Thursday, 11 June 2015

Morning Mumble: Chaarat Gold Holdings (CGH)...SXX + AMEC

Good Morning, 

Chaarat Gold Holdings (CGH) preliminary results are out. With 9 months since CGH last spiked and an overriding sell (EMC CGH Sept 2014), CGH is looking more positive. If the market is capable of accepting the fact CGH's assets are in Kyrgyz Republic and the Chinese connection risks, then things are starting to look positive. 

With sufficient cash to complete the DFS (Definitive Feasibility Study) that is due very soon. It’s a case of what the shareholders will end up with, as the entire project is likely to be funded/developed utilising Chinese companies. This includes their 9% shareholder China Nonferrous Int'l Mining Co. (also involved in the DFS). 

CGH have a JORC of just shy of 6.1m Ounces, (6.096m/oz.) when "various" mining methods are applied to maximise the project, with the bulk being measured and indicated within the high grade ore, circa 4.6m/oz's. 

The suggested economics, assuming the Kyrgyz Republic don't pull another fast one, are starting to stack up. CGH have secured an extension to the power supply quota, where the cost of power is less than 3¢/kwh. To put this in perspective, the UK is averaging 15¢/kwh with South Africa (to the miners’ detriment) at around 13¢/kwh. 

It’s noted CGH have now removed the additional expense for a tunnel (at least for the first 10 years anyway). One shall await the DFS but at 10-11 pence, assuming a conservative valuation of the measured and indicated + cash, it’s got better appeal than 9 months ago! Will 2015 be “a milestone year for Chaarat." It’s wise to consider Centerra Gold's technical report (TSX: CG)

A quick thought goes to Sirius Minerals (SXX). The North York Moors National Park Authority environmental consultant report Amec Foster Wheeler. Will they agree, diary date of 30 June 2015 NYM Site

More perhaps later, very busy morning! 

Atb Fraser

1 comment:

  1. Hi Fraser- Just back briefly before going out again at 5.30pm... its a hard life, keeping the better half topped up with pink prosecco today as she has passed 2 exams. Well done Rachael. No more exams for me apart from the Camp AV Quiz, which will no doubt see us all pulling our remaining follicles out.

    Re CGH- I found them recently and ignored the huge Kyrgyz red flag based on the mkt cap v the asset, which is world class and can be developed in two parts, heap leach first for 4/5 years and then BIOX, which is a better method re refractory devs than the standard POX in my view at least. I went in a month ago at 8.5p, added at 9.2p and have two more buys to go, hopefully pre the DFS, which could well be v tidy. They did have a forced seller (poss Blackrock) and that has helped me with my costs. The mkt cap is still less than £30m, which reflects the horrendous country risk and financing risk, as the 2011 capex was estimated at $473m, which needs to half or drop by two thirds to get the Chinese banks and miners interested. My capex guess for stage 1 is less than $80m btw. Still a good risk/reward bet for me, no doubt about to be nationalized or have its licences "lost" as we speak. Not for widows or orphans, but I appear to have pressed the Buy button twice already myself.

    Cheers. The Leggie

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