TIDMCGH
RNS Number : 4620Q
Chaarat Gold Holdings Ltd
21 October 2019
Chaarat Gold Holdings Limited
("Chaarat" or "the Company")
Q3 2019 Production and Operational Update
Chaarat (AIM:CGH), the AIM-quoted gold mining Company with an
operating mine in Armenia and assets at various stages of
development in the Kyrgyz Republic, announces its production and
operational results for the quarter ended 30 September 2019 (the
"Quarter", "Q3" or the "Period") for its Kapan Gold Mine ("Kapan"),
in Armenia, progress at the Tulkubash Project and a general
corporate update.
Q3 Kapan Highlights
-- Q3 had a total recordable injury case rate (per one million
hours worked) of zero, significantly below industry average and
since taking ownership in January the Company has had one Lost Time
Injury ('LTI').
-- A positive EBITDA contribution from Kapan of USD3.6 million
in Q3 2019 versus USD3.2 million for the initial five-month period
of control (February to June 2019) with improved recoveries, better
plant utilisation and increased mining rates under Chaarat's
ownership.
-- Gold equivalent production of 16,377 gold equivalent
ounces(1) ("oz") at a cash cost of USD1,092 / oz - compared to
16,996 oz at a cash cost of USD1,223/oz in Q2 2019 - consisting
of:
o 8,849 ounces of gold;
o 163,174 ounces of silver;
o 468 tonnes of copper; and
o 1,629 tonnes of zinc;
-- Realised gold price for the quarter of USD1,474 /oz versus
USD1,306/oz in Q2 2019 in line with the average gold price for the
three months to end-September.
-- On track to achieve run-rate of 65 Koz of gold equivalent
ounces per year and annualised EBITDA run-rate of USD20 million by
year end, as improvements continue on all workstreams,
including:
o Total tonnes mined of 175,182t at a feed grade of 3.31g/t AuEq
compared to 165,757t at a feed grade of 3.24g/t in Q2 2019.
o Recoveries improved to 83.9% in Q3 2019 versus 81.6% in Q2
2019 following improvements achieved in the grinding and flotation
circuits.
-- A fourth stage of crushing has been added to the existing
crusher setup to grind the mill feed finer from 20mm down to 12mm
and this is expected to increase recoveries in subsequent
quarters.
-- New reagents applied in the mill also showed positive
effects.
-- Work is continuing to improve recoveries further.
o Fleet availability improved as equipment issues seen in Q2
were fully resolved at the end of Q3.
o Underground development of 5,883 metres achieved in the
quarter, compared to 5,664 metres in Q2 2019. Increased meterage is
improving flexibility and availability of faces underground,
allowing for consistent delivery of ore to the plant.
o Cost improvements were achieved due to tendering all services
and goods again, bringing outsourced contracts in-house and
monitoring use of consumables.
-- Kapan Mine plan update under way and will be released in November.
Gold equivalent ounces based on gold ratios of 81 for silver,
0.48 for copper and 0.87 for zinc.
Tulkubash Construction Update
Construction continues at Tulkubash and the first gold
production is on track for late 2021. Chaarat is proceeding with
detailed engineering and has finalized several project components
for immediate construction readiness. This comprises:
-- Initial earthworks equipment mobilized; second phase of equipment mobilization started;
-- Ore haul road and platforms construction started;
-- Access road to site has been upgraded to improve year-round access to site;
-- Advance construction camp was installed; 360-man camp was
ordered, and installation will commence before year end 2019 with
completion scheduled for Q3 2020;
-- Detailed design of HLF, Crushing Circuit and ADR is advancing; and
-- Tree Cutting permit for the whole site has been secured.
Tulkubash Project Financing
The Company is advancing project financing discussions with
several international groups. As announced on 13 September 2019,
Chaarat completed the Joint Venture with Çiftay under which Çiftay
will invest USD31.5 million with Chaarat seeking the balance of the
USD110m capex requirement for Tulkubash from project finance
providers.
