Aim-listed Chaarat, which is aiming to be a key consolidator of gold projects in the Commonwealth of Independent States region, on Tuesday announced that a medium-sized polymetallic asset has piqued its interest.

The asset produced about 50 000 oz of gold equivalent in 2017, and, should the transaction be completed, it will transform Chaarat from a development company into a cash-flow generating producer.

In terms of a nonbinding agreement, Chaarat will buy the asset for $75-million, which the junior intends to fund by a combination of debt and fundraising proceeds.

The company, which is developing the Tulkubash project in Kyrgyzstan, said that the transaction was at an advanced stage and that definitive documents would be available in late September, with the deal expected to be concluded in November.

"The first asset we are acquiring will be an excellent addition to Chaarat's portfolio and accelerates our strategic aim of building a leading emerging markets gold company. It turns the company cash flow-generative in a single step, and demonstrates Chaarat Gold's ability to execute deals quickly, diligently and on accretive terms. Mergers and acquisitions is a vital component of our growth strategy and we are delighted to be in the process of securing this asset at what management believe is a very attractive price for Chaarat and its shareholders," said Chaarat CEO Artem Volynets.

Earlier this year, Chaarat made a move on the Kumtor mine, in Kyrgyzstan, but the company has failed to convince its owner, Canada-based Centerra Gold, of the merits of its proposal.

Despite a lack of feedback on its offer from Centerra, Chaarat said on Tuesday that it remained interested in Kumtor and that its financing partners had expressed continued interest and commitments in supporting the deal.

Meanwhile, Chaarat on Tuesday also announced that it had completed the first phase of up to $100-million of a convertible debt placement with existing convertible investors, as well as select new investors.

The fundraise comprises the issue of secured convertible notes 2021 with a conversion price of £0.37 a share and a 10% a year interest rate, which increases to 12% a year for the last 18 months. A single interest payment is due on the final repayment date (October 31, 2021) provided that no conversion has occurred.

The first round of the fundraise to refinance the existing bonds has resulted in irrevocable commitments totalling $26-million from holders of existing notes and a select few new investors.

The company intends to raise additional growth capital in a second fundraising round and is targeting a further closing in late September.

The gross proceeds of up to $100-million from the fundraise are anticipated to be used to fund the acquisition, for the continued development of the Tulkubash project, general corporate purposes and to refinance existing notes.