LONDON, UK: Chaarat Gold, a gold mining company listed on AIM, has announced that it has agreed to sell its Kapan Mine in Armenia to a local fintech company, Quanto, for $55.4 million.
The Kapan Mine is a polymetallic operation that produces copper and zinc concentrates with gold and silver by-products. Chaarat acquired the mine in 2019 and has improved its operational performance and mine life. The mine generated an EBITDA of $22.7 million in 2021 and $12.6 million in 2022.
Quanto is a private company that has developed an app-based payment system that can be used both inside and outside of Paraguay. Quanto has been a long-term partner of Chaarat, supplying ore from its Lichkvaz mine in Armenia to the Kapan plant for processing.
The deal is subject to shareholder and regulatory approvals and is expected to close between Q4 2023 and Q1 2024. The consideration comprises $5 million in cash and $50.4 million in the assignment of intra-group payables due to Chaarat.
Chaarat said that the sale was a beneficial exit opportunity at a time when the mine faced increasing costs, potential losses, and further funding requirements due to the appreciation of the Armenian Dram against the US dollar. The company said that it would focus on its growth opportunities in building its Tulkubash project in Kyrgyzstan, advancing its Kyzyltash project in Uzbekistan, and pursuing other external M&A opportunities.