Chaarat Gold Holdings Ltd (LON:CGH) said its newly acquired Kapan mine in Armenia is reaching its full potential and allowing the company to take advantage of the higher gold price.
Some 16,377 gold equivalent ounces were unearthed at the mine at a cash cost of US$1,092/oz in the three months to 30 September, compared to the cash cost of US$1,223/oz that saw 16,996 oz produced in the second quarter after its acquisition in February.
WATCH: Chaarat Gold's Dusty Nicol updates on drilling campaign at Tulkubash project
The AIM-listed company said it is on track to meet its full-year gold production and underlying earnings (EBITDA) targets of 65,000 gold equivalent ounces and US$20mln respectively.
The lower cash cost was said to be due to new tenders, converting outsourced contracts to in-house and monitoring the use of “consumables”.
Realised gold price for the quarter of US$1,474/oz versus US$1,306/oz in Q2.
EBITDA was US$3.6mln for the period, compared to the US$3.2mln in its first five months of ownership.
Closure of Tulkubash financing eyed
Works at the Tulkubash project in the Kyrgyz Republic are in progress with first gold production targeted for late 2021.
The company is looking to finalise financing by early 2020 at latest, while it secured US$7mln of additional working capital funds by upsizing an existing US$10mln loan.
“We are pleased to report further improvements across a number of operational points at the Kapan mine,” said chief executive Artem Volynets, saying the company was “getting this operation to run near its full potential, in time to benefit from the higher gold price”.
“We will not stop here and intend to continue to instil further operational improvements that are sustainable for the long term.”