Chaarat Gold Holdings Ltd. said April 3 that it plans to raise US$15 million through short-term senior secured convertible loan notes to cover first-stage financing for the Tulkubash heap leach project, part of the Chaarat gold project in Kyrgyzstan.
The company said the placement, which is planned to close by April 28, will have an 18-month maximum maturity in which it will be either refinanced or converted at a price of 30 cents per share. Chaarat opted for a debt issue, as it considered an equity issue too dilutive and because certain investors who had been wanting exposure to company stock found that the lack of liquidity was limiting their ability to buy stock.
Chaarat Gold Holdings plans to use the proceeds to conduct an approximately 12,000-meter drilling program aimed at increasing the reserve base of the Tulkubash project, to improve access to the site and to begin the engineering design of the project.
In April 2016, the company reported an optimized feasibility study for the overall project, showing posttax net present value at US$615 million, using an 8% discount rate, a gold price of US$1,250 per ounce and an internal rate of return of 24.82%.