TIDMCAN
RNS Number : 6846E
Central African Gold PLC
24 December 2009
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Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining
24 December 2009
Central African Gold Plc ('CAG' or 'the Company')
Interim Results
Central African Gold Plc ('CAG' or 'the Company'), the AIM traded gold mining
and exploration company, announces its unaudited interim results for the six
months ended 30 June 2009.
Chief Executive Officer's Statement
Overview
The period under review has certainly proved to be one of the most challenging
in CAG's history.
Despite undertaking a number of initiatives to improve the operational
performance at the Company's Bibiani mine in Ghana ('Bibiani'), which were
reported in more detail in the financial results for the year ended 31 December
2008, published today, the Company failed to improve the operational performance
to commercialise the mine. As a result the Company had to raise additional
capital via a loan from Investec Bank to its Ghanaian subsidiary and two equity
placements in Central African Gold Plc, the parent company.
In January 2009, Central African Gold Ghana Limited ('CAG Ghana'), which owns
the Bibiani mine, received a notice from Investec Bank Limited ('Investec Bank')
regarding the non-payment of monies due on the Investec Bank project loan
facility agreement and the non-payment of monies due under various gold forward
transaction agreements. Investec Bank demanded a full repayment of more than $20
million from the Company.
In addition to the demand for repayment, Investec Bank invoked its power of
attorney under the charge over the Company's shares in the CAG Ghana and
transferred the 90,000 shares in CAG Ghana to Investec Bank making it the legal
owner of Bibiani.
The Company undertook a placing in April 2009 to raise GBP5.7 million (US$8
million) before expenses to contribute to the settlement of the $5 million
guarantee to Investec Bank.
Simultaneously with the placing, the Company negotiated a partial conversion of
the loan notes entered into in June and July 2008. Investec Asset Management
('IAM') converted $1 million of the $3 million advanced into new ordinary shares
at 0.9p immediately following the placing. Emerging Capital Partners ('ECP')
converted $2.4 million of the $3.94 million initially advanced into new ordinary
shares at 0.9p immediately following the placing.
IAM and ECP agreed to defer the payment of the balance of $2.2 million plus
accrued interest to the earlier of the sale of the Mali assets or 14 April 2010.
As a consequence of the placement of shares and the partial conversion of the
loan notes, the majority of the shares in the Company are now held by three
shareholders - ECP, who now hold 50.02%, HBD Zim Investments Limited ('HBD'),
who now hold 28.18% and IAM, who hold 10.48%.
The Board resolved to focus on the Zimbabwean assets and announced its intention
to dispose of the Mali exploration portfolio. Our decision was based on their
relatively early stage of development as well as the difficulty of managing them
remotely.
CAG subsequently announced the disposal of the Mali portfolio for a total
consideration of $5 million on 21 December 2009.
Zimbabwe
In December 2008, the Company announced that, in common with a number of other
mining operators in Zimbabwe, its subsidiaries Falcon Gold Zimbabwe Limited
('Falgold') and Olympus Gold Mines Limited ('Olympus') had ceased all operations
in Zimbabwe due to the adverse political and economic climate that prevailed. A
hopelessly inadequate system of gold payment by the Reserve Bank of Zimbabwe and
chronic shortages of electricity contributed further to the decision to cease
mining operations.
Following this decision 2009 has commenced relatively slowly for CAG, however, a
number of far reaching policy decisions have been taken which could lead to the
rejuvenation of the Zimbabwean gold industry.
On 2 February 2009, the Governor of the Reserve Bank of Zimbabwe ('RBZ')
released a Monetary Policy Statement ('MPS') which proposed far reaching changes
which have had a significant and positive impact on the Company's ability to
resume its Zimbabwe gold mining operations:
* Gold producers, after receipt of a Gold Export Permit, are permitted to be in
control of their gold sales: gold companies are able to produce and sell gold
and receive payment for their bullion within normal trade terms; as such gold
production may be marketed outside of the control of the RBZ.
* Proceeds from the sale of bullion in foreign exchange may be held indefinitely,
as compared to the previous requirement to convert any remaining foreign
exchange into local Zimbabwe currency within thirty days of receipt.
* Gold producers have been given the freedom to access certain financial
instruments, such as gold loans from offshore markets that would then be
collateralised by their own physical gold inventory.
* All current outstanding receivables owed to gold producers, have been converted
into a 'Special Tradable Gold-Backed Foreign Exchange Bond', which will have a
12 month term and an eight per cent. coupon, payable at maturity. The interest
owed is to be accrued from the time that the money has been outstanding and the
RBZ will honour the full principal plus interest on maturity.
Furthermore, the RBZ has laid out certain measures to significantly de-regulate
Zimbabwe's exchange control policies. These measures include the ability of gold
producers to pay for goods and services offshore, as well as all genuine
external debts and dividends without prior Exchange Control approval.
The Board believes that these reforms, together with political changes in
Zimbabwe, including, inter alia, the agreement by all parties in February 2009
to establish a Government of National Unity, have enabled the Company to restart
gold production in Zimbabwe.
The Dalny and Old Nic mines were re-opened to test the system in the hope that
all Falgold and Olympus mines could be restarted. I can confirm that the system
is working and that realistic prices are now being achieved. In June 2009, the
Falgold and Olympus boards agreed to reopen Golden Quarry and Camperdown mines
and are currently negotiating to raise further funds to cover the initial
associated costs.
