NFC and NERIN to prepare DFS for the Chaarat Proj

RNS Number : 3093S

Chaarat Gold Holdings Ltd

23 September 2014

 



Chaarat Gold Holdings Limited
("Chaarat" or the "Company")

NFC and NERIN to prepare DFS for the Chaarat Project

Road Town, Tortola, British Virgin Islands (23^rd September 2014)

Chaarat (AIM - CGH), the AIM quoted exploration and development company with assets in the Kyrgyz Republic, is pleased to provide an progress update on the Definitive Feasibility Study ("DFS") for the Chaarat Project ("the Project").

Highlights

·     NFC (China Nonferrous Metal Industry's Foreign Engineering and Construction Co. , Ltd) and its majority owned subsidiary NERIN (China Nerin Engineering Co., Ltd) commissioned to complete DFS for Chaarat during H1 2015

·     Relevant  experienced project management appointed by NERIN/NFC

·     Study to comply with Chinese Bankable Feasibility Study standards

·     Strengthening of Chinese relationships to assist development of the Chaarat Project  following completion of the DFS

·     Site investigation work, geotechnical and hydrological work completed

·     Baseline measurements and investigation expanded to include new project layout

Chaarat has signed an agreement with NFC to complete the Definitive Feasibility Study for the Chaarat Project.  The work will be carried out by NFC's affiliated design institute NERIN.  

Both companies bring unrivalled relevant credentials to the development of the Chaarat Project. NERIN designed the Zijinshan gold/copper mine, a large heap leach operation in Inner Mongolia, as well as the Jinfeng gold mine in China.  Jinfeng has many similarities to the Chaarat Project both in ore composition and mining conditions.  The Zijinshan mine was developed in stages comparable with the current development plan for Chaarat.

NFC has developed and invested in approximately 90 mines around the world and has recently completed the construction of the Bozymchak copper gold mine in the Kyrgyz Republic for Kazakhmys. NFC is therefore ideally placed to understand the particular conditions of the Chaarat Project both in country and regionally.  

The project manager nominated for the preparation of Chaarat's DFS was a member of the project management teams for both Jinfeng and Bozymchak. The other team members will also be experienced in the development of gold mines.

Dekel Golan, CEO of Chaarat, comments: "We are excited about this significant milestone. It is my belief that this agreement is a first step towards a broader cooperation between our companies. In my meetings with President Wang and Vice President Qin it has been made very clear to me that NFC is interested in more than just the preparation of the feasibility study, and the management of both our companies have agreed to discuss further cooperation.

NFC is affiliated with our large Chinese shareholder (China Nonferrous Int'l Mining Co. Ltd) which owns about 9% of Chaarat. We view the strengthening of our relationship as a positive. 

More generally, we are seeing a renewed and strong interest in gold projects in the Kyrgyz Republic from mainly Asian based companies including those from China, Japan, Korea and Indonesia."

Further information

In March 2014 we announced the appointment of contractors to complete the DFS for the Chaarat Project. In June we announced that we were undertaking additional drilling to support the assessment of an enlarged heap leach opportunity.  This drilling is now complete and the results are being evaluated. We have also completed the data collection work from the revised location of the production facility in the adjacent valley to the Chaarat deposit.

While drilling and data collection were underway this summer, further work on the DFS was put on hold until the results could be evaluated.  During this period, representatives of NFC and NERIN, who had been working in the Kyrgyz Republic on the Bozymchak mine, approached Chaarat's team in Bishkek. Following a strategic assessment of the development and financing options available to Chaarat, the Board was convinced that working with a reputable Chinese group would ensure a more comprehensive review of available development options for the Project as well as retaining the costs of the DFS within the existing budget.

As a result, after considerable negotiation and a process of careful review, the Board decided that the best option to complete the DFS was to sign an agreement with NFC/NERIN and discontinue the contracts with the previous DFS contractors. RDi will continue to be Chaarat's metallurgical consultants and the new resource calculation will be prepared by GeoSystems International, Inc. 

Once the DFS is completed basic engineering and the EPC tender will take place in parallel with the local permitting process. An advantage of working with a Chinese company is that the "Adaptation" of the DFS to local standards, for the purpose of obtaining construction permits, will be more straightforward, since the structure of local and Chinese feasibility studies is similar.

Another persuasive factor in the Board's decision was the view that the development of a project such as Chaarat in today's environment should be carried out on a turnkey contract basis. Previous experience has demonstrated that in Engineering, Procurement and Construction (EPC) tenders Chinese contractors typically offer the best terms.

The final key consideration was the existence of a number of Chinese organisations providing credit for overseas development with specific subsidised credit facilities for projects in neighbouring countries such as the Kyrgyz Republic.

Chaarat's Board therefore believes that working with NFC/NERIN will pave the way to enable us to raise project finance quickly and efficiently and the DFS will include the information required in a Chinese Bankable Feasibility Study.

The Feasibility Study is expected to be concluded during the first half of 2015.

Enquiries:

Chaarat Gold Holdings Limited	+ 44 23 800 11747
c/o Central Asia Services Limited	[e-mail]
Dekel Golan   CEO
Linda Naylor  FD
Numis Securities Limited	[phone]
John Prior, Stuart Skinner (NOMAD)
James Black (Broker)

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 with a large, high grade resource - the Chaarat Gold Project. The Company's key objective is to become a low cost gold producer generating significant production from the development of the Chaarat Gold Project. Chaarat is preparing a Definitive Feasibility Study (DFS) and continuing its active community engagement programme to optimise the value of the Chaarat investment proposition. 

Chaarat aims to create value for its shareholders, employees and communities from its high quality gold and mineral deposits in the Kyrgyz Republic by building relationships based on trust and operating to the best environmental, social and employment standards.

 

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