Chaarat Gold Holdings Ltd (AIM:CGH) said its Kapan mine in Armenia remains on track to meet full-year production guidance and that financing discussions continue for the Tulkubash project in the Kyrgyz Republic.
"Tragically we had a further fatal injury at Kapan mine and have increased our efforts to ensure we continue to improve the design of safe work,” said chief executive Mike Fraser, following the second death at the mine this year after 14 injury-free months.
An underlying earnings (EBITDA) contribution of US$1mln was made in the quarter, down 54% on a year ago, with the Armenian dram 18% weaker than a year ago, while realised gold prices fell 4% on the year and 12% compared to the second quarter.
Said Fraser: “Steps have been taken to help mitigate this impact by reducing costs, renegotiating long-term contracts, and securing alternative supply sources.”
Production at Kapan increased in the third quarter thanks to higher mine rates and higher grades, with the three months to 30 September 2022 seeing 15,638 gold equivalent ounces (oz) unearthed, up 16.5% from a year ago and after 30,562 oz in the first half of this year.
The full-year guidance is for 56,000-62,000 oz.
All-in-sustaining cost was US$1,362 per oz versus US$1,366 a year ago.
An updated JORC-compliant mineral resource estimate and ore reserves estimate for Kapan are planned for release before the end of the year, which Fraser said were “expected to meaningfully increase our estimates and extend the mine life”.
On Tulkubash, the company said it “remains ready for final investment decision once project financing is finalised”, with discussions continuing with “various parties”.
Potential financiers have become more cautious due to the current macroeconomic environment and volatility in financial markets, Chaarat noted, despite the added mine life earlier this year.
Fraser also highlighted that recent media reports have commented on the corporate development efforts underway to add to the portfolio. “Further updates will be provided as appropriate in due course,” he said.
Earlier this month, Chaarat was revealed to be one of three companies that have made approaches for AIM-listed Shanta Gold.