Half Year Results to 30 June 2010

Wednesday, 29. September 2010 15:57
Chaarat Gold Holdings Limited
("Chaarat" or "the Company")

Half Year Results to 30 June 2010

Road Town, Tortola, British Virgin Islands (29 September 2010)

Chaarat (AIM: CGH) today announces its half-year financial results for the six
months ended 30 June 2010.

Highlights
* Continued progress on evaluating the small scale gold production opportunity
at Tulkubash for development in 2011
* Acquisition of Kyrex Limited ("Kyrex") ,a private company with four
prospective licences in the north west of the Kyrgyz Republic
* After the period end GBP 6.7 million raised before expenses to accelerate
project development


Dekel Golan CEO commented: "I am pleased to report good progress from our
exploration activities in the Kyrgyz Republic.  The PFS for our 4Moz Chaarat
Gold Project is progressing well.  In addition, we are continuing to evaluate
the various options available to us to accelerate the development of the
Tulkubash project which has the potential to commence production in 2011 thereby
providing early cash flow ahead of the main section of the Chaarat Gold Project
in 2012.  During the period, we also completed the acquisition of Kyrex Limited,
an early stage exploration company that owns three highly prospective licences
in the north west of the country."


Enquiries:
Chaarat Gold Holdings Ltd

c/o Central Asia Services Ltd +44 (0) 20 7499 2612

Dekel Golan dekel@chaarat.com

Linda Naylor linda.naylor@chaarat.com



Westhouse Securities Limited +44 (0) 20 7601 6100

Tim Feather tim.feather@westhousesecurities.com

Richard Baty richard.baty@westhousesecurities.com



Smith's Corporate Advisory +44 (0) 20 7239 0140

Dominic Palmer-Tomkinson tomkinson@smiths-ca.com



Conduit PR +44 (0) 20 7429 6603

Jos Simson jos@conduitpr.com

Emily Fenton emily@conduitpr.com




Chief Executive's Report

I am pleased to present the Company's financial results for the six months ended
30 June 2010 and also to reflect on progress at Chaarat in the period since my
last report.

Chaarat's main focus in the period has been on the development of a strategy for
advancement of the Company's 4Moz flagship Chaarat project; evaluation of the
option of advancing the Tulkubash resource into production in 2011 through an
initial small scale gold production operation and at the same time the group has
been widening its exploration asset base through the acquisition of new licences
in the Kyrgyz Republic.

The development of the Chaarat project is being progressed by a group of
consultants working on our "pre-feasibility study" ("PFS").  The final PFS will
enable the board to decide upon the most appropriate route to production.  As a
result of the continued evaluation of a number of options the PFS will not be
available before the end of 2010.  The board considers it to be in the best
interests of the future development of the project to thoroughly evaluate the
options at this stage.  Latest findings of the PFS are discussed below:

The analysis and testing of the best route for development of our Main Zone and
Contact Zone resource has been ongoing over the last two years and is beginning
to reach resolution.  More recently the Company has identified the fact that the
mineralisation of the Tulkubash resource is free milling.  This is an important
development as it presents Chaarat with the opportunity of developing a first
phase, low cost, small scale gold production operation relatively quickly.  In
addition there is an opportunity to develop at least part of the Tulkubash
resource as an open pit operation.

A number of companies have been invited to bid for the preparation of the full
feasibility study ("FS") on the Tulkubash project, tenders have been submitted
and are currently being reviewed.  We expect to have a FS in place for the
Tulkubash project before the end of Q2 2011.

The preliminary findings of the PFS indicate that the optimal metallurgical
process for the Chaarat deposit has been established as whole ore pressure
oxidation or POX process.  The POX process is well understood, is safe, robust
and most importantly generates completely non-hazardous tailings.  Of the
processes available it has the smallest environmental footprint.  Overall gold
extraction of ± 88% (85%-92%) is projected for the whole ore POX/cyanidation
with recovery in earlier years expected to be slightly higher.

A site for hosting the tailings dam and mill has been identified, studied and
proved to be suitable.  Two tailings dams with a capacity in total of about 10
million cubic metres have been designed.  The locations of the various
components of the operation were determined so that they could service both the
smaller Tulkubash project as well as the Main project.  This should mean that
the operation of the Tulkubash project will not be interrupted by the
construction of the main operation.

