TIDMCGH
RNS Number : 8913R
Chaarat Gold Holdings Ltd
27 September 2017
Chaarat Gold Holdings Limited
("Chaarat" or "the Company")
INTERIM STATEMENT FOR THE SIX MONTHSED 30 JUNE 2017
Road Town, Tortola, British Virgin Islands (27 September
2017)
Chaarat (AIM - CGH), the AIM quoted exploration and development
company with assets in the Kyrgyz Republic, today publishes its
unaudited results for the period ended 30 June 2017.
HIGHLIGHTS
-- Funding of USD 15 million secured via the issue of
convertible loan notes to finalise the Tulkubash Heap Leach Project
Bankable Feasibility Study and begin preparations for
construction
-- Development of the Tulkubash Heap Leach Project accelerated
by an intensive drilling programme and construction of access
road
-- Drilling results to date support the Board's confidence in
the potential to increase the reserves of the Tulkubash Project
-- Geotechnical works completed in preparation for detailed design
-- Senior management team continues to be strengthened in preparation for construction
-- Successful Kyrgyz Investor Forum held in May amid government
expressions of support for the Chaarat Gold Project
-- Licence agreement signed with Kyrgyz Government confirms
approval to bring stages one and two of the Chaarat Gold Project to
production following successful submission of the Technical Project
and positive public hearing
Martin Andersson, Chairman of Chaarat, commented: "I am
delighted with the progress during the first six months of 2017,
and subsequently, and the diligent execution of our plans to take
the Tulkubash heap leach project into production.
Based on the progress we have achieved, including the positive
drilling results and with all local permitting secured, the
management team are now working on budgets, plans and timelines to
accelerate construction ahead of securing the full construction
financing.
The improving climate in the country for mining companies has
been demonstrated not only by the recent licence agreement signed
by the Kyrgyz Government and Chaarat, confirming approval for the
plan to take stages one and two of the Chaarat Project to
production, but also the successful conclusion of the long running
dispute between the Kyrgyz government and Centerra in relation to
the Kumtor mine.
I would like to welcome our convertible holders and new
shareholders and thank all shareholders and convertible holders for
their support. The Board and management team at Chaarat are well
aware of the challenges ahead but can look forward with increasing
confidence based on a record of solid achievement so far in
2017."
Enquiries:
Chaarat Gold Holdings
Limited + 44 20 7499 2612
c/o Central Asia Services info@chaarat.com
Limited
Robert Benbow CEO
Linda Naylor FD
Numis Securities Limited +44 (0) 20 7260 1000
John Prior, Paul Gillam
(NOMAD)
James Black (Broker)
About Chaarat Gold
Chaarat Gold is an exploration and development company operating
in the Kyrgyz Republic with a large, high grade resource - the
Chaarat Gold Project. The Company's key objective is to become a
low cost gold producer generating significant production from the
development of the Chaarat Gold Project. Chaarat is engaged in an
active community engagement programme to optimise the value of the
Chaarat investment proposition.
Chaarat aims to create value for its shareholders, employees and
communities from its high quality gold and mineral deposits in the
Kyrgyz Republic by building relationships based on trust and
operating to the best environmental, social and employment
standards.
Further information is available at www.chaarat.com
CHIEF EXECUTIVE OFFICER'S REPORT
Dear Shareholder
Reporting progress is easier than achieving that progress and as
I write about our progress this year, I want to recognize the
efforts of our employees in achieving the accomplishments discussed
below. Our progress would not be possible without them. We continue
our steady progress towards putting the Tulkubash heap leach
project into production.
The Company executed the license agreement with the Kyrgyz
government as announced on 20 September 2017. This marks a major
milestone in advancing the mine. The agreement approves both the
oxide and the refractory ore project and supports the Company's
plan to develop the Tulkubash deposit first and the refractory ore
project at a later date. It also approves the local Kyrgyz
environmental assessment and mitigation measures. The Company is
working on an environmental and social impact analysis that meets
international standards. We are pleased that the agreement
recognizes the support of local communities in the Chatkal
region.
