Chaarat Gold Holdings is selling its only operating mine, in Kapan, Armenia for $54.5 million to Armenian miner Gold Mining Company.

The buyer operates the Lichkvaz mine in Armenia, which has supplied third-party ore to the Kapan processing plant for years.

“The consideration for the Proposed Sale is USD 55.4 million (the "Consideration") which comprises USD 5 million payable in cash and USD 50.4 million being satisfied by way of the Buyer taking an assignment of intra-group payables due to Chaarat Kapan,” the company said in a statement.

“Chaarat acquired the Kapan Mine in 2019 and has added value to the operation by extending mine life, improving ESG standards, improving operational performance and continuing to invest in the community despite significant geo-political events impacting on the operation including hostilities with a neighbouring country, impacts of COVID-19, and the indirect effects of the ongoing conflict in Ukraine.

“After four years of meeting the production guidance, improving the financial performance, and deleveraging the business, the significant appreciation of the Armenian Dram has had a significant impact on the financial performance which has led the Company to review all strategic options to ensure the sustainability of Kapan and  to preserve the long-term value of Chaarat in pursuing growth options through building Tulkubash, advancing Kyzyltash [both in Kyrgyzstan] as well as pursuing other external M&A opportunities,” the company added.