Chaarat Gold Holdings (LON:CGH) this morning unveiled the results of a pre-feasibility study, which it says underlines the robust economics of its project in the Western Kyrgyzstan. The Chaarat mine will have the capacity to produce 202,000 ounces of gold at a cash operating cost of US$501 an ounce, according to the report compiled by SNC-Lavalin South Africa. Initially this will be produced from an open pit before the operation heads underground for the remainder of the mine’s 13-year lifespan. The initial capital costs of the operation will be in the order of US$474 million, while the net present value of the Chaarat project is put at US$354 million using an eight per cent discount rate and a US$1,250 an ounce gold price. This represents an internal rate of return of 18 per cent, the analysis reveals, while it will take around four years for the mine to pay for itself. Chief executive Dekel Golan said: “The prefeasibility study is a substantial milestone in the long process of unlocking the value of the Chaarat deposit, and demonstrates the robustness of the project and points the way to its development. “Furthermore the company remains enthusiastic that these positive results can be significantly improved with more work which can increase the resource and reserve base and reduce costs.” The mine will use a carbon in leach plant which will process 1.718 million tonnes of ore per annum. However there are plans already in train to build an early stage production unit, which will be located on within the Tulkubash zone of the Chaarat project. The plan is to eliminate uncertainty “related to the infrastructure status of the project and easing concerns related to the perception of doing business in the Kyrgyz Republic”, Golan said. Earlier this year it raised US$80 million from investors, which it says is enough to fund these near-term plans.

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