CAN Central A.G.

RNS Number:9365J
Central African Gold PLC
14 December 2007


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


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

  Proposed placing of 60,000,000 new ordinary shares of 0.5p each at �0.26 per
  share to raise approximately �15.6 million in gross proceeds (the "Placing")


Central African Gold Plc, the AIM quoted gold mining and exploration company, is
pleased to announce that, subject to shareholder approval, the Company proposes
to raise �15.6 million (before expenses) through the issue of 60,000,000 new
ordinary shares ("Placing Shares") at a price of �0.26 per share. The funds
raised, together with the additional flexibility provided by the recently
secured extension to the Company's existing debt facility, will be utilised to
fund the development of CAG's African production and exploration portfolio in
Ghana, Mali, Zimbabwe and Botswana.

The Placing is conditional, inter alia, upon the passing of Resolution 1 by the
shareholders at the Extraordinary General Meeting which the Directors have
convened for 10.a.m. on 8 January 2008. At the EGM Shareholders will be asked to
consider and, if thought fit, pass two Resolutions: Resolution 1, disapplying
pre-emption rights for existing shareholders in respect of the Placing; and
Resolution 2, subject to Resolution 1 being passed, disapplying until the next
AGM pre-emption rights for existing shareholders in respect of the issue for
cash of up to 5% of the Company's Enlarged Share Capital. CAG has received
irrevocable undertakings from certain Shareholders to vote (or procure the vote)
in favour of the Resolutions in respect of 27,223,274 Ordinary Shares,
representing in aggregate approximately 25.7 per cent. of the Company's existing
issued share capital. A circular containing a notice of the EGM is being posted
to the Company's shareholders today.

The Company's aim is to realise an initial annualised gold production target of
200,000 oz and build a resource base of 7.5 million oz Au by the end of 2008.
The Placing was conducted by RBC Capital Markets ("RBC"), with both existing and
new institutional investors and is subject to the passing of Resolution 1 by the
shareholders.

Central African Gold's CEO Greg Hunter said, "These funds will enable us to
develop our extensive gold portfolio across Africa. At our flagship Bibiani
project, exploration and development work has already increased ore definition
at the Bibiani Main Zone by 288% to 2.68 million ounces Au and total global
mineral resources by 300% to 3.23 million oz Au, as well as a 391% increase in
the underground ore reserve estimate at Bibiani to 1.05 million ounces Au. Total
gold production for the year ending 31 December 2007 is expected to be circa
25,000 to 30,000 ounces and we are forecasting production to reach an annualised
rate of 100,000 ounces by the end of 2008. In Zimbabwe our focus is on the Dalny
Mine and the Golden Quarry/Camperdown complex where we are aiming to
significantly increase production and milling capacity as well as provide an
upgrade of underground infrastructure and access to additional reserves. The
Medinandi Project in west Mali is proving to be very exciting with approximately
500,000 ounces of gold resources delineated during 2007. With this capital I
believe that we can truly define the value of our portfolio and reward the
support of our valued shareholders."

Use of proceeds

   * Considerably increase production at the Bibiani gold mine in Ghana in
     2008 and advance ongoing exploration at its satellite pits - estimated
     underground ore reserve of circa 1.05 million oz Au
   * Initiate recapitalisation and fast track exploration at its Falcon and
     Olympus Zimbabwean properties - current estimated reserves of circa 632,000
     oz Au
   * Commence an advanced drilling programme at its Medinandi project in Mali
     -current estimated resource of circa 505,000 oz Au
   * Advance Mali and Botswana exploration programmes to understand the true
     economic potential of these areas
   * Currently reviewing other potential acquisitions in Mali, Democratic
     Republic of Congo, South Africa and Zimbabwe to expand portfolio

Bibiani gold mine, Ghana

The Company's primary focus has been to develop and progress its operations at
the Bibiani gold mine in Ghana. In line with this, CAG is planning to
considerably increase production at the Bibiani gold mine in 2008 and advance
its ongoing exploration at its satellite pits. Since CAG took over management of
Bibiani in December 2006, a Reverse Circulation ('RC') and Diamond Core Drilling
('DD') programme has been implemented, testing extensions to the Main Zone of
the Bibiani orebody and satellite oxide pits. In July 2007, a threefold increase
in its underground resource estimate for the Bibiani orebody was announced, with
the underground mineral resource estimate at the Bibiani Main Zone increasing by
circa 288% to 2.68 million oz Au and total global mineral resources increasing
by circa 300% to 3.23 million oz Au. These results provided a good indication
and strong basis for sustainable mineral resource to ore reserve conversion. In
addition, following the revised mineral resource estimation announced in July,
CAG reported a circa fourfold increase (approximately 391%) in the underground
ore reserve estimate at Bibiani to 1.05 million oz Au, which further underpinned
the Board's confidence in the potential for the advancement of an economically
sound long-life underground mining operation.

