(Kitco News) - Chaarat (AIM: CGH) said today that in Q1 2022, the company produced 15,266 gold equivalent ounces at its Kapan polymetallic mine in Armenia, which represents a 6.9% decrease on Q1 2021 (16,174 ounces).

According to the company's statement, production was lower due to reduced third-party processing and lower grade ore currently being mined; however, it said that performance was in line with plan based on the areas currently being mined.

All-in-sustaining cost was USD1,352 /oz compared to USD1,024 /oz in Q1 2021 (+32.0%) due to increases in energy prices, other raw materials costs and increased development work.

The company added that its preliminary unaudited standalone Kapan EBITDA contribution was USD7.6 million compared to USD6.9 million in Q1 2021 (+10.1%).

Chaarat said it remains on track to deliver on its AuEq 56-62koz guidance for the year including third-party ore production.

Third-party ore supply and mill throughput is expected to remain stable for the remainder of 2022 with the approximately 41 kt stockpile of own ore available for processing in the next quarters.

CEO Mike Fraser commented, "Kapan continues to operate on a steady state basis with the team focusing on value, not just volume, and managed to increase utilisation of equipment and efficiency. The on-site stockpile will give us improved operational flexibility in the coming quarters.

"At Tulkubash, the resource and reserve update including the 2021 drilling results will be available this quarter and feed into an updated economic model for the project."

Chaarat is a gold mining company which owns the Kapan operating mine in Armenia as well as Tulkubash and Kyzyltash gold projects in the Kyrgyz Republic.