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RNS Number : 0865O
Chaarat Gold Holdings Ltd
05 February 2021
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR").
Not for release, publication, or distribution to United States
newswire services or for release, publication or dissemination in
the United States and does not constitute an offer of the
securities herein.
This press release does not constitute an offer to sell, or a
solicitation of an offer to buy, securities in the United States or
any other jurisdiction. Any securities described in this press
release have not been, and will not be, registered under the US
Securities Act of 1933, as amended, and may not be offered or sold
in the United States absent registration except in transactions
exempt from, or not subject to, registration under the US
Securities Act and applicable US state securities laws. There is no
public offering of the securities in the United States
expected.
05 February 2021
Chaarat Gold Holdings Limited - (AIM:CGH)
("Chaarat" or the "Company")
Fundraise and Planned Debt Reduction
Chaarat (AIM:CGH), the AIM-quoted gold mining company with
assets in the Kyrgyz Republic and Armenia is pleased to announce
that it is launching a fundraise for approximately US$ 25 million
(the "Fundraise") through the issue of new ordinary shares of US$
0.01 each nominal value in the Company (the "New Ordinary Shares")
at 26 pence per New Ordinary Share (the "Issue Price").
The Company has received commitments for US$ 23.5 million
through legally binding subscriptions (the "Initial Subscription")
representing 65,908,088 New Ordinary Shares (the "Initial
Subscription Shares") and US$ 1.4 million in the form of
non-binding commitments.
Chaarat has closed the Initial Subscription element of the
Fundraise but will keep the balance of the Fundraise open until
Tuesday 9 February 2021 at 4.30pm GMT to allow completion of the
above mentioned non-binding commitments and any additional
demand.
Alongside the Fundraise, the Company's largest shareholder,
Labro Investments Ltd. ("Labro"), has indicated to the Company its
willingness to convert the entirety of the outstanding term loan of
US$ 22 million plus accrued interest (the "Labro Term Loan") into
equity in the Company at the Issue Price. The conversion is subject
to approval by the independent directors of the Company and would
be satisfied through signing a subscription agreement between the
Company and Labro to issue approximately 62.4 million new ordinary
shares at the Issue Price (the "Labro Subscription Shares"). If
approved by the Chaarat Board, this would reduce the Chaarat debt
position to US$ 46.5 million, a reduction of 33% from the currently
outstanding US$ 68.5 million.
Highlights
The Company received strong demand for the Fundraise in the form
of binding and non-binding commitments for a total US$ 24.9 million
from new institutional investors and family offices as well as
existing shareholders.
With the progress made in 2019 and 2020 on the Tulkubash project
construction, it is expected that the funds received from the
binding and non-binding commitments would represent the remainder
of the upfront equity portion to fund the Tulkubash project in the
Kyrgyz Republic and fulfils one of the key criteria in order to
draw on any debt project finance facility that is arranged. The
Company has ongoing discussions on debt financing of approximately
US$ 80 million and anticipates having this completed during H1 2021
in order to fully fund the project construction capital of
approximately US$ 110 million.
Funds in excess of those required for Tulkubash will be used for
growth activities at both the Company's Kyzyltash project and the
East Flank development at the Kapan operation.
Fundraise
- Chaarat signed subscription agreements with several new
institutional investors and family offices which have committed to
a total of US$ 19.9 million, of which US$ 19.5 million are binding
commitments and have been signed.
- The Company has received further support from its existing
shareholders of US$ 5.0 million, of which US$ 4.0 million are
binding commitments and have been signed.
- The Company has decided to keep the Fundraise open until
Tuesday 9 February 2021 at 4.30pm GMT to allow non-binding
commitments to close and provide an opportunity for further demand
to participate.
- Furthermore, the Company has also received notice from Labro
that it is willing to convert US$ 22 million of outstanding debt
from the Labro Loan Facility to equity through subscribing for
approximately 62.4 million new ordinary shares. It is expected the
Company and Labro will enter into legally binding documentation,
which is anticipated to be confirmed later today, subject to
approval by the independent directors of the Company.
- The Fundraise allows Chaarat to proceed on several critical-path items including:
o Ongoing construction activities at the Tulkubash project in
order to maintain Chaarat's targeted timeline for first gold pour
in Q4 2022
o Metallurgical test work on the Kyzyltash project
o Initial development of the East Flank extension at our Kapan operation
o Efforts to advance potential M&A opportunities
Completion of the Initial Subscription is subject to admission
of the Initial Subscription Shares to trading on the AIM market of
the London Stock Exchange plc ("Admission"). Application has been
for the Initial Subscription Shares to be admitted to trading on 10
February 2021.
Following Admission of the Initial Subscription Shares, the
Company's enlarged issued share capital will comprise 605,970,298
ordinary shares of US$0.01 each. This figure may be used by
shareholders of the Company as the denominator for the calculations
by which they will determine whether they are required to notify
their interest in, or a change to their interest in, the Company
under the Financial Conduct Authority's Disclosure Guidance and
Transparency Rules Sourcebook.
The Company will make separate applications to trading for the
Labro Subscriptions Shares (once issued) and any further shares
issued pursuant to the Fundraise.
Debt outstanding
Following Labro's proposal for a debt-to-equity conversion of
approximately US$ 22 million plus accrued interest and approval by
the independent directors of the Company, the Labro Term Loan would
be extinguished, saving the Company US$ 2.1 million in interest
payments per year from 2021 to 2024.
The Company reduced its outstanding Kapan acquisition loan by
another US$ 2 million as of 01 January to US$ 26 million. A further
US$ 2.5 million payment is scheduled for April 2021.
In total the debt position would be reduced from currently US$
68.5 million to US$ 46.5 million after the Labro debt-to-equity
conversion, a reduction of 33%.
Listing considerations
As part of the Company's ongoing considerations to further
enhance liquidity and broaden Chaarat's investor base, Chaarat has
initiated the process for a secondary listing on the Moscow Stock
Exchange ("MOEX") given indications of strong demand from investors
in the former Soviet Union. Chaarat also remains focused on a move
to the London Stock Exchange ("LSE") main market at the appropriate
juncture as the Company advances its strategic initiatives or
completes a transformative transaction.
Artem Volynets, Chief Executive Officer of Chaarat, said:
"We are delighted by the strong demand of new investors and our
existing shareholders to support the Company to fund the required
remaining equity portion for the Tulkubash project financing.
Furthermore, it allows us to progress our strategic activities on
the Kyzyltash asset and the East Flank development at Kapan.
Moreover, we are grateful for the continued support from our major
shareholder Labro to optimise the Company's balance sheet
further.
The Fundraise will achieve a critical milestone in the execution
of our strategy to build one of the leading gold companies in the
former Soviet Union by providing the equity funding required to
arrange the project debt finance and start full scale construction
of our fully licensed and permitted Tulkubash project in Kyrgyz
Republic.
The next key step will be to complete the project financing for
the Tulkubash project, which we are well advanced on to complete in
H1 of this year."
Enquiries
Chaarat Gold Holdings Limited +44 (0)20 7499 2612
Artem Volynets (CEO) info@chaarat.com
Canaccord Genuity Limited (NOMAD and + 44 (0)20 7523
Joint Broker) 8000
Henry Fitzgerald-O'Connor
James Asensio
finnCap Limited (Joint Broker) +44 (0)20 7220 0500
Christopher Raggett
Panmure Gordon (UK) Limited (Joint Broker) +44 (0)20 7886 2500
John Prior
Hugh Rich
About Chaarat
Chaarat 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 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/ .
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END
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