CGH Chaarat Gold Holdings Ltd

 
TIDMCGH 
 
Chaarat Gold Holdings Limited 
 
                          ("Chaarat" or the "Company") 
 
                            Tulkubash project update 
 
 
 
Road Town, Tortola, British Virgin Islands (7th December 2011) 
 
Chaarat (AIM - CGH), the AIM quoted exploration and development company with 
assets in the Kyrgyz Republic, is pleased to provide a project update on the 
Tulkubash Project, which is part of the Chaarat project area in north western 
Kyrgyzstan. 
 
Highlights 
 
  * Resource increased 56% to 501,000oz @ 2.92 g/t* from 321,000oz @ 3.96g/t 
  * Significant uplift potential for  resource and reserve identified 
  * Mine development continues with  production scheduled for second quarter 
    2013 
    *estimate compiled by the Company 
 
General 
 
The Tulkubash project is progressing well and on target for production in 
2013.  During 2011 the focus was: 
 
  * Upgrading the resource to reserve status and increasing the overall project 
    size and production rate; 
  * Permitting, design and detailed engineering; 
  * Infrastructure development and construction; 
  * Recruitment and team building. 
 
Resource increase and upgrade 
 
During the 2011 exploration season work focused on improving the resource and 
generating reserves from the open pittable section of the Central Tulkubash 
section of the ore-body - in both of which we had encouraging results.  This 
helped improve our understanding of the Tulkubash project to the extent that we 
believe that the resource may have the capability of supporting a larger 
production base of 2,500 tpd.  This will be confirmed after additional work 
during 2012. 
 
A total of 15,413 metres of drilling generated an open pittable resource of 
404,000 (from a total of 501,000) ounces at a grade of 2.92 g/t.  Further drill 
results to the south and north of the zone (as announced on 22 November) 
indicate that the reserve can be increased significantly. The strike extension 
and the geometry of the pit mean production can be increased without changing 
the strip ratio and without interrupting the mining activities. 
 
As reported on 22 November, drilling results in the Tulkubash zone suggest that 
the mineralised zone extends by a few kilometres due north and that this 
extension should make it possible to significantly increase production. The 
generation of a feedstock that is amenable to free milling from a low strip 
ratio open pit will give us exciting cash generation opportunities. 
 
Permitting, design and detailed engineering 
 
The Chaarat Project is subject to two separate permit regimes. The first, the 
Kiziltash section (which includes the more refractory element of the Chaarat 
Gold Project) is being developed subject to an exploration licence. This permit 
has been broadened to include the development of the infrastructure work such as 
access road, power system and miners' camp. The second permit relates 
specifically to the Tulkubash Project and includes the construction of the mine, 
mill, tailings dam and the relevant ancillary structures (workshops, warehouses 
etc.) 
 
In order to convert the Tulkubash permit to a mining permit, the company has to 
submit a report showing that it has delineated sufficient reserves to justify 
its grant. That report has now been prepared and submitted. The next step is for 
the National Resource State Committee to convene and either approve the report 
or seek more clarification. Under the law, the review has to take place within 
one month of the application being filed, after which the Company will be 
entitled to the issue of a mining licence. 
The report lodged by Chaarat has been compiled with the involvement of the 
authorities. We therefore have reason to believe that it meets all legal 
requirements and will receive prompt approval. A permit to mine should then be 
issued shortly thereafter. As a caveat the recent presidential election in the 
country could cause a delay as a new coalition government still needs to be put 
in place as does the appointment of new ministers. 
 
After the grant of a mining permit, the Company will be required to prepare a 
detailed preliminary project design; which will include all the elements of the 
mine to be built, their location and specification as well as a Social and 
Environmental Impact Assessment. This study, called locally a "Staged Project", 
has to be approved by a number of relevant ministries (the Ministry of Labor for 
safety, the Ministry of Forestry and Environmental, Ministry of Natural 
Resources etc.). When the Staged Project is approved, the detailed design work 
can take place. 
 
