. The HQ sized cores were split into two halves and one half was sampled. No splitting was applied to cores of NQ size and all of the sampled material was crushed. Drilling core samples and channel samples were collected from all hydrothermally altered sections. From 2005 to the present the samples were taken from the entire length of the boreholes. The length of the samples varies from 0.4 m - 3.0 m and depends on the variability of mineralisation and rock features. In the case of large thickness of altered rocks the samples were taken at equal intervals of 1 m or 1.5 m, and rarely 2.0 m. RC drilling was conducted using standard RC rigs and samples were taken every 1 m interval.
Drill sample recovery	Method of recording and assessing core and chip sample recoveries and results assessed.	The average core recovery was about 82% for the Pakrut Project (LLC Pakrut’s core samples). The core loss was predominately due to local structures/fractures and surface soil/overburden. The average recovery of mineralised intervals was about 90%. The gold mineralisation is related to hydrothermally altered zones and drill core samples and channel samples were collected from all hydrothermally altered sections. From 2005 to the present the samples were taken from the entire length of the boreholes. Swiss (ONRAM-1000) and American (LY-38) drilling rigs and Chinese rigs of type CSD1800A have been employed in the drilling programme of the Pakrut Project.
	Measures taken to maximise sample recovery and ensure representative nature of the samples.
	Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.
Logging	Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.	The cores have been geologically (lithology, structure, alteration, mineralisation, geotechnical features logged to a level of detail to support appropriate geological interpretation and Mineral Resource estimation. Underground tunnels developed prior to 2004 have been studied and re-logged by LLC Pakrut with a systematic channel sampling programme. All cores have been logged and the logs were recorded in a format of standard logging sheet and then typed to electronic copies of the logging sheet and were incorporated into database. Photographs of drill cores were taken during logging. In the earlier days when the digital camera was not wildly used the drill cores had not been photographed and instead of this histogram with logs of drillhole was completed. All cores and channels including trenches used in resource estimation were logged or re-logged by LLC Pakrut.
	Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.
	The total length and percentage of the relevant intersections logged.
Sub-sampling techniques and sample preparation	If core, whether cut or sawn and whether quarter, half or all core taken.	Drill cores were sampled by split cuts and core samples were taken a half of core. RC drilling chips were collected every 1 m interval. Both core and RC chips were sampled in the logging and sampling yard by field geologists from LLC Pakrut and/or former Soviet/Tajikistan geological team, after logging and photographing. Drilling and sampling were supervised by LLC Pakrut geologists and the initial sample preparation was done in LLC Pakrut laboratory located in Dushanbe (prior to 2004, sample preparation was done by geological team supervised by Tajikistan governmental geological department). Drill cores were stowed in wooden boxes with proper markers after being taken from drilling pipes, then were logged and recorded with standard sheets at Pakrut camp before being transported to LLC Pakrut’s laboratory in Dushanbe. From 1975 to1981, preparation of all types of samples was carried out firstly by crushing the rocks down to 1 mm in the preparation laboratory of the South Tajik Geological Exploration Expedition by mechanical grinding according to the Richards-Chechetta formula Q = kd2. In this formula, Q = sample mass, d = maximum diameter of the particles in the sample, in mm; and k = coefficient of uneven distribution of gold in the ore. Pulverizing the ore down to 0.75 mm (-200 mesh) was carried out by the Central Laboratory of Unified Enterprise of the Tajik SSR. From 2004 to the present, sample preparation has been carried out at LLC Pakrut’s laboratory in Dushanbe using two steps of jaw crushing and vibrating pulverisers. The required -200 mesh sample is obtained by selective splitting and sieving. Sample preparation methodology is subject to continuous quality control monitoring. Original core samples and channel samples were at a range of 3 kg - 10 kg depending on the recovery of cores and sample length. Core and chip samples were further split into coarse samples after crushing. Samples were further pulverised to fine pulps and about 200 grams were taken and packed for chemical assaying. Sample sizes were appropriate to the grain size of the material being sampled.
	If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.
	For all sample types, the nature, quality and appropriateness of the sample preparation technique.
