CGH Chaarat Gold Holdings Ltd

 
TIDMCGH 
 
Chaarat Gold Holdings Ltd 
 
                          ("Chaarat" or "the Company") 
 
                               Operations update 
 
Road Town, Tortola, British Virgin Islands (17 May 2010). 
 
Chaarat (AIM: CGH), the gold exploration and development company operating in 
the Kyrgyz Republic, is pleased to announce an update on recent developments in 
the Pre Feasibility Study (PFS) at its 100% owned Chaarat project, on which a 
4.009 million ounce JORC compliant gold resource has been reported. 
 
Highlights 
 
  * The PFS findings indicate the potential of implementing an initial high 
    grade, low-cost, open pit mine within the T0700 project area 
 
 
  * The PFS is on track for completion in Q3 2010 
 
 
 
T0700 Project Area 
 
Strong progress has been made in determining the development strategy and 
economic parameters of the Chaarat project. 
 
A significant development, which is being explored in more detail, is the 
potential of implementing an initial, high grade, low-cost open pit mine within 
the T0700 project area in the Tulkubash zone.  This area currently has a JORC 
compliant resource of 336,000 oz at a grade of 4.18 g/t Au.  The development of 
such a mine would require a comparatively small capital investment and provide a 
much shorter time frame to production than originally envisaged. 
 
Recent work has shown that a significant proportion of the mineralisation in the 
T0700 project area is not sulphidic and that consequently gold can be extracted 
by direct and simple cyanidation.  This option would not require the costly 
pressure oxidation unit which is part of the larger scale project.  It has also 
been confirmed that almost all of the resource in the T0700 project can be mined 
by an open pit method.  Open pit is a significantly cheaper mining method than 
underground mining and could allow a rapid increase in the mining rate. 
 
The benefits of developing an early stage open pit operation within the T0700 
project area will need to be considered against its inclusion within the 
construction of the full scale plant which will take place later and require 
much larger investment.  The economic analysis of the relative merits of the two 
options will be dependent on the fund raising options available to the Company. 
 Chaarat is in the process of assessing the best development strategy for its 
shareholders. 
 
The Company believes that the Tulkubash zone, which has not been extensively 
drilled to date, is very prospective and significant exploration attention will 
be directed towards it.  The Company is pleased to report that drilling will 
recommence this week in the Tulkubash zone and preliminary studies indicate the 
potential for the resource to be increased considerably. 
 
 
Update on PFS 
 
During the last few months, Chaarat has been coordinating a team of consultants 
and consulting companies to generate the information and analysis for a PFS. 
 SRK (Johannesburg) has been selected to manage the PFS as well as to prepare 
the mine design and mine-scheduling work.  SNC Lavalin, a world leader in 
process engineering and pressure oxidation plant designs, has been commissioned 
to undertake the process plant engineering and design.  RDI, a leading Denver 
based metallurgical laboratory, has developed the process package and 
Eco-Services, a Kyrgyz company, is preparing the tail dam design and the general 
arrangement of the site in order to ensure compliance with both Kyrgyz and 
"western" standards and legal requirements. 
 
Mining 
 
Following a thorough geo-technical study, a pit design and pit optimisation plan 
have been completed for the open pit areas within the project.  A mining method 
has been selected for the underground operation and scheduling of the mining 
activities is being undertaken to determine mining rate.  The work is attempting 
to balance production from open pit and underground activities in order to 
optimise the capital investment and the utilisation of equipment. 
 
Once the mine design has been completed, the ventilation and other facilities 
will be designed and included in the operational and economic models. 
 
Process 
 
The optimal process, developed by RDI, has been selected.  The process will 
involve flotation of the ore and pressure oxidation of the float concentrate, 
instead of the previously considered option of whole ore pressure oxidation. 
 Following oxidation, the concentrate, together with the tailings from the 
flotation circuit, will be sent to a CIL circuit for gold extraction.  The 
process will provide a significant reduction in both capital and operating 
costs, as well as technical complexity, whilst still subjecting the whole ore to 
CIL high gold recovery.  Bench scale trials are in process in order to further 
optimise the gold recovery parameters.  The Company believes that recovery of 
around 88%-90% of contained gold is feasible. 
 
