Chaarat Gold Share Discussion Threads

[casual47] 06/9/2018 20:45

From the clip, Dusty's Sequence of Events:
0. New resource update (done)
1. Put reserve model on resource update (October)
2. Put new mine plan and financial model on that (late October, perhaps early November)
3. Resource update based on completed drill data (Q1 2019)
4. Repeat reserve and financial model calculations

[casual47] 06/9/2018 20:37

Another Dusty interview!



Watch out for the mid-sentence, mid-word gulp Dusty special!

[jc2706] 06/9/2018 17:06

Well, Dekel was paid for his services but proved incapable of taking the project forward effectively. The changes over the last couple of years have revealed a company that was poorly run and whose asset was woefully understood or progressed. In fact, a lot of the work since appears to have had to undo the previous regimes' results. I have a great deal more confidence in the foundations currently being built. Admittedly it is being done so on the back of decent funds available but that is just indicative that the team currently in place are deemed an acceptable risk whereas the previous team was not.

[fishhead1] 06/9/2018 17:01

Yes the link works. Thanks for sharing

[2pablo] 06/9/2018 14:21

Do they allow these links :

Nice pic, good article :

[2pablo] 06/9/2018 11:00

Poor old Dekel, he did his best - lol

[casual47] 06/9/2018 10:37

It's crazy to think how often tack was changed over this asset. I mean...they even wanted to build a tunnel at some point.

All that money spent on trying to put a different spin on a poor set of drill results...If only that money had been spent on drilling intelligently.

Hopefully the right people will be reassured by this that "adults are in the room" now (to hijack a current news story).

[jc2706] 06/9/2018 10:26

casual47,

I suspect that the revised model (suggested by the tonnage, measured resources and grade) is likely to produce a materially lower capex requirement, although there are some aspects that just cannot be changed (local infrastructure being the obvious one). I also expect the 7 year LOM to be achieved in the October reserve update which I would anticipate being uplifted by a similar percentage as the grade was in this resource update. The proportions of proven and probable reserves will be materially different though as the measured resource is substantially lower.

[casual47] 06/9/2018 10:20

JC - will it materially affect the initial capex (before gold pour - estimated in the April update as 132m USD)?

Do you expect 7 year LOM to be achieved in the October reserve update?

The new mining model does seem hugely more efficient so capex over the life of the project should be materially reduced.

[jc2706] 06/9/2018 10:14

Unfortunately I have been busy the last couple of weeks so was unable to really look at the recent resource announcement until today. I have to say that the development of Tulkubash is very strange indeed and leads me to suspect that the previous regime did a very poor job indeed which the current regime are gradually shifting. If you compare the resource statement in January 2018 with the recent one, the most marked differences are the grade (much higher) and the measured tonnage (much lower). This is surely suggestive of a considerably different pit shell and mining model. It is also suggestive of the reserve statement likely being increased in a similar fashion to the grade so I expect them to achieve a 7 year mine life.

When considering the economics of the project now, I believe that the changes will have the following affects:

1. The increase in grade will mean that the same number of ounces can be produced from a reduced tonnage being mined and processed (or that production could be lifted by 50%+ with the same tonnage)
2. A reduced tonnage requirement will considerably reduce the capex
3. A longer mine life will considerably enhance the discounted cash flow

I don't believe that they will increase the production rate materially in a revised feasibility study (and this alteration in the resources certainly demands one) so we can anticipate a decent mine life, a revised (lower) capex requirement and increased free cash flow. All of which would suggest that the NPV and IRR should increase very significantly (multiple times), which is all to the good as the numbers published in the feasibility study were poor.

To take one number from the last feasibility study - undiscounted total cash flow. This came in at a lowly US$36.7m owing to the limited period that the mine was envisaged being operational. Just adding 3 years operations to the stated 3.75 years would increase the total cash flow by US$175m and that is without the enhancing effects of either reduced capital requirement or increased production. That would push the NPV and IRR numbers up substantially.

[casual47] 06/9/2018 10:13

Funny Kyrgyz FrontPage - the prime minister depicted as a jocky on a KO horse (a good metaphor for his attempts to revive a beaten down Kyrgyz economy)

[casual47] 06/9/2018 09:44

Would be interesting to know who the investors are that are taking up the 2021 loan notes. It's a shame there is no 3% threshold rule for those kind of things (is there?).

I note that the Chinese language version of the Chaarat website is still frozen in time about November 2017, see for example the directors:

So I'm guessing that the Chinese are no longer considered important to Chaarat's future.

A year or two ago Mr. Chelsea himself took Chinese investors to see Highland Gold's Unkurtash asset in Kyrgyzstan. Nothing happened and they are still looking for strategic partners. From the scoping study it seems their project is a lot more straightforward than Chaarat's so not sure why a much bigger outfit like HGM is struggling (it's not got a BFS, granted).

[casual47] 06/9/2018 09:15

Pablo - fyi, Advfn censors Pr0 Act1ve links. Bit childish but I suppose they are a competitor.

[casual47] 06/9/2018 09:14

Chaarat had to publicly release it as they are doing a funding round for it with investors ($20m goes toward the polymetal asset).

It can only be non-binding because they don't have the money for it yet - that is contingent on the loan notes and debt.

Polymetal (or A.N.Other) hasn't announced it because it's still reasonably under wraps.

[jc2706] 06/9/2018 09:13

I don't think that there is anything particularly wrong with the announcements. They did not announce which asset this was and it is only through deduction that an asset has been identified. Whilst the details look very closely aligned they could be wrong. Until an agreement in principle is reached I see no real reason why Polymetal should announce. Of course, this does not prevent them from creating positive sentiment by announcing that discussions are ongoing without naming names.

[2pablo] 06/9/2018 09:13

Don't know what it is about Dusty, he's just soooo likeable and oozes confidence with his experience - a great interview on the latest drilling :

[...]

[2pablo] 06/9/2018 08:52

Oli - probably a little premature "signed a non-binding term sheet for the acquisition of a medium-sized polymetallic asset". Perhaps it isn't POLY or they don't think it's definite enough yet to announce

[oli12] 06/9/2018 08:11

IF we are buying polymetal assets then is it not strange they have not informed the market of this? Or have Chaarat management simply been a little premature with their announcement, which purposefully omitted the name of what we are buying. Looking forward to re listing - I am positive management needs the company to be listed due to the benefits this brings.

[casual47] 05/9/2018 17:48

I don't know if the Kyrgyz govt is still doing this, but as part of the stand-off with Centerra they put a restriction on Kumtor cash leaving the country. Earlier this year, as part of the at the time better relations and in the spirit of the new agreement, they allowed money to be released. I don't know if that was a one-off or if they removed all restrictions. This was under the previous PM so who knows....

[casual47] 05/9/2018 17:05

The pressure on the Centerra BOD must be mounting:
-Drought issues at their Canadian flagship causing reduction in production
-Turkey, where they are looking to raise hundreds of millions capex to start mining, in economic turmoil
-Kyrgyz government still playing hardball

Some chunky cash to weather the storms might be handy?

[casual47] 05/9/2018 16:59

Yikes, Centerra plunging new depths (four year low). Big drop.

[casual47] 05/9/2018 16:52

That Kyrgyzstan barely has any roads probably doesn't help either.

[jc2706] 05/9/2018 14:31

It's not for the want of trying though. I should imagine that the difficulty has been obtaining those rigs in a timely fashion. Usually companies are dealing with one or two rigs so to have so many on the go is indicative of the sense of urgency which I like.