Chaarat delivers robust updated feasibility for Tulkubash, warns about potential delays in financing
(Kitco News) - Chaarat (AIM:CGH), a gold mining company with an operating mine in Armenia and assets at various stages of development in the Kyrgyz Republic, today released an updated bankable feasibility study for its Tulkubash oxide gold project located in the Kyrgyz Republic.
The company said that an updated mineral resource estimate increased to 49.9Mt grading 0.73g/t gold containing 1,177koz of gold from 24.3Mt grading 1.21g/t gold containing 944koz, an increase of 24.7% in contained gold.
Updated initial capital expenditures ("CAPEX") prior to first gold have increased from USD 110 million to USD 115 million. The change is mainly due to a change in the sequencing of the heap leach facility construction which has brought forward spending previously allocated to deferred CAPEX (USD 3 million change).
The site based OPEX has also undergone a review and as a result, the unit cost for mining, processing and owners cost was optimised and is about USD 0.55/t ore lower (-4%). This is mainly the result of design work to optimize the mine haulage scheme.
The post-tax NPV based on a real discount rate of 5% has increased from USD 70 million to USD 85 million based on 2021 BFS adjustments and revised long term gold pricing. The IRR has increased from 20% in the 2019 BFS to 25% in the 2021 BFS. The increase in project economics is mainly driven by an increase in the underlying commodity price assumptions which reflect the long-term consensus estimate as at April 2021.
The company added that the current disagreement between the government of the Kyrgyz Republic and Centerra Gold has no impact on any of Chaarat's operations or activities in country. Chaarat said it maintains strong relations with its communities and government representatives and has received positive feedback on its operations in country from the new government during the latest visits and meetings.
However, Centerra warned that the extensive media coverage of the discussions between Centerra and the Kyrgyz Republic is expected to be negatively perceived by potential future debt or equity investors and possibly result in a delay in the project financing.