Source - RNS
RNS Number : 3320K
Chaarat Gold Holdings Ltd
10 April 2018

Chaarat Gold Holdings Limited

("Chaarat" or "the Company")

Corporate Update

Road Town, Tortola, British Virgin Islands (10th April 2018)

Chaarat (AIM: CGH), the AIM quoted company developing the Chaarat Gold Deposit in the Kyrgyz Republic, announces an update on the plans to achieve its corporate strategy. 

·     Chaarat's strategy remains to become a leading mid-tier gold producer focused in Central Asia and the former Soviet Union

·     This strategy will be achieved via the initial development of the Chaarat Gold Project

·     The Company's position will be further enhanced by selective M&A in the region

·     This update covers the Tulkubash Project, future development of the Chaarat Gold Project and the Company's M&A strategy

·     A new corporate presentation, which outlines this strategy is available at

The Company will host an Investor Conference Call, on Monday 16 April 2018 at 12:00 BST, during which Robert (Bob) Benbow, CEO, and Dorian L. (Dusty) Nicol, Chair of the Company's Technical Committee, will discuss the Company's strategy and answer questions.  Non-Executive Director, Artem Volynets, will also be available to present the Company's M&A strategy and answer questions. To receive dial in details for the call, please register your interest using the following link: Click this link to register for the conference . 

Martin Andersson, Non-Executive Chairman, commented: "I am pleased to deliver this update on the Company's strategy and provide the market with more clarity on how Chaarat's management team plans to deliver on the Company's goal of becoming a leading mid-tier gold producer focused in Central Asia and the former Soviet Union.

The first step in Chaarat's strategy is to take the Chaarat Project into production, by adopting a two phase strategy. Production will be achieved initially through the development of the Tulkubash oxide ore using open pit mining and a heap leach processing facility in order to generate around US$40-60 million free cash flow per annum. In parallel with this development, the Company will carry out an aggressive exploration programme to significantly improve the Tulkubash mine plan ahead of the first gold pour, which is expected in 2020.

Phase 2 of the Chaarat Project is to develop the Kyzyltash refractory sulphide ore, which has the potential to produce 200,000-300,000 ounces of gold per annum, generating free cash flow of US$150-200 million per year. 

I remain encouraged by the support expressed for the Chaarat Project at the highest levels of government in the Kyrgyz Republic as evidenced at my recent meeting with the Prime Minister.

Additionally, Chaarat will look to pursue selective M&A opportunities in Central Asia and the former Soviet Union as the Company believes it is a region that is ripe for consolidation, and that Chaarat is well positioned to be able to deliver this.

I look forward to updating the market with the Company's progress in due course."


Chaarat's strategy remains fundamentally the same, to develop, via organic growth and selective M&A activity,  a leading mid-tier gold producer focused in Central Asia and the Former Soviet Union.  This update serves to clarify  how the Company plans to achieve this goal.  As the Company approaches construction of its first operating mine, and with the addition of Artem Volynets to the Board of Directors, M&A is becoming an increasingly important component of the Company's growth strategy.



Production from the Chaarat Project

The first step of Chaarat's strategy is to to take the Company's 100% owned Chaarat Project in the Kyrgyz Republic, capable of producing 300-400 koz of gold per year, into production.  The development of the Chaarat Project will take place in two phases, with Phase 2 being advanced in parallel with Phase 1, but coming on stream some time later:

Phase 1: Tulkubash oxide ore open pit heap leach

Phase 1 of the Company's strategy for the Chaarat Project is to develop the Tulkubash oxide ore using open pit mining and a heap leach processing facility. This will produce approximately 100,000 ounces of gold per year, generating c.US$40 - 60 million free cash flow per year at current gold prices.  

The Feasibility Study on the Tulkubash Project is due to be completed by Tetra Tech Inc. in mid April and is expected to demonstrate the ability of the Project to generate the anticipated cash flow.  The Feasibility Study will be based on the currently estimated resource of 1.05 million ounces of gold, at a grade of 0.84 grammes per tonne ("g/t"), which represents only a small proportion of the identified strike length of Tulkubash mineralisation (2.0 kilometres out of 24.0 kilometres). 

The Company is confident of its ability to add significantly to the oxide resource with ongoing exploration, which will be carried out in parallel with the development and construction of the open pit, heap leach mine.

