Chaarat Gold Holdings is pressing on with a bankable feasibility study (BFS) for the Tulkubash Heap Leach Project in the Kyrgyz Republic after rejecting an offer for the gold deposit. The AIM-listed company believes the offer, which was at a 30% premium to the market price, failed to reflect the progress it is making in crystallising the value of the Chaarat project.

Chaarat says the BFS is progressing on schedule while drilling is continuing despite recent snow falls and the first batch of ore to be extracted for further metallurgical testing is also in transit to UK laboratories. Initial results from the geotechnical drilling have confirmed the suitability of the company’s proposed layout for the project.

Company officials have also completed a visit to local communities to verify the results of the positive evaluation of the heap leach project.

In September the company raised just over £4 million to fund the bankable study for Tulkubash, which should be complete by in the second quarter of next year, with the local approval process largely concluded three months later.

Against this background of positive progress, the company received an expression of interest in the form of a cash offer to buy the Chaarat deposit. In a statement the company said the Board was encouraged by the expression of interest so soon after the announcement of its refreshed focus on taking the project into production.

“However, the Board is of the view the current price of Chaarat’s shares, including the premium to that price indicated in the expression of interest, does not reflect the concrete progress the company is making towards crystallising the underlying value of the Chaarat deposit. So, after due consideration, and in line with the company’s strategic focus on achieving production as announced on September 20, 2016, the Board has decided not to pursue this expression of interest.

“The Board is primarily focused on production and, while open to all serious expressions of interest from potential partners, will only pursue expressions of interest which it believes adequately reflect the true value of the Chaarat deposit, or can meaningfully contribute to the implementation of our strategy.”
Meantime, Chaarat has also recently welcomed new shareholders to its register after it successfully completed a block trade.

Around 11.6 million shares of fund manager First State Investment Management (UK) were placed at 8.5p and more than half were bought by new shareholders.

Labro Investments Ltd now holds 32.3% of the company. Chaarat chairman Martin Andersson is indirectly beneficially interested in the majority of Labro. Non-executive director of Chaarat, Martin Wiwen-Nilsson, also bought 1.15 million shares and holds 2.4% of the issued share capital. Sarastro Group Ltd now has 4.6% following the purchase of 2.55 million shares.