TIDMCGH
RNS Number : 8933L
Chaarat Gold Holdings Ltd
11 September 2019
11 September 2019
Chaarat Gold Holdings Limited
("Chaarat" or the "Company")
Funding Update
-- Extension of loan to 31 March 2020
-- Receipt of US$9.5m in cash from upsizing of loan by US$7m and
drawdown of US$2.5m from existing working capital facility
-- Closing of previously announced convertible notes offering
with a total of US$19,680,000 of 2021 notes issued over the course
of the year
-- Project Financing discussions progressing well for
construction of Tulkubash gold project, Kyrgyz Republic
Chaarat (AIM:CGH), the AIM-quoted gold mining company with
assets in the Kyrgyz Republic and Armenia is pleased to announce
the receipt of US$9,500,000 in cash as well as an update on its
financing discussions for the construction of its Tulkubash gold
project ("Tulkubash").
Further to the announcement of 14 August 2019, the Company
announces it has agreed a new maturity date of 31 March 2020 for
the US$10,000,000 loan agreement (the "Loan"), announced on 15
November 2018. In addition, the Company is pleased to announce the
Loan has been increased by US$7,000,000 to a total size of
US$17,000,000.
All the terms of the Loan remain unchanged, including the
interest charge of 13% per annum.
As part of the new agreement, Labro Investments Ltd ("Labro"), a
Substantial Shareholder of the Company, has provided a guarantee
directly to the lender for the full amount of the Loan. Under the
terms of this guarantee, Chaarat will pay Labro a fee of 2% of the
US$17,000,000, payable within 30 days of this date either in cash
or in shares at the then prevailing market share price at the
Company's election.
In addition, Chaarat has drawn a further US$2,500,000 from Labro
under the existing working capital facility.
The Company would like to announce that it has closed the
previously announced 2021 Convertible Bond raise to new
subscriptions. Following the most recent subscription of US$500,000
in July 2019, and the agreement with Polymetal to exchange USD 10
million of notes for equity, the total value of the 2021 notes in
issue is US$19,680,000.
The secured convertible notes 2021 ("2021 Notes") have a
conversion price of GBP0.37 / share and a 10% interest rate per
year which increases to 12% per year for the last 18 months. A
single interest payment is due on the final repayment date (31
October 2021) provided that no conversion has occurred. The notes
can be repaid early in cash upon 10 business days' notice provided
that the minimum accrued interest payable on early repayment is 5%
of the nominal amount.
The new arrangements with Labro to guarantee the Loan constitute
a related party transaction under AIM Rule 13 of the AIM Rules for
Companies (the "AIM Rules") as Labro is a Substantial Shareholder
of the Company and Martin Andersson (the executive chairman of
Chaarat) is indirectly beneficially interested in the majority of
the shares in Labro. The independent directors of the Company (all
of the Company's Directors save Martin Andersson), having consulted
with its nominated adviser, consider that the terms of the
transaction are fair and reasonable insofar as the Company's
shareholders are concerned.
Tulkubash Project Financing
Following the publication of an updated and optimised
Feasibility Study in June 2019 for the Tulkubash project, the
Company commenced project financing discussions with international
groups. As announced on 18 March 2019, Chaarat entered into a Joint
Venture with Çiftay under which Çiftay would invest US$31.5 million
with Chaarat seeking the balance of the US$110m capex requirement
for Tulkubash from project finance providers.
The Company has received positive interest in the form of a
preliminary term sheet to provide debt funding on acceptable and
market terms and is working to finalise the project financing by
the end of 2019 or early 2020. The term sheet indicates sufficient
funds to finance, alongside the Ciftay investment, the US$110m
capital requirement to construct the Tulkubash project.
Artem Volynets, Chief Executive Officer of Chaarat, said:
"We are pleased to announce the receipt of US$9.5m of additional
cash today, together with a new maturity date for the Loan into
2020. This additional headroom allows the Company to continue to
proactively manage our balance sheet while we focus on the funding
of Tulkubash which is progressing well with good interest from
multiple parties. The Company is grateful for the continued support
shown by both Labro and the lender."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) 596/2014
Enquiries
Chaarat Gold Holdings Limited
Martin Andersson (Executive
Chairman) +44 (0)20 7499 2612
Artem Volynets (CEO) info@chaarat.com
Numis Securities Limited
John Prior, Paul Gillam (NOMAD) +44 (0) 20 7260 1000
James Black (Corporate Broking)
Tavistock
Charles Vivian +44 (0)20 7920 3150
Gareth Tredway chaarat@tavistock.co.uk
Annabel de Morgan
About Chaarat Gold
Chaarat Gold is a gold mining company which owns the Kapan
operating mine in Armenia as well as Tulkubash and Kyzyltash Gold
Projects in the Kyrgyz Republic. The Company has a clear strategy
to build a leading emerging markets gold company with an initial
focus on Central Asia and the FSU through organic growth and
selective M&A.
Chaarat is engaged in active community engagement programmes to
optimise the value of the Chaarat investment proposition.
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. Further information
is available at www.chaarat.com.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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