Phase 2: Kyzyltash refractory sulphide ore project

Phase two of Chaarat's strategy is to develop the Kyzyltash refractory sulphide ore at the Chaarat Project. The ore is amenable to pre-oxidation and cyanidation recovery, with potential to produce 200,000-300,000 ounces of gold per year, generating free cash flow of US$150-200 million per year at current gold prices. 

The Kyzyltash Resource is currently estimated at 5.4 million ounces of gold at a grade of 3.75 g/t.  Again, only a small proportion (3.0 kilometres out of 24.0 kilometres) of prospective strike length has been explored to date.

Phase 1 - Tulkubash Project

Tulkubash will be put into production first as it is expected to require a relatively modest capital investment and will generate early cash flow.  Construction of site infrastructure began in 2017 with the first gold pour expected early in 2020.  The decision has been made to base the production rate on a nominal 13,500 tonnes per day in order to optimise project operating expenses and cash flow.  This will lead to a mine life of close to 4 years based on the currently defined resource.  The Company is confident that ongoing exploration will more than replace resources and reserves, thus extending mine life well beyond the projection of the upcoming Feasibility Study.

Tulkubash Exploration

The 2017 exploration programme comprised approximately 17,400 metres of drilling and added 287,000 ounces of gold to the Measured and Indicated Resource at an all-in discovery cost of less than US$ 20 per ounce, within a 1.0 kilometre strike length extension of the previous resource boundary. 

The 2018 drilling programme is budgeting 30,000 metres of drilling and the Company has every reason to anticipate similar results per metre drilled as those obtained in 2017. The Company plans to drill a further 30,000 metres in 2019 such that the total of 60,000 metres over two exploration seasons will result in a significant increase in mine life prior to the first gold pour in 2020.

The Company will then maintain, approximately, a 15,000 metre per year drilling programme aimed at adding to and replacing resources and reserves for the remainder of the Tulkubash mine life.  Exploration will be designed to discover additional mineralisation and define its extent within the 6.0 kilometre long mining licence, adding resources and mine life to the near-term Tulkubash mine plan. 

Ongoing exploration will also drill large scale soil gold anomalies already defined along strike in the Chaarat exploration licence.  In parallel, surface work, including mapping, trenching, and stream sediment/soil sampling will be conducted in underexplored parts of the exploration Licence to develop longer term exploration targets. 

It is important to recognise that Tulkubash is a geologically distinct deposit from Kyzyltash, not simply the oxidised cap of a sulphide ore body.  It thus has its own significant exploration potential independent of Kyzyltash.

Phase 2 - Kyzyltash

Whilst Tulkubash is being put in production, and expanded through exploration, development of the large, high grade Kyzyltash ore body presents the Company with a clear avenue for organic growth.

In parallel with Tulkubash development and production the Company will continue advancing technical studies on the Kyzyltash Project, building on the foundation of the NERIN Feasibility Study which the Company published in 2016. Ongoing work will comprise further metallurgical testing with a view to optimising and updating the Feasibility Study. 

On completion of an updated Feasibility Study for Kyzyltash, the decision to commence construction of Kyzyltash will be dependent on the Company's cash flow and development plans, as the Company's balance sheet continues to be strengthened by Tulkubash production.

Kyzyltash will produce gold through a refractory processing plant recovering gold via pre-oxidation followed by direct cyanidation.  Ore will be sourced from high grade underground stopes accessible via simple adit development into the hillside and could be augmented by ore accessible via open pit mining.  The currently defined resource of 5.4 million ounces of gold is capable of supporting at least a 7-8 year mine life at a production rate of 200,000-300,000 ounces of gold per year. 

The Kyzyltash mineralisation also remains open along strike and at depth and further exploration has the potential to vastly increase the size of the deposit.

Expansion and Growth Opportunites

Chaarat Project

Located in the prolific Tien Shan gold belt, the Chaarat Project has the potential to become the next multi-million ounce producer alongside other large mines in the area.  The Tien Shan belt hosts the Muruntau mine at the west end and the Kumtor mine in the east with several large deposits in between.  Chaarat already has over six million ounces of gold resources and a large, underexplored area that has the potential to add significantly more.

