Interim Results
September 25 2006 - 3:02AM
UK Regulatory
RNS Number:3858J
Central African Gold PLC
25 September 2006
Central African Gold Plc / Ticker: CAN / Index: AIM / Sector: Mining &
Exploration
25 September 2006
Central African Gold Plc
Interim Results
For the six months ended 30 June 2006
Central African Gold Plc ("CAG" or "the Company"), the AIM traded gold mining
and exploration company, announces its results for the six months ended 30 June
2006.
Overview
* Strategy underway to build CAG into a gold producer with a world class
portfolio of exploration projects
* Agreement to purchase the Bibiani gold mine and related assets including
the Bibiani North Prospecting Licence in Ghana from AngloGold Ashanti
* Joint venture with the Mali Mining House for the exploration and
development of 20 gold licences covering the prospective Birimian Gold Belt
in Southern and Western Mali - large anomalies already identified
* Further three gold exploration permits secured in the prospective Kenieba
district in Western Mali - prime target is the Medinandi permit
* Exploration portfolio being reviewed and evaluated with the aim of
drilling programmes being initiated shortly
* Company restructured and in good shape to deliver growth strategy in
favourable commodity environment
Chairman's Statement
As CAG's new Chairman it gives me great pleasure to report on the Company's
progress towards fulfilling its objective of becoming a gold producer with a
world class portfolio of exploration projects. During the period under review
we broadened our geographical focus, strengthened the balance sheet via an
institutional placing and restructured the Board. Since the period end, we have
signed two further agreements, namely a joint venture with a second Malian
exploration company, Mani SARL ("Mani"), for the Medinandi permit, and the
conditional acquisition of the Bibiani gold mine and Bibiani North Prospecting
Licence in Ghana from AngloGold Ashanti. These agreements underpin the Board's
belief in the CAG team's ability to create a leading African gold mining
company.
Mali
We signed our first joint venture in December 2005 with the Mali Mining House ("
MMH") for the exploration and development of 20 gold licences covering the
prospective Birimian Gold Belt in Southern and Western Mali. Having undertaken
reconnaissance work to review the large volume of geophysical and geochemical
data that exists over the southern and western regions of Mali, large anomalies
were identified. As a result, we began an exploration programme in late January
2006 and follow-up targets are now being prioritised for further work in 2007.
An 80/20 joint venture company, Mali Gold Fields SA, has been formed for the
development of the exploration projects. The Mali government would be entitled
to a statutory 10% free carried interest under Malian Mining Code in the
eventuality of a significant discovery.
On the back of the MMH agreement, an 80/20 joint venture was signed in July 2006
with Malian exploration company Mani SARL, housed in a joint venture company,
Songhoi Resources SA, to explore three gold exploration permits in the
prospective Kenieba district in Western Mali. The programme's prime target is
the Medinandi permit which is located in an historically proven belt that to
date has delivered over 20 million ounces of gold. An area of mineralisation at
Medinandi North has been drilled (Reverse Circulation and Diamond) and the
initial testing is consistent with results extrapolated from other major
deposits situated in the Kenieba area.
Ghana
More recently, we signed a conditional agreement to purchase the Bibiani gold
mine and related assets including the 19.3 km(2) Bibiani North Prospecting
License in Ghana from AngloGold Ashanti for an aggregate cash consideration of
US$40 million. The Bibiani gold mine is located 250km north west of Accra and
is situated in the Sefwi-Bibiani Greenstone Belt, one of the most prospective in
Ghana. Since its discovery in 1902, Bibiani has yielded approximately four
million ounces of gold from underground and open pit mining operations. Our
intention is to increase production at Bibiani following the implementation of
an underground production programme in the second half of 2007. Bibiani's
resource base as at 31 December 2005, as stated in AngloGold Ashanti's audited
2005 accounts, was 100,000 ounces of ore reserve and 900,000 ounces of mineral
resource (JORC compliant). An updated reserve and resource statement will be
released in the circular referred to below.
The consideration payable comprises US$36 million on completion and a further
US$4 million conditional on the renewal of the Prospecting Licence. Pursuant to
the AIM rules, 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. 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 due to be published
imminently. Until such time, trading in the Company's shares will remain
suspended.
In recent months we have restructured the Board and management. Mark Rosslee
(Chief Finanical Officer) and I joined the Board in March 2006 and with us came
a much respected team which is focused on identifying and evaluating new
prospects. Phil Edmonds, Andrew Groves and Brian Moritz stepped down from the
Board in June, and the Company is in consultation with its advisers with a view
to appointing new non-executive directors in due course.
The past six months have seen many positive developments for CAG. With its new
management team and solid portfolio of projects, I am confident that our success
will continue and that the future growth of the Company is secure. By
leveraging the team's extensive combined experience in mining in Africa we aim
to further strengthen CAG's project portfolio and in turn increase shareholder
value.
