Update on the Chaarat Project

RNS Number : 3926R

Chaarat Gold Holdings Ltd

19 November 2012

 



Chaarat Gold Holdings Limited

("Chaarat" or "the Company")

Update on the Chaarat Project

Road Town, Tortola, British Virgin Islands, 19 November 2012

Chaarat (AIM-CGH), the gold exploration and development company operating in the Kyrgyz Republic, is pleased to provide an update on the Chaarat Project.

Highlights

·    Shandong Gold Mineral Resources Group Co. has secured Chinese regulatory approval to negotiate an investment into Chaarat Gold

·    Memorandum of Understanding signed with China Gold International Resources Corp. for sharing construction and costs of  power line for the Project

·    Power line commissioning expected to significantly reduce Chaarat's production costs

Discussions with SGMR

Chaarat has been made aware that the National Reform and Development Commission of China (NDRC) has granted preliminary approval for Shandong Gold Mineral Resources Group Co., Ltd., (SGMR), the third largest gold producer in China, to negotiate an agreement with Chaarat. NDRC approval is required before any Chinese company can make an investment in a foreign company.

The Company's discussions with SGMR will continue but no agreement has been concluded and there can be no certainty that one will be concluded in the future. The Directors intend that any agreement will enhance long-term value for Chaarat shareholders.

Chaarat Infrastructure Update

Chaarat is also delighted to announce the signing of a Memorandum of Understanding (MOU) with China Gold International Resources Corp. (China Gold) , the largest gold producer in China, and its 70% owned subsidiary, Kichi Chaarat, holder of a deposit adjacent to the Chaarat asset. This MOU relates to the joint construction and sharing of the cost of a power line from Chatkal, the entry point to Chaarat, to the national grid of the Kyrgyz Republic.

The design of the line by Xinjiang Electric Power Design Institute has already commenced. Agreements for connection to the grid and allocation of the power quota have been granted to Chaarat; Kichi Chaarat is in the process of securing similar agreements.

Upon construction and commissioning of the power line, the projected cash cost of gold production at Chaarat is expected to decrease considerably. In addition, the need to transport large quantities of diesel by road will be eliminated. This will enable a more rapid development of the deposit overall.   

Chaarat's management is considering a range of options, including vendor finance, for funding the cost of the power line, which falls outside the original budget of the Project. 

Dekel Golan, CEO of Chaarat, commented: "Today's news confirms our confidence in the Chaarat Gold Project and its strong potential. We are already funded through to first production and, as we move towards the next stage of our development, we continue to explore options for further enhancing the value of the Company.

We are pleased with the interest from SGMR and note the approval given by the NDRC. This will enable SGMR to further progress their discussions with Chaarat. In addition, the MOU signed with China Gold offers Chaarat an opportunity to both accelerate the development programme and potentially to operate with a significantly better cost profile.

Finally, I would like to reiterate my full commitment to continue to safeguard the interests of our shareholders as we grow Chaarat into a successful gold producer in the Kyrgyz Republic. We look forward to updating the market further in due course."

Enquiries:  

Chaarat Gold Holdings Limited		[phone]
c/o Central Asia Services Limited
Dekel Golan   CEO		[e-mail]
Linda Naylor  FD		[e-mail]
Numis Securities Limited		[phone]
Alastair Stratton, Stuart Skinner (NOMAD)
James Black (Broker)
College Hill	[phone]
Matthew Tyler	[e-mail]
Anca Spiridon
Ali Roper

Further information is available at www.chaarat.com

NOTES TO EDITORS:

About Chaarat Gold

Chaarat Gold is an exploration and development company operating in the Kyrgyz Republic. Situated in the highly prospective Tien Shan gold belt the Company's principal strategy is the development of the Chaarat Gold Project with first gold production targeted during 2013. Chaarat's key objective is to become a low cost gold producer targeting annual production of 200,000 ounces.

In addition to the Chaarat Gold Project, the Company has several other promising prospects also located within the Kyrgyz Republic. An exploration programme is underway at both the Company's Chontash project, located in the Akshirak range of mountains, as well as at the Mironovskoye asset.

Disclaimer

This press release includes forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond Chaarat's control that would cause the actual results, performance or achievements of Chaarat to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding Chaarat's present and future business strategies and the environment in which Chaarat will operate in the future. Any forward-looking statements speak only as at the date of this document. Chaarat expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained in this document to reflect any change in Chaarat's expectations with regard to these or any change in events, conditions or circumstances on which any such statements are based. As a result of these factors, the events described in the forward-looking statements in this press release may not occur either partially or at all.

 

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