Canal+ Regulatory News (CAN)

11 Sep 2008 17:57



Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining

11 September 2008

Central African Gold Plc ("CAG" or "the Company")

AGM Statement 

Central African Gold Plc, the AIM traded gold mining and exploration company, today held its Annual General Meeting ("AGM") and the Company announces that all the proposed resolutions, with the exception of resolution 9, were passed. 

At the meeting, Roy Lander, Chairman of CAG, made the following statement:

"In terms of our Bibiani gold mine in Ghana ('Bibiani'), developments have progressed well. I am pleased to report that SRK Consulting Engineers ('SRK'), a leading mining consultant, has reported on our underground mining at Bibiani. They confirm that the mining method is capable of achieving 100,000 tonnes per month with a low to moderate risk. However, they draw attention to the need to accelerate underground development, so that the Company has four or five stopes available at any time, so providing full flexibility of production sources. We currently draw from two stopes and will be bringing a third into production shortly. However the purpose of the new decline, currently being sunk by Barminco, is to access ore at the northern section of the mine. Progress on this shaft sinking is slower than we expected and we now expect to reach a point at which a drive to new stopes 8, 9 and 10 can be achieved by March next year. 

I am pleased to report that the new haulage vehicles arrived in August and were in use by the end of the month. Ore trucked to portal has increased by circa 30 per cent. since these vehicles became available. However, congestion in the ramp decline will occur once CAG reached the level of moving 65,000 tonnes of ore per month and, as the new decline is late and we cease treating the slimes dam in December, deliveries to the plant from underground will be constrained until commissioning of the new decline.

Management has undertaken a rigorous technical assessment of all production issues over the next 15 months and is re-examining costs and production policy over the life of the mine, based on now proven and probable ore reserves. SRK is helping in this exercise and is helping to fine tune the Company's daily production techniques.

We intend preparing a new feasibility report on the potential of the mine and indicate future cash requirements. In this regard, we have appointed RBC Capital Markets to conduct a strategic review, including examining options for a capital injection, aimed at maximising shareholder returns.

Whilst we remain in a difficult position with regards to our immediate production requirements, the last 18 months have shown an encouraging improvement on the Group's total gold resources, and once our Zimbabwean producing mines are viable we will again turn our attention to these deposits and other potential growth areas. 

Finally, and as one of the new board members, may I thank the CEO, Greg Hunter, and his team for their contributions in what has been a very challenging period."

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For further information please visit www.centralafricangold.com or contact:

Notes to Editors:

Central African Gold Plc, admitted to AIM in April 2004, was established to acquire gold assets with a geographical focus on Africa. The Company has established a sound portfolio with projects in Ghana, Mali, Zimbabwe and Botswana. It has a highly experienced management team, which has worked together for four years managing six underground greenstone gold mining operations and building exploration portfolios.

CAG's portfolio includes the developing Bibiani gold mine and two prospecting licences in Ghana, which it acquired from AngloGold Ashanti Limited, three joint ventures in Mali covering 17 prospective permits and a licence in Botswana covering the extension of the Kraaipan greenstone belt from South Africa. During 2007, CAG acquired five gold mines and extensive exploration properties in Zimbabwe. The management team is evaluating additional prospects in Africa to establish CAG as a leading mid-tier African gold producer with world class exploration and production assets.