GGG P119 Jul 2010 13:08
Issue of Equity
Central China Goldfields plc (the "Company" or "GGG") £1,125,000 INSTITUTIONAL PLACING 19 July 2010
Central China Goldfields plc is pleased to announce that it has raised £ 1,125,000 in a share placing (the "Placing"), with over £1,000,000 of this sum raised from specialist institutional resource funds.
The new funds, coupled with £300,000 recently received into the Company from the sale of Chinese assets, as well as a further anticipated receipt of £ 1,600,000 after tax due in the coming months, will give the Company cash resources in excess of £3,000,000.
The Company is therefore fully funded to fast-track its principal asset, the Bullabulling gold project, to banking feasibility, which is scheduled for the third quarter of 2012. The initial cost of bringing the project to the bankable feasibility stage is estimated to be approximately A$4,000,000 (£2,500,000) of which GGG is responsible for 50% or £1,250,000.
GGG is in the position to fast-track Bullabulling because it is the site of a former gold mine in the Western Australia gold mining district and has already been granted a series of mining leases. Extensive existing data based on 12,000 earlier drill holes suggests that Bullabulling has the potential to yield large, open pittable gold deposits with high grade lodes. The Company is currently embarking on a new drilling programme, and expects to report to shareholders the first assay results in the next few weeks.
The potential of Bullabulling to become a sizeable gold mine has attracted two new major institutional resource funds. Funds controlled by Baker Steel Capital Managers and CQS Asset Management Limited have invested in excess of £1,000,000 with the remaining £125,000 raised mainly from the Directors of the Company.
The Company's new Non-Executive Director, experienced Australian engineer Michael Short, who joined the Board in June, has subscribed to 2,000,000 placing shares. A further four Directors increased their holdings at this time.
In total, the placing is for 29,605,263 new ordinary shares placed at 3.8 pence per share (the "Placing Shares"). For every three Placing Shares the Company issued one Placing Warrant exercisable at 6.3 pence until 19 January 2012 (18 months). In total 9,868,421 Placing Warrants are being issued.
Application will be made for the Placing Shares to be admitted to trading on AIM and it is expected that trading will commence on 23 July 2009. Following this placing, the total number of shares in issue will be 227,017,398.
Following the above transaction funds controlled by Baker Steel Capital Managers will hold 19,800,000 ordinary shares, representing 8.72% of the issued share capital, and 6,600,000 Placing Warrants