Funds raised to advance the Tulkubash HL Project

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This press release does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction.  Any securities described in this press release have not been, and will not be, registered under the US Securities Act of 1933, as amended, and may not be offered or sold in the United States or to a U.S. person (as defined in Regulation S under the US Securities Act) except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws.  There will be no public offering of the securities in the United States or any other jurisdiction.

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Funds raised to advance the Tulkubash Heap Leach Project

Road Town, Tortola, British Virgin Islands (18 December 2017)

Chaarat (AIM: CGH), is pleased to announce that the Board has decided to raise up to US$20 million through a mixture of equity and short term Senior Secured Convertible Loan Notes ("Notes") (the "Issue") in order to optimise the development of the Tulkubash heap leach project and ensure efficient execution of the construction schedule, while also allowing for continued exploration of the oxide deposit during 2018.

Highlights

·     Raising up to US$20 million through a mixture of:

o  Equity at a price of 25 pence per Chaarat ordinary share ("Share").

o  Notes with a conversion price of 33 pence per share.

·     US$15.0 million of commitments received to date including participation from management and directors of the Company.

·     Proceeds will be used to fund:

o  Accelerated detailed engineering and ongoing development of the owner's team to ensure that the Company is well placed to commence project construction in Q3 2018.

o  Ongoing exploration to further extend the heap leachable resource base in the Tulkubash Zone.

·     Proceeds will position the Company to deliver full construction financing in Q2 2018 and deliver effective execution of mine construction while continuously driving shareholder value through oxide resource expansion.

Robert Benbow, CEO of Chaarat, commented:

"I am proud of the achievements that we have delivered at Chaarat in 2017: developing our team and strategically positioning our company to be a material gold producer.  I am delighted to underline my belief in our team and our assets by investing in the financing of the next stage in our growth.

"As we transition Chaarat into production, accelerating the definitive engineering and developing our owner's team for the project will ensure that we are well placed to commence construction activities in 2018.

"Following the success of our exploration programme throughout 2017, securing the funding to commit to a similar programme in 2018 will allow Chaarat to deliver on its goal of developing the Tulkubash heap leach project at a significant scale. I look forward to announcing the updated resource in January 2018 and the results of the Tulkubash definitive feasibility study in Q1 2018."

Martin Andersson, Chairman of Chaarat, commented:

"I am encouraged with the level of interest we have received from both new and existing equity and loan note holders, allowing us to implement our plans for the Tulkubash development.  In particular, the meaningful participation from the management team in this financing is a significant show of confidence in our project and underlines my belief in the long term future for Chaarat.  The Company's Board and management team, with the consequential additions over this past year, have the ability and professionalism to deliver our near-term goals of heap leach development and resource expansion, which will be advanced by this financing."

Fundraising

In order to proceed with the development of the Tulkubash Heap Leach Project, the Board of Chaarat has decided to raise up to US$20 million to fund:

·     US$6.2 million for ongoing along-strike exploration activities to further extend the heap leachable resource base at Tulkubash.  To date, only 2.2 kilometres ("km") of the 6.0km Tulkubash resource potential in the mining licence has been drilled, and this drilling has shown mineralisation to be consistently continuous along strike.  Significant along-strike resource potential has been defined through a mixture of channel sampling and soil geochemistry along trend to the north-east.  A systematic exploration programme is being planned, targeting extension of the resource base in parallel with the construction of the heap leach project.  This should allow the scale of the Tulkubash heap leach project to be expanded quickly at a low capital cost once production has commenced.  If US$20 million is not raised the planned exploration programme will be scaled back accordingly.

·     US$10.5 million for accelerated detailed engineering and ongoing development of the owner's team to ensure that the Company is well placed to commence project construction in Q3 2018.  Much of the Tulkubash feasibility study is now complete, ahead of the updated resource due for release in January 2018.  Accelerating the detailed engineering, with a comprehensive owner's team, will allow potential cost savings to be identified and long-term supply partners to be brought in to the project.  This will place the Company in a strong position to commence project development in Q3 2018 and deliver the project on time and on budget.

·     US$3.3 million for general and administration costs of Chaarat for 2018 including corporate costs, licence retention, social programme and fundraising costs.

The Company is therefore conducting a private placing to selected investors to raise up to US$20 million through the Issue of a mixture of Shares and Notes.  As at 17 December 2017 commitments from investors and expressions of interest from directors and management have been received in respect of US$9.8 million in Shares and US$5.2 million in Notes, together representing 75 per cent of the total anticipated Issue.  An initial tranche of Shares is expected to be settled before the end of December 2017, with the second and final tranche of Shares, as well as the issue of the Notes, being settled by 31 January 2018.

