Chaarat Gold Share Discussion Threads

[casual47] 13/9/2019 13:34

If the Kapan deal is anything to go by:

August 2018: signed non-binding term sheet for a then unknown asset

January 31st 2019: completion.

[jc2706] 13/9/2019 13:26

Well, the suggestion has been that they have now received an acceptable term sheet but like most of these things I would like to see it signed, sealed and delivered before assuming that the funds are there to develop Tulkubash.

[casual47] 13/9/2019 13:20

Anyway. With the JV now formalised I am much more relaxed about holding Chaarat.

I still think the EBRD is in the mix here somewhere. It would be very strange if they weren't interested seeing how important the Tulkubash project would be to Kyrgyzstan and the whole focus on ESG front and centre does appear to be directed at them and the likes of them. The fact that they are not doing the joint EBRD-Chaarat Kyrgyz forum may be a red herring but I wonder if this was put on hold while negotiations are underway to avoid any conflict of interest.

If the EBRD are in the mix then I wonder if there could be an announcement of this on this side of the project finance in order to pull the other interested parties over the line or whether it will all be communicated as one "big bang" instead.

[jc2706] 13/9/2019 12:53

As I said, his only performance criterion is short term share price appreciation. On that basis CEY is performing appallingly and why aren't the BoD's doing something about it? (Despite the fact that it is because Blackrock are reducing).

And where has anyone been jumping up and down shouting how great the share price performance has been?

[casual47] 13/9/2019 12:28

The cost of sales per Au eq oz was $1,198.95.

I expect AISC to be below this.

They deducted a fair chunk of depreciation and amortisation ($4.2m), presumably mostly to do with Kapan, and this is AFAIK not included in AISC calculations, so would have to be excluded before adding the other bits that make up AISC.

AFAIK, imo, dyor etc

[juju44] 13/9/2019 12:27

And if CEY drops much more then I may switch back

[juju44] 13/9/2019 12:27

I do not jump up and down on a daily basis with the share price . This has gained nothing since coming out of suspension 10 months ago while gold has soared and the rampers here think that,s great .i don,t

[oli12] 13/9/2019 12:09

Juju did you sell your remaining CEY shares?
You will soon be able to buy them back again for 90p. I recall you previously stating that you sold half at 90 to buy chaarat.

[casual47] 13/9/2019 11:58

"Revenues in the period amounted to USD31.0 million, compared with nil in the corresponding period in 2018. This represented sales of concentrate at Kapan for the five-month period following acquisition by the Group from 31 January to 30 June. During this period, Kapan sold 4,025dmt of copper concentrate and 5,283dmt of zinc concentrate, containing a combined 23,327 ounces Au Eq."

I make that a gross sales price of $1,328.93 per Au eq oz, which is, I believe, higher than the average gold price in the period February-June?

[casual47] 13/9/2019 11:54

See:

"Revenue recognition
The Group has one stream of revenue being the sale of copper and zinc concentrate. Revenue is measured at the fair value of consideration to which an entity expects to be entitled in a contract with a customer in exchange for transferring promised goods, excluding amounts collected on behalf of third parties, such as value added tax (VAT). The Group recognises revenue when it transfers control of a product or service to a customer.

Sales of copper and zinc concentrate
The Group sells copper and zinc concentrate under pricing arrangements where final prices are determined by quoted market prices in a period subsequent to the date of sale. Concentrate sales are initially recorded based on spot prices. Revenue is recorded at the time of shipment, when control passes to the buyer. Provisional revenue is calculated based on the copper and zinc content in the concentrate and using the spot London Bullion Market Association (LBMA) or London Metal Exchange (LME) price, adjusted for the specific terms of the relevant agreement. Revenue is presented net of refining and treatment charges which are subtracted in calculating the amount to be invoiced. Until end of the quotation period revenue is adjusted monthly based on the forward prices. After quotation period end final revenue is calculated based on the spot prices in accordance with the relevant agreements"

[casual47] 13/9/2019 11:50

Perhaps someone can double check this but from reading the interims it seems Chaarat is getting spot prices for their concentrates rather than hedged prices?

This would be strange because the Kapan loan facility required up to 60% hedging.

[casual47] 13/9/2019 11:44

I presume there will be a q3 operational update for Kapan around end of October. I would also like to see a financial q3 update specifically on Kapan, though to fully evaluate the numbers we would have to consider a whole year's worth given the nature of mining and the often seasonal differences between quarters.

[casual47] 13/9/2019 10:41

My updated list of what (maybe) to expect soon-ish:

- Denver Gold Forum conference next week Tuesday 17th. The Gold Forum website suggests that there ought to be a video available for streaming of Chaarat's bit the following day (evening our time)

- Kapan reserves and LOM update ("mid-year"). They added 607k AuEq oz to the 2018 M&I figures (more than 50% increase) so hopefully this will translate into an increased LOM and reserves.

- Further Tulkubash drilling updates. There were a lot of drill holes from August for which they had not yet received Assay results so were not included in the last update. I would guesstimate that they have drilled about 13.8km as of today.

- Will there be a Tulkubash interim resource statement? (last year this dropped 4th September and was based on 10,525m of drilling - though they did announce that they would some weeks before)

- Labro purchases off the back of the waiver? With the H1 published Labro is now free to buy up to the end of the waiver period.

[casual47] 13/9/2019 10:15

The details of the JV RNS also provide a useful lesson for those, like myself, who could benefit from learning it:

Management had indicated the definitive JV would be signed in q2. This got then pushed back. What we didn't know is that legal paperwork needed to be drawn up and signed before they could finalise it: bondholders had to agree to secure their notes against 87.5% rather than 100% of Chaarat Zaav.

So while we are sometimes (often) impatient for news, in the real world delays do happen without needing to be caused by anything sinister.

[casual47] 13/9/2019 10:05

If Kapan can produce 65k oz au eq this year then that would be a significant achievement by Chaarat.

We will need to see the q4 and yearly results to get a sense of the economics of Kapan but clearly just in terms of cash flow it is already contributing.

Even if Kapan ends up being no more than the equivalent of a four-year $50m loan then I will be happy with that as it will have helped move along the Tulkubash project which is why we are all here after all.

[jc2706] 13/9/2019 09:59

casual47,

Juju44 purely judges whether something is good or bad based on the immediate reaction of the share price. Ergo, this statement is 'weak' as the share price has not shot up.

[sparkyboy1] 13/9/2019 09:58

But JUJU we dont want to lose you we love you

[casual47] 13/9/2019 09:17

Kapan was a producing mine which only ever produced 50k oz and mostly had net losses.

Fine to talk about takeovers but let's not move the goal posts, we are talking about the interims. There is nothing in the interims that is "weak" if you consider the stage of the company.

[juju44] 13/9/2019 09:14

Kapan already was a producing mine and we,especially you , expected more Takeover activity by now . You are too much in love with this and your endless ramp has not been matched with results. The market knows and is in no rush to hang out any flags

[jc2706] 13/9/2019 09:11

That was almost a coherent comment juju44. I even agree with the borrowing cost aspect.

[casual47] 13/9/2019 09:03

Juju, you are nuts. It is just an interim report capturing five months of Chaarat hitting the ground running on their first producing mine in a country they weren't in before.

In no imaginable way is it a "weak" report.

[juju44] 13/9/2019 09:00

Artem,s interview was to soften the reaction to this weak report. Kapan hardly startling and borrowing costs too high . They still have it all to prove which is why the share share price has Been so poor