Chaarat Gold moves into profit in 2020 on increased production and higher commodity prices


Chaarat Gold Holdings Ltd (LON:CGH) moved into a profit in 2020 on increased production from its Kapan mine in Armenia and as commodity prices recovered in the second half of the year.

The AIM-quoted company posted EBITDA of US$9.3mln, compared with a loss of US$12.8mln in 2019, as revenue grew 12.5% to US$76.0mln.

“I am pleased to be able to announce that the team at our Kapan mine exceeded our 55,000Koz AuEq [gold equivalent] production guidance despite the dual impact of the pandemic and the hostilities in the neighbouring Nagorno-Karabakh region during the final quarter of the year,” said chairman Martin Andersson.

Kapan produced 58,200 gold equivalent ounces in 2020, exceeding guidance by 6%.

Chaarat’s Tulkubash project in the Kyrgyz Republic was also affected by Coronavirus (COVID-19) and political unrest in the fourth quarter.

“The COVID-19 pandemic impacted the ability of potential funders to conduct due diligence on our assets and it was unfortunate that we had to postpone the date for first gold pour from Tulkubash due to material and personnel movement restrictions,” said Andersson.

“However, we have made progress on the early construction, engineering and updates of our studies I am hopeful that we will secure project finance during the first half of 2021.”

The company’s cash and cash equivalents at the end of 2020 were US$6.9mln. As of March 1 2021, the group had cash and cash equivalents of about US$31.2mln following an equity raising in February.

In a separate announcement, Chaarat said it would waive a requirement for a mandatory offer for the company by Labro Investments Ltd upon the acquisition of up to 3 million shares. Chaarat’s chairman Andersson indirectly holds the majority of shares in Labro.


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