THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION (WITHDRAWAL) ACT 2018 ("MAR"), AND IS DISCLOSED IN ACCORDANCE WITH THE COMPANY'S OBLIGATIONS UNDER ARTICLE 17 OF MAR

FOR IMMEDIATE RELEASE

17 May 2023

Chaarat Gold Holdings Limited

("Chaarat" or the "Company")

Non-binding Letter of Intent for US$250 million Investment

Chaarat Gold (AIM: CGH), the AIM-quoted gold mining Company with an operating mine in Armenia, and assets at various stages of development in the Kyrgyz Republic, is pleased to announce the signing of a non-binding letter of intent ("LOI") and an indicative term sheet with Xiwang International Company Limited ("Xiwang") for a potential equity investment of US$250 million (the "Investment").

The Investment would be used to develop Chaarat's organic pipeline and external growth through value-added acquisitions. The Investment would be in the form of a new issue of shares in Chaarat at a price of £0.20 per share resulting in Xiwang holding 60% of the shares in Chaarat.  Should the Investment be completed, it is anticipated that Xiwang would have the right to appoint two members to the Chaarat board.  As part of the completion documentation, it is expected that Xiwang and Chaarat would enter into a relationship agreement containing provisions typically found in such an agreement to ensure that the Company would continue to operate independently.

Chaarat and Xiwang expect to agree the terms of a preliminary investment agreement ("PIA") by the end of May 2023. Upon completion of the PIA, it is the intention of the parties to enter into a formal investment agreement with completion by 30 July 2023.  Conditions precedent to completing the Investment would include completion of all remaining due diligence, Xiwang completing its financing, and receipt of all necessary corporate, government, and regulatory approvals.

As a British Virgin Islands incorporated company, Chaarat is not directly subject to any restrictions on takeover offers such as those which exist in the United Kingdom pursuant to the City Code on Takeovers and Mergers. However, Chaarat's articles of association (the "Articles") include provisions dealing with takeover bids, squeeze-out and sell-out. Should the Investment be completed it is not anticipated that the Chaarat board will exercise its right to request an extension of the offer to all other shareholders pursuant to Regulation 19 of the Articles ¹.  

The LOI is not binding and there is no certainty at this stage that the proposed Investment will be completed. A further announcement will be made when appropriate.

About Xiwang

Xiwang International Company Ltd (Xiwang) is an investment company incorporated in the British Virgin Islands. As part of its long-term strategic investment plan, Xiwang is looking to create a significant portfolio of mining assets and resources on a global basis by partnering with and providing funding to listed public operating companies with strong governance, focussed on disciplined capital allocation and shareholder value creation.

Martin Andersson, Executive Chair of Chaarat, said:

"We are pleased to have taken the discussions with Xiwang to this stage. We will now work with Xiwang towards progressing the PIA and subsequent investment and relationship agreements to support the growth objectives of Chaarat.

Xiwang is undergoing a transformational change and Chaarat is one of the potential platforms for their investment consideration and passed their initial due diligence, governance and investment criteria."

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 through organic growth and selective M&A.

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.

Note

¹ The full text of these provisions can be found in Regulation 19 of the Articles which are available on the Company's website at this link: Articles