It must be stated that the country is still a tough environment in which to
operate. The Board anticipates further electricity shortages, as well as a lack
of supply of skilled labour. Furthermore, the country's decision to dispense
with the Zimbabwean dollar and use the US dollar as the legal tender means that
there is virtually no history of costs in the 'new' currency.
Once the initial production levels are achieved, plans will be put in place, to
update the plant, and increase gold production to better reflect the potential
of the extensive gold deposits owned by the Company. The Board has actively
engaged in the identification of suitable sources of finance with which to
develop the Zimbabwe assets in full.
Outlook
The Board continues to remain cautiously optimistic about the recovery of
Zimbabwe's mining sector.
Mines in Zimbabwe have suffered from years of under-capitalisation, as well as a
lack of development and exploration. The gold industry is very fragmented and
would benefit from consolidation. The hyper-inflationary environment, together
with the state's monopoly on gold, has eroded the working capital of companies.
Despite initial optimism, the expected flow of funds to restore liquidity to the
financial sector has not taken place. External investors have avoided investing
further, pending clarification of proposed policy changes. The recapitalisation
of the mines is therefore constrained by their operating cash flows.
Power supplied to the mines remains erratic, which negatively affects production
and plant efficiencies. The frequency of unscheduled power outages has
decreased, although scheduled power outages have increased in recent times.
The exodus of skills from Zimbabwe has had a profound effect on operations and
has resulted in the requirement to pay a premium to retain and attract suitably
skilled staff, particularly in the mining discipline. This has created an
artificial level of remuneration which is not sustainable in the longer term.
Implementation of the Indigenisation Act, which forces companies to hand over
51% of their equity to local Zimbabweans, has not taken place, despite being
enacted. The Board does not believe this requirement will be implemented, given
the mining sector's ability to play a leading role in the reconstruction of
Zimbabwe.
Board Changes
Roy Lander stepped down from the Board as Chairman on 11 December 2009 and Bryce
Fort replaced Navaid Burney as ECP's representative as a Non-Executive Director
on the Board. I would like to take this opportunity, on behalf of the Company,
to thank Roy Lander and Navaid Burney for their services to CAG and the support
they have provided to the Board, particularly during CAG's recent difficulties,
and wish them well in their future endeavours.
Annual and interim results
The delay in the publication of the annual results for the year ended 31
December 2008 and interim results for the period ended 30 June 2009 was the
result of accounting issues that arose from:
* a lack of complete accounting information for CAG Ghana, control of which passed
to Investec Bank on 14 January 2009, as a result of Investec invoking its power
of attorney under a charge and transferring the 90,000 shares in CAG Ghana to
Investec (as previously announced on 14 January 2009); and
* the correct accounting and foreign exchange treatment relating to the
consolidation of Falgold and Olympus, given the cessation of the Zimbabwe dollar
as the working currency in Zimbabwe.
Having successfully resolved these issues, the Board needed to demonstrate that
CAG remained a going concern, failing which, the Company would be delisted.
The support provided by the major shareholders has been remarkable. IAM and ECP
have agreed to extend the terms of their convertible loan notes, as described in
the March 2009 circular to shareholders, and defer the repayment of the
outstanding balance of the loan notes, repayable on the earlier of the sale of
Mali or 14 April 2010, to 29 April 2011. In addition thereto, the Company has
entered into new convertible loan agreements, for an amount of $1.25 million,
from ECP, HBD and IAM. The new loan notes carry interest at 10 per cent. per
annum, compounded monthly in arrears, and are repayable in full on 29 April
2011.
As a result of the support of the major shareholders, the Company is now able to
demonstrate that its cash resources are sufficient to meet the expected outflows
for the 12 months ended 31 December 2010. The Board is currently assessing new
sources of finance and identifying suitable partners with which to develop the
Zimbabwean assets fully to ensure their long term sustainability.
I would like to take this opportunity to apologise to shareholders for the late
publishing of the Annual Report and this Interim Report and the highly
unfortunate circumstances that have arisen.
Appreciation
In concluding this summary I would like to record my appreciation of the hard
work and determination with which my fellow directors and the Company's staff
have addressed our problems this year.
Roy Pitchford
Acting Chairman and Chief Executive
Financial Review
Introduction
The first half of the year was impacted by a number of significant events:
* On 14 January 2009, the Company's wholly owned subsidiary, CAG Ghana received a
notice of default from Investec Bank, regarding the non-payment of monies due on
the Investec Bank project loan facility agreement and the non-payment of monies
due under various gold forward transaction agreements with Investec Bank.
Investec Bank demanded a full repayment of more than $20 million from the
Company. In addition to the demand for repayment, Investec invoked its power of
attorney under the charge over the Company's shares in the CAG Ghana and
transferred the 90,000 shares in CAG Ghana to Investec Bank, making it the legal
owner of Bibiani.
* The Company's liability to Investec Bank, arising from a parent company
guarantee issued to secure the bank loan, was confirmed as US$5 million, in
accordance with what had been previously reported.
