1st Oct 2009 07:00
Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining
Central African Gold Plc
('CAG' or 'the Company')
Update re Preliminary Results / Annual Report and Accounts / Interim Results / AGM
Following the announcements made by the Company on 25 June 2009 and 22 July 2009 respectively ('the Announcements'), in which the Board of Directors of CAG ('the Board') announced that the resolution of technical accounting issues, identified in the Announcements, had resulted in a delay in publishing the Company's Preliminary Results and Group Accounts for the year ended 31 December 2008 ('the Results'), the Company is pleased to announce that a resolution to these technical issues has largely been achieved.
However, as shareholders are aware, the Board has also been seeking offers for CAG's Malian assets ('the Disposal'). Whilst the Board can announce that a number of formal offers have now been received as part of the Disposal process and that the Board is actively considering these offers, the cash components of these offers is less than the Board anticipated.
As a consequence, whilst the potential cash proceeds from the Disposal, based on the offers received to date, may be adequate to repay amounts due under the New Loan Agreements, as described in the circular sent to Shareholders, dated 27 March 2009, ('the New Loan Agreements'), there is no certainty that it would do so. In addition, the Disposal will immediately trigger cash shortfalls in the business as a result of other creditors, currently deferred pending the Disposal, becoming due for payment. CAG will therefore require additional funding to support the Company's working capital and funding commitments.
As a result, the Board believes that the cash likely to be available to the Company, subsequent to the Disposal, will not be sufficient to repay fully amounts due to Investec Asset Management ('IAM') and ECP Africa ('ECP') of US$2.2 million and US$1.8 million under the New Loan Agreements, together with the other creditors of the Company as they fall due.
However, the Board believes that CAG will require further funds to ensure that the Company remains a going concern.
To this end, CAG has approached both IAM and ECP to seek a deferral of the Company's obligations under the New Loan Agreements. Discussions with IAM and ECP are continuing, but there is no certainty that agreement will be reached.
As a result, without deferral of the amounts due under the New Loan Agreements being agreed and / or alternative sources of funding being secured, the Board believes that the Company may no longer be able to fund the ongoing working capital requirements of the Company for a period of 18 months and, therefore, meet the IFRS definition of a going concern.
Accordingly, although the Company is continuing to work with its advisors, it is not expected that the Results and the interim results for the six months ended 30 June 2009 ('the Interims') will be released until the Board is able to announce further progress on the issues referred to above.
As a result, the Board confirms that CAG's shares will remain temporarily suspended from trading on AIM, pending publication of the Results and the Interims, and that the notice convening the annual general meeting will not be issued until the publication of the Results.
The Board would like to take this opportunity to apologise to the Company's shareholders for this delay and to assure them that the Board and the Company's advisers are doing everything that they can to expedite this process.
A further announcement will be made in due course.
* * ENDS * *
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 Partners 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); three joint ventures in Mali covering 17 prospective permits spanning approximately 2,600km² of the Birimian strata; and a licence in Botswana covering the extension of the Kraaipan greenstone belt from South Africa.
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