Chaarat Gold : Proceeds and closure of Placing - Replacement

RNS Number : 0388L

Chaarat Gold Holdings Ltd

27 April 2020

The following amendment has been made to the 'Confirmed proceeds and closure of the Placing' announcement released on 27 April 2020 at 7.00am under RNS number 9286K.

The number of Placing Shares in respect of which application for admission to trading on AIM has been made has been changed to 42,112,025 Placing Shares.

All other details remain unchanged.

The full amended text is shown below.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

Not for release, publication, or distribution to United States newswire services or for release, publication or dissemination in the United States and does not constitute an offer of the securities herein.

This press release does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or any other jurisdiction. Any securities described in this press release have not been, and will not be, registered under the US Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration except in transactions exempt from, or not subject to, registration under the US Securities Act and applicable US state securities laws. There is no public offering of the securities in the United States expected.

27 April 2020

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Confirmed proceeds and closure of the Placing

Chaarat (AIM:CGH), the AIM-quoted gold mining company with assets in the Kyrgyz Republic and Armenia is pleased to announce

that, further to its announcement of 15 April 2020 (RNS 6997J), it has closed the Placing 1, having raised gross proceeds of approximately US$13.8 million from the issue of 42,112,025 new ordinary shares of US$0.01 each (the "Placing Shares") at 26 pence per Placing Share, subject to the admission of the Placing Shares to trading on the AIM market of London Stock Exchange plc ("Admission").

The share issue consists of:

• the subscription for 12,954,962 Placing Shares by existing shareholders and new investors;
• the subscription for 25,396,945 Placing Shares by Labro Investments Limited ("Labro"), Chaarat's largest shareholder, the majority of shares in which Martin Andersson (the executive chairman of Chaarat) is directly beneficially interested; and
• the subscription for 3,760,118 Placing Shares by directors (including 2,569,868 by Martin Andersson) and senior management.

Following the subscriptions for the Placing Shares announced today, the Company has decided to close the Placing with immediate effect.

Chaarat also announces that it has issued 297,330 new ordinary shares of US$0.01 each. These comprise:

• 177,330 new ordinary shares2 issued to Labro (the "Labro Fee Shares") pursuant to drawdowns made by the Company on the committed revolving term loan facility (the "Labro Facility") announced by the Company on 14 December 2018 (RNS number 5046K); and
• 120,000 new ordinary shares (the " Option Shares") issued to satisfy the Company's obligations under the Company's 2017 incentive plan to a former director on the exercise by that director of previously vested options.

An application has been made to the London Stock Exchange for the 42,112,025 Placing Shares, the 177,330 Labro Fee Shares and the 120,000 Option Shares (together, the "New Ordinary Shares") to be admitted to trading on AIM, and it is expected that admission will become effective and dealings in the New Ordinary Shares will commence at or around 8:00am (London time) on 30 April 2020.

Following Admission of the New Ordinary Shares:

• the Company's enlarged issued share capital will comprise 524,562,210 ordinary shares of US$0.01 each. This figure may be used by shareholders of the Company as the denominator for the calculations by which they will determine whether they are required to notify their interests in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules Sourcebook; and

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• Labro and Martin Andersson will hold the following ordinary shares of
  US$0.01 in the capital of the Company:

Financing update

In view of the level of interest in the Placing beyond the announced $12 million, Labro's participation in the Placing was reduced from US$10 million to US$8.3m and comprised a US$2 million cash subscription and a conversion to equity of US$6.3 million of indebtedness under the Labro Facility, reducing the outstanding principal amount and interest accrued under the Labro Facility to US$ Nil. US$6.5 million of the Labro Facility remains available for drawdown until 31 December 2020.

Artem Volynets, Chief Executive Officer of Chaarat, said:

"We are delighted to see continued support from our keys shareholders as well as welcome new investors into the exciting Chaarat story. Raising US$13.8 million beyond the previously announced US$12 million in the current challenging market environment shows the attractiveness of Chaarat's value proposition. The prime motivation behind this placing was to strengthen the balance sheet and allow the Company to continue its strategy amidst the current macro-economic factors.

