REG - Chaarat Gold Hlgs Ld - Revised Non-Binding Term Sheet Signed with Xiwang

Chaarat Gold HoldingsAnnouncement

17/05/2024 15:30

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RNS Number : 9727O  Chaarat Gold Holdings Ltd  17 May 2024

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

 Chaarat Gold Holdings Limited                             +44 (0)20 7499 2612
 Martin Andersson (Executive Chair of Chaarat)             IR@chaarat.com (mailto:IR@chaarat.com)

 Strand Hanson Limited (Nominated Adviser)                 +44 (0)20 7409 3494
 Ritchie Balmer / James Spinney / Robert Collins

 Panmure Gordon (UK) Limited (Joint Broker)                +44 (0)20 7886 2500
 Hugh Rich

 Axis Capital Markets Limited (Joint Broker)               +44 (0)20 3026 0449
 Ben Tadd / Lewis Jones

 St Brides Partners Limited (Financial Public Relations)   +44 (0)20 7236 1177
 Susie Geliher / Isabelle Morris

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.

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