* Zimbabwe's Government of National Unit introduced a number of economic reforms
which provided the confidence to restart gold production and exploration and
development programmes at certain of the Zimbabwe mines.
* The Board resolved to focus on the development of its Zimbabwe assets and opted
to dispose of the Mali exploration portfolio through a formal process.
* Shareholders approved the placement of approximately GBP5.7 million (US$8
million) before expenses, which proceeds of which contributed to the settlement
of the US$5 million guarantee to Investec Bank and provided working capital for
the enhancement of its remaining assets.
* Convertible loan notes issued in June and July 2008, totalling $6.94 million,
which were repayable in January 2009, were partially converted into new ordinary
shares. Repayment of the liabilities not converted into equity, were rescheduled
to the earlier of the disposal of Mali or April 2010.
Analysis of results
The Company's turnover for the 6 months to 30 June 2009 was GBP0.3 million,
generated from the sale of 504 oz Au from the Company's Zimbabwean subsidiaries.
Production recommenced in mid March 2009, following the cessation of mining
activities in December 2008, due to the adverse political and economic climate
that prevailed.
The production of gold resulted in a gross loss of GBP0.6 million. Operations
were adversely affected by power outages and breakdowns of aged equipment. The
lack of available spare equipment components and sufficient quantities of
consumables compounded this further.
Administrative expenses totalled GBP1.5 million (June 2008: GBP3.6 million) and
are reflective of the measures taken to address the Company's difficulties. The
operating loss for the period was GBP8.8 million (June 2008: GBP2.8 million).
The loss for the period amounts to 1.64p per share (June 2008: 3.58p per share).
This loss includes the loss arising from the forced divestment of CAG Ghana,
totalling GBP7.2 million. The loss on the divestment of CAG Ghana comprises the
payment of the parent company guarantee to Investec Bank of GBP3.4 million ($5
million), as well as the non-cash loss arising from the release of the foreign
currency translation reserve of GBP3.9 million accumulated at 31 December 2008.
In the year ended 31 December 2008, the Company recorded an impairment of
GBP14.45 million in respect of the assets at Bibiani. No charge for share based
payments (June 2008: GBP0.4 million) has been included.
Central African Gold Ghana
The Company's subsidiary, CAG Ghana, had a loan facility with Investec Bank. On
14 January 2009, the Company announced that CAG Ghana had defaulted on payment
of monies due on the loan. The security on the loan was the shareholding in CAG
Ghana, which owned the Bibiani mine, as well as a guarantee from CAG, the parent
company. Subsequently, Investec Bank took control of CAG Ghana. CAG agreed to
pay Investec US$5.0 million. A placing was subsequently undertaken in April 2009
to raise GBP5.7 million (US$ 8 million) before expenses to settle the guarantee
and to provide working capital for the development of the Company's remaining
assets.
Partial conversion of loan notes and issue of new ordinary shares
Shareholder approval was sought and received in April 2009 for an increase in
the authorised share capital to accommodate the issue of 565,970,992 new
ordinary shares at 1.00 pence ('the Placing') and to issue shares at 0.9 pence
per share in respect of the partial conversion of the loan notes ('the
Conversion'). The net proceeds of approximately GBP5.7 million before costs
were used predominantly to settle the outstanding liability to Investec Bank.
In June and July 2008, the Company entered into convertible loan agreements,
under the terms of which the Company borrowed $3.94 million (approximately
GBP2.17 million using the rate of exchange prevailing on the date of the
agreement) from ECP and $3 million (approximately GBP1.67 million, using the
rate of exchange prevailing on the date of the agreement) from IAM. The funds
received by the Company under the convertible loan agreements carried interest
at 10 per cent. per annum, compounded monthly in arrears and payable on
maturity.
The terms of the convertible loan agreements provide that the monies received by
the Company under the convertible loan agreements can be converted, at the
election of the lender, in the event that the Company allotted any new shares
prior to the date for repayment of the loan. The convertible loan agreements
further provided that they would be automatically converted in the event that
the Company raised at least $10 million (approximately GBP5.7 million, using the
rate of exchange prevailing at the date that the convertible loan agreements
were announced to the market) in an equity fundraising prior to the date for
repayment of the loan, in which case the convertible loan agreements and accrued
interest would convert automatically at a price which is 10 per cent. below the
issue price of such fundraising. The repayment date for the loans under the
terms of the convertible loan agreements was in January 2009 but the loans have
not been repaid and therefore the $6.94 million (being $3.94 million due to ECP
and $3.0 million due to IAM respectively) and accrued interest thereon (being
approximately $0.5 million) is due and payable by the Company.
While the proceeds under the Placing were, in the Directors' opinion, both
sufficient to repay the $5 million owed to Investec Bank and fulfil the
Company's working capital needs, the proceeds were not sufficient to repay the
monies due under the convertible loan agreements. Accordingly, the Company has
entered into the new loan agreements with IAM and ECP as detailed below.
Under the terms of the new IAM loan agreement, the Company has agreed with IAM,
subject to shareholder approval, for the disapplication of pre-emption rights
and the granting of the authority to Directors to allot shares, to amend and
supersede the terms of the IAM Convertible Loan Agreement, so that $1 million
(being approximately GBP0.7 million) of the monies lent, pursuant to the IAM
Convertible Loan Agreement, shall convert into new ordinary shares at 0.9p per
share immediately following the Placing, with the outstanding amount of $2.2
million (plus interest accruing at a rate of 10 per cent. per annum) being
repayable in cash on the earlier of the sale of the Mali assets or 14 April
2010.