	Quality control procedures adopted for all sub-sampling stages to maximise representativity of samples.
	Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.
	Whether sample sizes are appropriate to the grain size of the material being sampled.
Quality of assay data and laboratory tests	The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.	From 1975 to 1981 all primary analyses were conducted at the Central Laboratory of Unified Enterprise of the Tajik SSR (“CLUETS”). Semi-quantitative spectral analysis was used to determine the grades of 13 components: gold, silver, arsenic, tin, tungsten, molybdenum, copper, lead, zinc, antimony, mercury, tellurium, and bismuth, including a full spectral analysis for gold and silver, together with traditional chemical analysis for gold. At the same time a series of analyses were carried out to determine the samples’ bulk density, moisture, carbonate-silica ratio and other characteristics. During the second stage of exploration (2005 - 2010) the primary analyses for gold, silver, and arsenic of channel and core samples were performed by the LLC Pakrut laboratory in Dushanbe using aqua-regia digestion and atomic absorption spectrometry. The samples which returned grades greater than 0.15 g/t were reanalysed using fire assays by the SGS Laboratory in South Africa and by the Central Governmental Laboratory of the Republic of Tajikistan. During these periods a total of 26,358 samples were analysed using AAS and 7,243 by fire assay. These samples were taken from Pakrut Project. Since 2011, samples with gold grades ≥0.5 g/t as determined by LLC Pakrut laboratory have been reanalysed at the Intertek Laboratory in Beijing by fire assays. For quality assurance purposes, internal and external laboratory testing for gold and arsenic was performed in the process of conducting analytical work in 2009 and 2010. For internal control purposes, a portion of encrypted sample duplicates (taken from the other half of the primary sample) were included in the stream of primary samples and analysed using the same methodology. Additionally, two industrial standards were inserted in every batch of 20 to 25 samples. The standards were purchased from international sources and vary in grade from 0.26 g/t to 13.64 g/t. The results were analysed and reported by quality control personnel. External quality control tests were carried out by re-analysing duplicate samples in the Central Governmental Laboratory of the Republic of Tajikistan. Generally the samples for external control were submitted quarterly, but during periods of low sampling activity they were submitted every six months or even annually. The internal and external control results were both compared with the primary assays; if the discrepancy exceeded that permitted by regulation all results from that batch were rejected and the samples assayed again. All core and channel samples were first analysed for gold (and sometimes but not always for silver and arsenic) by a modified aqua regia method and gold content was determined by AAS. Samples returning gold values were subsequently sent to the Intertek Laboratory (“Intertek”) in Beijing, China, a branch of an internationally recognized establishment, where the gold concentration was determined by fire assay. It should be noted that in the drilling program from 2004 - 2010, all mineralised samples were sent to the SGS Laboratory (“SGS”) in South Africa for fire assays. LLC Pakrut’s QA/QC protocols for sample assaying include the insertion of commercial standards into each sample run prior to submission to the laboratories, along with pulp duplicate samples taken after pulverisation of the samples. These QA/QC samples are inserted at a rate of approximately 1 in 20 to 25 samples. A total of 2,906 commercial standard samples in 15 types with certified mean and standard deviation values of gold grades have been adopted by LLC Pakrut in routine sample batches to monitor the laboratory’s analytical accuracy through its internal laboratory and Intertek. The standards range in grade from 0.25 g/t gold up to 13.65 g/t. One type of standard blank sample, GLG304-3, was submitted to the LLC Pakrut laboratory to monitor for any significant contamination during the assaying process. This standard blank sample has an expected gold grade of 2.0 to 2.7 parts per billion (“PPB”), far below the lower detection limit of normal fire assay and/or aqua regia methods. Pulp duplicates were sent to Intertek and/or SGS to assess the assays’ level precision. A total of 3,396 duplicate samples were inserted in the routine samples at a frequency beyond 1:20. All samples identified by LLC Pakrut as containing gold values could be used for comparisons between LLC Pakrut’s gold grades using the aqua regia digestion method and Intertek’s or SGS’s results using fire assays. The results show that overall there is no significant difference between the laboratories in the mineralised grade ranges and the mineralised intervals derived from the two laboratories’ results are similar. Larger differences occurred in a few samples. For the pulp duplicates, the variability between duplicate assays is caused primarily by the pulp sub-sampling methodology, digestion (in this case using aqua regia) and the final analysis. Additionally, SGS and Intertek each have their own laboratory QA/QC protocols for sample assaying, including the insertion of standards, duplicates and blanks. The final database of sample analyses contained only the fire assay results returned from SGS and/or Intertek.
