www.chaarat.com
Chaarat Gold is an exploration and development company operating in the Kyrgyz Republic. The Company’s main activity is the development of the Kiziltash and Tulkubash projects situated within the Middle Tien Shan Mountains of Kyrgyzstan, which form part of the Tien Shan gold belt. The Company has delineated a JORC compliant mineral resource of 4.406Moz at a grade of 4.20g/t gold across both projects. Chaarat's key objective is to become a low cost gold producer; with initial production from the Tulkubash project, targeting annual production of over 200,000 ounces per annum as the Kiziltash project comes on stream.
Chaarat Gold raises £3.85m to advance Tulkubash zone into production in 2011
Chaarat Gold (LON:CGH) has raised approximately £3.85m through the a placing of 9.6 million new shares, representing approximately 8.5% of the company’s existing share capital, at a placing price of 40p each. The proceeds will fund the development of the Chaarat gold project in Kyrgystan, and the Tulkubash zone in particular.
With the new funds, the company aims to bring the project into production by the end of 2011.
At the Tulkubash zone, in May, Chaarat identified the potential of establishing an early stage, low cost, partially open pit mine. The new capital will fund further drilling, as well as the necessary studies and reports required for regulatory approval and permitting.
"The placing allows Chaarat to keep up its momentum as it progresses from a pure gold exploration company into a company focused on the development and production of the Chaarat gold project”, Chaarat chief executive Dekel Golan said.
"I would like to express my gratitude to those existing shareholders who have continued to support Chaarat and assure them, as well as our new shareholders, that management will work ceaselessly to justify this trust and support."
Drilling activities re-started in May. Within the T0700 project area, Chaarat has delineated a JORC compliant resource of 336,000oz grading 4.18 grams per tonne (g/t).
Westhouse Securities Limited conditionally placed the 9.6 million new shares, and they are expected to be admitted to AIM on 5 July 2010.
A number of Charaat directors participated in the placing. Chaarat chairman Christopher Palmer-Tomkinson subscribed for 700,000 shares, taking his total holding to 7.375m shares, which represents 6% of the company enlarged share capital. Linda Naylor, finance director, bought 250,000 shares, taking her total holding to 328,000 (0.3%) and non-executive director Oliver Green bought 50,000 shares for a total holding of 200,000 (0.2%).
Furthermore, under the terms of its deal with China Nonferrous Metals Int'l Mining Co Ltd (CNMIM), the placing may be extended. Chaarat is required to give notice to CNMIM if it intends to issue any Chaarat shares for cash or non cash consideration, and subsequently CNMIM has the right, within 15 business days, to maintain its 19.9% stake in the company. Any further shares issued to CNMIM must be issued on the same terms as the placing.
