Exploration and development company Chaarat Gold posted its preliminary results for the year ended 31 December on Monday, a year in which it was still pre-revenue, but implemented a revised strategy to develop the Chaarat project through a phased approach.
The AIM-traded firm said its strategy was also to conduct selective accretive mergers and acquisitions, with the aim of becoming a "leading" mid-tier gold producer focused in Central Asia and the former Soviet Union.
A series of board and management appointments were made during the year to deliver the new strategy, with $15m raised in convertible loan notes to fund the exploration and feasibility study work for Tulkubash.
Chaarat said a 17,240 metre drill programme was completed at Tulkubash, with metallurgical test work, geotechnical studies and environmental and social impact assessments also carried out to support the feasibility study.
A construction permit was granted in September last year, which the company called an "important milestone" to continue development at the project.
Construction work had now started, with upgrades to the main site access road, the bridge across the Sandalash river and the communications infrastructure.
Since the period ended, Chaarat said that following the drill programme carried out in 2017, 319,000 ounces was added to the Tulkubash resource.
The 2017 drill programme delivered a 43% increase in contained gold at a 25% increase in grade, for an average all-in discovery cost of $20 per ounce.
Chaarat also made an offer to acquire the Kumtor mine from Centerra, one of the largest gold mines in Central Asia.
In April, Chaarat published its feasibility study which highlighted an annual post-tax free cash flow of $58.6m during steady state operations.
It also announced an aggressive exploration programme for 2018 and 2019, to encompass 30,000 metres of diamond drilling per annum, with the 2018 programme ramping up on schedule since drilling commenced on 25 April.
Construction was expected to commence for the Tulkubash project in 2018.
On the financial front, the company's loss for the year totalled $18.09m, widening from $4.46m, making for a basic and diluted loss per share of 5.14 US cents, compared to 1.52 cents a year earlier.
Its exploration expenses had widened to $1.85m from $1.06m, but the primary reason for its bigger losses was the impairment of its assets under construction, which was reported as $10.01m, compared to nil the year before.
"I am delighted with the progress made during 2017, and excited by the plans we have for the next 12 months," said chairman Martin Andersson.
"Good progress was made at the Tulkubash project, with construction of infrastructure having commenced and an extended drill programme that upgraded the Tulkubash resource being carried out.
"This, in addition to the promising Kyzyltash deposit, has provided us with what we think is a very strong defined gold resource and the potential for sustained production in the future."
Andersson said the "exciting" potential acquisition of the Kumtor mine was something the board believed would propel the company to the "next level".
"We understand the frustrations surrounding the current share suspension, however, these things take time.
"The Chaarat board and management team are very focussed on a successful outcome for all stakeholders and have a firm belief that it will be beneficial to the company in achieving its goals," he explained.
"Our operational track-record in the Kyrgyz Republic, as well as the expertise and experience within our management team, position us well to complete this acquisition."
Andersson also noted that the company was continuously exploring accretive opportunities that would complement the Chaarat project, with a "firm focus" on due diligence.
"We expect further construction on the Tulkubash project during 2018 and have commenced our extensive exploration programme at Tulkubash.
"We look forward to updating shareholders, and the market, on the drill results along with any other developments when appropriate."