TIDMCGH
RNS Number : 6378K
Chaarat Gold Holdings Ltd
20 April 2015
Chaarat Gold Holdings Limited
("Chaarat" or "the Company")
Definitive Feasibility Study progress update
Road Town, Tortola, British Virgin Islands (20th April 2015)
Chaarat (AIM - CGH), the AIM quoted exploration and development
company with assets in the Kyrgyz Republic, is pleased to report
important developments identified during preparation of the
Definitive Feasibility Study ("DFS") which are expected to add to
the value of the Chaarat Gold Project ("the Project") as well as
reducing implementation and technological risk.
HIGHLIGHTS
-- Comprehensive review of available development options for the
Chaarat Project completed by NERIN
-- Upfront capital cost of stage one heap leach project reduced
by delay in tunnel construction with consequent uplift in value of
the Project and reduction in implementation risk
-- Improved metallurgical process identified for stage two
refractory ore reduces the capital cost and technological risk with
further benefits to the Project economics
-- Tulkubash heap leach pit shell contains 533,000 ounces (11.8
million tonnes at a grade of 1.41g/t)
Dekel Golan CEO commented: "Chaarat is continuing to pursue its
two objectives: the first is to complete a DFS which will both
underpin financing of the first stage of the Project and determine
a valuation benchmark for the Company. The DFS remains on track for
delivery in mid-2015. The second objective is to complete the
documentation required for completing the main permitting process,
which we are required by the terms of our licence, to submit to the
Kyrgyz authorities by the end of 2016. We expect to select a
contractor for the construction of the stage one heap leach
project, as well as complete the main permitting process, during
early 2016. Once we have these permits we can start construction
(subject to financing) with additional permits required only from
local authorities.
We decided last year to focus on China as a source of project
capital, equipment and construction services. Recently the Chinese
government announced its new Silk Road development strategy and set
of priorities summarized as: "one belt one road". This approach
encourages Chinese companies to expand and invest in the Silk Road
belt and in the seaways from China to Europe. This strategy
therefore identifies the Kyrgyz Republic as a top investment
priority. The Chaarat Project is one of the largest and best
undeveloped projects in the world and with a strong DFS prepared by
a reputable Chinese institute our ability to attract capital and
interest from China has been enhanced."
Key findings of the DFS to date:
Layout of the Project
Our previous team of DFS advisers recommended that, due to the
location of the deposit in a narrow valley, the production facility
should be located in an adjacent valley. This would necessitate the
construction of a tunnel to connect the plant to the mine site.
NERIN, together with local Kyrgyz companies, studied the
alternatives and identified a layout which will eliminate the need
to construct a tunnel for at least the first ten years of
operation. The elimination of the immediate requirement for a
tunnel will reduce the upfront cost of the project considerably, as
well as reducing the uncertainty involved in developing a tunnel
and the lead time to production. This is a major breakthrough in
minimizing risks and adding value to the Chaarat Project.
Expected Production Capacity
The optimisation of the pit design has been enhanced by the
reductions in upfront capital costs identified to date. This is an
iterative process and work continues on the production scheduling
such that we can be hopeful of a reduction in the overall cost per
ounce with further improvements to the net present value of the
Project and therefore the return on investment.
The design currently shows heap leachable reserves of 533,000
ounces, a grade of 1.41g/t and life of mine of 4.5 years. The
Tulkubash pit shells currently contain a total of 11.8 million
tonnes of material at a grade of 1.41 g/t. The mine operating
procedures and equipment selection continues and, assuming 8%
dilution and 3% loss, Chaarat expects circa 12.3 million tonnes of
Run of Mine Material at a grade of 1.3 g/t. We remain confident of
the potential of the available resource as supported by our update
following last year's drilling.
Heap leach recovery is expected to be 73%. The optimal
production capacity and schedule are being finalized with an annual
capacity of 2.7-3 million tonnes of ores to be processed, which
would result in production of between 80 and 90,000 ounces of gold
per year for the first stage of the Project.
Request for Proposals for the mining contract are being
solicited and site visits by contractors are expected soon. The
appointment of a mining contractor will reduce the risk of the
Project as Chaarat will not be responsible for recruitment,
training or equipment. However, a condition of the contract will be
that recruitment and training of residents from the valley adjacent
to the site is undertaken by the contractor.
Stage 1 - next steps
One of the advantages of appointing a Chinese design and
engineering institute such as NERIN is the similarity of Kyrgyz and
Chinese feasibility studies. Therefore the adaptation of the DFS to
local standards for the purpose of obtaining construction permits
should be more straightforward. This work has started with the
appointment of local Kyrgyz companies to undertake the adaptation.
They have now begun their work with NERIN.
The completion of the DFS, its adaptation and then the receipt
of the necessary permits will, subject to financing, enable
construction of stage one of the Project to begin.
Once production from the heap leach has commenced, which
assuming all proceeds to plan will be in 2017, the Company plans to
secure finance and commence stage two, being the development and
processing of the refractory ore.
Stage 2 - Refractory ore process update
Chaarat has continued to review different methods of processing
the refractory (sulphide) ore. After submitting an "industrial
size" sample to the Inner Mongolia Mineral Experiment Research
Institute (IMME) for test work we have been very encouraged by the
results from using the Bio-Oxidation (BIOX) process.
The results from IMME are in line with previous tests carried
out by Mintek in South Africa. However Mintek's results were only
obtained with a high level of cyanide consumption and further work
was recommended to develop suitable bacteria to overcome this
problem. At the time we decided not to pursue this option. IMME's
recent tests resulted in cyanide consumption only slightly above
that recorded when the Pressure Oxidation (POX) method was used,
due to the development of the BIOX technology in the period since
the original tests.
The ability to use BIOX rather than POX is very important for
the project. BIOX is used in a number of significant projects in
China and is considered a tried and tested technology. Chinese
engineering companies have significant experience with this
technology which provides comfort to financial institutions and
prospective investors that BIOX can be installed successfully. It
has the additional benefit of a much lower capital cost and
consequent further improvement in the economics of the Project.
Enquiries:
Chaarat Gold Holdings Limited + 44 23 800 11747
c/o Central Asia Services Limited info@chaarat.com
Dekel Golan CEO
Linda Naylor FD
Numis Securities Limited +44 (0) 20 7260 1000
John Prior, Paul Gillam (NOMAD)
James Black (Broker)
NOTES TO EDITORS:
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
low cost gold producer generating significant production from the
development of the Chaarat Gold Project. Chaarat is preparing a
Definitive Feasibility Study and continuing its active community
engagement programme 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 in the
Kyrgyz Republic by building relationships based on trust and
operating to the best environmental, social and employment
standards.
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTLLFERSDIDLIE
Chaarat Gold (LSE:CGH)
Historical Stock Chart
From Jun 2024 to Jul 2024
Chaarat Gold (LSE:CGH)
Historical Stock Chart
From Jul 2023 to Jul 2024