Chaarat Gold sells Kapan mine in Armenia for US$54.5M
Chaarat Gold Holdings (LSE: CGH) is selling its only operating mine, Kapan, for US$54.5 million ($73.4 million) to Armenian miner Gold Mining Company.
The miner, which once tried buying Centerra’s Kumtor mine in the Kyrgyz Republic, said the deal represented a beneficial exit opportunity at a time when Kapan is facing higher costs, potential losses and further funding requirements.
The proposed sale, chief executive Mike Fraser said, will allow Chaarat to focus on developing lower cost and higher value options within its portfolio, particularly the Tulkubash open pit project in the Kyrgyz Republic.
The transaction will improve Chaarat’s balance sheet by reducing its short and long-term liabilities by US$39 million, and the reception of US$5 million in cash.
Once the sale is closed, Chaarat will own two Kyrgyzstan-based gold development assets – Tulkubash and Kyzyltash – that have the potential to produce more than 350,000 oz. of gold per year.
The buyer operates the Lichkvaz mine in Armenia, which has supplied third-party ore to the Kapan processing plant for years.
Chaarat shares were up 5.9% to £7.15 ($12.30) apiece on Wednesday in London, valuing the company at £46.5 million. Its shares traded in a 52-week window of £6.06 and £6.10.
