Chaarat Gold Holdings Ltd (AIM:CGH) shares fell more than 20% as the company had to slash the price of a new funding round to get it away, even with the gold price at record highs.
The Kyrgyz Republic-based group is raising £1.1 million at 5.25p per share with a further £0.7 million coming from part conversion of Labro Investments' working capital facility.
Chaarat said the new funding will enable it to cover costs to complete the financing of the Tulkubash Gold Project, targeted for the end of the first quarter of 2024.
David Mackenzie, Chaarat’s chief financial officer, said: "Chaarat is at a pivotal stage in its evolution, as we approach a Final Investment Decision in the coming months of the Tulkubash project.
“We believe a low capex, as previously reported, of $104 million and a relatively short 18-month time horizon to first production is a compelling opportunity for investors.
“Tulkubash represents the first dimension of our production story, which could provide significant cash flow from a 95,000oz per annum gold operation from 2025 onwards.”