Update on Proposed Offer for the Kumtor Mine

RNS Number : 7858F

Chaarat Gold Holdings Ltd

31 October 2018

 

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

UPDATE ON PROPOSED OFFER FOR THE KUMTOR MINE

31 October 2018

As stated in Chaarat's announcements dated 24 April 2018 and 1 May 2018, Chaarat has previously made a proposal in relation to the potential acquisition of the Kumtor mine from Centerra Gold Inc ("Centerra").

On 18 September 2018 the Company made a further proposal for the all-cash acquisition of the whole of Centerra at a premium of not less than 35% above Centerra's prevailing share price of C$5.48 at the time of the proposal (yesterday, the stock closed at C$4.95). The ultimate objective of this proposal was to combine the operations of Chaarat and the Kumtor mine, as part of Chaarat's corporate strategy to participate in consolidation in the gold mining industry. Chaarat management requested to hold discussions with Centerra's management and Board with a view to finding a mutually beneficial outcome for all stakeholders. Chaarat also provided details of its funding for the proposed Kumtor offer, including letters of support from its debt and equity partners.  

Chaarat was hoping to reach an amicable and mutually beneficial agreement with Centerra on either of its two proposals, which would have created meaningful value for Centerra's investors and stakeholders, including the Kyrgyz Republic. However, Centerra's Board and management have continually declined to engage with Chaarat.

The Chaarat Board firmly believes in the strategic rationale for both of its proposals, and the opportunity these provide for value creation to all relevant stakeholders. The Board is convinced that Chaarat is a more natural long-term owner of the Kumtor mine; and that the proposals represented an opportunity to align the interests of investors directly with the Government and People of the Kyrgyz Republic, who would benefit from a 50 per cent interest in the post-tax cash flow from the mine.

Due to the unwillingness of Centerra to engage with Chaarat, the Chaarat Board is no longer pursuing either transaction.

Chaarat's shares remain suspended from trading on AIM pending the publication of an Admission Document in relation to the potential acquisition of Kapan Mining and Processing Company CJSC, announced on 30 October 2018. The Company will provide further updates to shareholders in due course.

Enquiries

Chaarat Gold Holdings Limited Martin Andersson (Chairman)	[phone]
Artem Volynets (CEO)	[e-mail]
Numis Securities Limited
John Prior, Paul Gillam (NOMAD)	[phone]
James Black (Corporate Broking)
Powerscourt
Conal Walsh	[phone]
Matthew Attwood Isabelle Saber	[e-mail]

About Chaarat Gold

Chaarat Gold is an exploration and development company operating in the Kyrgyz Republic with a large, high grade resource - the Chaarat Gold Project. The Company's key objective is to become a low-cost gold producer generating significant production from the development of the Chaarat Gold Project.

On 30 October 2018, Chaarat announced that it had entered into a binding sale and purchase agreement to acquire the Kapan mine in Armenia from Polymetal, for a consideration of US$55 million, subject to adjustments.

Chaarat is engaged in an active community engagement programme 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 in the Kyrgyz Republic by building relationships based on trust and operating to the best environmental, social and employment standards.

Further information is available at www.chaarat.com 

 

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