Chaarat Gold Share Discussion Threads

[casual47] 06/4/2020 09:45

Rather surprising...

note: "gold export growth is expected"



ADB forecasts 4% GDP growth in Kyrgyzstan amid pandemic
April 06, 2020

Against the backdrop of the coronavirus pandemic in 2020, the Kyrgyz economy will grow by 4%, but if the outbreak intensifies and the borders are closed, growth will be lower. This is stated in the report of the “Asian Development Bank Overview 2020” of the Asian Development Bank.

In 2019, real GDP growth in Kyrgyzstan amounted to 4.5%. The ADB believes that such growth can recover as early as 2021, as gold export growth is expected. The decline in imports due to COVID-19, affecting raw materials, equipment and food products from China and other countries, will restrain manufacturing, construction, and other import-dependent industries. Growth is expected to increase in 2021, provided that the region recovers after COVID-19.

Inflation in 2020 is projected at 3.5%.

The ADB report noted that Kyrgyzstan should continue to promote development and address poverty in lagging regions in order to promote higher and more inclusive economic growth.

In Kyrgyzstan on the morning of April 6, the number of patients with coronavirus was 216 people. Of these, 10 were cured, 4 died. The state of emergency is operating in the three largest cities and three regions of the country, which led to a significant slowdown in economic activity in the republic.

Radio Azattyk (Kyrgyz Service of RFE / RL) © Radio Free Europe / Radio Liberty. All rights reserved.

[casual47] 04/4/2020 12:35

For the latest on Corona in the Kyrgyz:

[casual47] 04/4/2020 12:05

Minister: Armenia to build up its government spending, possibly by increasing its public debt

“We are trying to provide such government assistance so that companies can keep their flows at least at the minimum level, but we also expect the private sector to seek a way out, since their further development will depend on present decisions. Now is a difficult time, and I urge the private sector to find the best solutions to overcome the problems. We are open to proposals for increasing the productivity of state assistance," Khachatryan said."

===========

"We are open to proposals".....Simples. Start production at Amulsar.

[casual47] 04/4/2020 11:13

I think we may see lots of countries decide to lift or significantly relax their covid restrictions before summer. The alternative exit strategies all seem worse.

Boris today invited the opposition leaders to be part of the covid decision making process. The main purpose, imo, is to get their backing for an exit strategy. I don't think he could do this by himself, without backing from the opposition, given the potential consequences.

[casual47] 03/4/2020 17:26

More (via Google Translate):

The maintenance of our employees and public health remains in the center of the company's attention, the measures taken to prevent infection and the observance of epidemic norms are becoming more and more severe. The company does not save money on effective disinfection by using the best disinfectants and accessories.
Recently, we have acquired new long-distance thermometers, with the help of which we maintain the social distance, we carry out every day in the thermometer of each person entering the company. Employees' thermometers are used not only for coming and going to work, but also for several times during the work, and in case of high temperature, the employee is not allowed to work.

Dear employees,
We remind you that the penal company will not impose any penalty on isolated or sick employees. During the state of emergency, the employee will not be fired and the salary will be paid in full. So please be honest and careful, and in case of contact with suspicious cases or suspects, isolate yourself and do not endanger the health of your family and others.
Be healthy.

[casual47] 03/4/2020 17:15

The $17m is what I'm looking out for. What happens to it may provide a more immediate indication of how bullish we can feel in the short term.

[jc2706] 03/4/2020 15:02

I wouldn't put it past our executive team to pull this out of the bag but I would consider it as a pleasant surprise rather than something to look for expectantly. Data from Kapan is my most immediate interest although finance for Tulkubash would be the biggest price driver (apart from our chairman buying of course).

[casual47] 03/4/2020 14:32

Assuming there is full 100% backing from government, creditors and locals then perhaps a merger of Chaarat with the remnants of Lydian might make sense? Remove the top brass of Lydian and fully rebrand as Chaarat. Maybe even have a dual listing on TSX?

The Amulsar project was about 70% completed so first gold pour could be done quite quickly?

[casual47] 03/4/2020 13:55

EBRD certain that Amulsar gold mine project complies with environmental standards
21:51, 30.01.2020
Region:Armenia
Theme: Economics

The European Bank for Reconstruction and Development is certain that the project for exploitation of the Amulsar gold mine complies with environmental standards, but the government must make the final decision.

“There has been so much talk about Lydian Armenia that it’s already hard to add anything,” Head of the European Bank for Reconstruction and Development in Armenia Dimitri Gvindadze told reporters today and added that the EBRD has a small share in the project.

He recalled that the Bank sets rather tough requirements for its participation in a particular project and added that the Government of Armenia has to make the decision on the project independently.

[casual47] 03/4/2020 13:50

There was nothing fundamentally wrong with the Lydian operation AFAIK. All the environmental permits etc are in order.

The EBRD was on-board and I have seen them ask for a resolution to this issue.

[casual47] 03/4/2020 13:45

It may be completely meaningless but I keep an eye on who is 'liking' the various posts on the corporate linkedin of Chaarat and among them I quite often see Lydian employees. A few of the Chaarat staff are ex-Lydian (even one of the independent directors). Another one who frequently 'likes' the posts is a "principal banker, corporate lending division" from Ameriabank, the main lender for the Kapan loan.

