Chaarat Gold has announced an updated feasibility study showing that gold reserves at its Tulkubash operations in Kyrgyzstan have increased by 39 per cent.

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Image source ©Chaarat Gold

The updated feasibility study on the oxide gold project has boosted reserves to 22.2 million tonnes for a total of 358,000 ounces of gold.

The London-based company estimated that, as per the updated feasibility study, Tulkubash will produce an average of 94,000 ounces of gold per year at an average cash operating cost of US$678 per ounce and an all-in sustaining cost of US$819 per ounce.

Chaarat also noted that there has been a reduction in capital requirements, which have moved from US$132 million down to US$110 million.

“An almost 40 per cent year-on-year increase in Tulkubash's gold reserves demonstrates the remarkable future growth potential of the Tulkubash Project,” commented Artem Volynets, Charrat Gold Chief Executive Officer

“To achieve this whilst also reducing the level of capital expenditure required to bring the mine into production, again illustrates the quality of this asset.”

Tulkubash is open along strike to the northeast, and a 2019 drilling program is focused on extending mineralisation along strike with the goal of further enhancing project economics.

Chaarat has developed a new recovery model based on the relationship between gold recovery and the oxidation state of the ore. This relationship allows the recovery estimate to better fit results from two major metallurgical test programs. As a result, the recovery has decreased from the original feasibility study to 69 per cent from 75 per cent. The new estimate of recoverable ounces is far more robust, significantly reducing project risk.

In March 2019, Chaarat signed a binding term sheet to enter into a Joint Venture with Çiftay İnsaat Tahhüt ve Ticaret A.S. (Çiftay), the Turkish mining and mine construction contractor, to collaborate on the Tulkubash project, providing a significant amount of the required equity for the Tulkubash project.

Under the agreement, based on an agreed valuation of US$252M (post money) for the Tulkubash and Kyzyltash projects, Çiftay would progressively invest US$31.5M for a 12.5 per cent equity stake in both projects.

The vast majority of the remaining capital expenditure is expected to be debt funded, thus avoiding substantial dilution to Chaarat's shareholders, a key strategic objective for the Company. Chaarat is in the process of securing the remaining project financing which is targeted to close in Q3 2019.

Construction is ongoing at Tulkubash and the first gold production remains on schedule for 2021.

“The project team’s highly successful optimisation of the project improves the value of the project and decreases the risks associated with its delivery. We plan to immediately advance the project development and are confident that our 2019 drilling programme will deliver similar results, further adding to the mine life of the project,” concluded Mr Volynets.


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