Chaarat Gold group production levels slip, reiterates guidance for Kapan project

Mining company Chaarat Gold reiterated full-year production guidance for its Kapan project on Friday, after having identified higher grade ore blocks at the asset, but said interim production levels had fallen across the group as a whole.

Chaarat said the run of mine grades at the Armenian project had improved over the last two months and still anticipates delivering 55,000 gold equivalent ounces in the current trading year.

The AIM-listed group also highlighted that higher commodity prices, postponed shipments of concentrates in June and improved operational factors had led to a $4.2m contribution from Kapan to underlying earnings in July - more than double the mine's year-to-date EBITDA contribution.

However, gold equivalent production across the whole group fell 9% during the six months ended 30 June to 26,960 ounces as grades were hit by some mining work in lower grade areas.

First-half revenues dipped to $29.9m from $31.0m a year earlier, although Chaarat said its operating loss had narrowed to $5.1m from $7.5m.

Chief executive Artem Volynets said: "We continue to make progress towards achieving our goal of becoming a leading emerging markets gold company with a focus on Central Asia and the Former Soviet Union.

"Kapan had a better first half compared to last year, despite June shipment delays, as a result of the optimisation initiatives we have implemented since we acquired this operation."

As of 0915 BST, Chaarat shares were down 5.73% at 37.10p.