Chaarat Gold Holdings Ltd (LON:CGH) has unveiled plans to raise at least US$12mln through a share placing in a bid to “opportunistically strengthen its balance sheet”.
The AIM-listed miner said it will issue the new shares at a price of 26p each, a 10.3% discount to its closing price on Tuesday.
READ: Chaarat Gold extends maturity date on US$17mln loan, posts 2019 results
Chaarat said it already has commitments from its major shareholders, all board members and senior management to invest over US$12mln by way of fresh investment or conversion of existing debt in the placing and is open to receiving additional offers.
This includes US$10mln from the company’s largest shareholder, Labro, and a subscription of at least US$2mln from all board members, senior management, the company's largest institutional shareholder and other existing investors.
Chaarat said the proceeds, alongside an extension to its US$17mln loan facility, will allow it to progress its construction schedule and drilling program at the Tulkubash project in Kyrgyzstan, as well as advancing the “high-grade” Kyzyltash project and accelerate “selected [merger & acquisition] opportunities” and reduce its overall indebtedness.
"We are pleased to announce a comprehensive set of measures to strengthen Chaarat's balance sheet and we are delighted to see such strong support from our equity and debt investors in the current challenging market environment”, said Chaarat chief executive Artem Volynets in a statement.
“We are also proud to report full alignment of interests between the company's management and its key stakeholders with all board members and top management investing in the placing. We all believe that strengthening of our balance sheet and the stability of our operations give us the ability to continue executing on our growth strategy and take advantage of opportunities presented", the CEO added.
Chaarat’s shares were 5.9% lower at 27.3p in early trading on Wednesday.