We initiated a drilling program earlier this year to add oxide
resources to our mineral inventory. As reported in our update
released on 7 September 2017, we are encouraged by the interim
results received so far. Originally planned as an 11,000-meter
program, excellent drilling productivity is allowing us to extend
the drilling program to 15,000 meters. We are encouraged by the
assay results and even more encouraged that the northeast trend
remains open-ended. As winter approaches, the drilling program will
wind down and we will begin building the new resource model,
designing the mine and reporting resources and reserves early next
year.
Construction of a new 16 km access road from the Chatkal valley
to the top of Kumbel pass began in late May. Two Kyrgyz contractors
are working on this road, one from the top down and one from the
bottom up. We expect the two will be connected by the end of the
construction season. This road will provide safe access to the top
of Kumbel pass for transporting equipment and supplies during
construction and operating supplies during operations. The access
road will be extended from the top of Kumbel pass down to the
project site as part of the next project construction program.
The Company continues to advance design of the crushing
facility, heap leach facility, ADR plant and infrastructure.
Geotechnical site investigations for detailed design were completed
this season for all facilities thus allowing foundation designs to
proceed. The Company is currently reviewing design schedules for
meeting our goals for beginning construction in the second quarter
next year.
Key additions to the project team are a Head of Geology to
oversee the drilling program and a Commercial Manager and a
Technical Manager to manage preparations for construction. The
requirement for additional personnel has been identified and a
recruitment schedule put in place as part of the construction
planning. Attracting high quality personnel to the project
continues to be our primary goal in recruitment.
I am proud of our team's efforts in achieving these results. Of
special note is the efforts of our Kyrgyz governmental group in
getting the license agreement signed amid a presidential election
campaign. The support from the Kyrgyz government and the local
communities reflects the hard work of our team.
With Highest Regards
Robert D. Benbow
Consolidated income
statement
For the six months
ended 30 June
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
USD USD USD
Exploration expenses (745,085) (991,276) (1,060,180)
Administrative expenses (1,490,480) (1,568,432) (3,297,786)
- Share options expense (449,108) (981) (1,962)
- Foreign exchange
gain/(loss) 2,924 3,808 (334,185)
-------------------------------- ------------ ------------ -------------
Total administrative
expenses (1,936,664) (1,565,605) (3,633,933)
Other operating income - 589,327 220,784
-------------------------------- ------------ ------------ -------------
Operating loss (2,681,749) (1,967,554) (4,473,329)
Finance income / (expenses) 17,312 18,453
Taxation (387,507) - -
-------------------------------- ------------ -------------
-
---------------------------- ------------ ------------ -------------
Loss for the period,
attributable to equity
shareholders of the
parent (3,069,256) (1,950,242) (4,454,876)
-------------------------------- ------------ ------------ -------------
Loss per share (basic
and diluted) - USD
cents (0.87) (0.71) (1.52)
-------------------------------- ------------ ------------ -------------
Consolidated statement
of comprehensive
income
For the six months
ended 30 June
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
USD USD USD
Loss for the period,
attributable to
equity
shareholders of the
parent (3,069,256) (1,950,242) (4,454,876)
Other comprehensive
income:
Items which may
subsequently
be reclassified to
profit and loss
Exchange differences
on translating
foreign
operations and
investments 388,392 2,689,088 2,601,427
Other comprehensive
income for the
period,
net of tax 388,392 2,689,088 2,601,427
Total comprehensive
loss for the period
attributable to
equity
shareholders of the
parent (2,680,864) 738,846 (1,853,449)
---------------------- ------------------ ------------------ -----------------------------------
Consolidated balance
sheet
At 30 June
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
USD USD USD
Assets
Non-current assets
Intangible assets 26,960 31,042 26,572
Mine properties 25,554,289 21,764,870 23,424,508
Property, plant and
equipment 740,682 906,746 840,682
Assets in construction 10,274,026 10,185,681 10,008,201
36,595,957 32,888,339 34,299,963
