Climate Change Data

Environmental Metrics

ESG Focus Areas

• Safety and health
• Sustainability
• Climate change
• Community

Environmental Achievements

• Enhanced buttressing of tailings storage facility (TSF) at Kapan, using mine waste rock, reducing the carbon footprint of construction.
• Internal assessment of TSF operation against the Global International Standard on Tailings Management (GISTM), identifying areas for improvement.

Social Achievements

• Construction and commissioning of a community road at Kapan, as part of the Kapan social package.
• Annual community assistance programme developed in collaboration with regional governments, aligning with community priorities.

Governance Achievements

• Implementation of a climate corporate governance structure with KPMG, focusing on Kapan and climate-related risks and opportunities.
• Completed implementation of its risk management framework.

Climate Goals & Targets

Environmental Challenges

• Poor safety record in 2022 with two fatalities at Kapan mine and a further fatality in March 2023.
• 23% appreciation of the Armenian Dram against the US dollar, impacting EBITDA.
• Higher energy costs and inflationary pressures due to the war in Ukraine.
• Slowed Tulkubash project development due to waiting for a more positive economic environment for project financing.
• Difficulties with terrain and high wind shear affecting drone surveying work at Tulkubash.

Mitigation Strategies

• Retention of external consultants to review systemic issues underlying fatalities at Kapan and assess high-risk work.
• Cultural assessment conducted to assess impediments to safe work design and execution at Kapan.
• Revised procurement strategy to source supplies on a more global basis to offset the impact of Dram appreciation.
• Continued efforts to secure funding for Tulkubash development project, exploring alternative project finance options.
• Ground magnetic survey and UAV reconnaissance to overcome drone surveying difficulties at Tulkubash.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Opportunities

• Installation of solar generation capacity at Kapan

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Safety and Health
• Community and Government Relations
• Environment and Cultural Resource Protection
• Climate Change

Environmental Achievements

• Work on the Kapan Tailings Storage Facility (TSF) buttressing continued during 2023, improving dam stability and safety.
• Engaged with the European Bank for Regional Development (EBRD) on green energy initiatives with the support of the Green Climate Fund (GCF) in 2022 (prior to reporting period, but relevant context).

Social Achievements

• Continued support for local community development in the Kyrgyz Republic via a social package assistance plan providing approximately US$170,000 per annum for local community support (education, infrastructure, healthcare, etc.).
• Provided training and support to multiple business start-ups in the Chatkal region of the Kyrgyz Republic.

Governance Achievements

• Completed implementation of its risk management framework.
• Established Audit, Remuneration, Nomination, Technical, and ESG committees.

Climate Goals & Targets

Environmental Challenges

• Fatality at the Kapan mine in March 2023 due to a fall of ground incident.
• Liquidity concerns due to convertible loan notes due in July 2024.
• Country risk related to changing laws and regulations in the Kyrgyz Republic.
• Commodity price volatility.
• Climate change related uncertainties (changing weather patterns, extreme weather events).

Mitigation Strategies

• Addressed inadequacies in risk assessments, procedures, and training at Kapan following the fatality.
• Maintaining discussions with existing lenders and potential finance providers; addressing potential gating items to securing project finance; looking for new funding options.
• Processes in place to monitor prospective legislative changes and engage with the Kyrgyz government.
• Periodically considering hedging strategies; using conservative long-term prices to evaluate projects.
• Developing a Climate change policy; developing alternate practices and implementing new technologies to reduce dependence on carbon fuels and water.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Reporting Standards

Frameworks Used: IFC Performance Standards on Environmental and Social Sustainability