25th Sep 2006 07:02
Central African Gold PLC25 September 2006 Central African Gold Plc / Ticker: CAN / Index: AIM / Sector: Mining & Exploration 25 September 2006 Central African Gold Plc Interim Results For the six months ended 30 June 2006 Central African Gold Plc ("CAG" or "the Company"), the AIM traded gold miningand exploration company, announces its results for the six months ended 30 June2006. Overview • Strategy underway to build CAG into a gold producer with a world class portfolio of exploration projects • Agreement to purchase the Bibiani gold mine and related assets including the Bibiani North Prospecting Licence in Ghana from AngloGold Ashanti • Joint venture with the Mali Mining House for the exploration and development of 20 gold licences covering the prospective Birimian Gold Belt in Southern and Western Mali - large anomalies already identified • Further three gold exploration permits secured in the prospective Kenieba district in Western Mali - prime target is the Medinandi permit • Exploration portfolio being reviewed and evaluated with the aim of drilling programmes being initiated shortly • Company restructured and in good shape to deliver growth strategy in favourable commodity environment Chairman's Statement As CAG's new Chairman it gives me great pleasure to report on the Company'sprogress towards fulfilling its objective of becoming a gold producer with aworld class portfolio of exploration projects. During the period under reviewwe broadened our geographical focus, strengthened the balance sheet via aninstitutional placing and restructured the Board. Since the period end, we havesigned two further agreements, namely a joint venture with a second Malianexploration company, Mani SARL ("Mani"), for the Medinandi permit, and theconditional acquisition of the Bibiani gold mine and Bibiani North ProspectingLicence in Ghana from AngloGold Ashanti. These agreements underpin the Board'sbelief in the CAG team's ability to create a leading African gold miningcompany. Mali We signed our first joint venture in December 2005 with the Mali Mining House ("MMH") for the exploration and development of 20 gold licences covering theprospective Birimian Gold Belt in Southern and Western Mali. Having undertakenreconnaissance work to review the large volume of geophysical and geochemicaldata that exists over the southern and western regions of Mali, large anomalieswere identified. As a result, we began an exploration programme in late January2006 and follow-up targets are now being prioritised for further work in 2007.An 80/20 joint venture company, Mali Gold Fields SA, has been formed for thedevelopment of the exploration projects. The Mali government would be entitledto a statutory 10% free carried interest under Malian Mining Code in theeventuality of a significant discovery. On the back of the MMH agreement, an 80/20 joint venture was signed in July 2006with Malian exploration company Mani SARL, housed in a joint venture company,Songhoi Resources SA, to explore three gold exploration permits in theprospective Kenieba district in Western Mali. The programme's prime target isthe Medinandi permit which is located in an historically proven belt that todate has delivered over 20 million ounces of gold. An area of mineralisation atMedinandi North has been drilled (Reverse Circulation and Diamond) and theinitial testing is consistent with results extrapolated from other majordeposits situated in the Kenieba area. Ghana More recently, we signed a conditional agreement to purchase the Bibiani goldmine and related assets including the 19.3 km(2) Bibiani North ProspectingLicense in Ghana from AngloGold Ashanti for an aggregate cash consideration ofUS$40 million. The Bibiani gold mine is located 250km north west of Accra andis situated in the Sefwi-Bibiani Greenstone Belt, one of the most prospective inGhana. Since its discovery in 1902, Bibiani has yielded approximately fourmillion ounces of gold from underground and open pit mining operations. Ourintention is to increase production at Bibiani following the implementation ofan underground production programme in the second half of 2007. Bibiani'sresource base as at 31 December 