Having reviewed the power supply options, it became clear that building a
dedicated power line is likely to be the cheapest and most reliable option.  The
comparatively low cost of power in the Kyrgyz Republic and its status as an
exporter of electricity should ensure a continuous supply.  So as to avoid power
outages from surges in demand from residential and other industrial users on the
national grid, it has been decided to build a dedicated line from a location
near an existing hydro power station.  A formal allocation has been received
from the Kyrgyz Power Supply Authority, which is effectively a commitment to
provide electricity.  A detailed study of the line route and technical and
economic aspects has been commissioned from an engineering company.

The Kyrex acquisition

During June Chaarat entered into agreement to acquire the entire issued and to
be issued share capital of a private company, Kyrex, in an all share
transaction.  Kyrex holds a number of promising licence areas in Kyrgyzstan.  As
the Chaarat deposit is nearing its development phase, management was of the view
that our exploration team can be better utilised in adding value through
exploration on other prospective licences.  At present the two Kyrex licences of
greatest interest to us are Chontash, a gold-copper- molybdenum project and
Mironovskoye, a polymetallic deposit.

Chontash, a skarn type deposit presents a significant opportunity for Chaarat.
 If our geological expectations materialise, it may host a sizeable porphyry
body with economic grades of copper, gold and molybdenum.  Chontash is located
near Makhmal, which until the establishment of the Kumtor Mine, was the largest
gold mine in Kyrgyzstan.  While Chontash does not have much by way of immediate
infrastructure it is only 15 km away from another mine which should ensure
access to power, labour and roads.  Drilling has commenced and we expect to be
able to report preliminary results soon.  We commenced drilling the property
with a small 1,000 metre programme in order to allow our exploration team to
gain further understanding of the property and design a broader drilling
programme.  We expect to be able to report preliminary results soon.

Mironovskoye is a small polymetallic deposit located near Bishkek and
consequently has rail, power lines and roads available nearby.  It should be
relatively easy to develop and generate cash flow with a modest investment.
 Prior to its acquisition by Chaarat, Kyrex has conducted significant
metallurgical work which will now be reviewed and possibly updated.  Once a
process has been developed, a feasibility study will be commissioned to support
the development of the project.

Kyrex also owns a number of other prospective grass root exploration properties
which will be evaluated in the coming years.

As mentioned in the Chairman's statement in the 2009 Annual Report, management
continues to look at ways of narrowing the gap between the Company's share price
and underlying value.  We continue to review different corporate options
including trading Chaarat's shares on the Hong Kong Stock Exchange, where there
seems to be an appetite for Asian mining companies; especially those involved in
gold exploration and production, nor have we excluded other resource friendly
exchanges such as the TSX in Toronto.

Since the period end Chaarat had raised an aggregate of GBP 6.7 million before
expenses through private placements.  I am pleased to report our Chinese partner
has indicated its intent to seek approval from the relevant State authorities to
maintain its 19.9% shareholding in the expanded share capital of the Company.
Receipt of these funds will leave the Company well capitalised.

Dekel Golan
Chief Executive Officer


Chaarat Gold

Chaarat is an exploration and development company operating in the Kyrgyz
Republic.  The Company's  main activity is  the development of the Chaarat Gold
Project situated within the Middle Tien Shan Mountains of Kyrgyzstan which form
part of the Tien Shan gold belt.  The Company has thus far delineated a JORC
compliant mineral resource of 4.009 Moz at a grade of 4.14 g/t gold.  A scoping
study demonstrating the economic viability of the Chaarat Gold Project was
completed at the end of 2008.  The Company is currently in the process of
compiling a pre-feasibility study.  Chaarat's objective is to become a low cost
gold producer targeting an initial production of over 200,000 ounces per annum
by early 2013.  In addition, the Company has identified the potential of
establishing an early stage, low cost, partially open pit mine at the Tulkubash
project for initial production, subject to funding, in Q4 2011.




Disclaimer

This press release includes forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other important
factors beyond Chaarat's control that would cause the actual results,
performance or achievements of Chaarat to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are based on
numerous assumptions regarding Chaarat's present and future business strategies
and the environment in which Chaarat will operate in the future.  Any
forward-looking statements speak only as at the date of this document.  Chaarat
expressly disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statements contained in this document to
reflect any change in Chaarat's expectations with regard to these or any change
in events, conditions or circumstances on which any such statements are based.
 As a result of these factors, the events described in the forward-looking
statements in this press release may not occur either partially or at all.



