Aim-listed Chaarat generated revenue of $92.4-million from concentrate sales for the 12 months ended December 31, 2021, with $72.8-million relating to own ore revenue and $19.6-million to third-party ore revenue.
Group earnings before interest, taxes, depreciation and amortisation (Ebitda) were $13.5-million – 45% higher than in 2020.
The group loss after tax was $3.6-million, an improvement of 84% from a loss after tax of $22.4-million in 2020.
Cash and cash equivalents increased from $6.9-million to $11.1-million year-over-year.
Net debt decreased from $77.2-million to $39.6-million owing to a debt-to-equity conversion and equity raise in February 2021, as well as the ongoing repayment of the Kapan acquisition loan.
Highlights during the period included ongoing reviews to assess the best available technologies for the project regarding environment control and energy savings.
At the Kapan mine, in Armenia, Charaat finished the year with production of 63 000 gold-equivalent ounces (GEOs), including 14 000 GEOs from third-party ore production, above its 2021 guidance of 57 000 oz.
At the Tulkubash construction project in the Kyrgyz Republic, an updated bankable feasibility study was released in May 2021, confirming robust project economics.
Charaat also successfully completed a 4 835 m drilling programme including infill drilling and initial exploration drilling on new target areas.
It also advanced camp construction, main construction preparation work and the exploration programme, with about $8.5-million invested in 2021.
At the Kyzyltash development project in the Kyrgyz Republic, Charaat successfully completed a 3 508 m drilling programme to obtain representative core of the Kyzyltash deposit ready for metallurgical testing. The core has been sent to SGS Lakefield in Canada for a full suite of metallurgical test work as part of assessing the preferred processing route for the project.
POST-YEAR END
Mike Fraser started as new CEO and member of the board on January 17, and since then completed a comprehensive strategic and operational review. Key elements of the strategy will be implemented within this year.
The Kapan mineral resource estimate (MRE) and ore reserves were updated in 2021 and signed off in April.
The 2022 MRE was developed on a constrained basis. The application of the constraining factors and a 2 g/t cut-off grade limits any direct comparison to the previously reported unconstrained resource in 2019.
A resolution of the Kumtor mine situation was announced in April and Chaarat is restarting financing discussions on the Tulkubash project as planned.
OUTLOOK
The conflict in Ukraine and associated sanctions against Russia have the potential to impact the supply chain, costs and commodity prices in Charaat’s region and, therefore, it notes that it is monitoring the developments closely.
So far, the conflict has had no direct impact on the group’s operations, and the group does not expect there to be a material impact this year.
At Kapan, Charaat confirmed mine production guidance of 50 000 oz to 53 000 oz of own-ore production and an additional 6 000 oz to 9 000 oz of third-party ore production based on 100 000 t milled during the year.
At the East Flank, resource definition drilling is ongoing as part of preparing an initial MRE expected in 2023.
At Tulkubash, updated mineral resource and reserve statements are expected to be released in the first half of this year. Given the resolution of Centerra's Kumtor situation, debt financing is expected to close in the second half.
Ongoing project work will focus on engineering completion and appropriate construction activities to optimise full activities once debt financing is secured.
At Kyzyltash, metallurgical test results are expected back from SGS Lakefield in the third quarter of this year to enable the company to perform an economic assessment on the best processing route in 2023.
Chaarat will continue to review its existing balance sheet structure with a view to further reducing its interest costs and improving the balance sheet structure.
EDITED BY: CHANEL DE BRUYN
CREAMER MEDIA SENIOR DEPUTY EDITOR ONLINE