The Chaarat mining and exploration licences are best viewed as comprising an emerging gold district, not simply two deposits.  The Company believes that it has only just begun to develop the potential of this emerging district.  The Company's land position comprises a surface area approximately 40%-50% the size of the Carlin trend in Nevada, which started with one mine in the 1960's and has now produced over 50 million ounces of gold.  Chaarat will be in a position to use its internally generated free cash flow to explore and define the long term potential of the Chaarat District.

The Tetra Tech, Inc. Feasibility Study on Tulkubash will be completed in mid-April 2018 and the Company will publish the results.  In addition, Tetra Tech, Inc. will be preparing Internal Technical Reports ("ITRs") illustrating the project economics of Tulkubash, based on continued exploration success, and of Kyzyltash, based on optimal refractory ore processing options.  The Tulkubash ITR will be completed by late April 2018 and the Kyzyltash ITR will be completed before the end of May 2018.  As the ITRs will not be JORC compliant, it is proposed that they will not be released publicly but will be available for review by select parties under the terms of a Confidentiality Agreement.


In addition to the organic growth opportunities, the Company will be pursuing selected M&A targets.  The Company believes that Central Asia / the former Soviet Union is amenable to consolidation and that Chaarat will be well positioned to be a driver of this consolidation due to its technical and operational expertise and its upcoming ability to generate cash flow and maintain a strong balance sheet. 

Chaarat's ambition is to build a leading emerging markets gold company, by looking at projects with potential geographic and operational synergies to Tulkubash and Kyzyltash, but also by reviewing other potential geographic clusters in Central Asia / the former Soviet Union, identifying projects with the following criteria:


·     Gold production or near term gold production at a competitive cash cost

·     Geographic / operational synergies

·     Exploration upside

·     Potential for extended mine life

·     Value accretive to shareholders

Financing Strategy

The financing process for Tulkubash is well underway, with Chaarat's management team reviewing debt, equity and alternative financing solutions, and the Company is encouraged by the relationships and quality dialogues it has been having with local and global institutions.

Following the site visits that took place during 2017,   the Company looks forward to hosting further institutions on site visits, from April this year, and starting deal specific global roadshows during the second quarter of 2018, following the non-deal roadshows which took place during 2017 and the first quarter of 2018.  

Sustainability and Government Support

The Company remains fully committed to sustainability and to continuing to implement the best social and environmental practices. 

Chaarat benefits from the full support of the Kyrgyz government and local authorities as evidenced by the granting of the Chaarat Mining Licence.  In 2017, Chaarat completed the Technical Project, including the OVOS (Environmental Impact Assessment), which is the basis for permitting and on 7 September 2017, the Company obtained Licence Agreement No. 4 to Mining Licence 3117AE. This Licence Agreement means Chaarat can proceed with detailed engineering of the plant and infrastructure, construction per approved designs, development of the mine, and initiation of gold production operations.


The Company recently held meetings with the Prime Minister, Sapar Isakov,  the First Vice Prime Minister, Askar Shadiev,  as well as several other senior Government Officials, including the Chairman of the State Committee of Industry, Energy, and Mining, Ulanbek Riskulov, and the Director of the Kyrgyz Republic Investment Promotion Agency, Esen Momunkulov.  Strong support for the Chaarat project and the Company's operations were expressed at these meetings.


Plans are being put in place for the annual investment forum in London promoting business and investment in the Kyrgyz Republic which will be hosted by Chaarat, the Kyrgyz government and the European Bank for Reconstruction and Development ("EBRD").  At a local level, the Company will continue its support for infrastructure development, healthcare, education and skills training, job creation, community facilities, and micro finance. 



Chaarat Gold Holdings Limited                                          + 44 (0) 20 7499 2612

Martin Andersson - Chairman                                             [email protected]

Linda Naylor - FD/Company Secretary

Numis Securities Limited                                                     +44 (0) 20 7260 1000

John Prior, Paul Gillam (NOMAD)

James Black (Corporate Broking)

BMO Capital Markets Limited                                               +44 (0) 20 7236 1010
Jeffrey Couch, Neil Haycock,
Thomas Rider (Joint Broker)

Blytheweigh (Financial PR)                                                    +44 (0) 20 7138 3204
Tim Blythe
Camilla Horsfall



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 long term, low-cost gold producer focused in Central Asia and the former Soviet Union.


Chaarat aims to create value for its shareholders, employees and communities 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

















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