Chaarat Gold Holdings Ltd (LON:CGH) is to raise US$15mln to fund the first stage of its Tulkubash heap leach project in the Kyrgyz Republic.
The money will come through in the form of short term senior secured convertible loan notes that will be refinanced or converted in 2018 and help fund 12,000m, intensive drilling program.
An equity raise would have been too dilutive at the current share price level, the board believes.
Once the drilling programme is complete, Chaarat said the aim is to reduce pre-stripping and upfront costs through a re-design of pit and mine area.
A bankable feasibility study and construction finance package for enlarged project is scheduled for completion at the end of the first quarter of 2018.
The Tulkubash heap leach project currently comprises only 13% of the total Chaarat resource, which has a total Measured and Indicated (M&I) Resource of 6.03 million ounces.
Shares eased 5% to 18.5p.