Canal+ Regulatory News (CAN)

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

10 December 2010

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

Increase of Facility Agreement

Central African Gold Plc, the AIM quoted gold mining and exploration company, announces that its major shareholder, New Dawn Mining Corp. ('NDM'), has agreed to increase the quantum of the loan facility previously made available to the Company ('the Facility Agreement'), as announced by CAG on 17 August 2010, from US$2.0 million to US$5.0 million.

The additional funds made available under the terms of the Facility Agreement will be made available to the Company solely to support CAG's ongoing operational and working capital requirements and cannot be used to repay any intra-group indebtedness of the Company. There have been no other changes to the terms of the Facility Agreement. 

As NDM is a substantial shareholder in the Company, the amendment to the Facility Agreement is classified as a related party transaction in accordance with the AIM Rules. 

Accordingly, the independent director, being Roy Pitchford, having consulted with Strand Hanson Limited ('Strand Hanson'), the Company's nominated adviser, considers the terms of the amended Facility Agreement to be fair and reasonable insofar as the Company's shareholders are concerned. In providing its advice, Strand Hanson has taken into account the independent director's commercial assessments.

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Notes to Editors

CAG

Central African Gold Plc is a gold mining company with a portfolio of production, development and exploration assets in Zimbabwe, where the Company operates through two subsidiaries, Falcon Gold Zimbabwe Limited (84.7 per cent. owned) and Olympus Gold Mines Limited (100 per cent. owned). Through these subsidiaries, CAG has five main gold mines, the Dalny, Old Nic, Golden Quarry, Venice and Camperdown mines, which are located in the highly prospective Kadoma, Shurugwi and Bulawayo gold regions in Zimbabwe.

NDM

The Company's 88.68% shareholder is Toronto Stock Exchange listed New Dawn Mining Corp. ('NDM'), a gold mining company with a broad portfolio of production and exploration assets also in Zimbabwe. NDM owns and operates the Turk and Angelus Mines in the upper southwest area of Zimbabwe, which it believes have the potential to produce an estimated 35,000 to 50,000 ounces of gold per annum. It is NDM's objective to orchestrate the development of CAG's mining operations and exploration portfolio, as well as its own, to become a mid-tier gold producer focussed in Zimbabwe, with a consolidated annualised gold production to between 50,000 and 60,000 ounces within the next 18 to 24 months, increasing to 100,000 ounces within 4 to 5 years.