The transaction sees 62.38mln new shares issued to Labro.
It results in Chaarat’s debt being reduced to US$46.5mln and it sees Labro hold a 42% equity stake in the company.
Charrat this morning launched a US$25mln funding and at the same time a US$22mln loan is set to be converted to shares.
To raise US$25mln the company will issue 65.9mln new shares, priced at 26p each, to new institutional investors and family offices as well as existing shareholders.
The group said the cash proceeds from the equity raise are expected to meet the remainder of upfront funds for the Tulkubash project in the Kyrgyz Republic, and, brings closer project financing.
Chaarat noted that it is in ongoing talks over a US$80mln debt financing which the company expects to complete in the first half of 2021. That would leave the company fully funded for the US$100mln project construction
“We are delighted by the strong demand of new investors and our existing shareholders to support the company to fund the required remaining equity portion for the Tulkubash project financing,” said Artem Volynets, Chaarat chief executive in a statement.
“The Fundraise will achieve a critical milestone in the execution of our strategy to build one of the leading gold companies in the former Soviet Union by providing the equity funding required to arrange the project debt finance and start full-scale construction of our fully licensed and permitted Tulkubash project in Kyrgyz Republic.
“The next key step will be to complete the project financing for the Tulkubash project, which we are well advanced on to complete in H1 of this year.”
Excess funds are earmarked for growth activities at the Kyzyltash and Kapan projects.