Consolidated income statement

For the six months ended 30 June

    6 months to 6 months to 12 months to
30 June 30 June 31 December
2010  2009  2009
(unaudited)  Restated (audited)
(unaudited)

  Note USD USD USD

Exploration expenses   (2,081,166) (1,190,702) (4,023,948)

Prefeasibility study expenses   (438,363) (234,197) (671,323)

Administrative expenses   (1,558,026) (1,020,034) (2,430,171)

Administrative expenses - Share (221,594) (51,618) (49,778)
options expense 5

Administrative expenses - Other (11,673) (33,524) (32,205)
operating expense

Administrative expenses - Foreign (61,935) 101,997 (240,532)
exchange (loss)/gain
--------------------------------------------------------------------------------
Operating loss   (4,372,757) (2,428,078) (7,447,957)

Financial income   8,270 4,883 19,048
--------------------------------------------------------------------------------
Loss for the period, attributable to
equity shareholders of the Parent   (4,364,487) (2,423,195) (7,428,909)
--------------------------------------------------------------------------------
Loss per share (basic and diluted) -
USD cents 2 (3.87)c (3.15)c (8.22)c
--------------------------------------------------------------------------------







Consolidated statement of comprehensive
income and expense

For the six months ended 30 June

    6 months to 6 months to 12 months to
30 June 30 June 31 December
2010  2009  2009
(unaudited)  (unaudited) (audited)
Restated

    USD USD USD

Loss for the period, attributable to
equity shareholders of the Parent   (4,364,487) (2,423,195) (7,428,909)



Other comprehensive income:

 Exchange differences on translating
foreign operations   (102,621) (64,874) (343,968)
--------------------------------------------------------------------------------
Total comprehensive loss  for the period   (4,467,108) (2,488,069) (7,772,877)
--------------------------------------------------------------------------------




See note 6 for details of the restatement of the share options expense for the
six months ended 30 June 2009.




Consolidated balance sheet

At 30 June

     30 June 30 June 31 December
2010  2009  2009
(unaudited)  (unaudited) (audited)
Restated

        USD     USD     USD

Assets

Non-current assets

   Intangible assets       30,010     73,470     60,558

   Property, plant and
equipment       720,759     1,667,202     1,221,765
--------------------------------------------------------------------------------
        750,769     1,740,672     1,282,323
--------------------------------------------------------------------------------
Current assets

   Inventories       146,430     27,057     156,691

   Trade and other
receivables       903,874     212,876     418,239

   Cash and cash
equivalents       3,007,319     2,850,852     6,812,046
--------------------------------------------------------------------------------
        4,057,623     3,090,785     7,386,976
--------------------------------------------------------------------------------
Total assets       4,808,392     4,831,457     8,669,299
--------------------------------------------------------------------------------


Liabilities and equity

Equity attributable to
shareholders

   Share capital       1,129,110     911,780     1,129,110

   Share premium       27,499,843     18,700,475     27,499,843

   Other reserves       13,529,935     13,449,409     13,312,190

   Translation reserve       (1,042,477)     (660,762)     (939,856)

   Retained losses       (37,159,481)     (27,928,508)     (32,798,843)
--------------------------------------------------------------------------------
        3,956,930     4,472,394     8,202,444
--------------------------------------------------------------------------------


Current liabilities

   Trade payables       527,360     127,911     285,890

   Accrued liabilities       324,102     231,152     180,965
--------------------------------------------------------------------------------
        851,462     359,063     466,855
--------------------------------------------------------------------------------
Total liabilities and
equity       4,808,392     4,831,457     8,669,299
--------------------------------------------------------------------------------




See note 6 for details of the restatement of the share options expense for the
six months ended 30 June 2009.
Consolidated cash flow statement

For the 6 months ended 30 June

6 months to 6 months to 12 months to
30 June 30 June 31 December
    2010  2009  2009
(unaudited)  Restated (audited)
(unaudited)

    USD USD USD

Operating activities

Loss for the period before and after tax   (4,364,487) (2,423,195) (7,428,909)

Adjustments:

   Amortisation expense - intangible   13,107 26,003 33,929
assets

   Depreciation expense - property plant   312,944 313,075 654,224
and equipment

   Loss on disposal of property, plant   3,052 34,864 37,546
and equipment

   Finance income   (8,270) (4,883) (19,048)

   Share based payments   221,594 51,618 49,778

   Foreign exchange   2,909 (174,477) (64,025)

   (Increase)/Decrease in inventories   10,261 (24,012) (106,800)

