Positive results to be recorded at Kapan mining and processing  enterprise in short time - Newly appointed general director assures

ArmInfo. I Positive results to be recorded at Kapan mining and processing enterprise in a short  period of time.  Newly appointed General Director of the Kapan mining and processing enterprise, Sasun Avetisyan, stated  during a meeting with Minister of Territorial Administration and Infrastructure of the  Republic of Armenia Gnel Sanosyan.

According to the press service of the Ministry, Sasun Avetisyan  assured that the company has developed a strategy to overcome  existing problems and has a clear vision of what to do next.  "Positive results will be recorded in the near future," the general  director assured.

During the meeting, an exchange of views on the situation and  problems at the plant took place, to resolve which the parties agreed  to continue cooperation.

Earlier, ArmInfo, reported that Chaarat Gold has it has signed an  agreement on the sale of the Kapan mine to the Quanto company   (Armenia) for $55.4mln, a press release by Chaarat gold reads.  The  consideration for the Proposed Sale is USD 55.4 million (the   "Consideration") which comprises USD 5 million payable in cash and   USD 50.4 million being satisfied by way of the Buyer taking an   assignment of intra-group payables due to Chaarat Kapan1.  The  decision to sell is due to rising costs, potential losses and   increased funding due to the appreciation of the Armenian dram   against the US dollar. The transaction is expected to close in Q4   2023 or Q1 2024, subject to shareholder and regulatory approval.

Chaarat plans to focus on the Tulkubash project in Kyrgyzstan and   Kyzyltash project in Uzbekistan. 

The Kapan Mine is located in the south of Armenia and has been   operating since the 1960s. It hosts a polymetallic ore body and   produces copper and zinc concentrates with gold and silver   by-products. Chaarat acquired the Kapan Mine in 2019.  During this   time, mine life has been extended, operational performance has been   improved, delivering on production guidance between 50-65koz AuEq in   each year under Chaarat's ownership. The asset has been the sole   operating asset of the Company, which generated an EBITDA of USD 22.7   million in 2021 and USD 12.6 million in 2022 and a profit after tax   of USD 10.5 million and USD 1.7 million in 2021 and 2022   respectively. As recently announced, the EBITDA for H1 2023 was USD   2.3 million (comprising positive EBITDA in Q1 2023 of USD 3.2 million   and negative EBITDA in Q2 2023 of USD 0.9 million), which was again   impacted by the adverse USD/AMD FX rate exchange and lower   production. This persistently high AMD against the USD FX rate impact   began in Q2 2022 and has retained its strength relative to the USD.   As at 31 December 2022, the Kapan Mine had assets of USD 75.1 million   and liabilities of USD 53.4 million. 

Charaat Kapan is one of the assets of Chaarat Gold International   Limited (Great Britain). The company is operating the Shahumyan gold   and polymetallic mine in Syunik, producing gold concentrate   containing copper and silver. 

Among the key stockholders are Executive Chairman Martin Andersson   (co-founder of Brunswick Brokerage) (33.4% of shares and 6% of  convertible bonds), China Nonferrous International Mining Co. Ltd   (CNIMC, 6.05%), Sarastro Group Limited, UBS (3.9%) and management  (3.12%). Since 2007, Chaarat shares have been listed on LSE.

In 1988, the Kapan combine was divided and renamed the Kapan ore   mining and processing enterprise. In 2002, Deno Gold Mining Company   (Switzerland) privatized the company. In 2006, Dundee Precious   Metals, Canadian-based international mining company, continued   operation of the company, and in 206 the company was sold to   Russia-based Polymetal International.