(Also other bankers from e.g. standard chartered, ING etc and of course the EBRD guy I mentioned earlier)

[casual47] 03/4/2020 13:38

JC - there might be other candidates, e.g. Russian Oligarch Trotsenko owns Geopromining which has a gold mine in Armenia.

The Kapan mine has been running for much longer of course before Chaarat came along.

In one of the Lydian admin documents it was mentioned early on that they were looking into a potential sale but that only one party had showed any tentative interest and that given the circumstances (lack of government support, illegal barricades) a sale would be very difficult. Haven't seen talk of a sale in the more recent admin docs. They have a stay of creditor action until end of April. It has been extended a few times but they are running out of money fast so I don't think it will drag on for too long.

[jc2706] 03/4/2020 13:20

That would certainly be a coup but have Chaarat a sufficient track record in country at this stage to justify such a statement of confidence? I agree that they would likely be keen to get this going though.

[casual47] 02/4/2020 09:34

I wouldn't be surprised if Chaarat were to suddenly get awarded the Lydian operation, maybe via a shared ownership structure with government.

The Armenian government was never dead set against the Amulsar project. It seems there was a total breakdown in relations between the company, the local community and the government. Can they really afford to let a 200k oz per annum operation lie fallow like that? Especially post-Covid?

[casual47] 02/4/2020 09:30

Chaarat is getting a lot of mileage out of their help fighting against Covid

[casual47] 01/4/2020 17:40

Chaarat has made it on to Zangezur TV news:



"On the initiative of Kapan Medical Center and with the support of Zarat Kapan CJSC two floors of the former building of the surgical center of the medical center are being repaired. It will serve 30 patients."

[casual47] 01/4/2020 16:20

I don't think anyone can be certain of anything nowadays but there are certain things which play in Chaarat's favour (all IMO, DYOR, etc):

1. The Kapan mine is critical to Kapan and the mining sector is critical to Armenia. There is a good chance that for both these reasons the mine will remain open throughout the lockdown (as they are already now by government decree -- mining is regarded as critical and is exempted). In other countries mines have been shut not because the government said so but because the locals went out in protest to have them shut. I cannot see this happen in Kapan. Chaarat has been very supportive of Kapan, e.g. helping to build the local hospital. The state aid provided by the government is limited and the workers know they can't really afford to lose their jobs.

2. The Armenian banks have already provided credit holidays on $400m worth of loans. Given the size of the $34m loan and the importance of the business there is a high chance that should there be a need for it, and so far there isn't, that Chaarat will also get a credit holiday on its loans.

3. The EBRD has expressed strong support for Kyrgyzstan. I believe they are the ones behind the "multi-lateral bank term sheet", this is just my opinion and pure speculation, I do not know this for a fact. The EBRD is a bank but more importantly they are a *development* bank -- their whole raison d'etre is to help develop countries like Kyrgyzstan (while at the same time increasing EU influence, but that's another story). Given the widespread corruption among state officials there is, imo, no better way for the EBRD to invest (develop) in Kyrgyzstan than through a private company like Chaarat. Chaarat is AFAIK the only Western company in Kyrgyzstan that could potentially employ hundreds of people and generate many millions of USD in tax. As long as the BFS shows the business case is there to develop Tulkubash then I think the EBRD will be supportive (imo dyor etc). If they (or similar) are on board then this derisks the project immensely. The fundamentals (gold price, oil price, currency devaluation) are only getting stronger.

[2pablo] 01/4/2020 12:25

Great interview with Artem, company doing well despite the global crisis. See they could get 10,000 testing kits, that's resourceful. Very robust company so far.

Still waiting for Mr A - hope he's ok and more importantly his cheque book, though he won't be opening it till after Results.

[casual47] 31/3/2020 21:28

Chaarat uploaded today's interview as a post on their corporate linkedin....in no time "Liked" by an EBRD banker (who has liked their posts before):

Huw Williams Associate Director Private Equity

Senior Banker - Equity
Sep 2014 - Present 5 yrs 7 mos
London, United Kingdom
Private equity investor and Non-executive director in emerging markets, primarily Central and Eastern Europe and former Soviet Union. Responsible for a c.Euro 800m portfolio of private and listed equities, mostly in Agribusiness and Mining sectors.

[casual47] 31/3/2020 20:21

The price of Brent Crude in March 2019, the month the provisional quote was given, was 66.14$ per barrel.

It is now 26$/bl.......

[casual47] 31/3/2020 20:17

From BFS, they calculated the $110m capex based on this:

"The cost of fuel for the BFS is USD0.60/ℓ delivered including VAT."

"Annual diesel consumption during operations is estimated to be approximately USD20M/yr based on an estimated consumption of approximately 85 m3 per day."

"The cost of 60c/ℓ is based on a quotation obtained in from March 2019. It is notable that since the break-up of the Soviet Union, the price of diesel fuel in KR has ranged from USD0.45-0.55/ℓ. The price of 60c/ℓ reflects the 20% price rise which occurred in 2018. Given the historical price of fuel in KR, this price used should be considered conservative."

[casual47] 31/3/2020 19:48

Kyrgyz and Armenian currency have been devaluating further.

Now compared to 3 months ago:

USDAMD +5%
USDKGS +18.26%