Chaarat Gold Holdings (CGH) has secured assurances from the Ministry of Natural Resources in Kyrgyzstan that the government has no intention of nationalising mineral resources in the country, lifting a cloud over the company’s projects there.
Chaarat, a gold exploration and development company operating in the Kyrgyz Republic, had been concerned by a recent media report by 24.kg news agency in Bishkek suggesting nationalisation of resources in the country was on the cards, citing alleged comments by the Minister.
The company issued a statement on 23 June to calm shareholder fears, saying it felt that the minister’s comments were mistakenly misinterpreted.
Today Chaarat issued a statement that includes an official clarification from the Ministry of Natural Resources.
The clarification in effect says the minister had been misinterpreted by 24.kg news and that there had been no intention to imply that the Ministry was considering nationalising any mineral resources in the country.
Referring to some recent proposed changes to the Republic’s constitution with regards to resources, the statement from the Ministry concludes that they do “not imply any nationalization or expropriation and any rumours in this connection have no grounds whatsoever".
In its statement today, the company says it continues to work closely with the authorities in Kyrgyzstan to progress its projects at Chaarat.
Chaarat’s main activity is the development of the Kiziltash and Tulkubash projects situated within the Middle Tien Shan Mountains of Kyrgyzstan, which form part of the Tine Shan gold belt.
Its two-pronged approach for assets will see it fast-track an open-pit mine into production at Tulkubash, while it continues the feasibility work on the much the larger Kiziltash underground mine development project.
Earlier this year, in February, it announced a £51.6m fund raising, with the new capital expected to facilitate Chaarat’s first production, which is expected by mid-2012.
Chaarat has already indicated a mineral resource of 4.406Moz at a grade of 4.20g/t gold across both projects.
The company’s key objective is to become a low cost gold producer; with initial production from the Tulkubash project, targeting annual production of over 200,000 ounces per annum as the Kiziltash project comes on stream.
Mid-afternoon Chaarat shares were up 2p to 32.5p.