Under the terms of the new ECP Loan Agreement, the Company has agreed with ECP
Africa, subject to shareholder approval, for the disapplication of pre-emption
rights and the granting of the authority to Directors to allot shares, to amend
and supersede the terms of the ECP Convertible Loan Agreement, so that $2.4
million (being approximately GBP1.7 million) of the monies lent, pursuant to the
ECP Convertible Loan Agreement shall, convert into new ordinary shares at 0.9p
per share immediately following the Placing, with the outstanding amount of $1.8
million (plus interest accruing at a rate of 10 per cent. per annum) being
repayable in cash on the earlier of the sale of the Mali assets or 14 April
2010.
Following the Conversion the Company owed $1.8 million (plus accrued interest)
to ECP and $2.2 million (plus accrued interest) to IAM.
Subject to shareholder approval for the disapplication of pre-emption rights and
the granting of the authority to directors to allot shares, the Conversion will
give rise to the issue of a further 267,264,081 new ordinary shares,
representing 26.62 per cent. of the resulting share capital. Following the
Conversion, ECP has a beneficial interest in 50.02 per cent. of the resulting
share capital and IAM has a beneficial interest in 10.48 per cent. of the
resulting share capital.
The resolutions were duly passed and admission of the placing shares and the
conversion shares to trading on AIM resulted in the lifting of the suspension on
the Company's shares on 22 April 2009.
Whereas the Board had announced its intention to dispose of the Mali properties,
it became apparent subsequent to 30 June 2009, that the cash component of the
offers received was less than the Board anticipated. As a result, the Board
believes that the cash likely to be available to the Company, subsequent to the
disposal, will not be sufficient to repay fully amounts due to IAM and ECP of
US$2.2 million and US$1.8 million, respectively, under the New Loan Agreements,
together with the other creditors of the Company as they fall due.
The disposal will immediately trigger cash shortfalls in the Company as a result
of other creditors, currently deferred pending the disposal, becoming due for
payment. The Board believes CAG will therefore require additional funding to
support the Company's working capital and funding commitments.
To this end, CAG approached both IAM and ECP to seek a deferral of the Company's
obligations under the new loan agreements.
IAM and ECP have agreed to extend the terms of the loans made available to the
Company as described in a circular sent to shareholders on 27 March 2009,
amounting to US$2.2 million and US$1.8 million respectively. These loans now
have a new maturity date of 29 April 2011 (previously the earlier date of 14
April 2010 or within five days of the receipt of funds by the Company from the
sale of its entire shareholding in Mali Goldfields SA and Songhoï Resources SA).
Additionally, as reported on 21 December 2009, CAG has entered into new
Convertible Loan Agreements ('the Convertible Loan Agreements') with HBD (the
'New HBD Loan Agreement'), ECP (the 'New ECP Loan Agreement') and IAM (the 'New
IAM Loan Agreement'), (together, 'the Lenders'). The Convertible Loan Agreements
total circa US$1.25 million (approximately GBP816,000) and amount to US$397,267
from HBD (approximately GBP238,924), US$705,070 from ECP (approximately
GBP424,048) and US$147,662 from IAM (approximately GBP88,808). (All loan amounts
used the rate of exchange prevailing on the date of the agreement). The funds
received by the Company under the Convertible Loan Agreements carry interest at
10 per cent. per annum, compounded monthly in arrears with the full amount
payable on the maturity date, 29 April 2011. There is no penalty for early
repayment of the loans. HBD entered into a further loan agreement with the
Company on 23 December 2009 (the 'Further HBD Loan Agreement') which superseded
the New HBD Loan Agreement. The Further HBD Loan Agreement provides that the
US$397,267 loaned by HBD would be provided on the same terms as the loans made
under the New ECP Loan Agreement and the New IAM Loan Agreements (as announced
on the 21 December 2009).
The terms of the New IAM Loan Agreement, the New ECP Loan Agreement and the
Further HBD Loan Agreement provide that the Lenders have the right to convert
all but not part only of the loans at the conversion price of the lesser of 0.9
pence per ordinary share and ten (10) percent below the USD equivalent of any
price at which the borrower issues shares, while any amount of the loan remains
repayable to the lender. Under the terms of New IAM Loan Agreement, the New ECP
Loan Agreement and the Further HBD Loan Agreement, each of the Lenders
acknowledge that the Company does not have the capacity to issue the full number
of shares issuable should they wish to convert the loans and that, should the
Company not receive the required shareholders approval needed to create and
issue all of the shares issuable on conversion, the Lenders shall only be able
to exercise their conversion rights to the extent that such shares exist and the
directors have the relevant authorities.
Malian Assets Disposal
As announced on 18 December, the Company has entered into a binding agreement to
dispose of (i) its 80 per cent. equity interest in Mali Goldfields SARL,
together with all net claims on loan account of the Company or any of its
subsidiaries against Mali Goldfields SARL and (ii) its 80 per cent equity
interest in Songhoï Resources SARL together with all net claims on loan account
of the Company or any of its subsidiaries against Songhoï Resources SARL
(together 'the Malian Assets') ('the Disposal') to Colonial Resources ('the
Agreement') for a total consideration of US$5.0 million ('the Consideration').
