Chaarat Gold (LON:CGH) has secured a £2.6 million investment from a Malaysian mining technician, the ASVI Group.
ASVI stepped in to take up the subscription shares that were originally destined for Chaarat’s planned Chinese investment partner China Nonferrous Metals International Mining (CNMIM).
This new placing will raise 15 percent more capital than originally anticipated.
The new investor, a specialist in high-end technical mining services group, plans to help Chaarat with its mine development projects in the Kyrgyz Republic.
"We see this subscription as a strong endorsement of both the Chaarat and Tulkubash projects as well as our management team,” chief executive Dekel Golan said.
Last week, Chaarat announced that it would develop the Tulkubash open pit separately from the main Chaarat project, thus allowing first gold production to be fast-tracked into 2011.
The 4 million ounce Chaarat underground mine’s pre-feasibility study is scheduled for completion in the first quarter of 2011.
“Chaarat is fully funded to complete the Definitive Feasibility study of the Tulkubash project as well as the Pre-feasibility study of the Main project,” Golan added.
“These additional funds will enable the company to commence certain development activities earlier than originally anticipated."
Regulatory delays in China caused Chaarat and CNMIM to cancel a £2 million share subscription last week.
ASVI is now buying the subscription shares at ‘near market prices’, thus generating 15 percent more capital than originally expected under the CNMIM deal. Chaarat will receive an additional 6 pence per share from the placing.
Chaarat will issue 5.7 million shares to ASVI at 46 pence each.
CNMIM currently has a 15.9 percent stake in the company and it is entitled to maintain is proportionate stake, it therefore has 15 days to confirm whether it intends to subscribe for additional shares.