--- ------------------ ------------------ -------------- -------------------
Current assets
Inventories 285,778 360,134 208,955
Trade and other
receivables 1,632,740 254,165 365,944
Cash and cash
equivalents 13,694,150 2,063,517 3,284,929
15,612,668 2,677,816 3,859,828
Total assets 52,208,625 35,566,155 38,159,791
-------------------------- ------------------ ------------------ -------------- -------------------
Equity and
liabilities
Equity attributable
to shareholders
Share capital 3,517,757 2,729,353 3,517,757
Share premium 136,553,470 132,108,746 136,553,470
Share warrant reserve 1,358,351 1,358,351 1,358,351
Convertible loan
note
reserve 867,373 - -
Other reserves 15,183,538 14,926,889 14,848,878
Translation reserve (15,539,037) (15,839,768) (15,927,429)
Accumulated losses (105,709,385) (100,328,935) (102,754,577)
-------------------------- ------------------ ------------------ -------------- -------------------
36,232,067 34,954,636 37,596,450
--- ------------------ ------------------ -------------- -------------------
Non-current
liabilities
Deferred tax - - -
Convertible loan
notes 14,273,151 - -
Current liabilities
Trade payables 450,731 132,663 401,096
Accrued liabilities 1,252,676 478,856 162,245
-------------------------- ------------------ ------------------ -------------- -------------------
1,703,407 611,519 563,341
--- ------------------ ------------------ -------------- -------------------
Total liabilities 15,976,558 611,519 563,341
-------------------------- ------------------ ------------------ -------------- -------------------
Total liabilities
and equity 52,208,625 35,566,155 38,159,791
-------------------------- ------------------ ------------------ -------------- -------------------
Consolidated statement of changes in equity
For the six months ended 30 June
Share Share Share Convertible Accumulated Other Translation
capital premium warrant loan losses reserves reserve Total
USD USD reserve note USD USD USD USD
USD reserve
USD
Balance at
31 December
2015 2,729,353 132,108,746 1,358,351 - (98,405,125) 14,952,340 (18,528,856) 34,214,809
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Currency
translation - - - - - - 2,689,088 2,689,088
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Other
comprehensive
income - - - - - - 2,689,088 2,689,088
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Loss for
the six
months
ended
30 June
2016 - - - - (1,950,242) - - (1,950,242)
Total
comprehensive
income for
the six
months
ended
30 June
2016 - - - - (1,950,242) - 2,689,088 738,846
Share options
lapsed - - - - 26,432 (26,432) - -
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Share options
expense - - - - - 981 - 981
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Balance at
30 June 2016 2,729,353 132,108,746 1,358,351 - (100,328,935) 14,926,889 (15,839,768) 34,954,636
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Currency
translation - - - - - - (87,661) (87,661)
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Other
comprehensive
income - - - - - - (87,661) (87,661)
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Loss for
the six
months
ended 31
December
2016 - - - - (2,504,634) - - (2,458,995)
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Total
comprehensive
income for
the six
months
ended
31 December
2016 - - - - (2,504,634) - (87,661) (2,592,295)
Share options
lapsed - - - - 78,992 (78,992) - -
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Share options
expense - - - - - 981 - 981
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Issuance
of shares
for cash 788,404 4,587,757 - - - - - 5,376,161
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Share issue
cost - (143,033) - - - - - (143,033)
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Balance at
31 December
2016 3,517,757 136,553,470 1,358,351 - (102,754,577) 14,848,878 (15,927,429) 37,596,450
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Currency
translation - - - - - - 388,392 388,392
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Other
comprehensive
income - - - - - - 388,392 388,392
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Loss for
the six
months
ended
30 June
2017 - - - - (3,069,256) - - (3,069,256)
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Total
comprehensive
income for
the six
months
ended
30 June
2017 - - - - (3,069,256) - 388,392 (2,680,864)
Share options
lapsed - - - - 114,448 (114,448) - -
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Share options
expense - - - - - 449,108 - 449,108
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Equity element
