TIDMCGH
RNS Number : 5478N
Chaarat Gold Holdings Ltd
21 May 2020
21 May 2020
Chaarat Gold Holdings Limited
("Chaarat" or "the Company")
Q1 2020 Operational and Production 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 31 March 2020 (the
"Quarter", "Q1" or the "Period") for its Kapan Mine ("Kapan"), in
Armenia and progress at the Tulkubash Project.
Operations - COVID-19 response
-- COVID-19 prevention measures have been successfully implemented
at all Chaarat offices and sites since mid-February leading
to no cases on record within the group.
-- We have also worked closely with our communities to provide
support and assistance via medical supplies and infrastructure
to help with social distancing. These measures are not
limited to but include the following:
o Kapan/Armenia
-- Donated beds and equipment to the medical centre
of Kapan
-- Provided diagnostic test kits and masks to the
Kapan regional hospital
-- Provided computers to help school children attend
remote classes
-- Sent gifts to the nurses of Kapan for their
contribution during the pandemic
o Tulkubash - Chatkal/Kyrgyz Republic
-- Delivered flour, masks, and disinfectant to
communities in the Chatkal region
-- Donated masks and hand sanitisers to hospitals
-- Donated PCR thermocycler and PCR tests for COVID-19
to the Kyrgyz Ministry of Health
Q1 Kapan Highlights and Outlook (1)
-- One lost time injury in Q1 and the recordable injury
case rate (per one million hours worked) is 0.39.
-- Gold equivalent production of 12,992 gold equivalent
ounces(2) ("oz") produced which represents a 12% increase
on the Q4 2019 production of 11,402 oz due to grade improvements.
Q1 2020 production consisted of:
o 6,656 ounces of gold;
o 130,366 ounces of silver;
o 455 tonnes of copper; and
o 1,886 tonnes of zinc;
-- All-in-sustaining cost ("AISC" (3) ) of USD1,074 /oz
was also improved compared to Q4 2019 (USD1,242 /oz).
-- Realised gold price for the quarter of USD1,565 /oz versus
USD1,512 /oz in Q4 2019 (+3.5%) in line with the average
gold price for the three months to end-March.
-- The geology in the areas mined in Q1 2020 led to delays
in accessing higher grade areas that were anticipated
and recoveries are directly impacted by lower grade areas:
o Total tonnes mined of 178,144t at a feed grade of
2.86g/t AuEq. The trend from Q4 2019 was again positive
with slight improvements in throughput and grades
(Q4 2019: 176,922t at a feed grade of 2.61g/t).
o AuEq recoveries increased slightly to 79.5% in Q1
2020 versus 78.6% in Q4 2019 (+1.1%) despite processing
more oxidised ore, which adversely impacted recoveries,
than in prior months.
o Gold recovery in the higher payable Cu concentrate
circuit improved by 2.1% vs Q4 2019. Base metal
recoveries and concentration grade have been stable.
o To improve grind optimisation and associated recovery,
two new cyclone clusters are being installed in
early Q2 to replace old inefficient units.
-- Underground development of 5,623 metres achieved in the
quarter, compared to 5,732 metres in Q4 2019 (-1.9%).
Chaarat continues to pre-develop at a high rate for improved
visibility on the future mining areas.
-- Fleet renewal of two new loaders and two new haul trucks
to replace aged and expensive equipment has started.
Delivery times have been affected by COVID-19, but arrival
of the new units is still expected for late Q2. This
will help to further improve mechanical availability,
decrease maintenance costs, and reduce the AISC.
-- Chaarat's new technical team is assisting Kapan with
the development of their 2020 mine plan. The focus is
to be able to speed up access to more value adding areas
of the mine for the rest of 2020 and beyond.
-- Chaarat remains on track to deliver on its AuEq 55koz
guidance for the year, as previously set out in its FY
2019 Production, Operational and Financial Update on
19 February 2020.
(1) The mine was purchased in Q1 2019 from Polymetal
International PLC which does not allow for a like for like
comparison to Q1 in 2019.
(2) Gold equivalent ounces for 2019 are based on gold ratios of
81 for silver, 6,698 for copper and 16,075 for zinc. For the LOMP
2020 to 2026 these ratios are being amended to 83 for silver, 7,778
for copper and 20,968 for zinc due to adjusted price
assumptions.
(3) AISC on a gold oz produced basis exclude smelter TC/RC
charges, others which add c. USD$ 150/oz. Sustaining capex of c.
USD$ 4 million p.a. is included in the AISC.
Tulkubash Construction Update
Chaarat is proceeding with detailed engineering and current
works are being completed on time despite precautionary measures
taken with respect to the COVID-19 situation. Design on the Heap
Leach Facility (HLF) and Adsorption-Desorption Recovery (ADR)
facilities are almost complete, and work on the crushing circuit
and final equipment selection are ongoing. Upcoming work streams
are being impacted due to border crossing restrictions and
equipment delays. Mobilization is on hold due to current travel and
movement constraints and camp activities are limited due to
in-country restrictions affecting travel in the Kyrgyz
Republic.
Tulkubash Project Financing
The Company is continuing discussions with several parties and
is working to finalise the project financing by end of 2020.
Interest from newly contacted banks has led to a thorough review of
additional proposals to further optimise the financing structure
for the Tulkubash asset.
Artem Volynets, Chief Executive Officer, commented:
"We are pleased to report continued operational improvement
across a number of points at the Kapan mine, that resulted in
higher production and lower AISC versus the previous quarter. The
fact that this pandemic did not have a material impact on the
operation supports the proactive approach on measures Chaarat has
successfully implemented. The newly ordered equipment and the added
cyclones in the plant shall further improve the operation and add
stability to the underground mine and the plant.
At Tulkubash the current workings are being completed in
accordance with schedule and budget. The restrictions on people and
equipment mobilisation led to a delay in first gold pour as
previously announced but will enable Chaarat to optimise the
feasibility and engineering further and allow for additional work
on exploration."
Enquiries
Chaarat Gold Holdings Limited +44 (0)20 7499 2612
Artem Volynets (CEO) info@chaarat.com
Numis Securities Limited +44 (0) 20 7260 1000
John Prior, Paul Gillam (NOMAD)
James Black (Corporate Broking)
SP Angel Corporate Finance
LLP + 44 (0) 20 3470 0470
Ewan Leggat (Joint Broker)
finnCap Limited +44 (0)20 7220 0500
Christopher Raggett (Joint
Broker)
Camille Gochez (Joint Broker)
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/ .
Q1 2020 PRODUCTION & OPERATIONAL SUMMARY
Sales were lower in Q1 2020 due to logistics delays at border
crossings and port handling.
Production Summary
Q1 2020 Q4 2019
============================ ======== ==========
Tonnes ore mined 178,144 176,922
Tonnes ore milled 175,960 174,376**
AuEq Grade (g/t) 2.89 2.61
Recovery (%) 79.5 78.6
Gold equivalent production
(oz) 12,992 11,614
Gold production (oz) 6,656 5,972
Silver production (oz) 130,366 118,526
Copper production (t) 455 355
Zinc production (t) 1,886 1,656
Realised gold price
(USD/oz) 1,565 1,512
AISC (USD/oz) 1,074 1,242
* Higher throughput due to stockpile
** An additional 4,193 tonnes 3(rd) party ore processed
recovering 322oz of AuEq.
ENDS
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END
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