   (Increase)/Decrease in accounts   (294,386) 345,283 (19,489)
receivable

   Increase /(Decrease) in accounts   380,200 18,418 117,116
payable
--------------------------------------------------------------------------------
Net cash flow used in operations   (3,723,076) (1,837,306) (6,745,678)
--------------------------------------------------------------------------------
Investing activities

Purchase of computer software   - - (117)

Purchase of property, plant and   (40,299) (70,217) (44,680)
equipment

Proceeds from sale of equipment   - 40,000 42,500

Loans issued   - - -

Loans repaid   4,407 8,557 48,557

Interest received   8,270 4,186 6,600
--------------------------------------------------------------------------------
Net cash used in investing activities   (27,622) (17,474) 52,860
--------------------------------------------------------------------------------
Financing activities

Proceeds from issue of share capital   - 3,357,258 12,762,180

Issue costs   - (129,765) (517,989)
--------------------------------------------------------------------------------
Net cash from financing activities   - 3,227,493 12,244,191
--------------------------------------------------------------------------------
Net change in cash and cash equivalents   (3,750,698) 1,372,713 5,551,373

Cash and cash equivalents at beginning   6,812,046 1,375,445 1,375,445
of the period

Effect of changes in foreign   (54,029) 102,694 (114,772)
exchange rates
--------------------------------------------------------------------------------
Cash and cash equivalents at   3,007,319 2,850,852 6,812,046
end of the period
--------------------------------------------------------------------------------



See note 6 for details of the restatement of the share options expense for the
six months ended 30 June 2009.


Consolidated statement of changes in
equity

For the six months ended 30 June

   Share  Share  Retained  Other Translation
capital premium losses reserves reserve     Total
  USD USD USD USD USD USD

Balance at
31 December
2008 718,834 15,665,928 (23,889,711) 11,782,189 (595,888) 3,681,352

Restatement    -  - (1,620,969)  1,620,969  - -

Balance at
31 December
2008
(restated) 718,834 15,665,928 (25,510,680) 13,403,158 (595,888) 3,681,352

Currency
translation  -  -  -  -  (64,874)  (64,874)

Net income
recognised
directly in
equity  -  -  -  -  (64,874)  (64,874)

Loss for
the six
  months
ended 30
June 2009
(restated)  -  - (2,423,195)  -  - (2,423,195)

Total
recognised
  income and
expense for
the six
months  -  - (2,423,195)  -  (64,874) (2,488,069)

Share
  options
lapsed  -  -  5,367  (5,367)  -  -

Share
  options
expense
(restated)  -  -  -  51,618  -  51,618

Issuance of
  shares for
cash  192,946  3,164,312  -  -  -  3,357,258

  Share issue
costs  -  (129,765)  -  -  -  (129,765)

Balance at
  30 June
2009
(restated) 911,780 18,700,475 (27,928,508) 13,449,409 (660,762) 4,472,394

  Currency
translation  -  -  -  -  (279,094)  (279,094)

Net income
  recognised
directly in
equity  -  -  -  -  (279,094)  (279,094)

Loss for
the six
  months
ended 31
December
2009  -  - (5,005,714)  -  - (5,005,714)

Total
recognised
  income and
expense for
the six
months  -  - (5,005,714)  -  (279,094) (5,284,808)

Share
  options
lapsed  -  -  135,379  (184,290)  -  (48,911)

Share
  options
expense  -  -  -  47,071  -  47,071

Issuance of
  shares for
cash  217,330  9,187,592  -  -  -  9,404,922

  Share issue
costs  -  (388,224)  -  -  -  (388,224)

Balance at
  31 December
2009 1,129,110 27,499,843 (32,798,843) 13,312,190 (939,856) 8,202,444

  Currency
translation  -  -  -  -  (102,621)  (102,621)

Net income
  recognised
directly in
equity  -  -  -  -  (102,621)  (102,621)

Loss for
the six
  months
ended 30
June 2010  -  - (4,364,487)  -  - (4,364,487)

Total
recognised
  income and
expense for
the six
months  -  - (4,364,487)  -  (102,621) (4,467,108)

Share
  options
lapsed  -  -  3,849  (3,849)  -  -

Share
  options
expense  -  -  -  221,594  -  221,594

  Balance at
30 June
2010 1,129,110 27,499,843 (37,159,481) 13,529,935 (1,042,477) 3,956,930


See note 6 for details of the restatement of the share options expense for the
six months ended 30 June 2009.




