Chaarat Gold Holdings Ltd (LON:CGH) provided an updated JORC-compliant bankable feasibility study for its Tulkubash oxide gold project in the Kyrgyz Republic and said it is in the process of starting exploration works for the 2021 season.
The AIM-quoted company also said it was in talks to complete the financing package for the project, but warned that this could be affected by current events in the mining sector of the former Soviet republic.
It noted that a current disagreement between the Kyrgyz government and Centerra Gold Inc (TSX:CG) has not affected the general business climate in country. It has been advised by government spokespersons that the issue is specific to Centerra’s Kumtor mine and is in no way reflective of the relationship of other businesses operating in the country.
“All such discussions have no impact on any of Chaarat's operations or activities in country,” the company said.
“However, the extensive media coverage of the discussions between Centerra and the Kyrgyz Republic is expected to be negatively perceived by potential future debt or equity investors and possibly result in a delay in the project financing,” it added.
Chaarat said it maintains strong relations with its communities and government representatives and has received positive feedback on its operations in country from the new government during the latest visits and meetings.
The resumption of full construction activity will be dependent on the timing to complete project financing.
Delays due to the longer-than-expected COVID-19 movement restrictions and political situation during 2020 and early 2021 as well as the expected timeline on project financing have resulted in expected first gold from Tulkubash being now targeted for the first half of 2023, the company said.
Away from financing, Chaarat said a recently completed bankable feasibility study (BFS) on the project confirmed robust economics for the development of an open-pit mining heap leach operation.
A more conservative model was used to develop the latest mineral resource estimate as part of this update to the 2019 BFS. Despite a 25% increase in the overall mineral resource, the approach to the updated model has resulted in a slight reduction in ounces contained in the measured and indicated categories, with this mineralisation now classified as Inferred.
Infill drilling is planned, as part of the 2021 exploration programme, to focus on converting inferred resources into measured and indicated. This conversion could also improve the current 5-year life of mine, the company said.