PROJECT FINANCE

Chaarat forms JV in Kyrgyz Republic

Chaarat Gold (AIM:CGH) has found a joint venture partner for its Tulkubash and Kyzyltash projects in the Kyrgyz Republic.

Staff reporter
Chaarat has found a partner to construct the Tulkubash project

Chaarat has found a partner to construct the Tulkubash project

Chaarat signed a binding term sheet with Turkish mining and mine construction contractor Çiftay nsaat Tahhüt ve Ticaret, which will be appointed as construction and long-term mining contractor for Tulkubash.

It said definitive agreements for the JV were likely to be concluded in the June quarter.

Under the agreement, Çiftay will invest US$31.5 million for a 12.5% equity stake in Tulkubash and Kyzyltash, which have an agreed combined valuation of $252 million.

Chaarat said Çiftay's investment in Tulkubash would cover a significant amount of the project's required equity, with total capital expenditure expected to be $120-130 million.

Executive chairman Martin Andersson said Çiftay's investment represented a significant milestone for Tulkubash's funding.

"This agreement illustrates our focus on shareholder value and ability to creatively fund the business on accretive terms," he said.

To avoid dilution to Chaarat's shareholders, the remainder of the capex will be funded via debt, which the company hopes to have secured by the end of the September quarter.

Çiftay has earthworks equipment at the mine site and has constructed a temporary construction camp to be ready for an early spring start to major earthworks, which had been negotiated at arms-length rates, representing an improvement to the terms indicated in last year's feasibility study.

Tulkubash construction is ongoing, with first gold production on schedule for 2021.

An updated feasibility study for Tulkubash is also on track to be published in the June quarter.

Chaarat's shares rose 4.5% Monday on the news to 25.44p (US33.73c), also up 20.57% from six months ago.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

A growing series of reports, each focused on a key discussion point for the farming sector, brought to you by the Kondinin team.

editions

Mining Journal Intelligence Investor Sentiment Report 2024

Survey revealing the plans, priorities, and preferences of 120+ mining investors and their expectations for the sector in 2024.

editions

Mining Journal Intelligence Mining Equities Report 2023

Access an exclusive, inside look on the quarterly mining IPOs and secondary raisings data and mining equities performance tables with an annual Stock Exchange Comparisons supplement.

editions

Mining Journal Intelligence World Risk Report 2023 (feat. MineHutte ratings)

A detailed analysis of mining investment risks across 121 jurisdictions globally, built on 11 ‘hard risk’ metrics and an industrywide survey.

editions

Mining Journal Intelligence Global Leadership Report 2023: Social licence

Gain insights into social licence trends and best practices from interviews with 20+ top mining company executives and an industrywide survey.