Chaarat Gold increases planned size of mine with tunnel

18th Jun 2014 11:00

Exploration and development company Chaarat Gold has set out its intention to significantly increase output at its planned mine in Kyrgyzstan. In an updated definitive feasibility study, the AIM-listed miner said it planned to begin its two-stage construction of the Chaarat mine with a simple heap leach to generate around 120,000 ounces of gold per year, before steadily increasing output to "at least 250,000 ounces per year". This is up from previous 200,000-ounces-per-year plans and reflects, the company says, a level more appropriate to the size of the deposit.The revised production level is much higher than previously expected, requiring further drilling of about 4,000-5,000 metres to support such a sustainable standalone heap leach operation. This drilling has begun and is expected to be finished in September. Chief Executive Dekel Golan said the heap leach operation, in itself, "underpins the economics of all the development - whether or not a second stage is built".Furthermore, after consultants recommended a 10km tunnel should be constructed through the mountain to connect the plant to the mine site, Golan said this "removes almost entirely issues of access to site and concerns about environmental protection in a restricted location; considerations which more than outweigh the increase in upfront costs and the delay to production caused by the construction of the tunnel". The design and cost of the tunnel are still to be calculated.Shares in Chaarat were up 1.55% to 9.85p at 11:10 on Wednesday.OH