CHAARAT GOLD ORD USD0.01 (DI) (LSE:CGH)

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Chaarat ticks upwards on Kyrgyz licence award

Gold exploration and development company Chaarat Gold Holdings (CGH) has been awarded two additional mining licences at its operations in the Kyrgyz Republic.

The licences were attributed to the company's main development focus, the Chaarat Gold Project.

The target for first gold production in the area was 2013, Chaarat said.

The first mining licence was for the Kiziltash area of the project, which follows the award of the mining permit for the Tulkubash licence area in June 2012.

The latest licence means the whole Chaarat project can now be brought into production. It is valid until 2033, and can be extended to the full life of mine once detailed development plans for the deposit are submitted and approved.

The second mining licence was for the Mironovskoye deposit, which was acquired in 2010 and is located close to infrastructure and to Bishkek, the capital of the Kyrgyz Republic.

The licence is valid until 2033 and can also be extended upon the approval of detailed plans.

Chaarat confirmed it was evaluating ways to unlock the value associated with the deposit.

"The award of these two mining licences is yet another milestone in our evolution from an exploration to a mining company," stated chief executive Dekel Golan. "The Kyrgyz government has stated it is committed to the development of the mining sector as a linchpin of the economy. We are encouraged that by the award of these licences the government is further delivering on its commitment."

The awards follow a modification in the tax code in the Kyrgyz Republic in January 2013, which further simplified and clarified the operational environment for local development projects such as Chaarat's.

Analyst view

Analysts at FoxDavies said, "This is a very positive step for the company as the Kiziltash area contains 90% of the current resources at Chaarat, albeit the sulphide component.

"This would be brought into production after the easier Tulubash open pit starts producing later this year," they added.