Georgian Mining Corp Significant resource upgrade for Kvemo Bolnisi East

Georgian Mining Corp (LON:GEO) have today announced that an upgraded Mineral Resource Estimate for the Kvemo Bolnisi East (“KB”) Copper Zone (‘Copper Zone 1’) has increased the total tonnage of in-situ copper metal by 92% in comparison to the initial estimate announced on 30 January 2017.

To view the press release with the illustrative diagrams please use the following link: Georgian Mining Corporation
Highlights

· JORC optimised in-pit 1.2 million tonnes @ 1.03% Cu at a 0.4% Cu cut off triggers the commencement of detailed discussions with the Company’s JV partner regarding the delivery of an initial 1Mt @ 1% Cu for toll treatment

· Total JORC Mineral Resource estimate of 2.22 million tonnes @ 0.8% Cu and 0.1 g/t Au at a 0.3% Cu cut-off

· GEO is also developing an adjacent mineable gold oxide resource (‘Gold Zone 2’) with the drilling progressing well

· New epithermal ore geology model provides exceptional exploration opportunities that previous explorers had not considered – has the potential to deliver both bulk tonnage and high grade zones

· Future resource expansion programme aims to develop a 50 million tonne resource – further drilling is being planned and target development work is underway on a further 14 advanced brownfield exploration sites within the tenure

Georgian Mining Corp Managing Director Greg Kuenzel said, “We are extremely pleased to have met the requirements of our JV partner to achieve early production. Resource drilling to date validates the Board’s confidence in its exploration programme and confirms that copper-gold sulphide and gold oxide mineralisation extends well beyond the limits of the original discovery programme. The recent identification of KB’s low sulphidation epithermal setting significantly expands our opportunity to explore both bulk tonnage and also high grade gold and copper-gold targets. We have retained Greg Corbett, an internationally renowned specialist on epithermal mineral occurrences, to advise on how best to exploit the significant new opportunities now presented. We are also in the process of establishing an initial gold resource and hope to be in a position to announce this shortly. We believe that this will present us with a similar opportunity to the copper resource for delivering near term, proof of concept production.”

Further Information

In terms of the project’s development, the Company benefits from its access to processing plants with excess capacity at nearby mines owned by its JV Partner. This offers a short lead time to low opex production which can be achieved with modest capital expenditure. This will benefit the Company by providing the cash flow to help fund future exploration and, most importantly, a proof of concept operation.

GEO is undertaking both copper-gold sulphide and gold oxide mineralisation drill programmes within the KB project area with extraction expected to be from the same open pit or series of satellite pits sharing a common infrastructure. The updated JORC compliant Mineral Resource Estimate for the KB East Copper Zone represents only a small part of a potentially much larger deposit. Recent exploration suggests that the region is similar in terms of geology and probable ore genesis to the large copper-gold breccia pipe or pipes at the nearby Madneuli mine where in excess of 50Mt has been mined to date.

The Company is undertaking a phased approach towards achieving this target:

Phase 1: H1 2017 target to delineate a minimum of 1-2 Mt to support initial spare capacity (now achieved and exceeded)

Phase 2: 2017 target to delineate a 3-5 Mt resource of combined copper-gold sulphide and gold oxide mineralisation (on target)

Phase 3: Long term target – to delineate a resource of 50Mt+

In addition to Copper Zone 1, two gold oxide zones are currently being progressed to provide an initial gold oxide resource for near term production and delivery to the JV partner’s neighbouring gold oxide leach plants. This gold oxide resource will be issued on completion of the current drill programme. Notably the gold oxides are located above the level of copper-gold sulphides and can be exploited as part of the necessary stripping to mine the copper-gold sulphides.

Now that the Phase 1 target to develop a 1Mt copper sulphide Resource grading 1% Cu has been achieved and exceeded, the Company will progress its Phase 2 objective of growing the initial Resource to 3 – 5Mt of combined copper-gold sulphide and gold oxide mineralisation as further potential feedstock to its JV partner’s operations through a toll treatment arrangement.

Once Phase 2 is complete, and mining of this ore has commenced, the Company will continue exploration to achieve Phase 3 by fully developing the KB breccia pipe with a Madneuli-size target resource. In tandem the Company will ramp up exploration on other priority targets already defined within the JV Licence.

This longer term vision is supported by the fact that recent drilling has established that the Bolnisi district is a classic low sulphidation epithermal gold camp, dispelling the previous understanding that the area is a VMS ( volcanogenic massive sulphide) camp comparable to the Eastern Pontide Belt of neighbouring Turkey. This fits well with the plethora of epithermal Cu-Au deposits found within the highly productive Tethyan Cu-Au Belt which extends into the southern half of Georgia. This offers scope for the occurrence of several styles of mineralisation across a greater vertical extent of volcanic stratigraphy. These range from bulk tonnage copper-gold breccias, where one large or multiple breccia pipes exist in close proximity (this appears to be the case at Madneuli and KB East), to high-grade “bonanza type” epithermal quartz-gold vein mineralisation. Our new epithermal ore geology model provides exceptional exploration opportunities not considered by previous explorers. GEO has now engaged renowned geological consultant Greg Corbett to confirm GEO’s new epithermal ore geology model. Mr Corbett made a recent site visit to the Bolnisi JV Project and the Madneuli mine and will provide future guidance to fully exploit this new model through more effective exploration targeting.

Mineral Resource Estimate & Exploration Upside

Mineral Resource

Recent diamond drilling has delineated a JORC Mineral Resource estimate of 2.22 million tonnes @ 0.80% Cu and 0.10g/t Au at a 0.30% Cu cut-off in line with the Company’s strategy to achieve Phase 1. GEO will now expand the programme beyond the initial target tonnage to demonstrate that scope exists for a much larger bulk tonnage resource.

Table 1: Kvemo Bolnisi Copper Zone Mineral Resource Update as of end March 2017

Notes: Historic Reverse Circulation data excluded from grade estimation; Maximum distance of extrapolation = 80m; All resources categorised as Inferred resources; Grade estimation using inverse-distance weighting; Updated wireframes for Polymict Breccia, base-of-oxides and topography. Unconstrained tonnage estimate.

Notable new drill intersections from KB copper zone drill holes include:-

· KED 001 – 60.25m @ 1.48% Cu and 0.12g/t Au from 89.75m

· KED 006 – 18.8m @ 1.5% Cu and 0.1g/t Au from 47.0m

· KED 008 – 28.6m @ 1.6% Cu and 0.8g/t Au from 47.4m

· KED 011 – 46.4m @ 2.88% Cu and 0.1g/t Au from 19.6m

Exploration Upside

Resource drilling to date validates the Board’s confidence in its exploration programme and confirms that copper-gold sulphide and gold oxide mineralisation extends well beyond the limits of the original discovery programme. The current surface area of the target defined by a combination of gold and copper-in-soil geochemistry, channel sampling, excavation, geological mapping, ground geophysics, and drilling now extends to an approximate 1km by 1km area, equivalent in size to the current rim of the nearby Madneuli open pit. The extent of copper and gold mineralisation throughout the KB area is indicative of a large well-mineralised system where the Company has to date only tested a small area.

Image 1: Kvemo Bolnisi East Project (see PDF)

Table 2 – Notable Drilling Intersections from Kvemo Bolnisi Copper Zone Drill Programme