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Chaarat Gold Hlgs Ld - Stabilization agreement with the Kyrgyz Government

RNS Number : 0977Y
Chaarat Gold Holdings Ltd
27 December 2019

27 December 2019


Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Stabilization agreement with the Government of the Kyrgyz Republic


Funding Update


Chaarat (AIM:CGH), the AIM-quoted gold mining company with assets in the Kyrgyz Republic and Armenia, is pleased to announce that it has concluded a stabilisation agreement with the Government of the Kyrgyz Republic in respect of the Company's Tulkubash and Kyzyltash projects (the "Agreement") and to provide a funding update.

The Agreement is based on the investments law of the Kyrgyz Republic (the "Law") which stimulates investors to make substantial investments, including ones into the country's mining industry, by providing to them formal assurances on stability of the tax regime. Subject to Chaarat's satisfaction of conditions specified in the Law and in the Agreement each of Chaarat and its local subsidiary CJSC Chaarat Zaav is entitled to benefit from any future changes of direct taxes (including income tax, profits tax, value added tax, royalty, property tax, land tax and bonus) and a number of non-tax payments (including license retention fees and others, except those to be made for services provided by public authorities) during 10 years from the date of the Agreement.

Each of the Company and its subsidiary CJSC Chaarat Zaav may realize such benefit by choosing the most beneficial terms of payment of taxes specified above using a procedure established by the Kyrgyz legislation. In case any of the taxes specified above are increased each of the Company and its local subsidiary is entitled to apply the rates effective as at the date of the Agreement.

Project construction continues to progress well at Tulkubash, with first gold production on track for late 2021. The Company is due to announce an updated Resource and Reserve statement for the project in Q1 2020, following exploration work conducted in 2019.

Funding Update

As announced in October 2019, the Company continues to advance project financing discussions for Tulkubash with several international groups. The Company is on track to finalise the project financing by the end Q1 2020 with term sheets having been received by the relevant parties. The Company is now working towards documentation and further updates will be made by the Company in due course.

The Company is also considering refinancing debt maturing in Q1 2020 and possible options for the Kapan debt as well, although the latter is optional. The objective of any possible refinancing is to reduce the cost of capital of the overall finance charges relating to the existing facilities and terms sheets have been received for this refinancing. The Company continues to evaluate opportunistic capital opportunities to refinance existing financing facilities, fund working capital and reduce its overall cost of capital, with an overall objective of maximising value for shareholders. 



Artem Volynets, Chief Executive Officer, commented:

"I am pleased to announce the signing of the Stabilization agreement with the Government of the Kyrgyz Republic with respect to our Tulkubash project. This agreement shows strong support for Chaarat in country and is a strong endorsement for the Company going forward. This also highlights both Chaarat's and the Government's focus on the stability of our future operations and allows us both to continue to commit to the development of this project.

Financing work for Tulkubash is progressing well and we are now at the term sheet stage. We look forward to providing further financing updates on this work and other refinancing workstreams in Q1 2020."


Chaarat Gold Holdings Limited
Artem Volynets (CEO)

+44 (0)20 7499 2612

[email protected]

Numis Securities Limited

John Prior, Paul Gillam (NOMAD)

+44 (0) 20 7260 1000

James Black (Corporate Broking)

SP Angel

+44 (0) 20 3470 0470

Ewan Leggat (Joint Broker)


Charles Vivian

+44 (0)20 7920 3150

Gareth Tredway

Barney Hayward

[email protected]



About Chaarat

Chaarat is a gold mining company which owns the Kapan operating mine in Armenia as well as Tulkubash and Kyzyltash Gold Projects in the Kyrgyz Republic. The Company has a clear strategy to build a leading emerging markets gold company with an initial focus on Central Asia and the FSU through organic growth and selective M&A.

Chaarat is engaged in active community engagement programmes to optimise the value of the Chaarat investment proposition.

Chaarat aims to create value for its shareholders, employees and communities from its high-quality gold and mineral deposits by building relationships based on trust and operating to the best environmental, social and employment standards. Further information is available at www.chaarat.com.



This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.

Quick facts: Chaarat Gold Holdings Ltd

Price: 26

Market: AIM
Market Cap: £122.24 m

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