Chaarat Gold Share Discussion Threads

[casual47] 22/10/2019 11:08

See:

Chaarat Gold* (CGH LN)


38p, Mkt Cap £169m – Q3 operational update

Target Price and Recommendation under review

At Kapan, production came in at 16.4koz GE (Q2/19: 17.0koz) reflecting stronger processed grades, improved recoveries and slightly lower throughput rates on the previous quarter.
Better gold recoveries (83.9% v 81.6% in Q2/19) attributed to the addition of a fourth stage crusher feeding finer material into the mill as well as new reagents used further down the processing circuit.
Mining fleet availability was also improved.
Cash costs have come down and averaged $1,092/oz (Q2/19: $1,223/oz).
Realised gold price averaged $1,474/oz (Q2/19: $1,306/oz) in line with the average spot gold price during the period.
EBITDA generated climbed to $3.6m compared to $3.2m for the initial five-month period since acquisition of the asset in the end of January.
The management reiterated guidance for annualised EBITDA of $20m run rates at 65koz pa GE to be achieved by year end.
Kapan mine plan update will be released in November.
At Tulkubash, operations gear up for the start of full scale development works with funding for ~$80m (ex Ciftay investment of $31.5m) of the balance of the $110m project capex to be closed this quarter or early 2020.
A term sheet received from one of parties indicated sufficient funds for the project.
On the ground, equipment mobilisation is in progress, work camp installation to commence before year end, access road to the site has been upgraded to improve year round access with detailed engineering on major parts of the processing plant continuing.

Conclusion: The update highlights operational and cost improvements at the Kapan polymetallic operation including de-bottlenecking of mining operations, enhancements to crushing and flotation circuits at the plant and an optimisation of contractors’ services. A reduction in unit costs is reflected in higher generated EBITDA during the quarter with management remaining on course for the $20m run rate before year end. Additionally, the team is eyeing closure of the Tulkubash funding in Q4/19 or Q1/20 paving the way for the first gold production in late 2021.

We are currently reviewing our recommendation/earnings forecasts and will be releasing an update in due course.

*SP Angel acts as Broker to Chaarat Gold

[casual47] 22/10/2019 11:07

An intriguing line from yesterday's share price Angel snippet on Chaarat:

"A term sheet received from one of parties indicated sufficient funds for the project"

Not sure how to interpret this. Would one of the parties cover the whole $80m? Or is this partner significant enough (EBRD?) to unlock the rest of the puzzle?

[2pablo] 22/10/2019 11:03

Artem got straight back to me, but ignored how I couldn't get through to ask questions but did answer them :

Thank you for your continued support!

Re:

1) I can only say that M&A remains a core part of the strategy and we are always working on various opportunities. We will inform the market when we are in the positions to do so.

2) I will pass to Martin your gratitude and a wish to him speaking. Martin is an integral member of the executive team, pls be assured that he continues to work hard for Chaarat on a daily basis as Executive Chairman

Best,
Artem

[2pablo] 22/10/2019 10:20

Excellent Conf Call bit frustrating I was not allowed to ask my two questions despite pressing '01'. They were :

Q1 ) It's not a bad thing for a company to not overstretch itself, but earlier in the year I believe you confidently predicted 1 or 2 mergers or acquisitions. You did say briefly today we're always considering but could you give me any more flavour on what has occurred this year, without naming any names or any price-sensitive material?

Q2) I was going to say also it would be great to hear Martin Andersson's voice one day on these calls. All long-term investors, I'm in since 2011, know what a fantastic difference he has made to the company. It would be great to put a voice to the name and to have a chance to express our gratitude to him.

Would, I hope, have added some pleasant none technical aspect to the Q&A. Have now emailed them to Artem

[casual47] 22/10/2019 09:04

Presentation is online:

Nothing of note that I could spot immediately, Kapan $40m loan has been further paid down and the principal appears to be $36m now (so another $2m of principal paid back since the last webcast)

[2pablo] 21/10/2019 15:39

Been out all day but 'nowt wrong with those figures as far as I can see. The mine plan update in a few weeks also promising.

All going well but as with most Aim stocks, production results usually mean Selling rather than Buying.

[casual47] 21/10/2019 11:09

It would also be more transparent to provide a TCC per payable metal oz rather than oz produced as Kapan is getting paid less per ounce for impurities at smelter e.g. lead content in the concentrates.

According to the Feb-Jun figures the "payable metals" ounces were 8% less than the "metals contained" ones so that is a significant cash deduction on the final price paid.

The cash cost recalculated as based on "payable metals" could be e.g. nearly 90$ higher so significant.

[casual47] 21/10/2019 10:50

Presumably it's something like the difference between C1 and TCC but it would be helpful if they would be clear or at least consistent as the term "cash cost" in itself is not very meaningful.

Would also help if they would be consistent from report to report on using e.g. "production" and "sales" versus "contained metals" and "payable metals"

[casual47] 21/10/2019 10:30

JC, any idea how to tally up the 887$/oz cash cost given as average for Feb-Jun and the 1223$/oz figure for q2?

[casual47] 21/10/2019 10:26

It's already impressive they will achieve 65k oz this year, seeing as Poly never got beyond 51k oz.

[jc2706] 21/10/2019 10:23

It was an interesting update for Kapan. A bit of a fall, although the suggestions are that the issues have been identified and addressed, but the costs per ounce have improved substantially which is a great performance. We need to see that the improvements result in improved production in Q4 to confirm that they are indeed on the right track but one half of the equation is already there.

[casual47] 21/10/2019 10:19

Hanam estimated EBITDA to be US$11m this year for Kapan, with US$10m in FCF post royalties and taxes.

This was based on a gold price of $1480/oz for the remainder of the year.

To get to US$11m EBITDA for the year they would need an EBITDA of US$4.2m in q4, which seems very achievable.

[casual47] 21/10/2019 09:31

I presume the table at the end of the Q3 update includes production data from Polymetal in the figures for Q1?

[casual47] 21/10/2019 08:34

Labro has 3,108,200 left to buy

[casual47] 21/10/2019 07:49

For those anxious about it: so far, gold has been 55% of the total "gold eq" production.

26,555 oz gold so far out of 48,180 oz au eq

Silver is around 10%, so value-wise nearly 2/3rds of the output is NOT copper or zinc, which is of course why they are working with AuEq.

[oli12] 21/10/2019 07:34

Mine plan update in November - not long to wait.

[oli12] 21/10/2019 07:33

I missed that - too excited reading the comprehensive update.

[casual47] 21/10/2019 07:30

38.2p new highest price paid by Labro!

[oli12] 21/10/2019 07:17

Mystic Casual. News indeed. Q3 update for all activities. Really positive. I am sure I will pick up on some gaps later but reads well.

[casual47] 20/10/2019 20:33

Chaarat will be at the 121 mining investment conference this Tuesday and Wednesday.

Fingers crossed for some good news tomorrow?

[casual47] 18/10/2019 16:59

Woohoo, new highest price: UT closing price of 38.20p

[casual47] 18/10/2019 09:24

3,228,652 left to buy

37.8p still highest Labro buy to date.

[2pablo] 17/10/2019 11:54

NEX don't do normal - lol

[casual47] 17/10/2019 10:42

I think that's just NEX -- completely normal over there

[rhuvaal2] 17/10/2019 10:40

quoting a very wide spread at the mo' 33.6 to 40.6