As at 31 December 2008, the Malian Assets, which are early stage gold
exploration assets, consisting, as at 30 November 2009, of 18 prospective
permits spanning circa 1,883km², located within the Kedougou-Kenieba window, a
major Lower Proterozoic Birimian outlier on the north east margin of the West
African Shield, were recorded as having a book value of GBP4.4million.
The Consideration is made up of an initial non-refundable payment of US$0.6
million in cash ('the Down Payment'), which is to be paid within two business
days of the signing of the Agreement; a further US$3.4 million payable in cash
to the Company on completion of the disposal ('Completion') ('the Completion
Payment'); and a further US$1.0 million contingent payment, which will only be
payable to the Company in cash upon the achievement of a JORC compliant
Indicated or Measured Resource of collectively at least 500,000 ounces gold in
respect of the areas covered by the licences granted to each of Songhoï
Resources SARL and Mali Goldfields SARL ('the JORC Payment').
Completion must occur on or before 11 March 2010 and is subject to, inter alia,
CAG and Colonial Resources shareholder approval, and the completion of a capital
raising by Colonial Resources to raise sufficient funds to satisfy the
Completion Payment and the JORC Payment (if payable) and to seek shareholder
approval for the necessary issue of equity. A circular containing notice of the
General Meeting to approve, inter alia, the Disposal and associated matters will
be sent to CAG shareholders for approval shortly.
CAG will use the Consideration, as it is received, to satisfy its general
working capital requirements, to meet certain creditor balances that will fall
due on Completion and to develop its Zimbabwean gold assets.
Financial risk management
The Company and its subsidiaries (together 'the Group') has exposure to the
following risks from its use of financial instruments in the normal course of
the Groups' business, credit risk, liquidity risk and market risk. This note
presents information about the Group's exposure to each of the above risks, the
group's objectives, policies and process for measuring and managing risk and the
Groups' management of capital. Further quantitative disclosures are included
throughout these consolidated financial statements.
Credit risk
Credit risk is the risk of financial loss to the Group if that a customer or
counterparty to a financial instrument fails to meet its contractual obligation,
and arises principally from the Group's receivables from customers and
investment securities.
At the balance sheet date there were no significant concentrations of credit
risk. The maximum exposure to credit risk is represented by the carrying amount
of each financial asset, including derivative financial instruments, in the
balance sheet.
Liquidity risk
Liquidity risk is the risk that the Group will not be able meet its financial
obligations as they fall due.
It is the Group's policy to finance its business by means of internally
generated funds supported by the Group's bankers and external share capital.
Facilities are regularly reviewed by the Board.
The Group manages its cash flows on a day to day basis from the centre,
considering currencies in each market. As a result the liquidity risk is
monitored closely throughout the Group.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial
instrument will fluctuate because of changes in market prices. Market risk
comprises of three types of risks being currency risk, interest rate risk and
other price risk.
Currency risk
Currency risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in foreign exchange
rates.
The Group is exposed to foreign currency risk on sales, purchases and
expenditures that are denominated in a currency other than the functional
currency. The currencies giving rise to this risk are primarily the U.S. Dollar,
Malian FCFA's and the South African Rand.
In respect of other monetary assets and liabilities held in currencies other
than the functional currency, the Group ensures that the net exposure is kept to
an acceptable level, by buying or selling foreign currencies at spot rates where
necessary to address short-term imbalances.
+------------------------------------------+-------------+------------+-------------+
| Un-audited consolidated income statement |
| For the 6 months ended 30 June 2009 |
+-----------------------------------------------------------------------------------+
| In thousands of pounds sterling | Unaudited | Unaudited | Audited |
| | Six months | Six months | Twelve |
| | ended | ended | months |
| | 30 June | 30 June | ended |
| | 2009 | 2008 | 31 December |
| | | | 2008 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Revenue | 293 | 8,620 | 14,101 |
+------------------------------------------+-------------+------------+-------------+
| Cost of sales | (908) | (7,840) | (24,312) |
+------------------------------------------+-------------+------------+-------------+
| Gross profit / (loss) | (615) | 780 | (10,211) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Other operating income | 564 | 17 | 4 |
+------------------------------------------+-------------+------------+-------------+
| Administrative charges | (1,589) | (3,646) | (5,671) |
+------------------------------------------+-------------+------------+-------------+
| Other administrative expenses | (1,589) | (3,189) | (4,915) |
+------------------------------------------+-------------+------------+-------------+
| Share based payments | - | (457) | (756) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Operating loss before impairment | (1,640) | (2,849) | (15,878) |
+------------------------------------------+-------------+------------+-------------+
| Impairment | - | - | (14,620) |
+------------------------------------------+-------------+------------+-------------+
| Loss on divestment of Ghana | (7,156) | - | - |
+------------------------------------------+-------------+------------+-------------+
| Operating loss | (8,796) | (2,849) | (30,498) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Financial income | 781 | 460 | 5,785 |
+------------------------------------------+-------------+------------+-------------+
| Financial expenses | (226) | (3,574) | (2,270) |
+------------------------------------------+-------------+------------+-------------+
| Other financial expenses | ( 226) | (463) | (2,272) |
