Shares in Chaarat Gold Holdings (CGH) fell by 17% following their latest financial report. The company stated that it may face operational difficulties unless it secures additional funding or successfully closes the sale of its Kapan mine in Armenia.
At 0827 GMT, CGH shares were down 1.10 pence at 5.35 pence, reflecting investor concerns.
During the first half of the year, CGH experienced a pretax loss of $25.8 million, compared to a loss of $1.5 million in the same period last year. This significant increase in loss was primarily due to a $16.4 million impairment from their Kapan asset.
Furthermore, CGH reported a decrease in revenue, amounting to $35.25 million, down from $50.4 million in the previous year. The decline can be attributed to lower sales at the Kapan mine.
Additionally, the company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) took a hit, swinging from $4.9 million in gains to a loss of $155,000. This decline in adjusted EBITDA was mainly caused by a 71% decrease in EBITDA from Kapan.
To address these financial challenges, CGH has agreed to sell its subsidiary Chaarat Kapan, including the Kapan mine, to Gold Mining Company for $55.4 million. The proceeds from this sale will be allocated towards general corporate purposes.
It remains essential for CGH to secure the necessary funding and successfully close the sale in order to sustain their operations going forward.
For more information and updates on Chaarat Gold Holdings and their financials, please visit their official website.