	For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.
	Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.
Verification of sampling and assaying	The verification of significant intersections by either independent or alternative company personnel.	Besides verification of data provided by LLC Pakrut, an independent sampling verification programme is detailed in Section 11 of this Report. No twin holes had been used. SRK as SRK had observed/inspected the on-going drilling programme including sampling and sample preparation in 2011 and 2012. All prepared samples were dispatched to Intertek for analytical process and SRK selected duplicate pulps for verification. The competent person opined there was no need to drill any twin holes for this project to achieve a Mineral Resource estimate. Exploration data was properly documented and presented. CNG was listed on London AIM therefore material exploration data/progress of the Pakrut Project was released publicly from time to time, and there was competent person to endorse the exploration data prepared as it presented. Sample assay results were obtained from accredited laboratories such as SGS and Intertek. By considering the reputation and internal QC protocols of such laboratories, as well as external checks and verifications, there was no adjustment needed to be performed to assay data.
	The use of twinned holes.
	Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.
	Discuss any adjustment to assay data.
Location of data points	Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.	Before drilling, survey was performed to ensure the rig installation was placed on a correct and accurate location as designed. After the drilling was completed, a repeated survey was performed to check the location of drill holes. Drill holes were sealed with cement and marked with borehole name, depth and date. Downhole survey had been performed every 50 m footage using anti-magnetic downhole compass. The drilling and downhole survey was logged by drillers with standardised logging sheet. LLC Pakrut geologists checked the logs and drill cores regularly to ensure the drilling programs were performed in line with a designed standard. The sample data was prepared in a local UTM grid system that was adopted by Tajikistan governmental geological department. This was not only to ensure the accuracy of the survey of local mining area, but also to be compliant to local country surveying and licensing requirement.
	Specification of the grid system used.
	Quality and adequacy of topographic control.
Data spacing and distribution	Data spacing for reporting of Exploration Results.	Sampling was conducted with a basic length of 1 m or 1.5 m as detailed in this Report context. Samples were continuously taken to cover all drill cores and mineralised sections (trench and underground channels). In Pakrut Project, sampling has been conducted in a relatively dense grid as shown in Figure 9‑1 in this Report. More than 500 drillholes were completed in Pakrut area with a total footage over 79,000 m, in addition to considerable amount of trenching and underground channelling samples. The data spacing varied from 10 m to 100 m and generally within a grade of 10 m - 40 by 40 m at Pakrut deposit area, which is sufficient to support a reasonable Mineral Resource estimate.
	Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.
	Whether sample compositing has been applied.
Orientation of data in relation to geological structure	Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type.	Where possible the drill holes were designed and completed spacing in exploration lines perpendicular to the overall strike azimuth of gold veins. Holes have been drilled at varying dip angle from -55° - -90° depending on terrain and to achieve the best angle to intercept the mineralisation at near perpendicular, by considering the realistic drilling techniques. There was no sample bias related to the angle of drilling. The dip angle and azimuth were used in a 3D modelling to reflect actual sampling location and orientation. Channel samples taken from trenches and underground crosscuts were generally designed and completed perpendicular to the vein strike orientation.
	If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.
Sample security	The measures taken to ensure sample security.	The sample security prior to LLC Pakrut’s management of this project is unknown. Previous sample rejects and duplicates are not available. Those samples were not used for resource estimation. LLC Parkut’s samples were taken and secured by CNG. Cores and channel chips were packed and transported to the laboratory located in Dushanbe with CNG’s own vehicles and secured by Company staff. In the laboratory located in Dushanbe, the samples were secured by CNG security staff, and all remained drill cores, coarse rejects and pulps were secured at a warehouse near LLC Pakrut office building in Dushanbe. Pulp samples for SGS or Intertek chemical assaying were transported by international commercial courier.
