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
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.
ReplyDeleteRe 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