Chaarat Gold Holdings Limited

("Chaarat" or "the Company")

Definitive Feasibility Study progress update

Road Town, Tortola, British Virgin Islands (20th April 2015)
Chaarat (AIM - CGH), the AIM quoted exploration and development company with assets in the Kyrgyz Republic, is pleased to report important developments identified during preparation of the Definitive Feasibility Study ("DFS") which are expected to add to the value of the Chaarat Gold Project ("the Project") as well as reducing implementation and technological risk.

HIGHLIGHTS

 Comprehensive review of available development options for the Chaarat Project completed by NERIN

 Upfront capital cost of stage one heap leach project reduced by delay in tunnel construction

with consequent uplift in value of the Project and reduction in implementation risk

 Improved metallurgical process identified for stage two refractory ore reduces the capital cost and technological risk with further benefits to the Project economics

 Tulkubash heap leach pit shell contains 533,000 ounces (11.8 million tonnes at a grade of

1.41g/t)

Dekel Golan CEO commented: "Chaarat is continuing to pursue its two objectives: the first is to complete a DFS which will both underpin financing of the first stage of the Project and determine a valuation benchmark for the Company. The DFS remains on track for delivery in mid-2015. The second objective is to complete the documentation required for completing the main permitting process, which we are required by the terms of our licence, to submit to the Kyrgyz authorities by the end of 2016. We expect to select a contractor for the construction of the stage one heap leach project, as well as complete the main permitting process, during early 2016. Once we have these permits we can start construction (subject to financing) with additional permits required only from local authorities.

We decided last year to focus on China as a source of project capital, equipment and construction services. Recently the Chinese government announced its new Silk Road development strategy and set of priorities summarized as: "one belt one road". This approach encourages Chinese companies to expand and invest in the Silk Road belt and in the seaways from China to Europe. This strategy therefore identifies the Kyrgyz Republic as a top investment priority. The Chaarat Project is one of the largest and best undeveloped projects in the world and with a strong DFS prepared by a reputable Chinese institute our ability to attract capital and interest from China has been enhanced."

Key findings of the DFS to date:

Layout of the Project
Our previous team of DFS advisers recommended that, due to the location of the deposit in a narrow valley, the production facility should be located in an adjacent valley. This would necessitate the construction of a tunnel to connect the plant to the mine site. NERIN, together with local Kyrgyz
companies, studied the alternatives and identified a layout which will eliminate the need to construct a tunnel for at least the first ten years of operation. The elimination of the immediate requirement for a tunnel will reduce the upfront cost of the project considerably, as well as reducing the uncertainty involved in developing a tunnel and the lead time to production. This is a major breakthrough in minimizing risks and adding value to the Chaarat Project.
Expected Production Capacity
The optimisation of the pit design has been enhanced by the reductions in upfront capital costs identified to date. This is an iterative process and work continues on the production scheduling such that we can be hopeful of a reduction in the overall cost per ounce with further improvements to the net present value of the Project and therefore the return on investment.
The design currently shows heap leachable reserves of 533,000 ounces, a grade of 1.41g/t and life of mine of 4.5 years. The Tulkubash pit shells currently contain a total of 11.8 million tonnes of material at a grade of 1.41 g/t. The mine operating procedures and equipment selection continues and, assuming 8% dilution and 3% loss, Chaarat expects circa 12.3 million tonnes of Run of Mine Material at a grade of 1.3 g/t. We remain confident of the potential of the available resource as supported by our update following last year's drilling.
Heap leach recovery is expected to be 73%. The optimal production capacity and schedule are being finalized with an annual capacity of 2.7-3 million tonnes of ores to be processed, which would result in production of between 80 and 90,000 ounces of gold per year for the first stage of the Project.
Request for Proposals for the mining contract are being solicited and site visits by contractors are expected soon. The appointment of a mining contractor will reduce the risk of the Project as Chaarat will not be responsible for recruitment, training or equipment. However, a condition of the contract will be that recruitment and training of residents from the valley adjacent to the site is undertaken by the contractor.
Stage 1 - next steps
One of the advantages of appointing a Chinese design and engineering institute such as NERIN is the similarity of Kyrgyz and Chinese feasibility studies. Therefore the adaptation of the DFS to local standards for the purpose of obtaining construction permits should be more straightforward. This work has started with the appointment of local Kyrgyz companies to undertake the adaptation. They have now begun their work with NERIN.
The completion of the DFS, its adaptation and then the receipt of the necessary permits will, subject to financing, enable construction of stage one of the Project to begin.
Once production from the heap leach has commenced, which assuming all proceeds to plan will be in 2017, the Company plans to secure finance and commence stage two being the development and processing of the refractory ore.
Stage 2 - Refractory ore process update
Chaarat has continued to review different methods of processing the refractory (sulphide) ore. After submitting an "industrial size" sample to the Inner Mongolia Mineral Experiment Research Institute (IMME) for test work we have been very encouraged by the results from using the Bio-Oxidation (BIOX) process.
The results from IMME are in line with previous tests carried out by Mintek in South Africa. However Mintek's results were only obtained with a high level of cyanide consumption and further work was recommended to develop suitable bacteria to overcome this problem. At the time we decided not to pursue this option. IMME's recent tests resulted in cyanide consumption only slightly above that recorded when the Pressure Oxidation (POX) method was used, due to the development of the BIOX technology in the period since the original tests.
The ability to use BIOX rather than POX is very important for the project. BIOX is used in a number of significant projects in China and is considered a tried and tested technology. Chinese engineering companies have significant experience with this technology which provides comfort to financial institutions and prospective investors that BIOX can be installed successfully. It has the additional benefit of a much lower capital cost and consequent further improvement in the economics of the Project.

Enquiries:

NOTES TO EDITORS: About Chaarat Gold

Chaarat Gold is an exploration and development company operating in the Kyrgyz Republic with a
large, high grade resource - the Chaarat Gold Project. The Company's key objective is to become a low cost gold producer generating significant production from the development of the Chaarat Gold Project. Chaarat is preparing a Definitive Feasibility Study and continuing its active community engagement programme to optimise the value of the Chaarat investment proposition.
Chaarat aims to create value for its shareholders, employees and communities from its high quality gold and mineral deposits in the Kyrgyz Republic by building relationships based on trust and operating to the best environmental, social and employment standards.