Proposed Acquisition of Kyrex Limited
21 Junho 2010 - 3:01AM
UK Regulatory
TIDMCGH
Chaarat Gold Holdings Limited
("Chaarat" or "the Company")
Proposed Acquisition of Kyrex Limited
Road Town, Tortola, British Virgin Islands (21 June 2010)
Chaarat Gold Holdings Limited (AIM: CGH), announces that it will today post an
offer document in relation to the proposed share for share acquisition of Kyrex
Limited ("Kyrex") (the "Offer").
Kyrex
Kyrex is a private exploration company, incorporated in Guernsey, with four
large licence areas in the north west of the Kyrgyz Republic.
The three most prospective assets are Chontash, Mironovskoye and Kyzil Ompul.
The proposed acquisition provides an opportunity to add exploration projects to
the Chaarat portfolio whilst developing the Chaarat gold project, the Company's
principal asset, towards production.
Further details of the three most prospective assets are set out below:
Chontash
Chontash is a skarn molybdenum-gold-copper deposit which contains potential for
a large scale copper gold porphyry deposit.
The licence has been held by Kyrex's subsidiary since 2006. Significant
exploration was undertaken in 2007/08, comprising 12 drill holes totalling over
2,800m and extensive trenching.
In July 2008 SRK Consulting Zimbabwe undertook an exploration property review in
which it established a resource estimate, classifying 3.2 million tonnes at a
grade of 0.223% molybdenum (Mo) in the Inferred category under the JORC
standard, and recommended further exploration work be undertaken on the
property. While Chontash has been identified as a molybdenum skarn, the
Soviet-era drilling results indicate some potential for significant copper
values to the east of the licence area. This potential has been verified by
geophysical works as well as a number of drill holes which, when penetrating the
skarn, showed gold and copper values. On a regional scale, Chontash appears to
be at the southern end of a metallogenic belt of large porphyry copper deposits
including Almalyk in Uzbekistan.
Mironovskoye
Mironovskoye is a gold-silver-copper deposit with a strike length of 1.4 km.
The deposit was extensively explored during the Soviet-era by driving adits and
drifts, with 5 km of underground development being completed in total. The main
economic minerals were identified as copper, gold and silver.
Work undertaken by Kyrex indicates that the resource model may have been based
on bismuth cut-offs and a grade of 1.2% Cu and 1.7g/t Au could be estimated for
a similar tonnage. Mironovskoye is easily accessible and infrastructure is in
place with the previously operating gold mine of Taldy Bulak only 30 km to the
southwest.
Kyzil Ompul
Kyzil Ompul is an early stage licence area in which a number of small gold,
copper, molybdenum, lead and uranium deposits have been delineated by Soviet
geological teams. To date Kyrex's exploration has been relatively limited and
has focused on base and precious metal prospects previously identified. This
has comprised geophysical surveys (IP and magnetic) and trenching and sampling
to confirm the Soviet-era data. Chaarat believes that Kyzil Ompul, which means
"red hill" in the local language, has reasonable prospectivity for an IOCG (Iron
Oxide Copper Gold) type deposit. Future programmes will focus on regional
target generation including GIS compilation and interpretation of all data and
regional aeromagnetic surveys in order to produce targets for additional
exploration.
No significant mineral potential has been defined to date in Kyrex's fourth
licence area, Severochontashskaya, where expenditure has been minimal.
Details of the Offer
The terms of the Offer were derived from an independent relative technical
valuation of the material mineral assets of Chaarat and Kyrex undertaken by SRK
Consulting (UK) Limited ("SRK"). The Company commissioned the valuation as part
of its due diligence process.
The Offer comprises 54 fully paid Chaarat ordinary shares of US$0.01 each (the
"Shares") for each Kyrex share. Assuming Chaarat acquires the whole of the
issued and to be issued share capital of Kyrex, the aggregate consideration will
comprise 11,928,222 Shares, equating to 10.56 per cent. of the Company's current
issued share capital.
The Offer will remain open for 15 business days from 22 June 2010. Provided
acceptances have been received from shareholders representing at least 75 per
cent. of the issued share capital of Kyrex, the drag along provisions in the
articles of association of Kyrex will enable Chaarat to acquire the remainder of
the issued and to be issued Kyrex shares.
Chaarat has received irrevocable undertakings to accept the Offer from
shareholders holding 122,556 Kyrex shares, representing 58.5 per cent. of
Kyrex's issued share capital.
