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Chaarat sets out new resource and updated operation parameters for the Kapan gold mine in Armenia

The new resource has boosted the expected life of the mine, even allowing for recent depletion

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Chaarat Gold Holdings Ltd (LON:CGH) has revealed its first ore reserve statement for the Kapan mine in Armenia since acquiring it in February 2019.

The resources have been updated to account for depletion as well as new assay and geological data derived from 627 meters of underground drilling completed since July, and the 24,321 meters of underground drilling completed to date in 2019.

The new resource allows for a mine life of seven years, with gold equivalent production averaging 60,000 per year.

The measured and indicated resource rings in at 1.6mln gold equivalent ounces, indicating that near-mine exploration continues to replace the mined tonnes.

The updated ore reserves comprise 4.5mln tonnes of proven and probable ore at grades of 1.69 grams per tonne gold, 31.72 grams silver, 0.35% copper, and 1.34% zinc.

The all-in sustaining costs are reckoned at US$1,032 per gold equivalent ounce.

Historically Kapan's reserve depletion has been replenished through ongoing exploration and development. This is expected to continue.

In addition, there are known exploration targets within the existing license area and others further away but still close to the current mine infrastructure. Exploration and development of these areas over the next few years should allow Kapan to open up new operating areas.

"We are very pleased with this update for Kapan,” said Chaarat chief executive Artem Volynets.

“The resource and reserve update show that depletion continues to be replaced with new reserves through our well-developed and successful exploration program. In addition, the work this year has allowed us to improve mine life while at the same time maintaining our target of $20mln run-rate EBITDA from the operation. This ongoing replacement of resource through exploration continues to give us the confidence that this mine should have many years of ongoing operation well beyond the current life of mine plan. Indeed, the fact that we bought the Kapan Mine in early 2019 with a 5-year LOM and now, net of depletion, we have a 7-year LOM, supports this confidence," he added.

 

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Price: 25.2 GBX

AIM:CGH
Market: AIM
Market Cap: £126.94 m
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