Notes to the financial statements

1   Dividend
    No dividend is proposed in respect of the period.

2   Loss per share
    The loss per share is calculated by reference to the loss of USD 4,364,487
for the six months ended 30 June 2010 and the weighted average number of shares
in issue of 112,911,003 during the period.  There is no dilutive effect of share
options.

3   Basis of preparation of financial statements
    The unaudited results have been prepared on a going concern basis and on the
basis of the accounting policies adopted in the audited accounts for the year
ended 31 December 2009.  The results for the period are derived from continuing
activities.
    The financial information set out in this half-yearly report does not
constitute statutory accounts.  The figures for the period ended 31 December
2009 have been extracted from the statutory financial statements, prepared under
IFRS, which are available on the Group's website www.chaarat.com.  The auditor's
report on those financial statements was unqualified.

4   Selected accounting policy
    Mining exploration and development costs
    During the exploration phase of operations, all costs are expensed in the
Income Statement as incurred.
    A subsequent decision to develop a mine property within an area of interest
is based on the exploration results, an assessment of the commercial viability
of the property, the availability of financing and the existence of markets for
the product.  Once the decision to proceed to development is made, exploration,
development and other expenditures relating to the project are capitalised and
carried at cost with the intention that these will be depreciated by charges
against earnings from future mining operations over the relevant life of mine on
a unit of production basis.

5   Share options
    On 25 February 2010 the Company awarded 2,079,731 share options to directors
and staff, at an exercise price of GBP 0.41 per share.  The total number of
share options outstanding were:
    At 31 December 2009      7,813,823
    Awarded 25 February 2010 2,079,731
    Lapsed in period         (35,124)
    At 30 June 2010          9,858,430
    An amount of USD 221,594 was recognised as share based payment expense
during the six month period ended 30 June 2010 (six months ended 30 June 2009
(restated): USD 51,618; 12 months ended 31 December 2009: USD 49,778).


6   Restatement of Administrative expenses - share options expense
    At 31 December 2009, management revisited the fair value estimates of the
share options, and identified that the share based payment charges were
incorrectly scheduled in respect of some of those options.  As a result the
period over which the related share based payment was charged was reduced to the
vesting period applicable to those options and the share based payment
recalculated.  As a result the six months ended 30 June 2009 has been restated.

7   Post Balance Sheet Events
    On 1 July 2010 the Company announced the closing of a placing of 9,634,675
new ordinary shares at 40p per share raising GBP 3,853,870 before expenses.  The
enlarged share capital after the placing was 122,545,678 shares.  Trading of the
new shares commenced on the AIM market of the London Stock Exchange on 5 July
2010.
    On 27 July 2010 the Company announced the completion of the acquisition of
Kyrex Limited ("Kyrex").  The offer comprised 54 fully paid Chaarat ordinary
shares of US$0.01 each for each Kyrex share.  The aggregate consideration for
the whole of the issued and to be issued share capital of Kyrex comprised
11,928,222 shares representing approximately 8.9 per cent of the Company's
issued ordinary share capital immediately after the acquisition.  The enlarged
share capital after the acquisition was 134,473,900 shares. Trading of the new
shares commenced on the AIM market of the London Stock Exchange on 28 July 2010.
    On 27 July 2010 the Company announced that China Nonferrous Metals
International Mining Co. Ltd (CNMIM) had confirmed that, pursuant to its option
in the subscription agreement with the Company, it will subscribe for such
number of new shares to maintain its 19.9 per cent holding in the Company.  The
subscription would therefore be for 5,357,074 new ordinary shares at a price of
40p being GBP 2,142,830.  The Company will therefore have raised a total of GBP
5,996,700 before expenses through both the Placing and CNMIM's subsequent
subscription.  The investment by CNMIM in Chaarat is subject to the necessary
regulatory approvals from the Chinese government; such approvals are expected by
31 October 2010.
    On 23 September the Company announced the closing of a further placing of
6,860,000 new ordinary shares at 42p per share raising GBP 2,881,200 before
expenses.  The enlarged share capital after the placing was 141,333,900 shares.
Trading of the new shares commenced on the AIM market of the London Stock
Exchange on 24 September 2010.
    The required notice to CNMIM in respect of the further Placing has been
issued.


[HUG#1447694]








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Source: Chaarat Gold Holdings Ltd via Thomson Reuters ONE
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