The Company is continuing discussions with several parties and
is working to finalise the project financing by the end of 2019 or
early 2020. A term sheet received indicates sufficient funds to
finance, alongside the Ciftay investment, the USD110 million
capital requirement to construct the Tulkubash project.
Corporate Financing
The Company secured USD7 million of additional working capital
funds via a USD7 million upsizing of the existing USD10 million
loan and extension of the maturity date to March 2020.
The Company also closed the previously announced 2021
Convertible Bond raise to new subscriptions. Following the most
recent subscription of USD0.5 million in July 2019, and the
agreement with Polymetal to exchange USD10 million of notes for
equity, the total value of the 2021 notes in issue is USD19.7
million;
Artem Volynets, Chief Executive Officer, commented:
"We are pleased to report further improvements across a number
of operational points at the Kapan mine. From improved development
and more tonnes from underground, to increased recoveries at the
plant, we are getting this operation to run near its full
potential, in time to benefit from the higher gold price.
"This is best reflected at the EBITDA level where we reported
earnings of USD3.6 million in the period compared to USD3.2 for the
first five months of ownership.
"We will not stop here and intend to continue to instil further
operational improvements that are sustainable for the long
term."
"At Tulkubash and Kyzyltash we were pleased to complete the
Ciftay JV during the period, having first announced this exciting
transaction earlier in the year. The debt package discussions for
the remaining finance for Tulkubash are progressing on
schedule.
"We are excited by the exploration work on our broader 24Km
Tulkubash lease area, having completed the 20,000m drill programme
recently with encouraging results."
Analyst conference call and presentation
Chaarat Gold will host an analyst conference call and
presentation Tuesday, 22 October 2019, at 9:30 BST. Participants
can access the call by dialling one of the following numbers below
approximately 10 minutes prior to the start of the call.
UK Toll-Free Number: 08003589473
UK Toll Number: +44 3333000804
PIN: 35415978#
The presentation will be available for download from the
Company's website: https://www.chaarat.com/ by clicking on the link
below:
https://www.anywhereconference.com?Conference=301302377&PIN=35415978&UserAudioMode=DATA
A recording of the conference call will subsequently be
available on the Company's website.
Enquiries
Chaarat Gold Holdings
Limited
Artem Volynets (CEO) +44 (0)20 7499 2612
info@chaarat.com
Numis Securities Limited
John Prior, Paul Gillam
(NOMAD) +44 (0) 20 7260 1000
James Black (Corporate
Broking)
Tavistock
Charles Vivian +44 (0)20 7920 3150
Gareth Tredway chaarat@tavistock.co.uk
Barnaby Hayward
About Chaarat
Chaarat is a gold mining company which owns the Kapan operating
mine in Armenia as well as Tulkubash and Kyzyltash Gold Projects in
the Kyrgyz Republic. The Company has a clear strategy to build a
leading emerging markets gold company with an initial focus on
Central Asia and the FSU through organic growth and selective
M&A.
Chaarat is engaged in active community engagement programmes 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 by
building relationships based on trust and operating to the best
environmental, social and employment standards. Further information
is available at www.chaarat.com.
Q3 2019 PRODUCTION & OPERATIONAL SUMMARY
Sales in Q3 were below Q2 partly due to concentrate in transit
not accounted for in September.
Production Summary
Q3 2019 Q2 2019 Q1 2019
Tonnes ore milled 182,521 198,884 182,428
Grade (g/t) 3.36 3.24 3.13
Recovery (%) 83.1 82.0 80.5
Gold equivalent (oz)
Production 16,377 16,996 14,807
Sales 14,617 17,829 14,570
Gold production (oz) 8,849 9,471 8,235
Silver production (oz) 163,174 149,152 126,149
Copper production (t) 1,032 1,042 934
Zinc production (t) 3,591 3,756 3,279
Realised gold price
(USD/oz) 1,472 1,306 1,306
ENDS
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
UPDURVBRKVARUAA
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October 21, 2019 02:01 ET (06:01 GMT)
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