Chaarat Gold Holdings Limited

("Chaarat" or "the Company")

PRELIMINARY ANNOUNCEMENT OF AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2015

Road Town, Tortola, British Virgin Islands (21 June 2016)

Chaarat (AIM - CGH), the AIM quoted exploration and development company with assets in the Kyrgyz Republic, today publishes its preliminary results for the year ended 31 December 2015.

Highlights for the year

• Optimised Definitive Feasibility Study (DFS) shows NPV of USD 615m and IRR of 25%

• Average gold production of 211k ounces per year

• Low all-in sustaining cost (AISC) of USD 605 per ounce

• Heap leach project in Tulkubash likely to be first stage development - public hearing process successfully completed

• Time scale to submit development plans for the Chaarat Project to the government extended to 2018 allowing flexibility in the development strategy for potential joint venture partners

Dekel Golan, CEO of Chaarat, commented:

"The publication of the DFS in early 2016 has provided a benchmark to underpin the value of the Chaarat Project and generated an increase in the level of interest shown by potential industry partners. We have maintained our twin track strategy of talking to potential acquirers or joint venture partners whilst working on our own staged development plans.

The agreement of the Kyrgyz government to extend to the end of 2018 our deadline to submit development proposals increases our opportunities for collaboration. We appreciate the support of our shareholders and local communities as we work on the stage one development plan for the Chaarat deposit."

Enquiries:

Chairman's report

This report is being written against a backdrop of a gold price that has shown a gradual advance. Confidence amongst gold production and development companies has been bolstered and, as a consequence, there has been an increase in deal flow as well as in capital raisings.

The company took the decision three years ago to sit-out a downturn within the mining industry, cutting back on expenditure and engaging in a feasibility study for the whole project aimed at putting a benchmark value on what we perceived to be, in terms of scale and grade, one of the best deposits in the world.

The optimised study demonstrates a present value for the project in excess of 20 times our current market capitalisation.

Increasing numbers of "non-western" companies are interested in Central Asia and its resources and they are not deterred by the real or mostly imagined difficulties associated with the region. We would expect these companies, being Chinese or from elsewhere within that region, to be comfortable with our study, especially one that has been put together by a credible company.

Chaarat is diligently working on evaluating a preferred development approach. It will involve the preparation of a ' starter ' mining and production plan that can balance a modest initial outlay of capital yielding an acceptable return whilst enabling the development of a scaled up project later on. Choices are being examined as to how such a plan can be financed.

I would like to record my thanks to our staff, advisers and shareholders for their patience and active support, particularly in the case of our largest shareholder.

Christopher Palmer- Tomkinson Chairman

Chief Executive Officer's Report

Our work in 2015 (as the lull in the mining industry continued) was dominated by finalisation of the Feasibility Study, the results of which were announced in early 2016. Although later than originally planned, the timing of its publication coincides with an upturn in interest in gold projects and a stabilisation of the gold price.

The credentials of the Chaarat Project as a world class, high grade and low cost of production asset are summarised in the table below which shows the results of the DFS and the work we undertook on its optimisation:

The optimisation reflected above relates only to identified improvements in the layout of the project with the consequent reduction of earthworks and the inclusion of updated quotes and operating costs. The optimisation is progressing to improve the recoveries to concentrate from the Chaarat ore.

Going forward

With the increased interest in gold projects we are pursuing our twin track strategy of keeping the door open for an acquirer or JV partner while adding value to the Chaarat deposit by developing a realistic profitable option to get into production.

The FS envisages a one-stage development of the project assuming capital requirements and funding were not limiting factors. This maximises the potential of the deposit but may not be the optimal practical approach given the scope of the project.

A number of options for a staged development strategy are therefore now being considered. We are aiming to identify a first stage project which requires a low capital outlay whilst generating a high return and which capitalises upon the investment in infrastructure we have already made: roads, bridge, camps, workshop and fuel tank farm. The stage one development will be scalable and not impede any future developments.

We have selectively strengthened our team in Bishkek to assist in the evaluation of options as to mining and metallurgy.

The government has approved our application to extend the time in which regulatory approvals for the project's development have to be obtained from December 2016 to December 2018. This has meant that we have more time for discussion with potential joint venture partners and by taking their contribution into consideration we will maintain flexibility in the development strategy.

We have also been successful in 2015 in securing our licence to operate the Tulkubash heap leach project which is likely to be the first stage development. To do so we arranged a visit for representatives from the local communities to the Copler mine - a large heap leach operation in Turkey. As a result we were very pleased that the public hearings process held subsequently in the nearby villages resulted in approval of the Project from all the local communities.

We are required to "sterilise" the alluvial gold from all areas on site which are to be built over. This process was completed in 2015.

Our range of development options has been enhanced by the Kyrgyz government awarding a tender which included the requirement to construct a smelter a short distance from Chaarat. This would open up the choice for building a project based on the refractory ore in the Main and Contact zones, by generating a smeltable concentrate. This would simplify the process and lower the capital cost as it would eliminate, at least at the outset, the need to build an expensive oxidation unit.

In 2015 there were two important changes affecting the economics of the Project. The first was the fall in the oil price which impacts many of the consumables used for mining such as fuel and explosives. The second, which accentuated the first, was a large devaluation of currencies in the Russian speaking world, first in Russia, as a result of the falling oil price combined with western sanctions and later in Kazakhstan and the Kyrgyz Republic. There has also been a reduction in the taxes affecting mining companies with the abolition of VAT on fuel and sales tax.

The Kyrgyz Republic joined the Eurasian Economic Union in August 2015. The Union includes Russia, Kazakhstan, Uzbekistan, Armenia and Belarus and enables free movement of goods and people between these countries. This is a positive development as it improves access to and the competitiveness of the Russian and Belarusian mining equipment manufacturers. That will enable local operators to have a larger pool of staff available to them and to source equipment with which they are familiar.

There are now eight active gold projects in the country of which six are in production.

We remain very disciplined on costs and are funded to the end of 2016. We are actively pursuing a number of options to fulfil our strategy, including any required funding.

I reported last year that we had taken a decision to fully impair our other exploration projects. We continue to seek ways to raise value from these projects and on this I am pleased to confirm that in March 2016 we sold our interest in the greenfield Kyzil Ompul licence for USD 200k.

Armed with a robust FS, an improving gold price and more flexible markets for equipment, we are now hopeful that we can feed the growing interest in our project from potential partners and deliver value to shareholders and stakeholders in the local communities.

Dekel Golan

Chief Executive Officer