Chaarat Gold Holdings Ltd (AIM:CGH) shares shot up almost 50% following a non-binding letter of intent and an indicative term sheet from Xiwang International for a potential equity investment of US$250mln.
Used to develop Chaarat's organic pipeline and external growth through value-added acquisitions, the investment would be in new shares issued at 2p a share.
Following the investment, Xiwang, an investment company registered in the British Virgin Islands, would hold 60% of the shares in Chaarat and have the right to appoint two board members.
Terms of a preliminary agreement are scheduled to be signed by the end of the month with a formal agreement in place by the end of July.
Chaarat added there is no certainty at this stage that the proposed Investment will be completed.
Martin Andersson, Chaarat’s executive chair, said: “We will now work with Xiwang towards progressing the PIA and subsequent investment and relationship agreements to support the growth objectives of Chaarat.
“Xiwang is undergoing a transformational change and Chaarat is one of the potential platforms for their investment consideration and passed their initial due diligence, governance and investment criteria."
Chaarat shares were up 4.2p at 13.1p in early trades.