CGH.L Regulatory News (CGH)

13 September 2019

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Chaarat completes joint venture with Çiftay İnsaat Tahhüt ve Ticaret A.S

Chaarat (AIM:CGH), the AIM-quoted gold mining company with assets in the Central Asia and the Former Soviet Union ("FSU"), is pleased to announce the conclusion and signing on 11 September 2019 of a Joint Venture Agreement with Çiftay İnsaat Tahhüt ve Ticaret A.S ("Çiftay"), the Turkish mining and mine construction contractor. This follows the announcement on 18 March 2019 that Chaarat had signed a binding term sheet to enter into a Joint Venture with Çiftay to collaborate on the Tulkubash and Kyzyltash projects in the Kyrgyz Republic.

Under the agreement, based on an agreed valuation of US$252 million (post money) for Tulkubash and Kyzyltash, Chaarat's mining projects in the Kyrgyz Republic, Çiftay will progressively invest up to US$31.5 million in cash for a corresponding 12.5% equity stake in these two project assets.

Çiftay's investment provides the remaining equity for the Tulkubash project. Chaarat has launched a process to raise senior project finance debt in June. The Company has received positive interest in the form of a preliminary term sheet to provide debt funding on acceptable and market terms and is working to finalise the project financing by the end of 2019 or early 2020. The term sheet indicates sufficient funds to finance, alongside the Çiftay investment, the US$110m capital requirement to construct the Tulkubash project.

Construction continues at Tulkubash and the first gold production is on track for late 2021. Chaarat is proceeding with detailed engineering and has finalized several project components for immediate construction readiness. This comprises:

- Initial earthworks equipment mobilized to the mine site;

- Advance temporary construction camp constructed last winter; and

- Ore haul road and platforms construction started last month

The updated June 2019 Tulkubash Feasibility Study, as well as the ongoing drilling programme, continue to suggest the emergence of a significant new gold district.

Çiftay has extensive experience as a mining and civil engineering contractor at multiple mine sites in Turkey including two major gold mines. Additional information about Çiftay can be found at http://www.Çiftay.com.tr/en/about.html.

Following the Joint Venture Agreement with Çiftay and in order to grant shares in Zaav Holdings Limited, the Company's subsidiary holding the Kyrgyz assets, it was necessary to seek noteholders' consent to change the security of the assets under the Company's convertible bonds program. This consent is required to ensure that at least 87.5 percent of the shares in Zaav Holdings Limited remained part of the security package and the shares to be owned by Çiftay would be excluded from it. The Company has hereby received consent from majority of bondholders approving this change.

Martin Andersson, Executive Chairman of Chaarat, said:

"I am very pleased to formally confirm our Joint Venture with Çiftay. We've been working with Çiftay for some time now and the industrial logic of this strategic partnership is clear. The team at Çiftay has extensive experience as a mining contractor in similar conditions and is extremely well placed to manage this type of operation."

"Tulkubash is a high-quality asset with robust economics akin to an emerging gold district with the potential to host numerous gold deposits. The project is being progressively de-risked by the team, and our drilling and exploration programmes continue to yield positive results. We fully expect Tulkubash to become a long-term cash generator capable of sustaining organic growth at Chaarat, and in due course facilitating the development of Kyzyltash."

"Çiftay shares our enthusiasm, as is demonstrated by its commitment to acquire an equity stake of its own in these assets. I look forward to reporting on further positive developments at Tulkubash as we continue towards first gold pour in 2021."

Serkan Aydin, Chairman of Çiftay, said:

"We were delighted when Chaarat offered us the opportunity to co-invest in the Tulkubash and Kyzyltash projects. We have seen first-hand the immense upside potential of both assets. We share Chaarat's enthusiasm and belief in the attractive long-term prospects for the Tulkubash project and are confident that this investment will provide a great platform to grow both businesses further."

"At Çiftay, we have been involved in the mining industry for more than 50 years, developing a market leading position in the development and operation of construction and production mines, both over and underground. It is exciting to combine this knowledge with Chaarat's considerable managerial and operational expertise."

"We look forward to extending our partnership with Chaarat and making this significant co-investment as a joint venture partner with them."

Background information on the Tulkubash and Kyzyltash gold projects

1.Tulkubash EBITDA approximated using US$1,300/oz gold price, US$678/oz C1 Cash Cost and 94koz p.a. gold production. Gold production and C1 Cash Costs as per the June 2019 Tulkubash Feasibility Study update.

2.Resources are shown inclusive of reserves, and include Measured, Indicated and Inferred.

During 2018, over US$13 million was spent on the projects, both of which are located in Kyrgyzstan.

Enquiries

About Chaarat

Chaarat is a gold mining company which owns the Kapan operating mine in the FSU as well as the Tulkubash and Kyzyltash Gold Projects in Central Asia. The Company has a clear strategy to build a leading emerging markets gold company with an initial focus on Central Asia and the FSU through organic growth and selective M&A activity.

Chaarat is engaged in active community engagement programmes to optimise the value of the Chaarat investment proposition and build close relationships and its reputation in all areas of operation.

Chaarat aims to create value for its shareholders, employees and communities from its high-quality gold and mineral deposits by building relationships based on trust and operating to the best environmental, social and employment standards. Further information is available at www.chaarat.com.