2005, as stated in AngloGold Ashanti's audited2005 accounts, was 100,000 ounces of ore reserve and 900,000 ounces of mineralresource (JORC compliant). An updated reserve and resource statement will bereleased in the circular referred to below. The consideration payable comprises US$36 million on completion and a furtherUS$4 million conditional on the renewal of the Prospecting Licence. Pursuant tothe AIM rules, the Acquisition constitutes a reverse takeover for the Companyand is conditional, inter alia, on a fundraising by the Company, obtainingGhanaian government and Minerals Commission approval and approval by theCompany's shareholders at an extraordinary general meeting. On execution of theagreement, the Company paid a deposit of US$1 million into an escrow account ("Deposit"). The Deposit will be applied towards satisfaction of theconsideration for the Acquisition and, should the transaction not complete, isfully refundable to the Company, save where it does not proceed due to failureto obtain shareholder approval. Full details relating to the acquisition and associated fundraising, includingan independent competent person's report and notice of extraordinary generalmeeting, will be set out in a circular to shareholders due to be publishedimminently. Until such time, trading in the Company's shares will remainsuspended. In recent months we have restructured the Board and management. Mark Rosslee(Chief Finanical Officer) and I joined the Board in March 2006 and with us camea much respected team which is focused on identifying and evaluating newprospects. Phil Edmonds, Andrew Groves and Brian Moritz stepped down from theBoard in June, and the Company is in consultation with its advisers with a viewto appointing new non-executive directors in due course. The past six months have seen many positive developments for CAG. With its newmanagement team and solid portfolio of projects, I am confident that our successwill continue and that the future growth of the Company is secure. Byleveraging the team's extensive combined experience in mining in Africa we aimto further strengthen CAG's project portfolio and in turn increase shareholdervalue. For the six months ending 30 June 2006 we are reporting a pre and post tax lossof £2.9 million which is stated after a share-based payment charge of £1.8million as a result of the fact that Financial Reporting Standard No. 20,share-based payment, applies to the Company for the first time. Importantly inApril we raised £9 million through an institutional placing and as a result wehave a healthy current cash position of £7.4 million. As mentioned, we areinvesting both time and finance in identifying and acquiring suitable projects,while at the same time we remain focused on managing costs prudently andensuring the Company is adequately financed to achieve its corporate objectives. I would like to thank my fellow directors, colleagues and advisors for theirhelp and support to date in getting CAG to where it is in a relatively shorttimeframe. Greg HunterChairman and Chief Executive Officer UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the six months ended 30th June 2006 Unaudited Re-stated and Re-stated and Unaudited Audited SIX MONTHS SIX MONTHS TWELVE MONTHS ENDED ENDED ENDED 30 JUNE 30 JUNE 31 DECEMBER 2006 2005 2005 £ 000's £ 000's £ 000's TURNOVER - - -Operating expenses (1 249) (122) (310)Share based payment charge (1 767) (2) (4)OPERATING LOSS (3 016) (124) (314) Interest receivable 66 11 35LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (2 950) (113) (279)Taxation - - -LOSS ON ORDINARY (2 950) (113) (279)ACTIVITIES AFTER TAXATIONMinority interests 20 15 29Loss for the financial period (2 930) (98) (250)LOSS PER SHARE Basic and diluted (1.439p) (0.059p) (0.151p) STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFor the six months ended 30 June 2006 Unaudited Re-stated Re-stated Unaudited Audited SIX MONTHS SIX MONTHS 12 MONTHS ENDED ENDED ENDED 30 JUNE 30 JUNE 31 DECEMBER 2006 2005 2005 £ 000's £ 000's £ 000's Loss for the Financial Period (2 930) (98) (250)Currency translation differences on (41) 6 -foreign subsidiariesTotal recognised gains and losses (2 971) (92) (250)relating