Audits or reviews	The results of any audits or reviews of sampling techniques and data.	Site visits and sampling verification had been performed by SRK geologists. Exploration, sampling techniques, QA/QC protocols and data collection had been reviewed during the time to ensure correct procedures and protocols were followed and that the data collected was reliable and accurate for Mineral Resource estimation and reporting to the JORC Code (best practice). Snowden Consultants, an independent consultancy had been engaged by CNG to review the Mineral Resource estimation and resource estimates were conducted by Snowden in 2012. Considering some updates of in-fill drillings, there were no material discrepancies between the resource results estimated by SRK and Snowden.

Section 2 Reporting of Exploration Results

Criteria	JORC Code explanation	Commentary - Assessment of the Pakrut Project
Mineral tenement and land tenure status	Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.	Tenure information and project location are detailed in Section 3 of this report.
	The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.
Exploration done by other parties	Acknowledgment and appraisal of exploration by other parties.	Previous exploration were summarised in relevant reports as a conclusion of each stage. Where possible SRK reviewed the exploration data derived from the previous exploration and made independent sampling verification. LLC Pakrut have conducted the exploration since 2004 and the progress/results have been disclosed in several public release on AIM market and in several resource estimates conducted by Snowden, SRK as well as GeoLogix Mineral Resource Consultants. Mineral Resource estimates in compliance with the JORC Code for the Pakrut Project were initially done by Snowden in 2007.
Geology	Deposit type, geological setting and style of mineralisation.	Detailed in Section 5 and 6 of this Report.
Drill hole Information	A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes:	Drilling information is summarised in Section 7 of this Report and a summary of database used for Mineral Resource estimates is presented in Section 12. More detailed individual exploration drillhole sample results and downhole intercepts are available on request.
	easting and northing of the drill hole collar
	elevation or RL (Reduced Level - elevation above sea level in metres) of the drill hole collar
	dip and azimuth of the hole
	down hole length and interception depth
	hole length.
	If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.
Data aggregation methods	·In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.	The sample data derived from drilling was compiled in an integrated database with information of collar, downhole survey and sample assay. Evaluation of outliers was performed according to the basic analysis of composite samples. Grade capping was applied for eliminating extreme high grade outliers at each mineralised vein. No metal-equivalence approaches were applied in the Pakrut Project
	Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.
	The assumptions used for any reporting of metal equivalent values should be clearly stated.
Relationship between mineralisation widths and intercept lengths	These relationships are particularly important in the reporting of Exploration Results.	The mineralised bodies were modelled according to the sample interceptions and mineralisation widths were reported as “true thickness” according to the modelled bodies. The geometry of the mineralisation with respect to the drillhole angle was known.
	If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.
	If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’).
Diagrams	Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.	Geological map and sections with drillholes are shown in relevant figures in Section 5.
Balanced reporting	Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced avoiding misleading reporting of Exploration Results.	It is considered the Exploration Results for Pakrut Project have been reported in a format of summarised information with balanced reporting protocol, such as weighted/estimated average grade, estimated tonnage constrained to wireframes, volume range.
Other substantive exploration data	Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.	SRK is not aware of any other material or substantive exploration data that has not been reported.
Further work	The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).	Exploration potential has been discussed in this Report. CNG reviews its exploration plan from time to time. SRK is aware CNG is making a detailed exploration plan for further work which could be disclosed later.
	Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Section 3 Estimation and Reporting of Mineral Resources

Criteria	JORC Code explanation	Commentary - Assessment of the Pakrut Project
Database integrity	Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.	The original exploration data was provided by LLC Pakrut Diamond drilling, reverse circulation drilling, trenching and underground channelling sample data were integrated and compiled for Mineral Resource estimation. Prior to using the data for Mineral Resource estimation, SRK performed due cross check of the digital data and constructed the database. An independent sampling verification programme was performed in 2011, and continued in 2012 and 2014. SRK is satisfied with performance of duplicate sample checks.
	Data validation procedures used.
