Chaarat Gold Holdings Ltd
17 May 2024
Chaarat Gold Holdings
Limited
("Chaarat" or "the Company")
Revised Non-Binding Term
Sheet Signed with Xiwang International for
US$150 million Funding
Package to Deliver First Production at Tulkubash Gold
Mine
Chaarat Gold (AIM:CGH), a mining
explorer and developer with projects in the Kyrgyz Republic, is
pleased to announce that it has entered into a non-binding term
sheet (the "Term Sheet") with Xiwang International Company Limited
("XWIC") relating to a US$150 million funding package which,
subject to entering into definitive legal agreements, further
advances discussions between the parties and outlines an action
plan towards a successful transaction. Completion of
definitive legal agreements would provide; full financing for the
further development and commencement of production at the Tulkubash
Gold Project in Kyrgyz Republic ("Tulkubash"), enabling the
restructuring of Chaarat's existing commitments and provide the
basis for future potential joint ventures in the gold mining
sector.
The Term Sheet progresses the
extensive negotiations, and collaboration between the parties,
which resulted in the agreement with PowerChina concluded in late
2023 (as previously announced). There is no certainty at this stage
that definitive agreements will be concluded, and therefore funding
provided, and further announcements will be made as and when
appropriate. Discussions also continue with other parties for
potential funding of the Group's initiatives and Chaarat also
expects to enter into discussions with convertible bond holders
regarding the outstanding convertible bonds which are due for
repayment on 31 July 2024.
Tulkubash is a 1.01Moz gold deposit
which has the potential to become a 95,000oz/annum gold mine.
Tulkubash has an initial mine life of six years, however, there
remains significant development upside from additional prospects
including Karator and Ishakuldy, and the Company is targeting a
total mine life exceeding 15 years.
XWIC is an investment company
incorporated in the British Virgin Islands and an affiliate of
Touchstone Capital Partners. As part of its long-term
strategic investment plan, XWIC is looking to create a significant
portfolio of mining assets and resources on a global basis by
partnering with and providing funding to listed public operating
companies with strong governance, focused on disciplined capital
allocation and shareholder value creation.
Principal terms of the non-binding
term sheet between Chaarat and XWIC are as follows:
· A
funding package of US$150 million in two tranches from XWIC would
provide funding into Tulkubash and enable the restructuring of
existing commitments
· In
return for its US$150 million investment, XWIC would receive a 60%
economic interest in the Tulkubash SPV and Chaarat would retain
40%, the parties have agreed to negotiate in good faith the further
advancement of the Kyzyltash project in due course. Post the
transaction XWIC will have full security over Tulkubash and
Kyzyltash.
· Power
Construction Corporation of China would be appointed as independent
contractor for the Engineering, Procurement and Construction,
Operation and Maintenance and Mining in accordance with best
practices/international standards, working in collaboration with
the Chaarat team.
· Funding would be conditional on a political risk insurance
("PRI") policy being provided, discussions on which are
progressing.
Next steps are focused on working
with XWIC to finalise PRI policies, progression to definitive legal
agreements and final investment decision, while at the same time
working closely together with the PowerChina to team to commence
construction activities within a short time frame. Further updates
will be provided as and when appropriate.
Enquiries
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Chaarat Gold Holdings Limited
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+44 (0)20 7499 2612
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Martin Andersson (Executive Chair of
Chaarat)
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IR@chaarat.com
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Strand Hanson Limited (Nominated Adviser)
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+44 (0)20 7409 3494
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Ritchie Balmer / James Spinney /
Robert Collins
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Panmure Gordon (UK) Limited (Joint Broker)
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+44 (0)20 7886
2500
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Hugh Rich
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Axis Capital Markets Limited (Joint Broker)
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+44 (0)20 3026 0449
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Ben Tadd / Lewis Jones
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St
Brides Partners Limited (Financial Public Relations)
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+44 (0)20 7236
1177
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Susie Geliher / Isabelle
Morris
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About Charaat
Chaarat is an exploration and
development company which is advancing the Tulkubash and Kyzyltash
Gold Projects in the Kyrgyz Republic. The Company has a clear
strategy to build a leading emerging markets gold company through
organic growth and selective M&A.
Chaarat aims to create value for its
shareholders, employees and communities from its high-quality gold
and mineral deposits by building relationships based on trust and
operating to the best environmental, social and employment
standards.
