Chaarat Gold Holdings Limited (LON:CGH) is to receive a cash boost of US$31.5mln to develop the Tulkubash and Kyzyltash projects in the Kyrgyz Republic.
Turkish mining specialist Ciftay will pay the cash in increments and become the mining and construction contractor at Tulkubash with a 12.5% stake in both that project and Kyzyltash.
The agreement values the two developments at US$252mln and the amount to be paid by Citfay amounts to a significant portion of the equity required for Tulkubash's construction.
Debt financing
Total capital expenditure for the project is between US$120 and $130 mln, but Chaarat expects the vast majority of the rest will be funded by debt with financing set to be agreed by the third quarter of 2019.
Çiftay has already started earthworks at Tulkubash, where first gold production is scheduled for 2021.
An updated feasibility study will be published next quarter.
Martin Andersson, Chaarat’s executive chairman said: "Çiftay's investment represents a significant milestone for the funding of Tulkubash and clearly demonstrates the company's inherent value.