CAG is currently developing a mechanised long-hole open stoping operation below
the main Bibiani open pit, initially through the extension of an existing
decline to 9 level (approximately 270 metres below surface). During the third
quarter of 2008, CAG intends to commission a 2.8km decline from the run of mine
("ROM") pad which will allow for both the conveyance of ore as well as access
for men and materials. The conveyor decline will have a design capacity of
200,000 tonnes per month ("tpm"). The Company has contracted a select team of
experienced Australian and South African mining and engineering personnel to
spearhead the initial development phase of the mine. The bulk of the mining
equipment is already commissioned underground. Initial underground development
has commenced, with old stope cleanup in progress, whilst initial stoping
commenced at the end of November 2007.

The Bibiani process plant has a capacity of 225,000 tpm. Underground production
is phased to achieve 100,000 tpm during the fourth quarter of 2008. The
favourable geology and drilling results are providing impetus to assess
expanding the planned output to over 150,000 tpm.

CAG mined 23,000 tonnes of ore in November 2007 at grades of between 2.5-3.0g/t
Au, above management's internal forecasts, and is expecting to expand on this
tonnage significantly in December 2007 at anticipated grades of around 3.0g/t
Au, in line with the current mining plan.

Total gold production for the year ending 31 December 2007 is expected to be
circa 25,000 to 30,000 ounces and management is forecasting production to reach
an annualised rate of 100,000 ounces by the end of 2008.

Zimbabwe

CAG is planning to recapitalise and fast track exploration at its Zimbabwe
properties. In February 2007, CAG acquired an 84.7% interest in Falcon Gold
Zimbabwe Limited and the entire issued share capital of Olympus Gold Mines
Limited, two Zimbabwean based gold operations (including the Dalny mine, Venice
mine, Golden Quarry mine, Camperdown mine and Old Nic mine) for an aggregate
consideration of approximately �3.1 million (US$6.2 million).

The investment into the Falgold and Olympus assets in Zimbabwe was premised on
CAG's view on the geological prospectivity of the portfolio. Coupled to that,
the location relative to South Africa, a mining heritage, the availability of
skills and basic infrastructure all made Zimbabwe an investment destination that
ranked well relative to other African locations. However, the country and the
assets have their challenges. CAG has therefore put in place a Reserve Bank of
Zimbabwe sanctioned loan structure of some �1.5m that allows it to remit funds
between CAG and Falgold. To date, just in excess of �0.5m of this facility has
been utilised. This allows CAG to provide limited but necessary support to
recapitalise the infrastructure of the mine, restock necessary consumables when
required and position the businesses to expand into what the Directors expect to
be a potential Zimbabwean turnaround in the medium term.

The focus is on the Dalny Mine and the Golden Quarry/Camperdown complex. At the
Dalny Mine, an expansion of the milling capacity is being undertaken as well as
an upgrade of underground infrastructure and access to additional reserves. A
trenching and bulk sampling programme is also being undertaken on two surface
oxide deposits to investigate the amenability to heap leaching. At the Golden
Quarry/Camperdown complex, upgrades are being undertaken on the metallurgical
plant to ensure sustained and cost effective throughput, while upgrades are also
being undertaken on the two existing heap pads at Camperdown. However, the
longer term strategic value is the drive to scope and evaluate the Camperdown
orebody, which has a large surface oxide opportunity. Initial investigation and
scoping on the re-opening of the Venice Mine is also being undertaken.

The exploration programme during 2007 and 2008 has been and will continue to be
focused largely on data compilation and digitisation, so as to enable a better
understanding of the scope and nature of targets, as well as prioritisation of
follow-up work. A fundamental step forward on all the properties during 2008
will be satellite image enhanced mapping studies, including structural analysis
and modelling of ore bodies where applicable information is available. The
emphasis on target prioritisation will be on delineation and evaluation of
opencast opportunities. These exploration programmes will have a significant
effect on the Falgold growth strategy through:

   * The anticipated increase of all the operations' life-of-mine through
     underground drilling;
   * certain opencast opportunities providing flexibility in assessing plant
     expansion options; and
   * structural studies providing predictive models that in turn will improve
     the "hit rate" of exploration drilling, as well as the basis for 
     sustainable production.