to the periodPrior Year Adjustment (8)Total Recognised gains and losses since (2 979)last annual report UNAUDITED CONSOLIDATED BALANCE SHEETAs at 30 June 2006 Unaudited Re-stated Re-stated Unaudited Audited 30 JUNE 30 JUNE 31 DECEMBER 2006 2005 2005 £ 000's £ 000's £ 000's FIXED ASSETSTangible assets 128 - -Intangible assets 436 262 287 564 262 287 CURRENT ASSETS 89 90 52DebtorsCash at bank and in hand 8 842 1,306 1,194 8 931 1,396 1,246CREDITORS: Amounts following (433) (128) (177)due within one yearNET CURRENT ASSETS 8 498 1 268 1,069NET ASSETS 9 062 1 530 1 356 CAPITAL AND RESERVES Called up share capital 266 166 166Share premium account 10 290 1,460 1,460Share options reserve 1 775 6 8Profit and loss account (3 336) (207) (365) EQUITY SHAREHOLDERS' FUNDS 8 995 1 425 1 269Minority interests 67 105 87 9 062 1 530 1 356 UNAUDITED CONSOLIDATED CASH FLOW STATEMENTFor the six months ended 30 June 2006 Unaudited Re-stated Re-stated Unaudited Audited SIX MONTHS SIX MONTHS TWELVE MONTHS ENDED ENDED ENDED 30 JUNE 30 JUNE 31 DECEMBER 2006 2005 2005 £ 000's £ 000's £ 000's Cash outflow from operating activities (1 058) (59) (174) Returns on investments and servicing 66 11 35of finance Capital expenditure and financial (290) (82) (1 03)Investment CASH OUTFLOW BEFORE (1 282) (130) (242)FINANCING Management of liquid resources (7 654) - (878) Financing 8 930 - - DECREASE IN CASH IN THE PERIOD (6) (130) (1 120) Reconciliation of Net Cash Flow toMovement in Net Funds Decrease in cash in the period (6) (130) (1 120) Cash outflow from increase in liquid 7 654 - 878Resources Net funds at beginning of period 1 194 1 436 1 436 Net funds at end of period 8 842 1 306 1 194 NOTES TO THE INTERIM ACCOUNTSFor the six months ended 30 June 2006 1. The financial information contained in this interim report does notconstitute statutory accounts within the meaning of section 240 of the CompaniesAct 1985. Subject to the FRS20 adjustment described below the figures relatingto the year ended 31 December 2005 have been extracted from the audited accountswhich have been filed with the Registrar of Companies and received anunqualified audit report which did not contain a statement under section 237(2)or (3) Companies Act 1985. The consolidated financial statements incorporate those of Central African GoldPlc and its subsidiary undertakings for the period. The current and thecomparative half year to June are Unaudited and have been prepared usingaccounting policies and practices consistent with those adopted in the accountsfor the year ended 31 December 2005, with the exception of the application ofFRS 20 (see below), and are also consistent with those which will be adopted inthe 2006 Annual Report and Accounts. 2. The adoption of FRS 20: Share-based Payment requires a prior periodadjustment to be made; the comparative figures for the half year to 30 June 2005and the year to 31 December 2005 have been restated accordingly. This hascreated a share option reserve at 31 December 2005 of £8 000 and reduced theretained profits at that date by £8 000; of this amount, £4 000 is attributableto the year ended 31 December 2005 and £2 000 to the six month period ended 30June 2005. 3. The Group's operating loss is derived from its continuing operationswhere the principal activity is gold exploration in Africa. 4. Basic and diluted loss per share is calculated by reference to the lossfor the financial period and the weighted average number of shares in issueduring the period of 204,972,579 (1 January 2006 to 19 April 2006 - 165,742,856:20 April 2006 to 30 June 2006 - 265,751,023), and 165,742,856 for thecomparative periods. 5. On 20 April 2006 the Company placed 100,008,167 ordinary shares of 0.1peach at 9p raising gross cash proceeds of £9,000,735. 