Chaarat Gold well placed to deliver a strong 2022
“…Our ambition absolutely is to grow our business and add more ounces into the portfolio…”
“We’ve had a very good operating performance. We had 10% more ore produced out of the mine due to improved fleet performance and increased development, so it gives me a lot of confidence that we’ve got the ability to deliver towards the upper end of our guidance over the full year.”
Chaarat Gold’s new chief executive chooses his words carefully. Mike Fraser is only months in the job and knows that he is not being judged by past successes in previous roles, but on what he can deliver to the company with an operating mine in Armenia and assets on the development cusp in Kyrgyzstan.
Kapan is that operating mine and Fraser says that on the back of soaring commodity prices, it’s going to be a strong cash generative year for Kapan.
“At this point in time our clear objective is to continue to drive Kapan for value and continue to create a longer term future.” And the additional cash being created this year is allowing the company supplementary drilling on the East Flank, which according to Fraser will give Chaarat “the potential of converting some of that resource into reserve to give us a longer runway.”
The runway Fraser envisages is not confined internally or to the FSU (Former Soviet Union), not because of the conflict in Ukraine, but because of the global consolidation opportunity.
“We continue to look at opportunities elsewhere in the sector. We believe the sector is very open for consolidation and most of us at this size of the sector are all trading at very big discounts to our underlying asset value. Consolidation makes sense and we think we’ve got a role to play in that.”
Fraser thinks about the wider responsibilities of resource miners. As he progresses the financing that will unleash the Tulkubash project, he says this won’t work unless there’s community and stakeholder alignment. The Chaarat team are advocates of “an equitable and fair share of value creation.”
It’s an attitude that will no doubt not be lost on Tulkubash financiers, and bond holders deciding what they want to do about the convertible bond due in October.
In this podcast with Sarah Lowther, Mike discusses how the company is redesigning its cost structure to mitigate inflation and how with three months stewardship under his belt he is creating the culture of one company.
Watch Mike talk to Mining Journal’s editor Tom Hoskyns about how recent political developments will help it progress to progress its Tulkabash project.
Watch Mike and other Chaarat Board members discuss the 2021 annual results
Follow the company on Twitter @ChaaratG
Read the company’s FY 2021 Results
The author was remunerated but does not hold shares in the company