CAN Central A.G.

RNS Number:1076A
Central African Gold PLC
12 July 2007


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


12 July 2007

               Central African Gold Plc ("CAG" or "the Company")
                     Update through letter to shareholders


Central African Gold Plc, the AIM traded gold mining and exploration company,
today wrote to shareholders updating them on the Company's activities and
explaining the context of the Kola Permit announcement made on 9 July 2007. The
transcript of the letter is below.


Dear Shareholder,

As many of you will be aware, the company announced on 9 July 2007 that it had
suspended activities on the Kola permit, which to date had only consisted of the
planning of an exploration programme. This follows the announcement made just
one month previously that we had signed a heads of agreement on the project.

The announcement coincided with a sharp downward movement in the share price,
albeit on relatively small traded volumes, and the receipt of a number of
queries from shareholders. The board believes that it is appropriate to provide
the necessary context to shareholders for this announcement and to outline
recent developments related to Central African Gold Plc ("CAG") which, in the
board's opinion, put the Kola announcement into its true context.


Our primary focus is Bibiani in Ghana

The focus of the directors has been, and remains, one of establishing CAG as a
leading mid-tier African gold producer with world class exploration and
production assets. Our main emphasis has been the underground project at the
operating Bibiani gold mine in Ghana, whilst at the same time producing from
tailings, with targeted production in FY2007 being in the region of 50,000 oz of
gold from both surface and underground sources. We are well on track to achieve
this.

As we stand, a large component of our mining fleet for the Bibiani gold mine
underground project has arrived on site and is being commissioned by the teams
of local and ex-patriot underground bulk mining specialists hired to manage the
project. We have conducted our first trial underground blast, development on
ventilation raises has started and additional general mine development work has
been initiated ahead of schedule. Stoping and the build up of underground
production is set to commence in September as anticipated.

Our surface drilling programme initiated in January 2007, whilst not complete,
is showing signs of yielding good results, confirming the continuity of the
orebody and supporting the confidence we have always displayed in the Bibiani
gold mine and the region as a whole.  It may be possible to access some areas
for mining from the conveyor decline that is planned from the run of mine pad to
below current planned underground mining infrastructure. Importantly, this could
provide an additional unplanned source of ore.  We look forward to announcing a
detailed release on Bibiani in the near future, which includes a revised reserve
and resource statement.


Our portfolio in Mali

Our portfolio in Mali currently consists of 23 properties covering some 2,500km
(2). On the 29 May 2007, post a successful field season on the Medinandi permit
in west Mali, the exploration work delivered a resource estimate of some 500,000
oz of gold grading 4.55 g/t Au, which we expect to increase with further
drilling. In addition to the area being drilled, there are four other walk-up
drill targets on the property, which underpin our belief that the area is host
to a significant economic gold system.

On the balance of the portfolio, over 10,700 assays effected to date with 39
follow-up gold targets identified, of which 16 are being prioritised, and six
are clustered and structurally controlled gold anomalies.  In particular, the
Yanfolila district is highly encouraging with a number of 2-7 km long clustered
gold-in-soil anomalies.


Where would Kola fit in?

While the Kola permit could complement CAG's existing interests in south Mali
and the country as a whole, and may still do so, the current impasse has not and
will not result in a financial loss for the Company besides de minimis legal
fees. Would we like Kola? Yes. Does it currently feature in our growth strategy?
No. Have we started investing in the project? No. Current activities to date had
only consisted of the planning of an exploration programme.

As cited in the release on 9 July 2007, we remain positive of being able to
potentially conclude the transaction but, in the interests of good governance,
we issued the announcement in respect of the suspensions of activities.  If we
do not complete the transaction, this will not affect our portfolio of assets in
Mali, which remains large, robust and attractive in its own right, and if we do,
the Kola permit is effectively a bonus to this portfolio.


Operating in Zimbabwe

We continue to be positive about the long-term prospects for Zimbabwe. While the
situation on the ground is difficult, for now it is not unmanageable. Reliable
power supply is our single largest issue, but we are looking at ways to address
the situation.


Options in Botswana

We continue to review our Botswana property, Kraaipan, with a view to either
selling or taking our equity interest up to 100%.


In conclusion

We have been pleased more recently at the consistency of the share price, the
volumes traded and the general response of the market to the consolidation. It
is the board's belief that once we quantify production from the underground
project at Bibiani and the integrity of the orebody is confirmed, we will be
rewarded in terms of a suitable rating relative to our peers.

In summary, the board believes that the Company is well placed to achieve its
objectives of becoming a leading mid-tier African gold producer with world class
exploration and production assets. We will continue to look at potential for
growth in the medium and long-term, including resolving the issues around Kola.
 It's business as usual for CAG though.


Yours sincerely,

Greg Hunter

                                  * * ENDS * *



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

Central African Gold Plc
Greg Hunter                                           Tel:   +27 (0)82 882 4222

In London:
St Brides Media & Finance Ltd
Hugo de Salis/ Felicity Edwards                       Tel:   +44 (0)20 7242 4477

Strand Partners Limited
Simon Raggett  /Braden Saunders                       Tel:   +44 (0)20 7409 3494

In South Africa:
Central African Gold
Nicole Broome                                         Tel:   +27 11 676 2500
                                                      Mob:   +27 83 601 1702

Russell and Associates
Charmane Russell                                      Tel:   + 27 11 880 3924
                                                      Mob:   + 27 82 372 5816



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 producing Bibiani gold mine and prospecting
licences in Ghana, which it acquired from AngloGold Ashanti Ltd, two joint
ventures in Mali covering 23 prospective permits and licences in Botswana
covering the extension of the Kraaipan greenstone belt from South Africa. CAG
recently acquired five mines and extensive exploration properties in Zimbabwe.
The directors are evaluating additional prospects in Africa to establish CAG as
a leading mid-tier African gold producer with world class exploration and
production assets.



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