Gold mining company Chaarat Gold has signed a non-binding letter of intent (LOI) and an indicative term sheet with Xiwang International to secure a $250m potential equity investment.
Xiwang is an investment management company that holds assets across various industry sectors, including food and wellness, speciality steel, and real estate management.
Chaarat intends to use the equity investment to develop its organic pipeline and external growth through value-added acquisitions.
As part of the transaction, Chaarat would issue its shares at a price of £0.20 per share, resulting in Xiwang holding 60% of the shares in the gold mining company.
Xiwang will hold the right to appoint two members to the Chaarat board, upon completion.
In addition, Xiwang and Chaarat would sign a relationship agreement, which contains provisions for the company to operate independently.
Chaarat executive chair Martin Andersson 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.”
Chaarat and Xiwang are expected to agree on the terms of a preliminary investment agreement (PIA) by the end of this month.
Upon completion of the PIA, both parties intend to sign a formal investment agreement, which is expected to be completed on 30 July.
The completion of the transaction is subject to the completion of all remaining due diligence, Xiwang completing its financing, and receipt of corporate, government, and regulatory approvals.
