30th Nov 2006 17:10
Central African Gold PLC30 November 2006 Central African Gold Plc / Ticker: CAN / Index: AIM / Sector: Mining & Exploration 30th November 2006 Central African Gold Plc ("CAG" or "the Company") Update re Acquisition of Bibiani gold mine and related assets and licences in Ghana Central African Gold Plc, an AIM listed gold mining and exploration company, ispleased to announce an update on its acquisition of the Bibiani gold mine andrelated assets and liabilities, including prospecting licences in Ghana fromAngloGold Ashanti Limited ("AGA") and the placing of additional shares ("thePlacing"). The Acquisition is part of the Company's growth strategy aimed atrapidly building CAG into a significant African gold producer with extensiveworld class exploration and production assets. As announced on 29 September 2006, CAG conditionally agreed to acquire theBibiani gold mine and the 19.3 sq km Bibiani North Prospecting Licence ("PL") inGhana from AGA for a cash consideration of US$40 million of which US$4 millionis contingent on extension of the PL, by the Ghanaian Government ("the ProposedTransaction"). Following a review by the Directors in conjunction with theirprofessional advisers, consultation with AGA and taking into account generalmarket conditions, the proposed transaction has now been amended. The aggregate cash consideration to be paid to AGA remains unchanged. However,AGA has agreed, subject to fulfilment of the conditions of the Acquisition, tosubscribe for $3 million of Ordinary Shares in the Company, at a price set atthe volume weighted average trading price of the Ordinary Shares in the 20trading days preceding the closing of the Proposed Transaction ("AGA Price") aspart of the Placing. As a sign of its ongoing commitment, AGA has agreed to belocked-in for the 12 months following closing of the Proposed Transaction inrespect of these Ordinary Shares. Following the above mentioned review, the Company has decided to raise a reducedamount of £16.1 million (US$30.6 million) by the issue of an estimated179,192,896 Placing Shares, comprising 161,642,570 Ordinary Shares at a PlacingPrice of 9 pence per Ordinary Share and an estimated 17,550,326 to AGA at theAGA Price. The money raised, together with existing cash balances, will providethe necessary funds to pay the purchase price of the acquisition, develop theBibiani gold mine, and meet the general working capital requirements. It isexpected that Admission of the Placing Shares and readmission of the existingOrdinary Shares will take place on the day of Completion, which is expected tooccur on or around 12 December 2006, subject to satisfaction of the conditionsprecedent. Furthermore, the Company in conjunction with AGA, has successfully securedGhanaian Minerals Commission approval for the transaction and has secured, or isconfident of securing, further satisfactory outcomes or waivers shortly inrelation to other outstanding regulatory approvals in Ghana. A Supplementary Admission Document reflecting the above mentioned changes willtoday be circulated to shareholders. Additionally, the Company has received credit committee approval from a leadingSouth African banking group to provide debt financing of up to US$15 million(subject to the satisfaction of certain standard conditions precedent). Ifconcluded, this additional financing will enable the Company to access furtherfunds to optimise future development of Bibiani as an alternative to furtherequity issues at the current share price. CAG's CEO, Greg Hunter, commented, "With the support of our spread of new andexisting shareholders as well as management, the Company is on track to deliveron the definitive timetable now firmly in place. This will see CAG rapidlybecoming a gold producer with a solid foothold in Ghana that is complementary toour exploration portfolio in Mali." As stipulated in the Admission Document, pursuant to the AIM Rules, the ProposedTransaction will constitute a reverse takeover and is subject to Shareholderapproval. The Extraordinary General Meeting, which was adjourned on 23 October2006, has been reconvened to be held at 9.15a.m. on 11 December 2006 on thethird floor, Aldermary House, 10-15 Queen Street, London EC4N 1TX. Terms used in this announcement and not otherwise defined herein shall have themeanings given to such terms in the Admission Document dated 28 September 2006and Supplementary Admission Document dated 30 November 2006. Copies of thesewill be available during normal business hours on any business day free ofcharge to the public at the registered office of the Company at MillenniumBridge House, 2 Lambeth Hill, London EC4V 4AJ for a period of one month from thedate of completion of the Proposed Transaction and on the Company's website atwww.centralafricangold.com. Further Information The Bibiani gold mine is situated in the Sefwi-Bibiani Greenstone Belt, one ofthe most prospective belts in Ghana and its acquisition will provide the Companywith immediate production and revenue generation. As of 29 August 2006 the minehad Proved and Probable Reserves of 4,220,000 tonnes at 1.92g/t Au for 260,000ounces, Measured and Indicated Resources of 20,533,000 tonnes at 1.11g/t Au for733,000 ounces and total Inferred Resources of 4,600,000 tonnes at 4.2g/t Au for624,000 ounces of contained gold (JORC Compliant). CAG aims to re-establish hard rock mining operations and develop new miningopportunities on the Mining Lease and Prospecting Licence, with the intention toincrease production at Bibiani following re-commencement of an undergroundproduction programme in the second half of 2007. Importantly, a well maintained2.7 million tonnes per annum processing facility is on site (built 8 years agoat a cost of circa US$50m). The Company's objective is to establish a leading mid-tier operating goldcompany, with an initial target of 200,000 ounces of annualised low-cost goldproduction and 7.5 million ounces of resource by the end of 2008. Licences inMali and Botswana provide exploration targets in geologically attractive goldregions and exploration in these areas is ongoing. * * ENDS * * For further information please contact or visit www.centralafricangold.com orcontact: Greg Hunter Central African Gold Plc Tel: +27 (0)82 882 4222 Hugo de Salis St Brides Media & Finance Ltd Tel: +44 (0)20 7242 4477 Simon Raggett Strand Partners Limited Tel: +44 (0)20 7409 3494 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
Canal+