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RNS Number : 4819H
Chaarat Gold Holdings Ltd
12 July 2012
Chaarat Gold Holdings Limited
("Chaarat" or "the Company")
Tulkubash Project - suspension lifted
Road Town, Tortola, British Virgin Islands (12 July 2012)
Chaarat (AIM-CGH), the gold exploration and development company
operating in the Kyrgyz Republic, announces an update on the
development of the Tulkubash Project, which is part of the Chaarat
project area in the north west of the country.
Highlights
-- Kyrgyz President set to ratify new legislation governing mining companies which has been approved by Kyrgyz Parliament
-- New legislation provides clarity and long term stability
sought by Chaarat without the need for the negotiation of an
Investment Agreement
-- The suspension of further capital investment activities
reported on 16 April 2012 has been lifted
-- The Company expects gold production to commence during H2 2013
Dekel Golan CEO comments: "We are pleased to report the Kyrgyz
Government has put in place steps to adopt a clearer and investor
friendly mining legislative code. Our progress to production can
now continue without the need for further negotiation on
stabilisation with the Kyrgyz Government."
New legislation and political situation - background
Since the formation of a new coalition government in the Kyrgyz
Republic in December 2011, the legislation under which the mining
industry operates has been under review with the aim of
establishing a legal regime conducive to the development of the
industry. Late in June 2012 a package of new legislation and
amendments to existing laws was presented to Parliament with the
aim of providing clarity, consistency and ease of operation for the
industry.
The new legislation is a result of long deliberations between
the Government and the mining industry. The Board of Chaarat
believes that the Kyrgyz Republic will, on the basis of the
proposed legislation, offer one of the more supportive legal
regimes for the mining industry relative to other countries.
In summary the important aspects of the new legal regime which
will impact on the Company are:
Procedure for obtaining a mining permit
As reported on 27 June 2012 Chaarat has obtained a mining
permit. The procedure for applying for a mining permit in future
will not change but a clear time frame for the State Agency on
Geology and Mineral Resources (SAGMR) will be established.
Geological reports must be reviewed within 60 days of submission or
are to be considered approved and accepted. The recent delays in
issuing permits are chiefly related to the slow and lengthy process
of approving geological reports.
Title to a discovery
Any discovery (which is detailed in the geological report
submitted to SAGMR) will result in the holder of the exploration
licence for that discovery having an automatic right to obtain a
mining permit. This is very different from the situation in certain
other countries where the state becomes the owner of the discovery
and an auction process determines the award of the mining
permit.
Land allocation
The process of allocating state owned land to mining ventures
has been simplified. Previously any allocation of land to a foreign
owned company required a government resolution. The status of
foreign owned mining companies will now be made equivalent to that
of local companies.
Taxation
The income tax regime will be changed to a strict revenue based
regime in which a sliding scale of royalties increases with the
gold price.
In view of these favourable changes to the mining regime, the
clarity they will bring and the removal of consequent uncertainty
which has been brought to the phased development of the Chaarat
Project, the Board has decided that it is no longer necessary to
continue the direct negotiations with the Government to develop an
Investment Agreement. A further announcement will be made when
these changes are passed into law and an update provided, if
applicable, on any amendments.
Accordingly the Board has decided to lift the suspension of
further capital investment activities (other than the
infrastructure projects relating to power and roads which have
continued uninterrupted) as previously announced on 16 April
2012.
Project update
As Chaarat is now in receipt of a mining permit (announced on 27
June 2012), the tentative allocation of land by the regional
authorities can be formalised at the state level. This formal
allocation is a pre-requisite for securing the building permits for
the various facilities: the Company believes this will be obtained
in the near future.
Applications for construction permits are being completed and
will soon be presented to the Government. Some permits have already
been secured (principally for the access road, power supply and
shift camp).
Wardell Armstrong International has been commissioned to prepare
a gap analysis of the final project design.
A new tender has been issued for additional road works, the
tender for the process plant has been issued and contractors are
being shortlisted. The mining fleet is being sourced and about 40%
of the fleet has already been ordered.
Drilling in the flanks of the designed pit of the Tulkubash
Project has continued with the aim of increasing the free milling
open pittable reserve base. The Company expects the exploration
programme to be completed by mid August and a conclusion as to the
feasibility of increased production to be reached by November.
The recruitment of the mining operations team is almost
complete, with all key positions in that team now filled.
Enquiries:
Chaarat Gold Holdings
Limited +44 (0) 20 7499 2612
c/o Central Asia Services
Limited
Dekel Golan CEO dekel@chaarat.com
Linda Naylor FD linda.naylor@chaarat.com
Numis Securities Limited +44 (0) 20 7260 1000
Alastair Stratton, Stuart
Skinner (NOMAD)
James Black (Broker)
Bankside Consultants +44 (0) 20 7367 8888
Simon Rothschild simon.rothschild@bankside.com
Smith's Corporate Advisory +44 (0) 20 7601 6100
Dominic Palmer- Tomkinson tomkinson@smiths-ca.com
Note to Editors:
About Chaarat Gold
Chaarat Gold is an exploration and development company operating
in the Kyrgyz Republic. The Company's main activity is the
development of the Chaarat Gold Project situated within the Middle
Tien Shan Mountains, which form part of the Tien Shan gold belt. A
JORC compliant mineral resource of 5.59Moz at a grade of 4.08g/t
gold has been delineated at the Chaarat Gold Project. Chaarat's key
objective is to become a low cost gold producer; with initial
production from the Tulkubash project, targeting increased combined
annual production of over 200,000 ounces as the full project comes
on stream.
In addition to the Chaarat Gold Project, the Company has
initiated an exploration programme at Chontash, located in the
Akshirak range of mountains of the Kyrgyz Republic. A maiden
resource for Chontash was compiled by Wardell Armstrong
International and announced in April 2011.
Further information is available at www.chaarat.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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