Site visits	Comment on any site visits undertaken by the Competent Person and the outcome of those visits.	SRK Competent Persons visited the projects in 2011, 2012 and 2013. Data verification was performed by SRK field geologists were approved and closely supervised by SRK team leader (Competent Person) Dr Anshun Xu FAusIMM (Director, Principal Geologist).
	If no site visits have been undertaken indicate why this is the case.
Geological interpretation	Confidence in (or conversely, the uncertainty of ) the geological interpretation of the mineral deposit.	The geological interpretation was based on lithological, assay, and structure and geotechnical information. Drilling interceptions provided general confidence of the interpretation of gold mineralised veins. Ground geochemistry, geological mapping, lithological and geotechnical logging and channel (trenching) sample assays provided additional confidence of the mineralisation and the interpretation of mineralised veins at the surface. Geological continuity has been assessed by reference of cross sections interpreted by chief and senior geologists form LLC Pakrut and SRK. SRK’s interpretation of mineralised veins/bodies was produced as a 3D wireframe model, which was supported by a similar interpretation from CNG.
	Nature of the data used and of any assumptions made.
	The effect, if any, of alternative interpretations on Mineral Resource estimation.
	The use of geology in guiding and controlling Mineral Resource estimation.
	The factors affecting continuity both of grade and geology.
Dimensions	The extent and variability of the Mineral Resource expressed as length (along strike or otherwise), plan width, and depth below surface to the upper and lower limits of the Mineral Resource.	Wireframe and block dimensions are discussed in Section 12. The wireframes are used to constrain the block estimation.
Estimation and modelling techniques	The nature and appropriateness of the estimation technique(s) applied and key assumptions, including treatment of extreme grade values, domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used. The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes appropriate account of such data.	The Mineral Resource estimation presented in SRK’s report was completed using MineSight and Surpac software. Prior to modelling and estimation, the database was verified by SRK and both geological interpretations (including the interpretations disclosed previously) made by SRK and CNG have been reviewed. Wireframes of mineralised zones were modelled according to the interpretation made based on lithological, assay, and structure and geotechnical information. Resource domains (wireframe of mineralisation) in the Pakrut Project were modelled using a cut-off grade of 0.5 g/t Au. Sample assays were composited to uniform 1 m length in the mineralised domains (wireframe of mineralised zones) according to statistics of sample assays. Outliers of extreme high grades were assessed according to basic statistics of the composite assays and grade capping has been applied to the assays in each mineralised zone/vein. Geostatistical analysis has been performed and variography was modelled with nugget effect and spherical structure(s). Kriging method with its variations such as Multiple Indicator Kriging has been employed for the grade estimation where possible, and an inverse distance weighted (“IDW”) method was applied to the mineralised zones accordingly, where the ordinary kriging was not applicable. Detailed parameters for grade estimation are described in this report. Visual validation of block grades against drillhole grades; and global statistical validation of the mean composite grades versus block estimates have been applied. SRK is satisfied that the estimation was performed generally honoured to the drilling data.
	The assumptions made regarding recovery of by-products.
	Estimation of deleterious elements or other non-grade variables of economic significance (e.g. sulphur for acid mine drainage characterisation).
	In the case of block model interpolation, the block size in relation to the average sample spacing and the search employed.
	Any assumptions behind modelling of selective mining units.
	Any assumptions about correlation between variables.
	Description of how the geological interpretation was used to control the resource estimates.
	Discussion of basis for using or not using grade cutting or capping.
	The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.
Moisture	Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.	Specific gravity analysis and grade assaying were conducted on a dry basis; therefore the tonnages were estimated on a dry basis. Moisture factor has not been considered into Mineral Resource estimation.
Cut-off parameters	The basis of the adopted cut-off grade(s) or quality parameters applied.	A cut-off grade of 0.75 g/t Au has been applied for the resource estimation with assumptions as below. Gold price: 1,250 United States dollars (USD) per ounce, A combined direct cash cost for mining and processing (excluding Administrative and General Costs) at approximately USD 30 per tonne ore feed. The parameters assumed by SRK are used to test for “reasonable prospects for eventual economic extraction”. This is showing marginal economic potential of the Pakrut Project’s resource. In SRK’s opinion a cut-off grade of 0.75 g/t Au is suitable for the Mineral Resource reporting for the CNG Gold Project.
