TSG.L Regulatory News (TSG)

23 Nov 2006 12:19

Trans-Siberian Gold PLC23 November 2006 Trans-Siberian Gold plc Asacha project and Financing update London: 23 November 2006 - Trans-Siberian Gold plc ("TSG" or "the Company")(TSG.L) reports that it has been informed by Standard Bank plc ("Standard Bank")that it is unable in current circumstances to arrange project finance of up toUS$50 million for the Asacha project as contemplated by the indicative termsheet agreed between TSG and SBL and announced on 9 June 2006. Although Standard Bank had recently confirmed to the Company that it and itsconsultants were satisfied on all aspects of the Asacha project required priorto submission for Credit Committee approval, Standard Bank has now been advisedby its intended co-lender that it does not wish to participate and is unwillingto proceed as sole lender. The capital and pre-production operating cost of the project, based on annualproduction of 100,000 ounces, has increased from US$108 million to US$113million, largely as a consequence of the delay in arranging project equity andloan financing, of which US$36 million has already been spent. The project willgenerate an attractive return at current gold prices. TSG will now consult withits major shareholders, AngloGold Ashanti Limited ("AGA") and UFG Private EquityFund I, LP ("UFG") on alternative approaches to bring Asacha into productionduring the latter part of 2008. The agreement for the sale of TSG's two Krasnoyarsk based subsidiaries to AGAfor a cash consideration of US$40 million announced on 21 September 2006 isexpected to be finalised in the near future. The agreement provides for aninitial payment of US$10 million on signing, which will enable essential projectexpenditure, principally the erection of the accommodation camp at Asacha,completion of the explosives magazine and continuation of infrastructureimprovements, to continue over the winter period. Receipt of the balance of theproceeds is subject to the confirmation of extensions to the mining andexploration licences at Veduga and regulatory approvals in Russia and SouthAfrica. TSG also reports that UFG has withdrawn its proposal in respect of the possibleacquisition by the Company of UFG's interest in the Kamchatka based OAOSibirskiy Gorno-Metallurgichesky Alyans("Sigma"), following receipt of anopinion from Seymour Pierce to the effect that the terms of the Transaction, asproposed, were not fair and reasonable to TSG. Further announcements in respect of the development of Asacha and the sale ofthe Krasnoyarsk companies will be made in due course. Ends Contacts: TSGPeter Burnell +44 (0) 1434 632 292 Simon Olsen +44 (0) 1223 265 760/07770 484 965 Seymour PierceStuart Lane +44 (0) 207 107 8000 BanksideKeith Irons +44 (0) 20 7367 8873 This information is provided by RNS The company news service from the London Stock Exchange