Chaarat Gold Holdings Limited (LON:CGH) said is confident of meeting its targets at the Kapan mine in Armenia by the end of the third quarter.
The Kapan mine, which Chaarat bought in January, increased run of mine (ROM) ore production by 8% year-on-year in the year to date.
Production of copper concentrates was up 12% on the year while zinc concentrate output fell 10% due to lower grades and slightly less mill recoveries.
The RoM grade in gold equivalent (AuEq) terms dropped 14%, resulting in a 6% decline in contained RoM metal.
But costs per tonne of ore treated was 10% lower year on year, allowing the company to absorb the impact of lower ROM ore grades.
New mineral resource estimate better reflects value of the assets, says CEO
The group announced a new mineral resource estimate (MRE) of 1.775mln ounces of AuEq, measured and indicated (M&I) based on the results of 69,000 meters of drilling completed in 2018.
Chief executive Artem Volynets said the MRE better reflect the underlying potential and value of the assets.
“We are especially encouraged by the significant increase in M&I Resource of 54% from 1.15 to 1.775Moz Au Eq, which supports our belief that we will be able to replace reserves at Kapan on a continuous bases going forward,” he said.
Actions taken to address legacy issues
A number of legacy issues and operational challenges have had a negative effect on operations but Chaarat said the actions it has taken to address the problems are starting to yield results.
“Although this year has seen a challenging start to ownership due to a number of legacy issues, our experienced management and mine-site team identified these early and began remedial work immediately with encouraging results,” said CEO Volynets.
“As we continue to streamline operations and drive other improvements, we are confident that Kapan will achieve our targeted operational results in Q3 of this year.”