16th Oct 2018 11:45
LONDON (Alliance News) - Chaarat Gold Holdings Ltd on Tuesday said it is halving its fundraising target due to positive developments in its acquisition and accelerated funding for its Tulkubash gold mine in Kyrgyzstan.
Chaarat has cut its convertible debt placement goal to USD50 million from USD100 million, citing positive developments in its acquisition of an unnamed medium-sized polymetallic asset in the Commonwealth of Independent States.
"The company is in the process of completing due diligence and finalising definitive terms, and plans to sign the sale and purchase agreement as soon as practicable," said Chaarat.
The resource upgrade at Chaarat's Tulkubash mine was also a contributing factor in the target reduction. Chaarat said it has made significant progress with a plan to bring forward a separate debt financing package of up to USD100 million. This is to reduce the upfront equity needed to bring the mine into production.
In September, having raised just USD17.6 million in the first phase of fundraising, Chaarat amended its terms. The new terms included a semi-annual cash coupon on shares, rather than a single interest payment.
"The company's decision to reduce its fundraising requirements also reduces the dilutive effects on current shareholders of a larger fundraising. Chaarat continues to consider alternative funding options that provide greater benefits to shareholders," Chaarat said.
Chaarat shares are currently suspended, last closing at 24.15 pence.
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