We believe that continuous stability of the Kapan operation in Armenia, along with progress on the Tulkubash construction programme in the Kyrgyz Republic, and the deleveraging of the business allows us to progress with our strategic plans and take advantage of the opportunities presented."

• Definitions

Capitalised terms used but not otherwise defined in this announcement have the meanings given to them in the 'Proposed Equity Capital Raise and Funding Update' announcement released on 15 April 2020 under RNS Number 6997J.

• Regulation 19 Waiver

There is a provision in the Company's Articles of Association (the "Articles") (Regulation 19) which states that the Board has the right to require any holder of more than 20% of the Ordinary Shares to make a mandatory offer to all the Company's shareholders to acquire their Ordinary Shares if they acquire an additional interest in any Ordinary Shares.

The Labro Fee Shares do not fall under the waiver for market share purchases of up to three million Ordinary Shares announced by the Company on 24 February 2020 (RNS number 8217D) and, as explained below, a separate waiver has been granted by the Board.

The Labro Facility requires the Board to exercise its discretion under Regulation 19 of the Articles so as not to require a mandatory offer to be made in connection with the issue to Labro of any Ordinary Shares pursuant to the Labro Facility or as a result of any redemption or purchase by the Company of its own voting shares at any time in the future, but not in respect of any other purchase of Ordinary Shares or any interest therein by Labro (the "Waiver"). The Board has resolved to grant the Waiver.

285,541 of the shares being subscribed for byMartin Andersson personally do not fall under the waiver granted by the board on14 April 2020 and announced by the Company on15 April 2020 (RNS number 6997J). O n 24 April 2020, the Board (excludingMartin Andersson) exercised its discretion to waive the requirement for a mandatory offer for the Company by Labro, to allow Martin Andersson to receive an additional 285,541 Ordinary Shares in the Placing.

• Labro also holds loan notes forUS$1,000,000 (the "Loan Notes") convertible into 2,849,330 ordinary shares ofUS$0.01 each in the capital of the Company ("Ordinary Shares") (assuming full conversion of principal and interest to maturity). If all the Loan Notes were subsequently converted (assuming full conversion of principal and interest to maturity), if an additional 8 million shares fell due to be issued to Labro pursuant to the loan security fee arrangements announced by the Company on 15 April 2020 (RNS 6997J), and if no options to subscribe for Ordinary Shares issued by the Company were exercised, no other convertible loan notes issued by the Company were converted and no other Ordinary Shares were issued), Labro would hold 213,677,772 Ordinary Shares representing 39.91% of the resulting enlarged share capital.

• Pursuant to restricted share awards and share options granted by the Company toMr Andersson, he may become entitled to a further 18,111,821 Ordinary Shares. If Mr Andersson were to acquire all the shares to which he may become entitled (and no other restricted share awards vested and no other options to subscribe for Ordinary Shares issued by the Company were exercised and no other Ordinary Shares were issued), on a combined basis, Labro and Mr Andersson would together hold 237,619,589 Ordinary Shares representing 43.07% of the resulting enlarged share capital.

Christopher Raggett (Joint Broker)

Camille Gochez (Joint Broker)

About Chaarat

Chaarat is a gold mining company which owns the Kapan operating mine in Armenia as well as Tulkubash and Kyzyltash Gold Projects in the Kyrgyz Republic . The Company has a clear strategy to build a leading emerging markets gold company with an initial focus on Central Asia and the FSU through organic growth and selective M&A.

Chaarat is engaged in active community engagement programmes to optimise the value of the Chaarat investment proposition.

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Chaarat aims to create value for its shareholders, employees and communities from its high-quality gold and mineral deposits by building relationships based on trust and operating to the best environmental, social and employment standards. Further information is available at www.chaarat.com.

Appendix 1 - PDMR forms

1Details of the person discharging managerial responsibilities / person closely associated

• Reason for the notification

1. Initial notification / Amendment amendment

• Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

• Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

1. Aggregated information

1Details of the person discharging managerial responsibilities / person closely associated

• Reason for the notification

1. Initial notification / Amendment amendment

• Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

• Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

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