Subscription by Management and Concert Party

Chaarat has received expressions of interest from directors and members of the Concert Party (as referred to and defined in the Company's announcement on 27 October 2017) (the "Concert Party") to participate in this fundraising.  The Concert Party members hold 46.7 per cent of the existing issued share capital of the Company, which is expected to be reduced as a result of this fundraising.    The Concert Party members include: Labro Investments Limited ("Labro"), in which Martin Andersson has an indirect beneficial interest in the majority of the shares; and Martin-Wiwen-Nilsson.  Both Martin Andersson and Martin Wiwen-Nilsson are directors of the Company. 

Equity

Ordinary shares of the Company will be placed at 25 pence per share.  

Senior Secured Convertible Loan Note:

Senior Secured Convertible Loan Notes will be placed on the following principal terms:

1.     Short term - 18 months maximum.  The Notes mature on 30 June 2019.

2.     High yield - a minimum of 10 per cent, US$ denominated.

3.     Conversion price of 33 pence.

4.     Security to be held jointly with holders of the Company's existing 2018 Notes (repayable on 30 September 2018).

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.  Upon the publication of this announcement, this inside information is now considered to be in the public domain.  It is expected that a further announcement will follow on closing of the second tranche of the transaction, including to confirm the final subscriptions of Labro, Martin Wiwen-Nilsson, and the other Concert Party members.

Enquiries: 

Chaarat Gold Holdings Limited                                             + 44 (0) 20 7499 2612

Martin Andersson - Chairman                                               info@chaarat.com

Linda Naylor - FD/Company Secretary

Numis Securities Limited                                                        +44 (0) 20 7260 1000

John Prior, Paul Gillam (NOMAD)

Further information relating to the Issue

The Company's issued share capital currently comprises 351,865,832 Shares and the total number of voting rights, on the basis of one vote per Ordinary Share, comprise 351,865,832 voting rights (the "Total Voting Rights").  The Total Voting Rights figure may be used by shareholders as the denominator for any calculation by which they will determine whether or not they are required to notify their interests in, or a change to their interest in, the issued share capital of the Company.  Further announcements will be made following settlement of the first tranche of Shares forming part of the issue, as well as upon settlement of the final tranche of Shares and Notes.

Chaarat is a company incorporated in the British Virgin Islands and is therefore not subject to the UK City Code on Takeovers and Mergers.  The Articles contain a regulation which provides that where any person (i) acquires interests in shares which (taken together with interests in shares held or acquired by persons acting in concert with him) carry 20% or more of the voting rights of the Company; or (ii) holds (together with persons acting in concert with him) interests in shares representing not less than 20% but not more than 50% of the voting rights and such person (or any person acting in concert with him) acquires an interest in additional shares which increases his percentage of voting rights, the Board shall be entitled, but not obliged, to require that person to extend a mandatory offer to all of the Company's shareholders to acquire their Ordinary Shares.

The Board has exercised its discretion under the Articles so as not to require a mandatory offer to be made in connection with the Issue by any member of the Concert Party in respect of the issue to them of Shares, or the issue to them of Notes or the conversion thereof, or as a result of any redemption or purchase by the Company of its own voting shares at any time in the future, but not in respect of any other purchase of Shares or any interest therein by any member of the Concert Party or any other person acting in concert with them.

China Nonferrous Metals International Mining Co Ltd ("CNMIM")

Chaarat is required to give notice to CNMIM if it intends to issue any Shares for cash or non-cash consideration. CNMIM may, within 15 business days of receipt of such notice being issued in connection with any issue of Shares under the Issue or any conversion of Notes into Shares, give written notice to require Chaarat to issue such number of Shares to CNMIM, on the same terms as such issue of, or conversion of Notes into Shares, as is necessary to maintain the percentage shareholding of CNMIM in the Company prior to conversion. If and when any Shares are issued or Notes are converted, the required notice in respect of the issue of, or conversion of Notes into, Shares will be sent to CNMIM and a further announcement made, if appropriate.  CNMIM currently holds 22,469,289 Ordinary Shares representing 6.39% of the issued share capital of Chaarat.

NOTES TO EDITORS:

About Chaarat Gold

Chaarat Gold is an exploration and development company operating in the Kyrgyz Republic with a large, high grade resource - the Chaarat Gold Project. The Company's key objective is to become a long term, low-cost gold producer.

Chaarat aims to create value for its shareholders, employees and communities in the Kyrgyz Republic by building relationships based on trust and operating to the best environmental, social and employment standards.

Further information is available at www.chaarat.com