JOHANNESBURG (miningweekly.com) – Aim-quoted Chaarat, which is developing a namesake gold project in the Kyrgyz Republic, on Tuesday provided more detail about how it plans to become a midtier gold producer focusing on Central Asia and the former Soviet Union.

In a corporate update, nonexecutive chairperson Martin Andersson said that its initial focus would remain on bringing the Chaarat project into production, but that the company would also pursue selective merger and acquisition (M&A) opportunities in the region.

“As the company approaches construction of its first operating mine, and with the addition of Artem Volynets to the board of directors, M&A is becoming an increasingly important component of the company’s growth strategy,” the corporate update stated.

The boxes that potential M&A opportunities should tick include a producing or near producing gold opportunity at a competitive cash cost, with geographical or operational synergies to Chaarat’s Tulkubash and Kyzyltash deposits, exploration upside and potential for an extended mine life.

The firm’s immediate focus, however, is to bring the 300 000 oz/y to 400 000 oz/y Chaarat project, comprising Tulkubash and Kyzyltash, into production.  

Phase 1 is to develop the Tulkubash oxide ore using openpit mining and a heap-leach processing facility. This will produce about 100 000 oz/y of gold, which Chaarat said would generate about $40-million to $60-million a year free cash flow at current gold prices.

The feasibility study on the Tulkubash project is due to be completed by Tetra Tech in mid-April. The study will be based on the currently estimated resource of 1.05-million ounces of gold, at a grade of 0.84 g/t, which represents only about 2 km of the 24 km identified strike length of Tulkubash mineralisation. Chaarat plans to add to the oxide resource with exploration, which will be carried out in parallel with the development and construction of the openpit, heap-leach mine.

Phase 2 is to develop the Kyzyltash refractory sulphide ore, which is amenable to pre-oxidation and cyanidation recovery. This has the potential to produce about 200 000 oz/y to 300 000 oz/y, generating free cash flow of $150-million to $200-million a year at current prices. The Kyzyltash resource is currently estimated at 5.4-million ounces of gold at a grade of 3.75 g/t, representing about 3 km out of 24 km of prospective strike length that has been explored to date.

Phases 1 and 2 of the Chaarat project would be advanced concurrently, although the Kyzyltash project will come on stream later than Tulkubash. The first gold pour from Tulkubash is expected in 2020.

Andersson stated that the Chaarat project had a high level of government support.