CAN Central A.G.

RNS Number:9869H
Central African Gold PLC
23 August 2006


     Central African Gold Plc / Ticker: CAN / Index: AIM / Sector: Mining &
                                  Exploration


23 August 2006

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

                Proposed purchase of Bibiani gold mine in Ghana
              from AngloGold Ashanti Limited ("AngloGold Ashanti")


Central African Gold Plc, the AIM listed gold mining and exploration company, is
pleased to announce, further to its announcement dated 27 July 2006, that it has
entered into a conditional agreement to purchase the Bibiani gold mine and
Bibiani North Prospecting Licence ("Prospecting Licence") in Ghana from
AngloGold Ashanti for an aggregate cash consideration of US$40 million ("the
Acquisition"). Extension of the Prospecting Licence is currently under review by
the Ghana Minerals Commission. The consideration payable for the Acquisition
comprises US$40 million on completion with US$4 million repayable to the Company
in the event extension of the Prospecting Licence is not granted.

The Acquisition represents the first stage in fulfilling CAG's strategy of
effectively identifying and acquiring gold projects in order to achieve the
Company's objective of becoming a focussed gold production company with a world
class exploration portfolio.

The Bibiani mine, located 250km north west of Accra, is situated in the
Sefwi-Bibiani Greenstone Belt. This belt is one of the most prospective in
Ghana, and also hosts Newmont's Ahafo (circa 16 million oz resource) and
Redback's Chirano (circa 2.3 million oz resource) operations (Source: Metals
Economic Group, 2006). Since its discovery in 1902, Bibiani has yielded
approximately 4 million oz of gold from both underground and open pit mining
operations. The 2.7 million ton per annum processing facility was commissioned
in 1997, and in the opinion of the directors has been well-maintained.

CAG's objective is to increase Bibiani's resource base from its stated inventory
of gold as at 31 December 2005 of 100,000 ounces of ore reserve and 900,000
ounces of mineral resource (JORC compliant) as stated in AngloGold Ashanti's
audited 2005 accounts and achieve immediate gold production from the continued
processing of tailings. The Company intends to commence underground production
in the second half of 2007. CAG's team of experienced mining professionals will
utilise their expertise and techniques to achieve the Company's objectives of
increasing production and the resource base from both the current mining lease
and Bibiani North, the above mentioned Prospecting License covering an area of
19.3 km2.

The Acquisition constitutes a reverse takeover for the Company and is
conditional, inter alia, on a fundraising by the Company, obtaining Ghanaian
government and Minerals Commission approval and approval by the Company's
shareholders at an extraordinary general meeting ("Shareholder Approval"). On
execution of the agreement, the Company paid a deposit of US$1 million into an
escrow account ("Deposit"). The Deposit will be applied towards satisfaction of
the consideration for the Acquisition and, should the transaction not complete,
is fully refundable to the Company, save where it does not proceed due to
failure to obtain Shareholder Approval .

Full details relating to the Acquisition and associated fundraising, including
an independent competent person's report and notice of extraordinary general
meeting, will be set out in a circular to shareholders which will be published
as soon as practicable. Until such time, trading in the Company's shares will
remain suspended.

CAG's CEO, Greg Hunter, commented: "We have an excellent team in place to
achieve our objective of increasing production and unlocking resource conversion
to reserves using our advanced technology, data integration and modelling, to
begin a new chapter in Bibiani's history. I am confident that we will be able to
grow the production and earnings potential quickly and efficiently."


                                  * * ENDS * *


For further information please visit the Company website on 
www.centralafricangold.com or contact:


Greg Hunter        Central African Gold                 Tel: +27 (0)82 882 4222
Hugo de Salis      St Brides Media & Finance Ltd        Tel: +44 (0)20 7242 4477
Simon Raggett      Strand Partners Limited              Tel: +44 (0)20 7409 3494




                      This information is provided by RNS
            The company news service from the London Stock Exchange

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