1st May 2018 12:11
LONDON (Alliance News) - Chaarat Gold Holdings Ltd said Tuesday its recent acquisition proposal for the Kumtor mine from Canadian mining company Centerra Gold Inc values the mine at USD800 million.
The current proposal will see Chaarat pay USD400 million in cash. Subject to the Kyrgyz government, USD400 million of Centerra shares currently held by OJSC Kyrgyzaltyn will be transferred to Centerra and cancelled in exchange for a 50% direct preferred economic interest in the Kumtor mine.
Chaarat will own all of the common equity of Kumtor - as well as control over management and operations of the mine - and Kyrgyzaltyn will own all of the preferred equity of the mine and be entitled to 50% of the economic benefits from the mine.
The gold exploration company will find the cash component through a mixture of debt and equity backed by two "major international financial institutions".
In a separate statement, Chaarat said it has begun its 2018 drilling campaign at its Tulkubash oxide gold deposit in the Kyrgyz Republic.
CEO Robert Benbow said: "The ongoing infrastructure construction at Tulkubash has allowed us to get an early start on this year's drilling programme. The drilling programme is designed to extend gold mineralisation along strike from the defined resource that forms the basis for the recently completed and announced feasibility study. The feasibility study is the blueprint that defines how we initiate gold production in 2020. The ongoing exploration along strike from the currently defined resource is the mechanism by which the initial investment is warranted and enhanced."
Shares in Chaarat are suspended but last closed at 24.15 pence each.
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