+------------------------------------------+-------------+------------+-------------+
| Gold sale agreement fair valuation | - | (3,111) | 2 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Loss before taxation | (8,241) | (5,963) | (26,983) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Taxation | - | 67 | 449 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Loss for the period | (8,241) | (5,896) | (26,534) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Attributable to: | | | |
+------------------------------------------+-------------+------------+-------------+
| Equity holders of the parent | (8,159) | (5,896) | (26,684) |
+------------------------------------------+-------------+------------+-------------+
| Minority interest | (82) | - | 150 |
+------------------------------------------+-------------+------------+-------------+
| Loss for the period | (8,241) | (5,896) | (26,534) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Basic and diluted loss per share (pence) | (1.64p) | (3.58p) | (15.91p) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
+------------------------------------------+-------------+------------+-------------+
| UN-AUDITED CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSES |
| FOR THE 6 MONTHS ENDED 30 JUNE 2009 |
+-----------------------------------------------------------------------------------+
| In thousands of pounds sterling | Unaudited | Unaudited | Audited |
| | Six months | Six months | Twelve |
| | ended | ended | months |
| | 30 June | 30 June | ended |
| | 2009 | 2008 | 31 December |
| | | | 2008 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Foreign exchange translation differences | 991 | 472 | (10) |
+------------------------------------------+-------------+------------+-------------+
| Income and expense recognized directly | 991 | 472 | (10) |
| in equity | | | |
+------------------------------------------+-------------+------------+-------------+
| Loss for the period | (8,241) | (5,896) | (26,534) |
+------------------------------------------+-------------+------------+-------------+
| Total recognised income and expense for | (7,250) | (5,424) | (26,544) |
| the period | | | |
+------------------------------------------+-------------+------------+-------------+
| Attributable to: | | | |
+------------------------------------------+-------------+------------+-------------+
| Equity holders of the parent | (7,168) | (5,424) | (26,694) |
+------------------------------------------+-------------+------------+-------------+
| Minority interest | (82) | - | 150 |
+------------------------------------------+-------------+------------+-------------+
| Total recognised income and expense for | (7,250) | (5,424) | (26,544) |
| the period | | | |
+------------------------------------------+-------------+------------+-------------+
+------------------------------------------+-------------+------------+-------------+
| UN-AUDITED CONSOLIDATED BALANCE SHEET |
| AS AT 30 JUNE 2009 |
+-----------------------------------------------------------------------------------+
| In thousands of pounds sterling | Unaudited | Unaudited | Audited |
| | Six months | Six months | Twelve |
| | ended | ended | months |
| | 30 June | 30 June | ended |
| | 2009 | 2008 | 31 December |
| | | | 2008 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| ASSETS | | | |
+------------------------------------------+-------------+------------+-------------+
| Goodwill | 620 | 501 | 691 |
+------------------------------------------+-------------+------------+-------------+
| Property, plant and equipment | 3,960 | 38,186 | 37,424 |
+------------------------------------------+-------------+------------+-------------+
| Exploration and other evaluation | 3,577 | 2,884 | 4,405 |
| assets | | | |
+------------------------------------------+-------------+------------+-------------+
| Total non-current assets | 8,157 | 41,571 | 42,520 |
+------------------------------------------+-------------+------------+-------------+
| Inventories | 48 | 4,067 | 1,003 |
+------------------------------------------+-------------+------------+-------------+
| Trade and other receivables | 414 | 1,847 | 1,452 |
+------------------------------------------+-------------+------------+-------------+
| Cash and cash equivalents | 962 | 3,265 | 3,905 |
+------------------------------------------+-------------+------------+-------------+
| Total current assets | 1,424 | 9,179 | 6,360 |
+------------------------------------------+-------------+------------+-------------+
| Total assets | 9,581 | 50,750 | 48,880 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| EQUITY | | | |
+------------------------------------------+-------------+------------+-------------+
| Share capital | 5,020 | 841 | 854 |
+------------------------------------------+-------------+------------+-------------+
| Share premium | 47,268 | 43,131 | 43,625 |
+------------------------------------------+-------------+------------+-------------+
| Foreign currency translation reserve | 760 | 250 | (231) |
+------------------------------------------+-------------+------------+-------------+
| Accumulated loss | (48,843) | (20,195) | (40,684) |
+------------------------------------------+-------------+------------+-------------+
| Total equity attributable to equity | 4,205 | 24,027 | 3,564 |
| holders of the parent | | | |
+------------------------------------------+-------------+------------+-------------+
| Minority interest | 68 | - | 150 |
+------------------------------------------+-------------+------------+-------------+
| Total equity | 4,273 | 24,027 | 3,714 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| LIABILITIES | | | |
+------------------------------------------+-------------+------------+-------------+
| Loans and other borrowings | - | 8,310 | - |
+------------------------------------------+-------------+------------+-------------+
| Other financial liabilities | - | 4,671 | 1,694 |
+------------------------------------------+-------------+------------+-------------+
| Deferred taxation | 556 | 828 | 563 |
+------------------------------------------+-------------+------------+-------------+
| Provisions | 14 | 3,682 | 5,260 |
+------------------------------------------+-------------+------------+-------------+
| Total non-current liabilities | 570 | 17,491 | 7,517 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Loans and borrowings - current portion | 2,502 | 3,227 | 19,709 |
