13th Feb 2017 09:09
LONDON (Alliance News) - Chaarat Gold Holdings Ltd on Monday said the bankable feasibility study for the Tulkubash heap leach project in the Kyrgz Republic should be completed before the end of the first half, with financing talks ongoing with a number of parties.
The miner said Chairman Martin Andersson visited the company's operations recently and received "unanimous expressions of support" for Chaarat's operations in the country and its investment plans from senior political leaders in the Kyrgyz Republic, including Prime Minister Sooronbay Jeenbekov.
"Alexander Novak, the Chaarat director based in Bishkek, was invited by the speaker [of Parliament] to join the council which has recently been set up by Parliament to promote foreign investment. As part of this group, Chaarat will have the ability to comment on proposed changes to legislation affecting, for example, mining regulations and the foreign investment climate," said the miner.
The government has initiated plans to construct a smelter near Chaarat. That will be constructed by a newly-formed joint venture between Turkey's Eti Bakir and state-owned KyrgzAltyn, and will enable the processing of concentrate in the country.
"This could materially benefit Chaarat by reducing its capital expenditure requirements in the second stage processing of refractory ore," said Chaarat.
The bankable feasibility study remains on track to be completed before the end of June. Importantly, the miner said it is investigating a number of different processing options that could increase planned capacity by up to 50%, to 12,000 tonnes of ore per day. That would increase production to about 100,000 ounces of gold per year, Chaarat said.
"The board believes this option could add significant value to shareholders and is confident the reserve base can be increased to support a satisfactory life of mine at this revised rate," said Chaarat.
The permit for construction of the new access road to site has been secured. The new route, identified by a local designer, has fewer serpentines and points at risk from avalanches, facilitating maintenance and ensuring its use by heavier traffic which is expected during construction and operation.
In addition, Chaarat said it has appointed Bob Benbow as its new chief operating officer to oversee development and commercial operations at Tulkubash. Benbow has been supervising the company's teams and consultants since last September, the miner said.
Chaarat said it intends to appoint an independent board member shortly, preferably one with "significant mining experience".
Chairman Andersson has also taken responsibility for the financing workstream. Several options with potential providers are being analysed to optimise finance for construction. Endeavour Financial Ltd has been appointed to assist with the financing process.
"The board remains of the view that the current share price does not reflect the underlying value of the Chaarat deposit. Consequently, the board's primary criteria in evaluating financing options will be added shareholder value on a risk adjusted basis," said Chaarat.
Lastly, a new share option plan has been implemented to grant directors and certain employees with options over shares priced at 15 pence each, exercisable over a period between one to eight years. Half of the options will vest over three years with the rest vesting on achievement of certain milestones, including the completion of the bankable feasibility study and first gold.
Chief Executive Dekel Golan has been awarded 4 million options, Executive Director Alexander Novak and Finance Director Linda Naylor have both been awarded with 3 million options each, Non-Executive Richard Rae has been awarded with 300,000 options and other Non-Executive Martin Wiwen-Nilsson has been given 200,000 options.
The newest board addition, Benbow, has been awarded 3.5 million options. A further 4.9 million options have been awarded to certain employees.
By Joshua Warner; [email protected]; @JoshAlliance
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