Mining factors or assumptions	Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the mining assumptions made.	An underground mining with cut and fill method was considered for the Pakrut Project, as designed by the FS. They are detailed in Section 14. The direct mining cost is estimated at approximately USD 20 - USD 22 per tonne ore mined, including the costs of the administrative and general costs of the mine.
Metallurgical factors or assumptions	The basis for assumptions or predictions regarding metallurgical amenability. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous. Where this is the case, this should be reported with an explanation of the basis of the metallurgical assumptions made.	The FS competed by BGRIMM has designed the metallurgical flowsheet and is detailed in Section 15. A combined processing and metallurgical cost at approximately USD 12 - USD 15 per tonne of ore feed was assumed (including the costs of the administrative and general costs of the plants) when considering the mine economics for determining the resource cut-off grade.
Environmental factors or assumptions	Assumptions made regarding possible waste and process residue disposal options. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider the potential environmental impacts of the mining and processing operation. While at this stage the determination of potential environmental impacts, particularly for a greenfield project, may not always be well advanced, the status of early consideration of these potential environmental impacts should be reported. Where these aspects have not been considered this should be reported with an explanation of the environmental assumptions made.	Environment costs were considered in the costs of mining, processing and general & administrative costs. No other substantial environmental risks were identified or assumed during the Mineral Resource estimation. Environmental factors and assumptions are disclosed in Section 18.
Bulk density	Whether assumed or determined. If assumed, the basis for the assumptions. If determined, the method used, whether wet or dry, the frequency of the measurements, the nature, size and representativeness of the samples.	The density of ore was determined according to sample data that collected at the project area. Instead of bulk samples, small volumetric samples weighing about 5 - 10 kg were collected representing both fresh ores and oxidised ores. The density information is detailed in Section 12.7 “Specific Gravity”. Average ore density calculated from the known sample results is about 2.62 g/cm3.
	The bulk density for bulk material must have been measured by methods that adequately account for void spaces (vugs, porosity, etc), moisture and differences between rock and alteration zones within the deposit.
	Discuss assumptions for bulk density estimates used in the evaluation process of the different materials.
Classification	The basis for the classification of the Mineral Resources into varying confidence categories.	The classification of Mineral Resource reflects confidence of the estimation basing on both geological continuity and geostatistical analysis. Therefore SRK considered both the nature of drilling controls (interceptions) and distance and numbers of informing samples (drillholes). The classification of each mineralised zones at Pakrut Project is detailed in Section 12.11. The Competent Person is satisfied that the result appropriately reflects the Competent Person’s view of the deposit.
	Whether appropriate account has been taken of all relevant factors (i.e. relative confidence in tonnage/grade estimations, reliability of input data, confidence in continuity of geology and metal values, quality, quantity and distribution of the data).
	Whether the result appropriately reflects the Competent Person’s view of the deposit.
Audits or reviews	The results of any audits or reviews of Mineral Resource estimates.	This Mineral Resource estimate is an update of the Mineral Resource statement in a Resource and Reserve Report prepared by SRK in 2012. Both internal and external peer reviews have been applied to that estimation Peer reviews of this resource estimation addressed in this Report have been performed within SRK internally. SRK is not aware of any other audits or reviews that have been undertaken to this Mineral Resource estimation.
Discussion of relative accuracy/ confidence	Where appropriate a statement of the relative accuracy and confidence level in the Mineral Resource estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the resource within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors that could affect the relative accuracy and confidence of the estimate.	Within certain parts of the deposit, the drill spacing and grade continuity is sufficiently detailed to allow for a local estimation of the gold grades. The on-going underground development, as well as previous underground tunnels have revealed that the gold mineralisation discovered are consistent with the grades and geometry reported in this Report.
	The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used.
	These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.

