24th Apr 2018 10:51
LONDON (Alliance News) - Chaarat Gold Holdings Ltd on Tuesday, noting recent media reports, confirmed the potential acquisition of the Kumtor gold mine in the Kyrgyz Republic from Canadian mining company Centerra Gold Inc.
The Kumtor gold mine is one of the largest in Central Asia, as it production exceeded 500,000 ounces last year and generated USD188.0 million of free cash flow.
The gold development company said that it intends to purchase Centerra's stake in Kumtor mine in partnership with the Kyrgyz state consortium Kyrgyzaltyn OJSC.
Chaarat said that following the transaction it will secure control over Kumtor's common equity and operation of the mine while, Kyrgyzaltyn will own Kumtor's preferred equity and will be entitled to 50% of the economic benefits.
Chaarat said that it will pay for the purchase with cash, raised through a mixture of debt and equity, "backed by two major international financial institutions" that it didn't name, while Kyrgyzaltyn will return its Centerra holding back to the company.
The deal would represent a reverse takeover of Chaarat under AIM rules, and therefore shares in Chaarat were temporarily suspended from trading on Tuesday, pending an announcement and publication of an admission document.
Looking ahead, Chaarat said that it plans to invest up to USD600.0 million into two other projects in Kyrgyz Republic's mining sector over the next five to seven years as part of this deal.
"Chaarat is ideally placed to take advantage of the opportunities presented by this world-class asset," the company said. "The proposed acquisition represents a substantial increase in the overall scale of Chaarat's business and Chaarat's board of directors is confident that Chaarat can achieve significant value for its shareholders."
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