Chaarat rejects offer to buy gold project
Updated : 15:45
Exploration and development company Chaarat announced on Tuesday that the preparation of the Bankable Feasibility Study for the Tulkubash Heap Leach Project was progressing on schedule.
The AIM-traded firm said drilling on site continued despite the recent snow falls, and the first batch of ore to be extracted for further metallurgical testing was in transit to UK laboratories.
It said the initial results from the geotechnical drilling confirmed the suitability of its proposed layout for the project, and a visit to verify the results of the positive evaluation of the Heap Leach Project amongst the local communities was successfully completed.
“It is with this background of continuing progress to production that we were pleased to receive an expression of interest in the form of a cash offer to buy the Chaarat deposit,” Chaarat’s board said in a statement.
“The price indicated was at a premium of approximately 30% to the current market price of the company's shares. “
It said it was encouraged by the expression of interest so soon after the announcement of the 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.”
The board explained that, after due consideration, and in line with its strategic focus on achieving production as announced on 20 September, it decided not to pursue the 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.
It said it remained convinced that the best and possibly only way, under current circumstances, to crystallise a more representative value for the Chaarat deposit would be to continue to pursue the most effective and direct route to produce gold.