Chaarat Gold Holdings Limited (LON:CGH), has concluded a stabilisation agreement with the Government of the Kyrgyz Republic regarding the company's Tulkubash and Kyzyltash projects.
The agreement is based on a scheme in the Kyrgyz Republic designed to encourage investment in the country by providing investors formal assurances on the stability of the tax regime.
Subject to certain conditions being satisfied by Chaarat, the London-listed company and its local subsidiary CJSC Chaarat Zaav are effectively entitled to have their tax treatments frozen as at the time of the agreement, effectively inoculating the company from any adverse tax changes.
Meanwhile, Chaarat revealed project construction continues to progress well at Tulkubash, with the first gold production on track for late 2021.
The company said it remains on track to finalise the project financing by the end of March 2020 with term sheets having been received by the relevant parties.
Chaarat is also considering refinancing debt maturing in the first quarter of next year and is reviewing possible options for the Kapan debt as well, although the latter is optional.
"This agreement shows strong support for Chaarat in country and is a strong endorsement for the company going forward. This also highlights both Chaarat's and the Government's focus on the stability of our future operations and allows us both to continue to commit to the development of this project," said Artem Volynets, the chief executive officer of Chaarat.
“Financing work for Tulkubash is progressing well and we are now at the term sheet stage. We look forward to providing further financing updates on this work and other refinancing work-streams in Q1 2020," he added.