6. Reconciliation of Movement in Equity Shareholders' Funds Unaudited Re-stated Re-stated Unaudited Audited SIX MONTHS SIX MONTHS 12 MONTHS ENDED ENDED ENDED 30 JUNE 30 JUNE 31 DECEMBER 2006 2005 2005 £ 000's £ 000's £ 000's Loss for Period (2 930) (98) (250)Net proceeds from issue of shares 8 930 - -Effect of currency exchange movements (41) 6 -Share option reserve movement 1 767 2 4Net increase (decrease) in shareholders' 7 726 (90) (246)fundsOpening Shareholders' Funds 1 269 1 515 1 515Closing Shareholders' Funds 8 995 1 425 1 269 7 Cash flows Unaudited Re-stated Re-stated Unaudited Audited SIX MONTHS SIX MONTHS 12 MONTHS ENDED ENDED ENDED 30 JUNE 30 JUNE 31 DECEMBER 2006 2005 2005 £ 000's £ 000's £ 000's Reconciliation of operating loss to net cashoutflow from operating activitiesOperating loss (3 016) (124) (314)Depreciation 3 - -(Increase)/decrease in debtors (37) (23) 15Increase in creditors 225 86 121Share based payment charge 1 767 2 4 Net cash outflow from operating activities (1 058) (59) (174) Analysis of cash flows for headings nettedin the cash flowReturns on investments and servicing offinance Interest received 66 11 35 Net cash inflow from returns on investments 66 11 35and servicing of finance Capital expenditure and financial investmentPurchase of intangible fixed assets (290) (82) (103) Net cash outflow from capital expenditure (290) (82) (103)and financial investment Management of liquid resourcesCash placed on deposit (7 654) - (878) Net cash outflow from management of liquid (7 654) - (878)resources FinancingProceeds from issue of share capital 9 001 - -Share issue costs (71) - - Net cash inflow from financing 8 930 - - Analysis of net fundsCash at bank and in hand 142 1 306 148Cash on deposit 8 700 - 1 046 8 842 1 306 1 194 8. Segmental Information £'000's Loss Before Tax Net Assets Unaudited Re-stated Re-stated Unaudited Re-stated Re-stated Unaudited Audited Unaudited Audited Six Months Six Months 12 Months Six Months Six Months 12 Months Ended Ended Ended Ended Ended Ended 30 June 2006 30 June 2005 31 December 30 June 2006 30 June 2005 31 December 2005 2005 South Africa (252) - - 28 - -Botswana (34) (33) (61) 133 344 304Mali (84) - (53) 272 - -Head Office (2 580) (80) (165) 8 629 1 186 1 052TOTAL (2 950) (113) (279) 9 062 1 530 1 356 9. These interim accounts were approved by the Directors on 22 September2006. For further information please visit www.centralafricangold.com or contact: Mark Rosslee Central African Gold Plc Tel : +27 (0) 11 676 2500 Greg Hunter Central African Gold Plc Tel : +27 (0) 11 676 2500 Hugo de Salis St. Brides Media & Finance Ltd Tel: +44 (0) 20 7242 4477 INDEPENDENT REVIEW REPORT TO CENTRAL AFRICAN GOLD PLC Introduction We have been instructed by the company to review the financial information setout on pages 5 to 11 and we have read the other information in the interimstatement and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. This report, including the conclusion, has been prepared for and only for thecompany for the purpose of their interim statement and for no other purpose. Wedo not, therefore, in producing this report, accept or assume responsibility forany other purpose or to any other person to whom this report is shown or intowhose hands it may come save where expressly agreed by our prior consent inwriting. Directors' responsibilities The interim statement, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the Interim Statement in accordance with the AIMMarket Rules which require that the accounting policies and presentation appliedto the interim figures must be consistent with those that will be adopted in thecompany's annual accounts. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board for use in the United Kingdom, as if thatBulletin applied. A review consists principally of making enquiries of groupmanagement and applying analytical procedures to the financial information andunderlying financial data and based thereon, assessing whether the disclosedaccounting policies have been consistently applied unless otherwise disclosed.A review excludes audit procedures such as tests of controls and verification ofassets, liabilities and transactions. It is substantially less in scope than anaudit and therefore provides a lower level of assurance. Accordingly, we do notexpress an audit opinion on the financial information Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 30 June 2006. BAKER TILLY Chartered Accountants2 Bloomsbury StreetLondonWC1B 3ST 22 September 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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