Working Capital Facility

Chaarat Gold Holdings Ltd

12 October 2023

 

12 October 2023

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Working Capital Facility

Chaarat Gold (AIM: CGH), the AIM-quoted exploration and development company with assets at various stages of development in the Kyrgyz Republic, is pleased to announce that it has entered into a new US$5 million secured working capital facility arrangement (the "Facility") with its largest shareholder, Labro Investments Limited ("Labro").  The Facility carries interest at 12% per annum and must be repaid no later than 31 July 2024.  The key terms of the Facility are below.

The new US$5 million facility (combined with the US$5 million cash consideration already received from the sale of Kapan) will enable Chaarat to repay its existing working capital facilities in full and will provide Chaarat with sufficient operational funding through to Q3 2024.

David Mackenzie, Chief Financial Officer, said:

"Chaarat appreciates the continued strong support from our largest shareholder which enables the Company to continue towards the development of its Kyrgyz assets. The new facility will provide sufficient operational funding for Chaarat to continue to work constructively with the holders of its convertible loan notes and towards the completion of a fully-financed first phase development of Tulkubash."

Key terms of the Facility

•     Principal amount of US$5 million available for drawdown in four tranches.

•     Repayment date no later than 31 July 2024.

•     Interest rate of 12% per annum.

•     Security in the form of a charge over the Company's assets  (excluding its wholly-owned subsidiary, Zaav Holdings Limited ("ZHL"), which is already charged to the holders of the Company's convertible loan notes) and an option for Labro to take a second fixed charge (subordinated to the charge in favour of the convertible loan noteholders) over ZHL.

•     A 5% commitment fee to be satisfied by the issue to Labro of 4,000,000 new ordinary shares of US$0.01 each in the Company (the "Commitment Fee Shares"). The shares are to be issued at 5p/share price at USD/GBP 1.25.

Related Party Transaction

The Facility constitutes a related party transaction under AIM Rule 13 of the AIM Rules for Companies as Labro is a substantial shareholder of the Company and Martin Andersson (the executive chair of Chaarat) is indirectly beneficially interested in the majority of the shares in Labro. The independent directors of the Company for the purposes of this transaction (being all of the Company's Directors save Martin Andersson) consider, having consulted with the Company's Nominated Adviser, that the terms of the Facility are fair and reasonable insofar as the Company's shareholders are concerned.

Regulation 19 Waiver

There is a provision in the Company's articles of association ("Regulation 19") which states that the Board has the right to require any holder of more than 20% of ordinary shares in the capital of the Company (the "Ordinary Shares") to make a mandatory offer to all the Company's shareholders to acquire their Ordinary Shares if they acquire an additional interest in any Ordinary Shares.

Labro currently holds: •     308,750,537 Ordinary Shares representing approximately 44.77 per cent of Chaarat's issued share capital; and •     a loan note for US$1,614,316 (the "Loan Note") convertible into 3,947,260 Ordinary Shares assuming full conversion of principal and interest to maturity on 31 October 2023. Mr Andersson is personally beneficially interested in 6,969,592 Ordinary Shares representing 1.01% of Chaarat's issued share capital.  In addition, Mr Andersson also holds options to acquire 16,300,639 Ordinary Shares under the Company's 2019 management incentive plan. Following the issue of the Commitment Fee Shares, Labro's and Mr Andersson's combined shareholdings in the Company will be as follows: Undiluted* Diluted for Loan Notes* Fully diluted* Labro 312,750,537 45.09% 316,697,797 45.40% 316,697,797 44.36% Mr Andersson 6,969,592 1.00% 6,969,592 1.00% 23,270,231 3.26% Combined 319,720,129 46.09% 323,667,389 46.40% 339,968,028 47.62% * Undiluted assumes issue of 4m Commitment Fee Shares and no other issue of new Ordinary Shares, including on exercise of existing options or on conversion of any existing convertible loan notes. * Diluted for Loan Notes assumes issue of 4m Commitment Fee Shares and full conversion by Labro of the Loan Note principal and interest to maturity, no options to subscribe for Ordinary Shares exercised, no other convertible loan notes converted, and no other Ordinary Shares issued. * Fully diluted assumes issue of 4m Commitment Fee Shares and full conversion by Labro of the Loan Note principal and interest to maturity, no other convertible loan notes converted, the exercise in full by Mr Andersson of his existing share options, no other options to subscribe for Ordinary Shares exercised, and no other Ordinary Shares issued.

On 11 October 2023, the Board (excluding Martin Andersson) exercised its discretion to waive the requirement for a mandatory offer under Regulation 19 of the Company's articles of association in respect of the issue of the Commitment Fee Shares to Labro.

An application has been made to the London Stock Exchange for the Commitment Fee Shares to be admitted to trading on AIM, and it is expected that admission will become effective at or around 8:00am (London time) on 17 October 2023.

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.

Enquiries
Chaarat Gold Holdings Limited	[phone]
Martin Andersson (Executive Chair)	[e-mail]
Canaccord Genuity Limited (NOMAD and Joint Broker)	[phone]
Henry Fitzgerald-O'Connor
James Asensio
Cavendish Capital Markets Limited (Joint Broker)	[phone]
Neil McDonald
Panmure Gordon (UK) Limited (Joint Broker)	[phone]
John Prior Hugh Rich

About Chaarat

Chaarat is an exploration and development company which owns the Tulkubash and Kyzyltash gold projects in the Kyrgyz Republic. The Company has a clear strategy to build a leading emerging markets gold company through organic growth and selective M&A.

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.

ENDS

Appendix 1 - PDMR form

1	Details of the person discharging managerial responsibilities / person closely associated
a)	Name	Labro Investments Limited
2	Reason for the notification
a)	Position / status	Person/Entity closely associated with the Chairman
b)	Initial notification / amendment	Initial notification
3	Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor
a)	Name	Chaarat Gold Holdings Limited
b)	Legal entity identifier	213800T2A5CV84VTFJ70
4	Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted
a)	Description of the financial instrument, type of instrument	Ordinary shares of US$0.01 each
	Identification code	VGG203461055
b)	Nature of the transaction	Remuneration in shares under a loan agreement
c)	Currency	GBP
d)	Price(s) and volume(s)		Price(s)	Volume(s)
			5p	4,000,000
e)	Aggregated information ·    Aggregated volume ·    Aggregated price ·    Aggregated total	4,000,000 5 pence £200,000
f)	Date of the transaction	11 October 2023
g)	Place of the transaction	XLON

 

END