Section 4 Estimation and Reporting of Ore Reserves

Criteria	JORC Code explanation	Commentary - Assessment of the Pakrut Project
Mineral Resource estimate for conversion to Ore Reserves	Description of the Mineral Resource estimate used as a basis for the conversion to an Ore Reserve. Clear statement as to whether the Mineral Resources are reported additional to, or inclusive of, the Ore Reserves.	Detailed in section 13. The Mineral Resources are reported inclusive of the Ore Reserves.
Site visits	Comment on any site visits undertaken by the Competent Person and the outcome of those visits. If no site visits have been undertaken indicate why this is the case.	Detailed in section 5.5. SRK has not conducted a site visit since September 2014. Image and video information were provided for a desktop review, while a physical site visit is planed to verify the new exploration data since 2014 in May 2023.
Study status	The type and level of study undertaken to enable Mineral Resources to be converted to Ore Reserves. The Code requires that a study to at least Pre-Feasibility Study level has been undertaken to convert Mineral Resources to Ore Reserves. Such studies will have been carried out and will have determined a mine plan that is technically achievable and economically viable, and that material Modifying Factors have been considered.	Detailed in section 14.1. Overall, SRK converted ore reserves based on validated assumptions of Stage 1 in the FS, latest update of mineral resources and current mine plan.
Cut-off parameters	The basis of the cut-off grade(s) or quality parameters applied.	Detailed in section 14.2. The cut-off grade estimation is based on a cost and revenue assumption, with inputs from mining and processing as well as metallurgical considerations.
Mining factors or assumptions	The method and assumptions used as reported in the Pre-Feasibility or Feasibility Study to convert the Mineral Resource to an Ore Reserve (i.e. either by application of appropriate factors by optimisation or by preliminary or detailed design). The choice, nature and appropriateness of the selected mining method(s) and other mining parameters including associated design issues such as pre-strip, access, etc. The assumptions made regarding geotechnical parameters (eg pit slopes, stope sizes, etc), grade control and pre-production drilling. The major assumptions made and Mineral Resource model used for pit and stope optimisation (if appropriate). The mining dilution factors used. The mining recovery factors used. Any minimum mining widths used. The manner in which Inferred Mineral Resources are utilised in mining studies and the sensitivity of the outcome to their inclusion. The infrastructure requirements of the selected mining methods.	Detailed in section 15. The selected mining methods have been practised widely in the mining industry. It’s conventional method and technically feasible. The stope layout and size have been practised a long time since 2015. SRK considered these assumptions are technically feasible to support future mining. The mining recovery and dilution rates are detailed in section 14.3. The minimum mining width is 1.0 m. Inferred Mineral Resources were treated as waste rocks with a gold grade of zero. Pakrut Project has completed its infrastructure construction at the time of this reporting. There is no further renovation or expansion plan in place. It can be reasonably expected that the practises would guide future production well.
Metallurgical factors or assumptions	The metallurgical process proposed and the appropriateness of that process to the style of mineralisation. Whether the metallurgical process is well-tested technology or novel in nature. The nature, amount and representativeness of metallurgical test work undertaken, the nature of the metallurgical domaining applied and the corresponding metallurgical recovery factors applied. Any assumptions or allowances made for deleterious elements. The existence of any bulk sample or pilot scale test work and the degree to which such samples are considered representative of the orebody as a whole. For minerals that are defined by a specification, has the ore reserve estimation been based on the appropriate mineralogy to meet the specifications?	Detailed in section 16. There is no further renovation or expansion plan in place. It can be reasonably expected that the practises would guide future production well.
Environmental	The status of studies of potential environmental impacts of the mining and processing operation. Details of waste rock characterisation and the consideration of potential sites, status of design options considered and, where applicable, the status of approvals for process residue storage and waste dumps should be reported.	Detailed in section 19. There is no further renovation or expansion plan in place. It can be reasonably expected that the studies available now would guide future production well.
Infrastructure	The existence of appropriate infrastructure: availability of land for plant development, power, water, transportation (particularly for bulk commodities), labour, accommodation; or the ease with which the infrastructure can be provided, or accessed.	Detailed in section 17. There is no further renovation or expansion plan in place. It can be reasonably expected that the infrastructures would support future production well.