With these objectives in mind, field exploration has been initiated on the
opencast targets of the Dalny shear zone, inclusive of multi element soil
geochemistry, trenching, and heap leach bench test-work on mineralised zones.
Surface RC and DD drilling programmes are planned based on the outcome of the
above work, which is expected to ultimately advance certain targets to mining
stage. Also, an underground drilling programme has been initiated at the Dalny
main project, where a broad (10-30m) mineral envelope grading 2-4g/t Au is being
evaluated from surface to 9 level (approximately 270 metres below surface) to
test a conceptual open pit target. A DD drilling programme has been planned and
is scheduled to commence in January 2008, to further delineate an opencast
expansion at Camperdown.

Mali

The Company has built a strong position in Mali through joint venture agreements
and has assembled a highly prospective portfolio of assets consisting of 20
properties spanning over circa 2,500 sq km in the south and west of the country.
It's CAG's objective to advance its drilling programme at its Medinandi property
and continue to develop its exploration projects in Mali. To date, CAG has
effected follow-up ground programmes on all 20 of its Mali properties. This work
is currently being prioritised into follow-up targets for the 2008 field season
(November 2007-July 2008).

The Medinandi Project in west Mali is the Company's most advanced project, with
approximately 500,000 ounces of gold resources delineated during 2007. Further
reverse circulation ("RC") and diamond core ("DD") drilling is prioritised at
Medinandi during 2008. The whole permitted area will be investigated with a high
resolution airborne geophysical survey planned for Q1/Q2 2008. Other ground
geophysical surveys (such as induced polarisation ("IP") is planned, coupled
with trench and reverse-air-blast ("RAB")/RC follow-up drilling.

In southern Mali, four properties have been prioritised for RAB drilling during
Q1/Q2 2008. Infill soil geochemistry, pitting and trenching programmes are
planned on the other properties. CAG will also continue advancing regional
structural targeting in Mali south.

Botswana

In October 2007, CAG announced it had consolidated 100 per cent. ownership of
Motako from Golden Tau, and renewed the Kraaipan prospecting licence for a
further 3 years commencing on 1 July 2007.

The Kraaipan prospecting licence extends over 430.3 km(2) of the north westward
strike continuation of the Archean Kraaipan greenstone belt, originating from
South Africa. The belt is highly prospective for gold, with past production and
resource figures indicating approximately four million ounces of gold at the
Gold Ridge mine in South Africa. To date, Golden Tau has undertaken a detailed
examination of previous reconnaissance work completed in the 1980's. Exploration
has included geological mapping, airborne geophysical surveys and limited
percussion and DD drilling. The results have indicated gold mineralisation
although the economic viability is yet to be determined.

The next phase of exploration on the Kraaipan prospecting licence, scheduled for
early 2008, will entail more detailed structural mapping combined with the
integration of enhanced Aster imagery with the existing data-sets. Follow-up
targets will be reviewed and re-prioritised. CAG has initiated collation of this
data with remote sensing and structural interpretations. Priority targets are to
be tested in the field with systematic trenching and RC/DD drilling where
applicable.

The technical information in this announcement has been reviewed by Phil
Bentley, CAG Manager: Geology and Exploration. Mr Bentley is a registered
SACNASP professional and is the Company's Competent Person with respect to
mineral reserves and mineral resource estimation.

Placing details

RBC, on behalf of the Company, has conditionally placed 60,000,000 Placing
Shares with institutional and other investors at the Placing Price to raise net
proceeds of approximately �14.8 million after expenses.

The Placing Shares will, on their Admission to trading on AIM, be credited as 
fully paid and rank pari passu in all respects with the Company's existing 
issued Ordinary Shares, including the right to receive all dividends and other 
distributions declared, made or paid on the Ordinary Shares after that date.

The Placing Shares represent approximately 56.6 per cent. of the Company's 
existing issued share capital.

Application will be made to the London Stock Exchange for the Placing Shares to
be admitted to trading on AIM. It is expected that, conditional upon the passing
of Resolution 1 at the EGM, dealings in the Placing Shares will commence on 9
January 2008.

Following the Placing there will be 166,079,962 Ordinary Shares in issue. The
Placing Shares will represent approximately 36.1 per cent of the enlarged share
capital of the Company.

                                  * * ENDS * *

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

Central African Gold Plc
Greg Hunter/Nicole Broome                       Tel: +27 (0) 11 676 2500

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

RBC Capital Markets
Martin Eales/Andrew Smith                       Tel: +44 (0) 20 7029 7881

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










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

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