TIDMCGH
RNS Number : 2016M
Chaarat Gold Holdings Ltd
13 September 2019
13 September 2019
Chaarat Gold Holdings Limited
("Chaarat" or the "Company")
Chaarat completes joint venture with Çiftay İnsaat Tahhüt ve
Ticaret A.S
Chaarat (AIM:CGH), the AIM-quoted gold mining company with
assets in the Central Asia and the Former Soviet Union ("FSU"), is
pleased to announce the conclusion and signing on 11 September 2019
of a Joint Venture Agreement with Çiftay İnsaat Tahhüt ve Ticaret
A.S ("Çiftay"), the Turkish mining and mine construction
contractor. This follows the announcement on 18 March 2019 that
Chaarat had signed a binding term sheet to enter into a Joint
Venture with Çiftay to collaborate on the Tulkubash and Kyzyltash
projects in the Kyrgyz Republic.
Under the agreement, based on an agreed valuation of US$252
million (post money) for Tulkubash and Kyzyltash, Chaarat's mining
projects in the Kyrgyz Republic, Çiftay will progressively invest
up to US$31.5 million in cash for a corresponding 12.5% equity
stake in these two project assets.
Çiftay's investment provides the remaining equity for the
Tulkubash project. Chaarat has launched a process to raise senior
project finance debt in June. 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 Çiftay
investment, the US$110m capital requirement to construct the
Tulkubash project.
Construction continues at Tulkubash and the first gold
production is on track for late 2021. Chaarat is proceeding with
detailed engineering and has finalized several project components
for immediate construction readiness. This comprises:
- Initial earthworks equipment mobilized to the mine site;
- Advance temporary construction camp constructed last winter; and
- Ore haul road and platforms construction started last month
The updated June 2019 Tulkubash Feasibility Study, as well as
the ongoing drilling programme, continue to suggest the emergence
of a significant new gold district.
Çiftay has extensive experience as a mining and civil
engineering contractor at multiple mine sites in Turkey including
two major gold mines. Additional information about Çiftay can be
found at http://www.Çiftay.com.tr/en/about.html.
Following the Joint Venture Agreement with Çiftay and in order
to grant shares in Zaav Holdings Limited, the Company's subsidiary
holding the Kyrgyz assets, it was necessary to seek noteholders'
consent to change the security of the assets under the Company's
convertible bonds program. This consent is required to ensure that
at least 87.5 percent of the shares in Zaav Holdings Limited
remained part of the security package and the shares to be owned by
Çiftay would be excluded from it. The Company has hereby received
consent from majority of bondholders approving this change.
Martin Andersson, Executive Chairman of Chaarat, said:
"I am very pleased to formally confirm our Joint Venture with
Çiftay. We've been working with Çiftay for some time now and the
industrial logic of this strategic partnership is clear. The team
at Çiftay has extensive experience as a mining contractor in
similar conditions and is extremely well placed to manage this type
of operation."
"Tulkubash is a high-quality asset with robust economics akin to
an emerging gold district with the potential to host numerous gold
deposits. The project is being progressively de-risked by the team,
and our drilling and exploration programmes continue to yield
positive results. We fully expect Tulkubash to become a long-term
cash generator capable of sustaining organic growth at Chaarat, and
in due course facilitating the development of Kyzyltash."
"Çiftay shares our enthusiasm, as is demonstrated by its
commitment to acquire an equity stake of its own in these assets. I
look forward to reporting on further positive developments at
Tulkubash as we continue towards first gold pour in 2021."
Serkan Aydin, Chairman of Çiftay, said:
"We were delighted when Chaarat offered us the opportunity to
co-invest in the Tulkubash and Kyzyltash projects. We have seen
first-hand the immense upside potential of both assets. We share
Chaarat's enthusiasm and belief in the attractive long-term
prospects for the Tulkubash project and are confident that this
investment will provide a great platform to grow both businesses
further."
"At Çiftay, we have been involved in the mining industry for
more than 50 years, developing a market leading position in the
development and operation of construction and production mines,
both over and underground. It is exciting to combine this knowledge
with Chaarat's considerable managerial and operational
expertise."
"We look forward to extending our partnership with Chaarat and
making this significant co-investment as a joint venture partner
with them."
Background information on the Tulkubash and Kyzyltash gold
projects
Tulkubash Kyzyltash
-------------------- ---------------- --------------
Stage In construction Development
LOM Avg. Production 94koz 200-300koz
LOM Avg. EBITDA(1) US$48m Not disclosed
Reserves(2) 658koz -
Resources(2) 1,657koz 5,377koz
-------------------- ---------------- --------------
1.Tulkubash EBITDA approximated using US$1,300/oz gold price,
US$678/oz C1 Cash Cost and 94koz p.a. gold production. Gold
production and C1 Cash Costs as per the June 2019 Tulkubash
Feasibility Study update.
2.Resources are shown inclusive of reserves, and include
Measured, Indicated and Inferred.
During 2018, over US$13 million was spent on the projects, both
of which are located in Kyrgyzstan.
Enquiries
Chaarat Gold Holdings Limited
Artem Volynets (CEO) +44 (0)20 7499 2612
info@chaarat.com
Numis Securities Limited
John Prior, Paul Gillam (NOMAD) +44 (0) 20 7260 1000
James Black (Corporate Broking)
SP Angel +44 (0) 20 3470 0470
Ewan Leggat (Joint Broker)
Tavistock
Charles Vivian +44 (0)20 7920 3150
Gareth Tredway chaarat@tavistock.co.uk
Barney Hayward
About Chaarat
Chaarat is a gold mining company which owns the Kapan operating
mine in the FSU as well as the Tulkubash and Kyzyltash Gold
Projects in Central Asia. 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 activity.
Chaarat is engaged in active community engagement programmes to
optimise the value of the Chaarat investment proposition and build
close relationships and its reputation in all areas of
operation.
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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