Chaarat Gold completes acquisition of Kapan from Polymetal

The AIM-traded firm said that of the total consideration of $55m, subject to net debt and working capital adjustments, $10m was settled on completion in convertible loan notes and $5m was previously paid as a deposit in November.

It said the remaining $40m was payable in cash following the execution of certain settlement procedures associated with the Kapan acquisition financing.

Payment was secured by a pledge over the Kapan shares in favour of PMTL, which would be released upon receipt of payment by PMTL, anticipated on 1 February.

As a result, trading in Chaarat’s shares was suspended, with re-admission to AIM expected to take place on 4-5 February.

The company said documentation had been finalised for the Kapan acquisition financing, which was syndicated with Ameriabank for $32m, HSBC Bank Armenia for $5m, and Ararat Bank for $3m.

In addition, the Kapan offtake agreements had been renewed, and certain Kapan Drilling Agreements were extended.

In 2017, the Kapan mine produced around 50 koz gold equivalent, generating more than $20m EBITDA, with gross assets of $96m.

The acquisition strengthened the company's portfolio of assets, the board claimed, with an anticipated group production of approximately 65 Koz gold equivalent in 2019.

“We are very pleased to announce completion of the Kapan transaction,” said Chaarat chief executive officer Artem Volynets.

“Securing this high-quality, cash-generative asset under attractive terms bears testament to the strength of our mergers and acquisitions consolidation strategy.

“This acquisition is an excellent and complementary addition to Chaarat's portfolio, transforming the company from a developer to producer with three solid assets in two jurisdictions.”