Chaarat Gold in talks to buy Armenian mine from Russia’s Polymetal

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Chaarat Gold, the Aim-listed gold explorer, is in talks to buy the Kapan gold mine in Armenia from Russia’s Polymetal, in its latest effort to expand through acquisitions.

The mine, which Polymetal acquired in 2016, produced 50,000 ounces of gold last year, making a profit of $20m before taxes.

Chaarat, which is based in Kyrgyzstan, has said it wants to build a “leading Central Asia” gold company through acquisitions, targeting 1m ounces of annual production. In May it made an $800m bid for the Kumtor gold mine in Kyrgyzstan from Centerra Gold, which was rejected by the company.

Chaarat is led by Artem Volynet, a former chief executive of Russia’s EN+ and who was appointed deputy chief executive of aluminium producer Rusal in June.

Polymetal said “there is no certainty that a transaction will be agreed.”

Chaarat said in a statement that “should agreement be reached, the company plans to sign the sale and purchase agreement as soon as practicable.”

Shares in Chaarat have risen by 6 per cent this year to 24.15p. The company is looking to raise $50m from a convertible bond sale.

Bloomberg News.

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