LONDON (ShareCast) - Chaarat Gold could soon get Chinese investment after a potential deal was given the thumbs up by authorities in the country.

Chaarat, a gold explorer based in the Kyrgyz Republic, said Shandong Gold Mineral Resources had secured regulatory approval for investing from the Development Commission of China (NDRC).

Approval from the NDRC is required before any Chinese firm can make an investment in a foreign company.

Chaarat said discussions with Shangdong, the third largest gold producer in China, could continue but warned no agreement had been made and there was no certainty a deal would be done.

The business also announced a deal between China Gold International Resources, the largest gold producer in China, and its 70%-owned subsidiary Kichi Chaarat.

The venture will see joint construction and sharing of the cost of a power line from Chatkal, the entry point to Chaarat, to the national grid of the Kyrgyz Republic.

When construction and commissioning of the power line in complete, the company said the projected cash cost of gold production at the site was expected to fall considerably.

In addition, the need to transport large quantities of diesel by road would be eliminated, enabling a more rapid development of the deposit, it added.

The firm's shares rose 5.7% following the news.

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