Aim-quoted Chaarat has concluded the previously announced joint venture (JV) agreement with Turkish contractor Çiftay İnsaat Tahhüt ve Ticaretthe Turkish, in terms of which the parties will collaborate on the Tulkubash and Kyzyltash projects in the Kyrgyzstan.

Based on an agreed valuation of $252-million for Tulkubash and Kyzyltash, Çiftay will progressively invest up to $31.5-million in cash for a corresponding 12.5% equity stake in these two project assets.

Çiftay's investment provides the remaining equity for the Tulkubash project.

Chaarat has launched a process to raise senior project finance debt in June and reported on Friday that it had received positive interest in the form of a preliminary term sheet to provide debt funding. It is aiming 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 $110-million capital requirement to construct the Tulkubash project.

Construction continues at Tulkubash and the first gold production is on track for late 2021.

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,” commented Chaarat executive chairperson Martin Andersson.

Çiftay chairperson Serkan Aydin described Tulkubash as a high-quality asset with robust economics akin to an emerging gold district with the potential to host numerous gold deposits.

“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.”