As can be seen the process is onerous, Chaarat is though working on all three 
layers of design in parallel. As mentioned, the first of these, the report for 
the mining permit, has already been completed. Work for the Staged Project is 
being supervised by a number of engineering companies who are preparing 
different aspects of the study. Finally the detailed design of other elements 
including the processing plant is also separately being worked on. 
 
The Company believes that all documents will be ready on time for inspection. In 
the absence of unforeseen delays in the review process, permitting should be 
completed so as to allow the Company to reach production in the second quarter 
of 2013. 
 
The engineering of the process plant has been mandated to ProMet from South 
Africa, which is affiliated to a large Chinese engineering and construction 
company, Dadi Engineering. As such a large part of the detailed design work is 
being executed in China. Tender packages for the civil and construction works 
are anticipated to be completed by the end of 2011 and, for the process plant in 
January 2012. The Company expects to be in a position to enact the relevant 
construction agreements once the relevant permits have been granted. 
 
Infrastructure development and construction 
 
Three infrastructure projects, the power system, access road and camps are 
related to the exploration licence, hence their construction has already 
commenced. All of the projects are running slightly behind schedule. Plans 
though are in hand to make up for lost time. 
 
As regards cost, the power component of the project will be lower than 
originally estimated with a consequent reduction in overall cost. Conversely, 
the access road cost is running above budget but within the contingency 
provided. The camps are expected to be completed on budget. 
 
Recruitment and team building 
 
The Company is meeting its recruitment needs slowly and systematically. Training 
programs for operatives are being developed. The management team is being 
carefully built, and in general the Company is making good progress towards 
building an excellent operations team. 
 
Budget update 
 
The directors continue to foresee that the funds raised in March 2011 will be 
sufficient to complete the project and reach production within the anticipated 
budget framework. The option of leasing the mining fleet and diesel generators 
is being investigated with a view to reducing the cash outlay further. 
 
Tenders for the processing plant and mining fleet are expected to be completed 
by February 2012. 
 
  For further information about the Company please contact: 
 
  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 
 
  Westhouse Securities Limited        +44 (0) 20 7601 6100 
 
  Tom Price                           tom.price@westhousesecurities.com 
 
  Richard Baty                        richard.baty@westhousesecurities.com 
 
  Bankside Consultants                +44 (0) 20 7367 8888 
 
  Simon Rothschild                    simon.rothschild@bankside.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 Kiziltash and 
Tulkubash projects situated within the Middle Tien Shan Mountains of Kyrgyzstan, 
which form part of the Tien Shan gold belt. The Company has delineated a JORC 
compliant mineral resource of 4.736Moz at a grade of 4.28g/t gold across both 
projects.  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 Kiziltash project comes on 
stream. 
 
Further information is available atwww.chaarat.com 
 
Competent Person 
The Competent Person with overall responsibility for this press release, and who 
has reviewed the information contained herein, is Sunit Patel, M.Sc (Geology), 
FGS, GSSA, who is an employee of Chaarat Gold.  Sunit is an exploration 
geologist with 22 years of experience in the resource industry who has 
sufficient experience relevant to the style of mineralisation and type of 
deposit under consideration and to the activity which he is undertaking to 
qualify as a Competent Person as defined in the 2004 Edition of the 
'Australasian Code for Reporting of Exploration Results, Mineral Resources and 
Ore Reserves' and he was supervisor to the work subject of this release. Mr 
Patel consents to the inclusion in the report of the matters based on this 
information in the form and context in which it appears. 
 
 
 
 
 
 
 
This announcement is distributed by Thomson Reuters on behalf of 
Thomson Reuters clients. The owner of this announcement warrants that: 
(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
 
Source: Chaarat Gold Holdings Ltd via Thomson Reuters ONE 
 
[HUG#1569574] 
 

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