29th Jul 2019 14:59
(Alliance News) - Chaarat Gold Holdings Ltd said on Monday that legacy challenges from its recently-acquired Kapan development in Armenia have dented profit.
However, the project could meet its full year operational targets as early as the third quarter.
The company acquired the Kapan development in January and Chaarat said operational challenges have hurt profit. To offset this, the company said it is cutting mine planning and maintenance programme costs.
Despite the challenges, Chaarat said it is confident that Kapan can achieve its full-year production targets by the end of the third quarter, including its aim of producing 65,000 ounces of gold.
The mineral resource estimate at Kapan has been increased, Chaarat said. The new estimate of 1.78 million ounces of gold equivalent "better reflects the underlying potential and value of the asset", the company said.
Chief Executive Artem Volynets said: "I'm pleased with the progress that the new management team are making at Kapan. Our Environmental Social and Governance statistics have been outstanding, showing solid management commitment to establishing a safe operating environment.
"Although this year has seen a challenging start to ownership due to a number of legacy issues, our experienced management and mine-site team identified these early and began remedial work immediately with encouraging results."
In the same announcement, Charaat said tonnes of ore mined increased year-on-year by 8% to 276,378 tonnes from 255,323 tonnes during the five month period ended June 30.
There was a 23% increase year-on-year of ore milled, rising to 321,538 tonnes from 261,750 tonnes. Ore milled rose 23% year-on-year to 321,538 tonnes from 261,750 tonnes.
Copper concentrate produced rose by 12% to 3,925 tonnes from 3,505 tonnes but zinc concentrate produced fell by 10% to 4,689 tonnes from 5,213 tonnes.
Run of mine grade in gold equivalent terms declined by 14% during the period, however.
Shares in Chaarat Gold were up 0.5% at 29.752 pence each in London on Monday afternoon.
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