12th Feb 2010 07:00
Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining
12 February 2010
Central African Gold Plc ('CAG' or 'the Company')
New Loan Agreements
Central African Gold Plc, the AIM quoted gold mining and exploration company, announces that it has entered into new loan agreements with its two largest shareholders, ECP Africa Fund II PCC ('ECP') and HBD Zim Investments Limited ('HBD') ( 'NLAs') in an aggregate amount of circa US$1 million (approximately £690,000). ECP and HBD together hold 78.2 per cent. of the issued share capital of the Company.
The NLAs have been subscribed for on the following basis:
ECP US$705,070.17 (£450,539.84)
HBD US$302,732.48 (£193,446.05)
The Company is in the process of agreeing a new loan agreement with Investec Asset Management (Pty) Limited ('IAM') under the terms of which IAM will loan a further sum to the Company. A further announcement will be made in due course.
The Board confirms that funds received under the NLAs will be used to accelerate investment in CAG's Zimbabwean operations and support the Company's general working capital requirements. The Company is continuing to seek debt finance from a number of sources to support further CAG's working capital requirements. Accordingly, a further announcement on the progress of the debt finance process will be made in due course.
The NLAs carry interest at 10 per cent. per annum, compounded monthly in arrears. The full amount is repayable on the maturity date, 29 April 2011, or upon ECP, IAM and HBD and/or their Associates (as defined in the section 1152 of the Companies Act 2006) ceasing to hold, directly or indirectly, more than 50 per cent. in aggregate of the issued share capital of the Company. There is no penalty for early repayment of the loans.
As ECP and HBD are substantial shareholders in the Company, the NLAs are classified as related party transactions in accordance with the AIM Rules. Accordingly, the independent directors, being Roy Pitchford and Craig Campbell, having consulted with Strand Hanson Limited, the Company's nominated adviser, consider the terms of the NLAs to be fair and reasonable insofar as the Company's shareholders are concerned. In providing its advice, Strand Hanson Limited has taken into account the independent directors' commercial assessments.
Roy Pitchford, CAG's Chief Executive Officer and Acting Chairman, said, "We feel that the NLAs demonstrate the continuing support of our major shareholders, their belief in the value of CAG's core assets and their desire to assist CAG in fully developing its operations in Zimbabwe, to the benefit of all shareholders."
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For further information please visit www.centralafricangold.com or contact:
Roy Pitchford / Craig Campbell
|
Central African Gold Plc |
Tel: +44(0)77 9390 9985 Tel: +27(0)11 317 3654 |
Stuart Faulkner / James Spinney
|
Strand Hanson Limited |
Tel: +44(0)20 7409 3494 |
Hugo de Salis / Felicity Edwards |
St Brides Media and Finance Ltd |
Tel: +44(0)20 7236 1177
|
Notes to Editors
Central African Gold Plc is an established gold mining company with a portfolio of production and exploration assets in Africa. The Company has two subsidiaries in Zimbabwe: Falcon Gold Zimbabwe Limited (84.7 per cent. owned) and Olympus Gold Mines Limited (100 per cent. owned); and a subsidiary in southern Botswana with a licence covering 430.3km² of the extension of the Kraaipan greenstone belt from South Africa.
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