of
convertible
loan note - - - 867,373 - - - 867,373
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Balance at
30 June 2017 3,517,757 136,553,470 1,358,351 867,373 (105,709,385) 15,183,538 (15,539,037) 36,232,067
-------------- --------- ----------- --------- ------------ ------------- ---------- ------------ -----------
Consolidated cash
flow statement
For the 6 months ended
30 June
6 months 6 months 12 months
to to to
30 June 30 June 31 December
2017 2016 2016
(unaudited) (unaudited) (audited)
USD USD USD
Operating activities
Loss for the period (3,069,256) (1,950,242) (4,454,876)
Adjustments:
Amortisation expense
- intangible assets 38 3,580 7,287
Depreciation expense
- property, plant
and equipment 135,019 197,905 332,698
(Profit)/loss on disposal
of property, plant
and equipment 3,587 (154,700) 40,074
Provision for inventories - - (22,660)
Finance income (20,991) (17,312) (18,453)
Other operating income - - (220,784)
Share based payments 449,108 981 1,962
Interest payable 408,498 - -
Decrease in inventories (77,255) (15,557) 147,423
(Increase)/Decrease
in accounts receivable (584) (1,688) (590)
Increase/(Decrease)in
accounts payable (364,838) 291,999 (58,507)
Net cash flow used
in operations (2,536,674) (1,645,034) (4,246,426)
--------------------------------------- ----- ----------------------- ---------------------- ------------------------
Investing activities
Purchase of tangible
fixed assets (60,657) (28,351) (68,812)
Capitalisation of
development activities (2,153,360) (181,138) (2,052,669)
Sale of subsidiary - - 200,000
Proceeds from sale
of equipment (27,999) 1,224,585 1,106,055
Interest received 20,991 17,312 18,453
--------------------------------------- ----- ----------------------- ---------------------- ------------------------
Net cash used in investing
activities (2,221,025) 1,032,408 (796,973)
--------------------------------------- ----- ----------------------- ---------------------- ------------------------
Financing activities
Proceeds from issue
of share capital - - 5,376,162
Proceeds from issue
of convertible loan
note 15,000,000 - -
Issue costs (267,975) - (143,033)
Net change from financing
activities 14,732,025 - 5,233,129
Net change in cash
and cash equivalents 9,974,326 (612,626) 189,730
Cash and cash equivalents
at beginning of the
period 3,284,929 2,839,159 2,839,159
Effect of changes
in foreign exchange
rates 434,895 (163,016) 256,040
---------------------------------------------- ----------------------- ---------------------- ------------------------
Cash and cash equivalents
at end of the period 13,694,150 2,063,517 3,284,929
---------------------------------------------- ----------------------- ---------------------- ------------------------
Notes to the financial statements
1 Loss per share
The loss per share is calculated by reference to the loss of USD
3,069,256 for the six months ended 30 June 2017 and the weighted
average number of shares in issue of 351,775,832 during the period.
There is no dilutive effect of share options.
2 Basis of preparation of financial statements
The financial information set out in this interim statement does
not constitute statutory accounts.
The unaudited results for the period ended 30 June 2017 have
been prepared on the basis of the accounting policies adopted in
the audited accounts for the year ended 31 December 2016 except as
disclosed below in relation to the issue of convertible loan notes.
The results for the period are derived from continuing activities.
The figures for the period ended 31 December 2016 have been
extracted from the statutory financial statements, prepared under
IFRS, which are available on the Group's website www.chaarat.com.
The auditor's report on those financial statements was
unqualified.
The proceeds received from the issue of the Company's
convertible loan notes have been allocated into their liability and
equity components. The amount initially attributed to the debt
component equals to the discounted cash flows using a market rate
of interest that would be payable on a similar debt instrument that
does not include an option to convert. Subsequently, the debt
component is accounted for as a financial liability measured at
amortised cost until extinguished on conversion or maturity of the
loan note. The remainder of the proceeds is allocated to the
conversion option and is recognised in other reserves within the
shareholders' equity, net of income tax effects.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR LFMFTMBBTBRR
(END) Dow Jones Newswires
September 27, 2017 02:00 ET (06:00 GMT)
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