Gold mining company Chaarat, which trades on London’s Aim, on Friday unveiled plans for a fundraising to raise $25-million and said an agreement with its largest shareholder would slash debt by one-third.
The company would raise the capital by issuing new shares at 26p each. It has received commitments for $23.5-million.
Chaarat said it would use the fundraising to complete the upfront equity portion of the Tulkubash project, in Kyrgyzstan, and that the raising would fulfil one of the key criteria to draw on any debt project finance facility to be arranged.
The company has ongoing discussions on debt financing of about $80-million and anticipates having this completed during the first half of 2021 in order to fully fund the project construction capital of $110-million.
Funds in excess of those required for Tulkubash would be used for growth activities at the Kyzyltash project and the East Flank development at the Kapan operation.
Alongside the fundraise, Charaat said Labro Investments would convert the entirety of its outstanding term loan of $22-million plus accrued interest. Labro would be issued about 62.4-million new shares at the issue price.
If approved by the board, this would reduce the Chaarat debt position to $46.5-million, a reduction of 33% from the currently outstanding $68.5-million.