CHAARAT Gold Holdings will use US$15 million raised by issuing short term senior secured convertible loan notes to advance its Tulkubash Heap Leach Project in the Kyrgyz Republic. The company is moving in to the first phase of development at Tulkubash, which forms part of the larger Chaarat Gold Project in the country’s west.

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The Chaarat Gold Project is in the prolific Tien Shan gold belt that stretches from western Uzbekistan to western China.

The funds will allow Chaarat to drill 12,000 metres to increase the reserve base of Tulkubash; construct a new section of the access road; start basic and detailed engineering design; and recruit construction and operating teams.

Chaarat Gold completed a feasibility study in 2016 for the Chaarat deposit, a 7.04 million ounce resource. The first lower risk start-up phase of the development will be a mid-size heap leach operation at Tulkubash on which a bankable feasibility study (BFS) is now under way.

The resource underpinning Tulkubash comprises only 13% of the total Chaarat resource. The directors believe that there is significant upside beyond this initial phase including additional exploration along strike in order to extend the life of the heap leach operation and, in due course, the development of the larger refractory resource.

Chaarat has been investigating the impact of different processing capacities to increase production from the project. In parallel, preliminary negotiations with various potential project finance providers have resulted in a recommendation from Endeavour Financial, Chaarat’s financial advisors, that the Tulkubash reserve base be enlarged in order to significantly extend the life of mine beyond the period required to pay back the project finance.

The Chaarat team has therefore planned a drilling program to increase the heap leachable reserve base, which will take place throughout the 2017 season. The drilling companies that will carry out the program have been selected and will start work in May.

Based on an increased reserve, the mine plan will be updated and it is expected that the pre-stripping required before mining can commence will be considerably reduced.

The permit for construction of the new portion of the access road has been obtained and construction will begin as soon as the weather improves. Tenders are under way to select the contractors to build the road.

The company aims to achieve the first gold pour from Tulkubash in 2019.

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