For the six months ending 30 June 2006 we are reporting a pre and post tax loss
of #2.9 million which is stated after a share-based payment charge of #1.8
million as a result of the fact that Financial Reporting Standard No. 20,
share-based payment, applies to the Company for the first time. Importantly in
April we raised #9 million through an institutional placing and as a result we
have a healthy current cash position of #7.4 million. As mentioned, we are
investing both time and finance in identifying and acquiring suitable projects,
while at the same time we remain focused on managing costs prudently and
ensuring the Company is adequately financed to achieve its corporate objectives.
I would like to thank my fellow directors, colleagues and advisors for their
help and support to date in getting CAG to where it is in a relatively short
timeframe.
Greg Hunter
Chairman and Chief Executive Officer
UNAUDITED CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months ended 30th June 2006
Unaudited Re-stated and Re-stated and
Unaudited Audited
SIX MONTHS SIX MONTHS TWELVE MONTHS
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
2006 2005 2005
# 000's # 000's # 000's
TURNOVER - - -
Operating expenses (1 249) (122) (310)
Share based payment charge (1 767) (2) (4)
OPERATING LOSS (3 016) (124) (314)
Interest receivable 66 11 35
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (2 950) (113) (279)
Taxation - - -
LOSS ON ORDINARY (2 950) (113) (279)
ACTIVITIES AFTER TAXATION
Minority interests 20 15 29
Loss for the financial period (2 930) (98) (250)
LOSS PER SHARE
Basic and diluted (1.439p) (0.059p) (0.151p)
STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
For the six months ended 30 June 2006
Unaudited Re-stated Re-stated
Unaudited Audited
SIX MONTHS SIX MONTHS 12 MONTHS
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
2006 2005 2005
# 000's # 000's # 000's
Loss for the Financial Period (2 930) (98) (250)
Currency translation differences on (41) 6 -
foreign subsidiaries
Total recognised gains and losses (2 971) (92) (250)
relating to the period
Prior Year Adjustment (8)
Total Recognised gains and losses since (2 979)
last annual report
UNAUDITED CONSOLIDATED BALANCE SHEET
As at 30 June 2006
Unaudited Re-stated Re-stated
Unaudited Audited
30 JUNE 30 JUNE 31 DECEMBER
2006 2005 2005
# 000's # 000's # 000's
FIXED ASSETS
Tangible assets 128 - -
Intangible assets 436 262 287
564 262 287
CURRENT ASSETS 89 90 52
Debtors
Cash at bank and in hand 8 842 1,306 1,194
8 931 1,396 1,246
CREDITORS: Amounts following (433) (128) (177)
due within one year
NET CURRENT ASSETS 8 498 1 268 1,069
NET ASSETS 9 062 1 530 1 356
CAPITAL AND RESERVES
Called up share capital 266 166 166
Share premium account 10 290 1,460 1,460
Share options reserve 1 775 6 8
Profit and loss account (3 336) (207) (365)
EQUITY SHAREHOLDERS' FUNDS 8 995 1 425 1 269
Minority interests 67 105 87
9 062 1 530 1 356
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2006
Unaudited Re-stated Re-stated
Unaudited Audited
SIX MONTHS SIX MONTHS TWELVE MONTHS
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
2006 2005 2005
# 000's # 000's # 000's
Cash outflow from operating activities (1 058) (59) (174)
Returns on investments and servicing 66 11 35
of finance
Capital expenditure and financial (290) (82) (1 03)
Investment
CASH OUTFLOW BEFORE (1 282) (130) (242)
FINANCING
Management of liquid resources (7 654) - (878)
Financing 8 930 - -
DECREASE IN CASH IN THE PERIOD (6) (130) (1 120)
Reconciliation of Net Cash Flow to
Movement in Net Funds
Decrease in cash in the period (6) (130) (1 120)
Cash outflow from increase in liquid 7 654 - 878
Resources
Net funds at beginning of period 1 194 1 436 1 436
Net funds at end of period 8 842 1 306 1 194
NOTES TO THE INTERIM ACCOUNTS
For the six months ended 30 June 2006
1. The financial information contained in this interim report does not
constitute statutory accounts within the meaning of section 240 of the Companies
Act 1985. Subject to the FRS20 adjustment described below the figures relating
to the year ended 31 December 2005 have been extracted from the audited accounts
which have been filed with the Registrar of Companies and received an
unqualified audit report which did not contain a statement under section 237(2)
or (3) Companies Act 1985.
The consolidated financial statements incorporate those of Central African Gold
Plc and its subsidiary undertakings for the period. The current and the
comparative half year to June are Unaudited and have been prepared using
accounting policies and practices consistent with those adopted in the accounts
for the year ended 31 December 2005, with the exception of the application of
FRS 20 (see below), and are also consistent with those which will be adopted in
the 2006 Annual Report and Accounts.
2. The adoption of FRS 20: Share-based Payment requires a prior period
adjustment to be made; the comparative figures for the half year to 30 June 2005
and the year to 31 December 2005 have been restated accordingly. This has
created a share option reserve at 31 December 2005 of #8 000 and reduced the
retained profits at that date by #8 000; of this amount, #4 000 is attributable
to the year ended 31 December 2005 and #2 000 to the six month period ended 30
June 2005.
