Chaarat production and throughput on back foot in third quarter
By Josh White
Date: Friday 29 Oct 2021
(Sharecast News) - Armenia and Kyrgyz Republic-focussed gold miner Chaarat updated the market on production from the Kapan Mine in the third quarter on Thursday, reporting that, following a "strong" first half, July was impacted by lower grades and fleet availability.
The AIM-traded firm said performance improved in August, and returned to run-rate performance in September, with the company on track to meet its production guidance of 57,000 ounces for 2021, which would rely on a "steady source" of third-party ore supply for the rest of the year.
Production totalled 13,224 gold equivalent ounces in the quarter, down from 15,547 ounces year-on-year, which the board said was the result of lower mine rates in the mine plan and lower-than-expected grades.
A total of 9,935 ounces was from own ore, down from 12,652 ounces, and 3,289 ounces was from third-party ore, up from 2,895 ounces, year-on-year in the three months ended 30 September.
Third-party treated ore came in at 27,900 tonnes, up 31.2% year-on-year, which the board put down to the third quarter being the first period under the firm's current long-term supply contract.
Its all-in-sustaining cost was 1,366 per ounce, up 14.6% over the prior year, which Chaarat put down to the lower produced ounces in July and August.
The quarter had a preliminary unaudited standalone EBITDA contribution of $2.6m, compared to a previous $6.4m.
Charat's board put that reduction down to its decision to delay sales pending discussions with the government of Armenia on its new metals export regulation, and its application to specific concentrate sales, as well as the mine performance factors.
Year-to-date preliminary unaudited standalone EBITDA stood at $16.4m, which included the impact of delayed sales and operational factors in the third quarter, and was up from $10.5m in the same period in 2020.
"We are grateful for the continuing support of our note holders and the beneficial solution found for all parties," said chairman and chief executive officer Martin Andersson.
"Operationally, this quarter has been a challenging one for the company with external factors impacting our progress."
Andersson said the situation around Kumtor had delayed the company's funding plans in the Kyrgyz Republic, with the new export regulation in Armenia requiring the firm's full attention.
"The export regulation change is expected to be clarified shortly and product shipments are due to start at the beginning of November, with current concentrate inventory likely to be sold in the fourth quarter."
At 1110 BST, shares in Chaarat Gold Holdings were down 9.36% at 19.85p.
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