Chaarat, the AIM-quoted gold mining company with assets in the Kyrgzistan and Armenia, announced the conclusion and signing of the Joint Venture agreement with Turkish Company.
Two sides had signed a binding term sheet to enter into a Joint Venture to collaborate on the Tulkubash and Kyzyltash projects in the Kyrgyz Republic on 18 March 2019.
According to the agreement, Çiftay will progressively invest up to US$31.5 million in cash for a corresponding 12.5% equity stake for Tulkubash and Kyzyltash, Chaarat’s mining projects located in the Kyrgyz Republic.
Chaarat stated that Çiftay’s investment will provide to the project the remaining equity for the Tulkubash project. The company has launched a process to raise senior project finance debt in June. The Company has received positive interest in the form of a preliminary term sheet to provide debt funding on acceptable and market terms and is working to finalise the project financing by the end of 2019 or early 2020.
The term sheet indicates sufficient funds to finance, alongside the Çiftay investment, the US$110m capital requirement to construct the Tulkubash project.
Construction of the Tulkubash projects is ongoing. The company aims to realize first gold production on late 2021. Chaarat is proceeding with detailed engineering works and has finalized several project components for immediate construction readiness.
The company mobilized initial earthworks equipment to the mine site and constructed advance temporary construction camp. Ore haul road and platforms construction have started last month and ongoing.
Chaarat Stated that the updated (on June 2019) Tulkubash Feasibility Study, as well as the ongoing drilling programme, shows the emergence of a significant new gold district.
Martin Andersson, Executive Chairman of Chaarat, commented about the conclusion of signing the Joint Venture Agreement : “I am very pleased to formally confirm our Joint Venture with Çiftay. We’ve been working with Çiftay for some time now and the industrial logic of this strategic partnership is clear. The team at Çiftay has extensive experience as a mining contractor in similar conditions and is extremely well placed to manage this type of operation.”
Tulkubash is a high-quality asset with robust economics akin to an emerging gold district with the potential to host numerous gold deposits. The project is being progressively de-risked by the team, and our drilling and exploration programmes continue to yield positive results. We fully expect Tulkubash to become a long-term cash generator capable of sustaining organic growth at Chaarat, and in due course facilitating the development of Kyzyltash.
Çiftay shares our enthusiasm, as is demonstrated by its commitment to acquire an equity stake of its own in these assets. I look forward to reporting on further positive developments at Tulkubash as we continue towards first gold pour in 2021.“
Serkan Aydin, Chairman of Çiftay, said: “We were delighted when Chaarat offered us the opportunity to co-invest in the Tulkubash and Kyzyltash projects. We have seen first-hand the immense upside potential of both assets. We share Chaarat’s enthusiasm and belief in the attractive long-term prospects for the Tulkubash project and are confident that this investment will provide a great platform to grow both businesses further.
At Çiftay, we have been involved in the mining industry for more than 50 years, developing a market leading position in the development and operation of construction and production mines, both over and underground. It is exciting to combine this knowledge with Chaarat’s considerable managerial and operational expertise.
We look forward to extending our partnership with Chaarat and making this significant co-investment as a joint venture partner with them.”