3. The Group's operating loss is derived from its continuing operations
where the principal activity is gold exploration in Africa.
4. Basic and diluted loss per share is calculated by reference to the loss
for the financial period and the weighted average number of shares in issue
during the period of 204,972,579 (1 January 2006 to 19 April 2006 - 165,742,856:
20 April 2006 to 30 June 2006 - 265,751,023), and 165,742,856 for the
comparative periods.
5. On 20 April 2006 the Company placed 100,008,167 ordinary shares of 0.1p
each at 9p raising gross cash proceeds of #9,000,735.
6. Reconciliation of Movement in Equity Shareholders' Funds
Unaudited Re-stated Re-stated
Unaudited Audited
SIX MONTHS SIX MONTHS 12 MONTHS
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
2006 2005 2005
# 000's # 000's # 000's
Loss for Period (2 930) (98) (250)
Net proceeds from issue of shares 8 930 - -
Effect of currency exchange movements (41) 6 -
Share option reserve movement 1 767 2 4
Net increase (decrease) in shareholders' 7 726 (90) (246)
funds
Opening Shareholders' Funds 1 269 1 515 1 515
Closing Shareholders' Funds 8 995 1 425 1 269
7 Cash flows
Unaudited Re-stated Re-stated
Unaudited Audited
SIX MONTHS SIX MONTHS 12 MONTHS
ENDED ENDED ENDED
30 JUNE 30 JUNE 31 DECEMBER
2006 2005 2005
# 000's # 000's # 000's
Reconciliation of operating loss to net cash
outflow from operating activities
Operating loss (3 016) (124) (314)
Depreciation 3 - -
(Increase)/decrease in debtors (37) (23) 15
Increase in creditors 225 86 121
Share based payment charge 1 767 2 4
Net cash outflow from operating activities (1 058) (59) (174)
Analysis of cash flows for headings netted
in the cash flow
Returns on investments and servicing of
finance
Interest received 66 11 35
Net cash inflow from returns on investments 66 11 35
and servicing of finance
Capital expenditure and financial investment
Purchase of intangible fixed assets (290) (82) (103)
Net cash outflow from capital expenditure (290) (82) (103)
and financial investment
Management of liquid resources
Cash placed on deposit (7 654) - (878)
Net cash outflow from management of liquid (7 654) - (878)
resources
Financing
Proceeds from issue of share capital 9 001 - -
Share issue costs (71) - -
Net cash inflow from financing 8 930 - -
Analysis of net funds
Cash at bank and in hand 142 1 306 148
Cash on deposit 8 700 - 1 046
8 842 1 306 1 194
8. Segmental Information
#'000's Loss Before Tax Net Assets
Unaudited Re-stated Re-stated Unaudited Re-stated Re-stated
Unaudited Audited Unaudited Audited
Six Months Six Months 12 Months Six Months Six Months 12 Months
Ended Ended Ended Ended Ended Ended
30 June 2006 30 June 2005 31 December 30 June 2006 30 June 2005 31 December
2005 2005
South Africa (252) - - 28 - -
Botswana (34) (33) (61) 133 344 304
Mali (84) - (53) 272 - -
Head Office (2 580) (80) (165) 8 629 1 186 1 052
TOTAL (2 950) (113) (279) 9 062 1 530 1 356
9. These interim accounts were approved by the Directors on 22 September
2006.
For further information please visit www.centralafricangold.com or contact:
Mark Rosslee Central African Gold Plc Tel : +27 (0) 11 676 2500
Greg Hunter Central African Gold Plc Tel : +27 (0) 11 676 2500
Hugo de Salis St. Brides Media & Finance Ltd Tel: +44 (0) 20 7242 4477
INDEPENDENT REVIEW REPORT TO CENTRAL AFRICAN GOLD PLC
Introduction
We have been instructed by the company to review the financial information set
out on pages 5 to 11 and we have read the other information in the interim
statement and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.
This report, including the conclusion, has been prepared for and only for the
company for the purpose of their interim statement and for no other purpose. We
do not, therefore, in producing this report, accept or assume responsibility for
any other purpose or to any other person to whom this report is shown or into
whose hands it may come save where expressly agreed by our prior consent in
writing.
Directors' responsibilities
The interim statement, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. The directors are
responsible for preparing the Interim Statement in accordance with the AIM
Market Rules which require that the accounting policies and presentation applied
to the interim figures must be consistent with those that will be adopted in the
company's annual accounts.
Review work performed
We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom, as if that
Bulletin applied. A review consists principally of making enquiries of group
management and applying analytical procedures to the financial information and
underlying financial data and based thereon, assessing whether the disclosed
accounting policies have been consistently applied unless otherwise disclosed.
A review excludes audit procedures such as tests of controls and verification of
assets, liabilities and transactions. It is substantially less in scope than an
audit and therefore provides a lower level of assurance. Accordingly, we do not
express an audit opinion on the financial information
Review conclusion
On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2006.
BAKER TILLY
Chartered Accountants
2 Bloomsbury Street
London
WC1B 3ST
22 September 2006
This information is provided by RNS
The company news service from the London Stock Exchange
END
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