Pursuant to the subscription agreement dated 10 July 2009 between Chaarat and
China Nonferrous Metals Int'l Mining Co Ltd ("CNMIM"), Chaarat is required to
give notice to CNMIM if it intends to issue any Chaarat shares for cash or non
cash consideration. CNMIM may within 15 business days of receipt of the notice
give written notice to require Chaarat to issue such number of Chaarat shares to
CNMIM on the same terms as the Offer, as is necessary to maintain the percentage
holding of CNMIM prior to the Offer, being 19.9 per cent. The required notice
has been sent to CNMIM and the price at which CNMIM will be required to
subscribe for the shares is the mid-market closing price on 18 June 2010 of
40.5p per share.
Related Party Disclosure
Christopher Palmer-Tomkinson, Dekel Golan and Alexander Novak, who are directors
of Chaarat, are also directors and shareholders of Kyrex, holding interests of
6.5, 28.0 and 24.0 per cent. of the issued share capital respectively. In
addition, Luo Tao and David Tang are not considered independent of the
transaction by virtue of CNMIM's right to subscribe for additional equity in the
Company in order to maintain its level of shareholding.
The Offer therefore constitutes a related party transaction in accordance with
Rule 13 of the AIM Rule for Companies. The independent directors (being Linda
Naylor and Oliver Greene), having consulted with the Company's nominated
adviser, Westhouse Securities Limited, consider that the terms of the Offer are
fair and reasonable insofar as Chaarat shareholders are concerned.
Potential changes to Directors' Interests
Provided the Offer is completed, Christopher Palmer-Tomkinson, Dekel Golan and
Alexander Novak will each receive Shares as consideration for their interests in
Kyrex. On completion of the transaction, the following changes would occur to
their respective shareholdings:
Previous Consideration Total Percentage of
Shares Shares Shares Company's
Enlarged Issued
Share Capital
Christopher Palmer-Tomkinson 6,675,000 736,344 7,411,344 5.94
Dekel Golan 11,554,033 3,166,722 14,720,755 11.79
Alexander Novak 8,960,400 2,714,958 11,675,358 9.35
On completion, and assuming full acceptance, of the Offer, the Company will have
a total of 124,839,225 Shares in issue excluding any Shares to be issued to
CNMIM pursuant to its option the terms of which are set out above.
Competent Person
Sunit Patel, M.Sc (Geology) FGS, GSSA, who is an employee of Chaarat and is an
exploration geologist with 22 years of experience in the resource industry, has
reviewed and approved the information in this announcement.
Enquiries:
Chaarat Gold Holdings Ltd
c/o Central Asia Services Ltd +44 (0) 20 7499 2612
Dekel Golan dekel@chaarat.com
Linda Naylor linda.naylor@chaarat.com
Westhouse Securities Limited +44 (0) 20 7601 6100
Tim Feather tim.feather@westhousesecurities.com
Richard Baty richard.baty@westhousesecurities.com
Mirabaud Securities LLP +44 (0) 20 7321 2508
Rory Scott rory.scott@mirabaud.com
Smith's Corporate Advisory +44 (0) 20 7239 0140
Dominic Palmer-Tomkinson tomkinson@smiths-ca.com
Conduit PR +44 (0) 20 7429 6603
Jos Simson jos@conduitpr.com
Emily Fenton emily@conduitpr.com
Chaarat
Chaarat is an exploration and development company operating in the Kyrgyz
Republic with its current main activity being the development of the Chaarat
Gold Project. The Chaarat Gold Project is situated within the Middle Tien Shan
Mountains of Kyrgyzstan which form part of the Tien Shan gold belt. The Company
has thus far delineated a JORC compliant mineral resource of 4.009 Moz at a
grade of 4.14 g/t gold. A scoping study demonstrating the economic viability of
the Chaarat Gold Project was completed at the end of 2008. The Company is
currently in the process of compiling a pre-feasibility study. Chaarat's
objective is to become a low cost gold producer targeting an initial production
of over 200,000 ounces per annum by early 2013.
Disclaimer
This press release includes forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other important
factors beyond Chaarat's control that would cause the actual results,
performance or achievements of Chaarat to be materially different from future
results, performance or achievements expressed or implied by such
forward-looking statements. Such forward-looking statements are based on
numerous assumptions regarding Chaarat's present and future business strategies
and the environment in which Chaarat will operate in the future. Any
forward-looking statements speak only as at the date of this document. Chaarat
expressly disclaims any obligation or undertaking to disseminate any updates or
revisions to any forward-looking statements contained in this document to
reflect any change in Chaarat's expectations with regard to these or any change
in events, conditions or circumstances on which any such statements are based.
As a result of these factors, the events described in the forward-looking
statements in this press release may not occur either partially or at all.
[HUG#1425522]
This announcement is distributed by Thomson Reuters on behalf of Thomson Reuters clients.
The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and other applicable laws; and
(ii) they are solely responsible for the content, accuracy and originality of the information contained therein.
All reproduction for further distribution is prohibited.
Source: Chaarat Gold Holdings Ltd via Thomson Reuters ONE
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