(Alliance News) - Chaarat Gold Holdings Ltd on Thursday announced a USD5.8 million share placing as it looks to strengthen its balance sheet.
Chaarat, which has assets in Kyrgyzstan and Armenia, placed 12.9 million new shares at a price of 35 pence each. Shares were untraded Thursday in London, last quoted at 34.40p.
Most of the shares have been taken up by existing and new shareholders, but 2.9 million were taken by Labro Investments Ltd. Labro, majority-owned by Chair Martin Andersson, has been slowly purchasing shares recently and now holds 35% of Chaarat following the placing.
Chaarat owes debt to Labro as part of a working capital facility announced last December, but the miner said on Thursday this has been offset by Labro taking up the placing shares. The amount owed to Labro is now USD3.5 million, from USD4.8 million before.
Chief Executive Artem Volynets commented: "We are delighted to see continued support from our existing shareholder base as well as welcome new investors into the exciting Chaarat story.
"The prime motivation behind this placing was to strengthen the institutional investor base of the company by providing the opportunity for institutional investors to purchase blocks of shares and the funds will support our various growth initiatives and strengthen our balance sheet."
"We believe the ongoing execution of our strategy, the successful operational improvements of the Kapan mine in Armenia, along with progress on the Tulkubash construction programme in the Kyrgyz Republic, will make Chaarat a stronger investment prospect for investors looking to access growth gold mining opportunities in the former Soviet Union region," Volynets continued.
By George Collard; georgecollard@alliancenews.com
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Chaarat Gold (CGH)