The Tien Shan gold belt is playing host to another potentially significant gold project as Chaarat Gold's independent scoping survey, produced by Behre Dolbear International Ltd, provides promising results.  The survey, based on an estimated resource of 22.1 million tonnes of ore grading 4.41 g/tonne, has projected a possible production rate of 210,000 ounces of gold per annum and, with a low estimated production cost of $470 per ounce, the company's stated confidence in the project is running high. 

Chaarat's project on the 6km strike stretch is thought to have over 3 million ounces in gold resources (2.2 million ounces at 4.45g/t Au are in the Indicated resource category and 0.95 million ounces at 4.32 g/t are in the Inferred resource category) and with possible silver and antimony credits the gold cost per ounce could go down to as little as $378.  At an assumed long-term gold price of $750 per ounce the project's NPV (Net Present Value) could reach $158 million giving Chaarat a healthy 20.3% Internal Rate of Return.  Coupled with a relatively slim working capital of $21 million, and requiring an estimated total investment of $320 million, the Tien Shan gold belt could well have launched another junior on its way.

Chaarat Gold's young project still has another four years left to run before it could begin to produce any gold, so the Chaarat Board can't grab their shovels just yet.  Their CEO, Dekel Golan, appears to be still keeping a level head however, telling the press in a conservative media statement Our immediate priority is to complete the pre-feasibility study in order to maintain our momentum towards our production target of 2012. In a message to all that he is concentrating on the next step forward.

It's potentially a good policy to keep, especially when Chaarat has only the one project and its budget still has four years of the unknown to grow into.  The dangerous tactic of investing all of your fortunes in a single venture can be disastrous and a loss of focus now could ruin all of the junior's hopes.  Chaarat don't appear to be forgetting about their project just yet however, one of the benefits of Golan's strategy is that without other projects taking up time and expense they can devote their full resources to their adventure in Kyrgyzstan.

Chaarat Gold (AIM-CGH) is currently trading at £0.45 per share at 11.00GMT 17 June 2008.