+------------------------------------------+-------------+------------+-------------+
| Other financial liabilities - current | - | 2,272 | 2,137 |
| portion | | | |
+------------------------------------------+-------------+------------+-------------+
| Trade and other payables | 2,253 | 3,681 | 14,729 |
+------------------------------------------+-------------+------------+-------------+
| Bank overdraft | - | - | 1,061 |
+------------------------------------------+-------------+------------+-------------+
| Taxation | (17) | 52 | 13 |
+------------------------------------------+-------------+------------+-------------+
| Total current liabilities | 4,738 | 9,232 | 37,649 |
+------------------------------------------+-------------+------------+-------------+
| Total liabilities | 5,308 | 26,723 | 45,166 |
+------------------------------------------+-------------+------------+-------------+
| Total equity and liabilities | 9,581 | 50,750 | 48,880 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| UN-AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
| FOR THE 6 MONTHS ENDED 30 JUNE 2009 |
+-------------------------------------------------------------------------------------------------------+
| | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| In thousands of pounds | Share | Share | Foreign | Retained | Total | Minority | Total |
| sterling | capital | premium | currency | earnings | | interest | equity |
| | | | transla-tion | | | | |
| | | | reserves | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Balance at 1 January | 854 | 43,625 | (231) | (40,684) | 3,564 | 150 | 3,714 |
| 2009 | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Recognised income and | - | - | - | (8,159) | (8,159) | (82) | (8,241) |
| expense | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Share based payments | - | - | - | - | - | - | - |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Shares issued | 4,166 | 3,643 | - | - | 7,809 | - | 7,809 |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Translation reserve | - | | 991 | - | 991 | - | 991 |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Balance at 30 June | 5,020 | 47,268 | 760 | (48,843) | 4,205 | 68 | 4,273 |
| 2009 | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Balance at 1 January | 530 | 28,352 | (221) | (14,756) | 13,905 | - | 13,905 |
| 2008 | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Recognised income and | - | | | (5,896) | (5,896) | - | (5,896) |
| expense | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Share based payments | - | | | 456 | 456 | - | 456 |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Shares issued | 311 | 14,779 | - | - | 15,090 | - | 15,090 |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Translation reserve | - | - | 471 | - | 471 | - | 471 |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Balance at 30 June | 841 | 43,131 | 250 | (20,196) | 24,026 | - | 24,026 |
| 2008 | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Balance at 1 January | 530 | 28,352 | (221) | (14,756) | 13,905 | - | 13,905 |
| 2008 | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Recognised income and | - | - | - | (26,684) | (26,684) | 150 | (26,534) |
| expense | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Share based payments | - | - | - | 756 | 756 | - | 756 |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Shares issued | 324 | 15,273 | - | - | 15,597 | - | 15,597 |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Translation reserve | - | - | (10) | - | (10) | - | (10) |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| Balance at 31 December | 854 | 43,625 | (231) | (40,684) | 3,564 | 150 | 3,714 |
| 2008 | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
| | | | | | | | |
+------------------------+---------+---------+--------------+----------+----------+----------+----------+
+------------------------------------------+-------------+------------+-------------+
| UN-AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS |
| FOR THE 6 MONTHS ENDED 30 JUNE 2009 |
+-----------------------------------------------------------------------------------+
| In thousands of pounds sterling | Unaudited | Unaudited | Audited |
| | Six months | Six months | Twelve |
| | ended | ended | months |
| | 30 June | 30 June | ended |
| | 2009 | 2008 | 31 December |
| | | | 2008 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Cash flow from operating activities | | | |
+------------------------------------------+-------------+------------+-------------+
| Loss before tax | (8,241) | (5,963) | (26,983) |
+------------------------------------------+-------------+------------+-------------+
| Adjusted for: | | | |
+------------------------------------------+-------------+------------+-------------+
| Financial income | (781) | (460) | (5,785) |
+------------------------------------------+-------------+------------+-------------+
| Financial expenses (including gold sale | 226 | 3,574 | 2,270 |
| agreement) | | | |
+------------------------------------------+-------------+------------+-------------+
| Share-based payment | - | 457 | 756 |
+------------------------------------------+-------------+------------+-------------+
| Depreciation | | 1,251 | 2,084 |
+------------------------------------------+-------------+------------+-------------+
| Exchange rate adjustment | - | 305 | - |
+------------------------------------------+-------------+------------+-------------+
| Loss on divestment of CAG Ghana | 7,156 | - | - |
+------------------------------------------+-------------+------------+-------------+
| Impairment of Ghanaian assets | - | - | 14,620 |
+------------------------------------------+-------------+------------+-------------+
| (Increase)/decrease in inventories | (45) | (1,110) | (529) |
+------------------------------------------+-------------+------------+-------------+
| (Increase)/decrease in trade and other | 10 | (1,267) | (1,991) |
| receivables | | | |
+------------------------------------------+-------------+------------+-------------+
| (Decrease)/increase in trade and other | 605 | (1,651) | 3,971 |
| payables | | | |
+------------------------------------------+-------------+------------+-------------+
| Net cash (used in)/ from operating | (1,070) | (4,864) | (11,587) |
| activities | | | |
+------------------------------------------+-------------+------------+-------------+