An added benefit of this process is a much reduced environmental impact due to 
the fact that most, if not all, the arsenic is expected to be locked in 
non-soluble, non-hazardous compounds following the high pressure oxidation 
process. 
 
Road and Transport 
 
A number of trade-off studies have shown that the optimal way to site is a route 
of 190 km from the nearest rail head.  The majority of the route is on public 
roads and only the last 40 km are on a private road.  Another option being 
investigated is to avoid a mountain pass by taking a detour of 80 km.  The 
decision is not purely economic as the needs of the local population and the 
impact traffic will have on their lives must be considered.  It does seem 
however, at this stage, that the shorter road is also the one which has the 
least negative impact on society and the environment. 
 
Additional resource and exploration 
 
With the progress on the mine planning and the mining scheduling, it has become 
clear where further drilling will have the most significant impact, not only on 
the resource, but also on the quantity of reserves to be determined at the end 
of the PFS.  The Company plans to target those areas in the current season. 
 
 
Dekel Golan, CEO of Chaarat, comments: "I am delighted to report such pleasing 
progress on the project and look forward to updating the market as we proceed to 
completion of the PFS later this year." 
 
 
Enquiries: 
 
Chaarat Gold Holdings Ltd 
 
c/o Central Asia Services Ltd +44 (0) 20 7499 2612 
 
Dekel Golan                   dekel@chaarat.com <mailto:dekel@chaarat.com> 
 
Linda Naylor                  linda.naylor@chaarat.com 
                              <mailto:linda.naylor@chaarat.com> 
 
 
 
Westhouse Securities Limited  +44 (0) 20 7601 6100 
 
Tim Feather                   tim.feather@westhousesecurities.com 
                              <mailto:tim.feather@westhousesecurities.com> 
 
Richard Baty                  richard.baty@westhousesecurities.com 
                              <mailto:richard.baty@westhousesecurities.com> 
 
 
 
Mirabaud Securities LLP       +44 (0) 20 7321 2508 
 
Rory Scott                    rory.scott@mirabaud.com 
                              <mailto:rory.scott@mirabaud.com> 
 
 
 
Smith's Corporate Advisory    +44 (0) 20 7239 0140 
 
Dominic Palmer-Tomkinson      tomkinson@smiths-ca.com 
                              <mailto:tomkinson@smiths-ca.com> 
 
 
 
Conduit PR                    +44 (0) 20 7429 6603 
 
Jos Simson                    jos@conduitpr.com <mailto:jos@conduitpr.com> 
 
Emily Fenton                  emily@conduitpr.com 
 
 
 
 
Chaarat 
Chaarat is an exploration and development company operating in the Kyrgyz 
Republic with its current main activity being the development of the Chaarat 
Gold Project. The Chaarat Gold Project is situated within the Middle Tien Shan 
Mountains of Kyrgyzstan which form part of the Tien Shan gold belt. The Company 
has thus far delineated a JORC compliant mineral resource of 4.009 Moz at a 
grade of 4.14 g/t gold. A scoping study demonstrating the economic viability of 
the Chaarat Gold Project was completed at the end of 2008. The Company is 
currently in the process of compiling a pre-feasibility study. Chaarat's 
objective is to become a low cost gold producer targeting an initial production 
of over 200,000 ounces per annum by early 2013. 
 
 
 
Disclaimer 
This press release includes forward-looking statements. Such forward-looking 
statements involve known and unknown risks, uncertainties and other important 
factors beyond Chaarat's control that would cause the actual results, 
performance or achievements of Chaarat to be materially different from future 
results, performance or achievements expressed or implied by such 
forward-looking statements. Such forward-looking statements are based on 
numerous assumptions regarding Chaarat's present and future business strategies 
and the environment in which Chaarat will operate in the future. Any 
forward-looking statements speak only as at the date of this document.  Chaarat 
expressly disclaims any obligation or undertaking to disseminate any updates or 
revisions to any forward-looking statements contained in this document to 
reflect any change in Chaarat's expectations with regard to these or any change 
in events, conditions or circumstances on which any such statements are based. 
As a result of these factors, the events described in the forward-looking 
statements in this press release may not occur either partially or at all. 
 
 
 
 
 
 
 
[HUG#1415999] 
 

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