Costs	The derivation of, or assumptions made, regarding projected capital costs in the study. The methodology used to estimate operating costs. Allowances made for the content of deleterious elements. The source of exchange rates used in the study. Derivation of transportation charges. The basis for forecasting or source of treatment and refining charges, penalties for failure to meet specification, etc. The allowances made for royalties payable, both Government and private.	Detailed in section 20. Cost analysis is based on actual production data and records from LLC Pakrut. The forecast has considered the performance in recent three years, during which the operation has been seen stable.
Revenue factors	The derivation of, or assumptions made regarding revenue factors including head grade, metal or commodity price(s) exchange rates, transportation and treatment charges, penalties, net smelter returns, etc. The derivation of assumptions made of metal or commodity price(s), for the principal metals, minerals and co-products.	Production schedule is shown in section 15.6.3. Prices are detailed in section 18.3. Costs are detailed in section 20.
Market assessment	The demand, supply and stock situation for the particular commodity, consumption trends and factors likely to affect supply and demand into the future. A customer and competitor analysis along with the identification of likely market windows for the product. Price and volume forecasts and the basis for these forecasts. For industrial minerals the customer specification, testing and acceptance requirements prior to a supply contract.	Detailed in section 18. Overall, the gold bullion has been and will be mainly sold to National Bank of Tajikistan.
Economic	The inputs to the economic analysis to produce the net present value (NPV) in the study, the source and confidence of these economic inputs including estimated inflation, discount rate, etc. NPV ranges and sensitivity to variations in the significant assumptions and inputs.	Detailed in section 21. The economic analysis is based on a forecasted production schedule considered by mining and processing (including metallurgical) sectors with high confidence according to recent production performance, and forecasted commodity price and costs. The variation of commodity price will impact on project economics which has been discussed in the report.
Social	The status of agreements with key stakeholders and matters leading to social licence to operate.	Detailed in section 19.17. It is assumed no social issues to impact much on future operations.
Other	To the extent relevant, the impact of the following on the project and/or on the estimation and classification of the Ore Reserves: Any identified material naturally occurring risks. The status of material legal agreements and marketing arrangements. The status of governmental agreements and approvals critical to the viability of the project, such as mineral tenement status, and government and statutory approvals. There must be reasonable grounds to expect that all necessary Government approvals will be received within the timeframes anticipated in the Pre-Feasibility or Feasibility study. Highlight and discuss the materiality of any unresolved matter that is dependent on a third party on which extraction of the reserve is contingent.	A risk analysis was detailed in section 24. In general, a production rate around 2,000 tpd is considered achievable with high confidence.
Classification	The basis for the classification of the Ore Reserves into varying confidence categories. Whether the result appropriately reflects the Competent Person’s view of the deposit. The proportion of Probable Ore Reserves that have been derived from Measured Mineral Resources (if any).	Detailed in section 14.4. Proved and Probable Reserves have been classified accordingly, based on modifying factors and Mineral Resource classifications.
Audits or reviews	The results of any audits or reviews of Ore Reserve estimates.	The Report has been peer reviewed by other consultants.
Discussion of relative accuracy/ confidence	Where appropriate a statement of the relative accuracy and confidence level in the Ore Reserve estimate using an approach or procedure deemed appropriate by the Competent Person. For example, the application of statistical or geostatistical procedures to quantify the relative accuracy of the reserve within stated confidence limits, or, if such an approach is not deemed appropriate, a qualitative discussion of the factors which could affect the relative accuracy and confidence of the estimate. The statement should specify whether it relates to global or local estimates, and, if local, state the relevant tonnages, which should be relevant to technical and economic evaluation. Documentation should include assumptions made and the procedures used. Accuracy and confidence discussions should extend to specific discussions of any applied Modifying Factors that may have a material impact on Ore Reserve viability, or for which there are remaining areas of uncertainty at the current study stage. It is recognised that this may not be possible or appropriate in all circumstances. These statements of relative accuracy and confidence of the estimate should be compared with production data, where available.	The Ore Reserve estimate of SRK was reviewed by technicians of Pakrut Project. SRK was told that both the tonnage and grade are close to those estimated by themselves.

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