Shares in Chaarat Gold Holdings (AIM, CGH), the Kyrgyzstan-focused miner, rose more than 12 percent after the company said findings of the preliminary feasibility study at its Chaarat project indicate the potential of implementing an initial high grade, low-cost, open pit mine within the T0700 project area.
The focus of a preliminary feasibility study has been on the Tulkubash zone of the Chaarat project, and in particular area TO700.
This zone currently has resources of 336,000 ounces at a grade of 4.18 grams per tonne, which are easily accessible and would not require a costly pressure oxidation unit which is part of the larger scale project.
‘The development of such a mine would require a comparatively small capital investment and provide a much shorter time frame to production than originally envisaged,’ Charaat said in a statement to the stock exchange this morning.
A number of studies have shown that the optimal way to site is a route of 190 kilometres from the nearest rail head. All bar the last 40 kilometres are public highway – the last stretch is a private road. Another option being
investigated is to avoid a mountain pass by taking a detour of 80 kilometres. The decision is not purely economic as the needs of the local population and the impact traffic will have on their lives must be considered.
But it adds: "It does seem however, at this stage, that the shorter road is also the one which has the least negative impact on society and the environment."
The preliminary study, which is being conducted by a team including Johannesburg-based SRK, which will prepare the mine design and carry out scheduling work, is on track to be completed in the third quarter of the year.
At 13.57, the shares were up 5p at 45p.
Chaarat is an exploration and development company operating in the Kyrgyz Republic with its current main activity being the development of the Chaarat gold project. The project is situated within the Middle Tien Shan Mountains of Kyrgyzstan which form part of the Tien Shan gold belt.
The company has thus far delineated a JORC compliant mineral resource of 4.009 million ounces at a grade of 4.14 g/t gold. A scoping study demonstrating the economic viability of the Chaarat Gold Project was completed at the end of 2008.
Chaarat's objective is to become a low cost gold producer targeting an initial production of over 200,000 ounces per annum by early 2013.