New-look Chaarat Gold returns to trading on AIM

Chaarat Gold published its admission document relating to the proposed acquisition of Kapan Mining and Processing Company on Friday, and announced the re-admission of its ordinary shares to trading on the AIM market.

The AIM-traded firm said that, following publication of the admission document, the temporary suspension of trading in its shares was lifted at 1130 GMT.

It also announced that it had secured further improved terms on the agreed acquisition of Kapan by its subsidiary, Chaarat Gold International Limited (CGIL).

Kapan's vendor, PTML Holding - a subsidiary of Polymetal International - had agreed to accept $10m of the $55 million total consideration for Kapan in convertible notes of Chaarat, rather than $5m as had been previously announced.

“This change strengthens Chaarat's financial position,” the company’s board said in its statement.

“It also demonstrates the ability of the company to reach favourable terms in transactions, as well as the attractiveness of its investment proposition.”

The change remained conditional on closing the Kapan acquisition no later than 15 January, otherwise the terms of the transaction would revert to those set out on 30 October.

Polymetal also agreed that its right to require CGIL to purchase such loan notes would apply only after 19 months from the date of completion of the acquisition.

In addition, certain changes were made to the working capital adjustments, Chaarat said.

The Kapan acquisition was announced after trading in Chaarat’s ordinary shares was suspended in April.

“Subject to shareholder approval, the Kapan acquisition is expected to be a key milestone in the Company's development, turning Chaarat from developer to producer in a single step,” the board explained.

“It has been achieved under the stewardship of a new CEO and senior management team, supported by an augmented board.

“Additionally, the company continues to develop - subject to funding - two standalone projects with significant growth potential.”

Chaarat said the period of change had involved “significant and global” investor marketing and engagement, which the board believed set the firm up well for future capital market activities.

It said it was “pleased” that the capital market activities thus far had resulted in minimal dilution to shareholders - a key strategic objective for the directors.

“Chaarat will continue to pursue its strategy of organic growth from its existing exploration programme, and transformative mergers and acquisitions, and add-on acquisitions.”

The board also announce a number of changes to its composition as it passed those new milestones, with Hussein Barma joining as an independent non-executive director with effect from Friday.

Gordon Wylie, already a board member, had been appointed as deputy chairman and senior independent director, while Dorian ‘Dusty’ Nicol - currently technical director and head of exploration - was stepping down from the board with effect from 12 December.

Nicol would join the executive team as senior vice-president of exploration with immediate effect.

Richard Rae, current senior independent non-executive director and the company's longest-serving board member, had resigned as a non-executive director with effect from Thursday, while Sergei Zhukov was joining the company as head of legal and company secretary.

“We are very pleased to be issuing an admission document in respect of the Kapan acquisition, and look forward to bringing a new Chaarat back to the AIM market,” said chief executive officer Artem Volynets.

“Since the suspension of the shares in April, the company has been transformed with a new board and management, and is successfully executing on its new strategy.”

Volynets said the firm expected to close on its first major M&A deal and become a producer shortly.

“Chaarat is fully funded on a steady-state basis, including the acquisition of Kapan, as we pursue our ambitious plans in our target regions.”