(Alliance News) - Chaarat Gold Holdings Ltd on Friday gave an update on its Kapan mine in Armenia and on its secured convertible loan notes due 2023.
The gold mining company with an operating mine in Armenia, and assets in Kyrgyzstan said Kapan produced 26,523 gold equivalent ounces in the first half of 2023, down 12% from 30,022 ounces a year prior. This consisted of 81% own core, up from 78% a year ago. Chaarat explained that gold output fell due to lower stope availability.
The preliminary standalone Kapan earnings before interest, tax, depreciation and amortisation contribution in the first half was USD2.3 million, dropped 72% from USD8.1 million a year prior. This was mostly due to lower volumes mills and a continued adverse impact of the dollar to Armenian dram foreign exchange rate. The USD has fallen 4.1% over the past 12 months against AMD, to AMD389.60 per dollar from AMD405.91 a year ago.
Looking ahead, for 2023 the company continues to expect a Kapan mine production of 50,000 to 55,000 gold equivalent ounces of own core, noting a newly installing crushing unit which increased capacity availability by about 30% to drive a stronger growth during the second half.
The outlook compares to 50,023 gold equivalent ounces production of own core at Kapan reported for 2022.
Further, Chaarat expects a third party gold equivalent production of 5,000 to 10,000 ounces for 2023, down from 12,811 ounces in 2022.
Meanwhile, Chaarat said it extended the maturity of its secured convertible loan notes 2023 to October 31 from July 31, with approval of holders of a majority in value of loan notes. Further, the loan notes will now incur interest at a new rate of 20% from August 1. Further, a one-off fee of USD1.0 million will be payable to loan note holders as remuneration for the extension.
The total outstanding balance of the loan notes will be USD34.3 million by October 31, if not repaid early.
Chief Executive Officer Mike Fraser said: "Chaarat is appreciative of the continued support from its loan noteholders. The maturity extension allows the company to focus on identifying broader financing solutions to support the corporate and asset development needs of the group."
Chaarat Gold shares rose 0.9% to 7.19 pence each on Friday morning in London.
By Tom Budszus, Alliance News reporter
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