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Chaarat enters JV with Çiftay Insaat Tahhüt ve Ticaret A.S.

Published by , Assistant Editor
Global Mining Review,

Chaarat, the AIM-quoted gold mining company with assets in the Kyrgyz Republic and Armenia, has signed a binding term sheet to enter into a joint venture with Çiftay Insaat Tahhüt ve Ticaret A.S. (Çiftay), the Turkish mining and mine construction contractor, to collaborate on the Tulkubash and Kyzyltash projects in the Kyrgyz Republic.


  • Çiftay, a partner since 2017, which mobilised equipment to the Tulkubash site in the Chatkal Valley last year, will be appointed as construction and long-term mining contractor for the Tulkubash project.
  • Under the agreement, based on an agreed valuation of US$252 million (post money) for the two assets, Çiftay will progressively invest US$31.5 million for a 12.5% equity stake in Chaarat’s mining projects Tulkubash and Kyzyltash in the Kyrgyz Republic.
  • Çiftay’s investment provides a significant amount of the required equity for the Tulkubash project. Total capital expenditure for the project is between US$120 and US$130 million, and after the Çiftay equity investment the vast majority of the remaining capital expenditure is expected to be debt funded, thus avoiding substantial dilution to Chaarat’s shareholders, a key strategic objective for the company.
  • Chaarat is in the process of securing the remaining project financing which is targeted to close in 3Q19. Çiftay will commence earthworks in anticipation of this, negotiated at arms-length rates, which represent an improvement to the terms indicated in the 2018 Feasibility Study.  
  • Construction is ongoing at Tulkubash and the first gold production remains on schedule for 2021. The company continues to advance detailed engineering and has finalised several project components for immediate construction readiness.  Çiftay has earthworks equipment at the mine site and constructed a temporary construction camp this winter to be ready for an early spring start to major earthworks.  The recent resource update continues to suggest the emergence of a significant new gold district.
  • An updated feasibility study for Tulkubash will be published in 2Q19 as previously advised.
  • Ciftay has extensive experience as a mining and civil engineering contractor at multiple mine sites in Turkey including two major gold mines. Definitive agreements for the joint venture are expected to be concluded in 2Q19.

Martin Andersson, Executive Chairman of Chaarat, said: “I am delighted with this agreement and would like to express my sincere gratitude to the Çiftay team for their clear expression of confidence in Chaarat and the Tulkubash project. Çiftay’s investment represents a significant milestone for the funding of Tulkubash and clearly demonstrates the company’s inherent value. Further, this agreement illustrates our focus on shareholder value and ability to creatively fund the business on accretive terms.” 

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