Chaarat Gold Holdings Ltd (AIM:CGH, FRA:9IS) saw its interim profits jump, helped by higher production and commodity prices from its Kapan operating mine in Armenia, and said it expects its strong performance to continue during the second half.
Adjusted EBITDA surged to US$10.4mln, from US$0.5mln in the first half of 2020, due to the significantly improved operating performance at Kapan and lower overhead costs. Revenue grew 61% to US$48.1mln, boosted by a seven-fold leap in third-party ore production.
Kapan produced 32,813 gold equivalent ounces in the first half - with 25,896 ounces coming from its own ore and 6,917 ounces from third-party ore - up from 27,683 ounces in the year-earlier period.
The AIM-quoted company said it is on track to deliver on its gold equivalent 57,000-ounce guidance for the year.
Chaarat also said it is continuing to explore debt financing opportunities for the Tulkubash project and expects to conclude them in the second half.
"With a stable operation at Kapan and the equity financing in the beginning of 2021, we made further progress towards achieving project financing and developing our Tulkubash gold project in the Kyrgyz Republic,” said interim chief executive and chairman Martin Andersson.
“Kapan had a significantly better first half compared to last year, mainly due to the favourable commodity prices on all fronts but also as a result of the additional optimisation initiatives on recoveries implemented this year.”
“With US$13.8mln Kapan EBITDA contribution in H1 2021 and continuing strong price environment, we look to the second half of the year with confidence to another strong performance,” he added.
The company said it is in advanced talks with a preferred potential candidate for the role of chief executive after Artem Volynets stepped down last month.
READ: Chaarat Gold says CEO Artem Volynets to step down by mutual agreement
Chaarat also said it is considering alternatives for the refinancing of about US$26mln debt outstanding from 2021 convertible bonds due on 31 October 2021 and that it has been in discussions with bond holders around an optimal solution.