Centerra’s Kumtor gold mine was seized earlier this month, arguing the company had violated environmental regulations.
The Canadian miner has initiated arbitration proceedings and accused a former board member of have co-operated with Canadian and US lawyers, as well as with the government of Kyrgyzstan to stage the mine expropriation.
Chaarat noted that government representatives have assured it the issue with Centerra was specific to the company and its Kumtor mine. They also said the conflict “in no way” reflects the relationship the country has with other firms.
“All such discussions have no impact on any of Chaarat’s operations or activities in country,” the company said. “However, the extensive media coverage of the discussions between Centerra and the Kyrgyz Republic is expected to be negatively perceived by potential future debt or equity investors and possibly result in a delay in the project financing,” it added.
Chaarat said resumption of construction was dependent on financing, which it originally hoped would be in place by June.
Delays due to longer than expected covid-19 restrictions, Kyrgyzstan’s political situation and project financing issues means the company now expects first gold from Tulkubash by the second half of 2023.
The company’s update on timing is part of an updated bankable feasibility study (BFS) for Tulkubash published Tuesday, which showed a 13% drop in reserves, with the mine life falling 7% to 4.8 years
An 11% jump in the assumed gold price — to $1,450 an ounce — saw the post-tax NPV 5% increase 23% to US$85 million, while the IRR rose by five percentage points to 25%.
The capital cost of building Tulkubash increased by $5 million to $115 million, due to a change in the sequencing of the heap leach facility.
The study outlined a 25% increase in the overall mineral resource to 49.9 million tonnes grading 0.73g/t gold containing 1.1Moz of gold from 24.3Mt grading 1.21g/t gold containing 944,000 ounces.
Chaarat shares have dropped 35% in the last 12 months and were down 4.7% mid-afternoon on Tuesday to 22.89p, valuing the company at about £157 million.