| Cash flows from investing activities | | | |
+------------------------------------------+-------------+------------+-------------+
| Interest received | - | 151 | 112 |
+------------------------------------------+-------------+------------+-------------+
| Interest expense | (226) | (78) | (192) |
+------------------------------------------+-------------+------------+-------------+
| Divestment of CAG Ghana net of cash | (2,377) | - | |
+------------------------------------------+-------------+------------+-------------+
| Acquisition of exploration assets | (215) | (826) | (1,360) |
+------------------------------------------+-------------+------------+-------------+
| Acquisition of property, plant and | | (7,511) | (4,901) |
| equipment | | | |
+------------------------------------------+-------------+------------+-------------+
| Net cash used in investing activities | (2,816) | (8,264) | (6,341) |
+------------------------------------------+-------------+------------+-------------+
| Cash flow from financing activities | | | |
+------------------------------------------+-------------+------------+-------------+
| Proceeds from issue of share capital | 5,404 | 15,090 | 15,597 |
+------------------------------------------+-------------+------------+-------------+
| Loans and borrowings received | - | (1,514) | 3,593 |
+------------------------------------------+-------------+------------+-------------+
| Repayment of loans | (3,398) | - | (1,946) |
+------------------------------------------+-------------+------------+-------------+
| Net cash from financing activities | 2,006 | 13,576 | 17,244 |
+------------------------------------------+-------------+------------+-------------+
| Net increase in cash and cash | (1,882) | 448 | (684) |
| equivalents | | | |
+------------------------------------------+-------------+------------+-------------+
| Cash and cash equivalents at 1 January | 2,844 | 2,821 | 2,821 |
+------------------------------------------+-------------+------------+-------------+
| Cash acquired (restricted) | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| Effect of exchange rate fluctuations on | - | (4) | 707 |
| cash held | | | |
+------------------------------------------+-------------+------------+-------------+
| Cash and cash equivalents | 962 | 3,265 | 2,844 |
+------------------------------------------+-------------+------------+-------------+
| Restricted cash include in cash and cash | - | 2,169 | 2,978 |
| equivalents | | | |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
NOTES TO THE INTERIM ACCOUNTS
For the 6 MONTHS ended 30 June 2009
1. Basis of preparation
Central African Gold Plc ('CAG' or 'the Company') is a company domiciled and
incorporated in the United Kingdom. The condensed consolidated interim financial
statements of the Company as at and for the six months to 30 June 2009 comprise
the Company and its subsidiaries (together referred to as 'the Group').
These condensed consolidated interim financial statements have been prepared in
accordance with IAS 34 - Interim Financial Reporting, as adopted by the EU.
They do not include all of the information required for full annual financial
statements and should be read in conjunction with the consolidated financial
statements of the Group for the year ended 31 December 2008.
The financial information contained in this interim report does not constitute
statutory accounts within the meaning of section 240 of the Companies Act 1985.
The comparative figures for the financial year ended 31 December 2008 are not
the Group's full statutory accounts for that financial year. Those accounts,
released on 24 December 2009, have been reported on by the Group's auditors and
will be delivered imminently to the Registrar of Companies. The report of the
auditors was:
(i)qualified based on the limitation of information available to them in respect
of one subsidiary, CAG Ghana. While
KPMG's work was not limited in
respect of the other assets, liabilities, income and expenses of the group and
they were
able to obtain sufficient appropriate audit evidence over
those amounts, because of the significance of the CAG Ghana
balances
to the group as a whole, KPMG have been unable to form a view on the
consolidated financial statements.
(ii)drew attention to the going concern assumption by way of emphasis of matter
without qualifying their report, and
(iii)did not contain a statement under section 237(2) or (3) of the Companies
Act 1985.
The consolidated financial statements of the Group as at and for the year ended
31 December 2008 are available upon request from the Company's registered office
at Millennium Bridge House, 2 Lambeth Hill, London EC4V 4AJ.
These condensed consolidated interim financial statements were approved by the
Board of Directors ('the Board') on 23 December 2009.
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 financial statements to June have not been audited and
have been prepared using accounting policies and practices consistent with those
adopted in the audited financial statements for the year ended 31 December 2008.
The financial statements are presented in pounds sterling, rounded to the
nearest thousand. The preparation of financial statements in conformity with
adopted International Financial Reporting Standards ('IFRS') requires management
to make judgements, estimates and assumptions that affect the application of
policies and reported amounts of assets and liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making the judgements
about carrying values of assets and liabilities that are not readily apparent
from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period or in the period of
the revision and future periods if the revision affects both current and future
periods.
The Directors believe, after making inquiries that they consider to be
appropriate, that the Company has adequate resources to continue in operational
existence for the foreseeable future. The Board continues to adopt the going
concern basis in preparing the financial statements for the following reasons:
* The Board have performed a detailed review of current trading which has included
consideration of the Company's funding position as at the date of these interim
results and the projected funding requirement covering the next 12 months.
* The repayment of the interim funding advanced during the period leading up to
the capital raise has been deferred by the Company's major shareholder.
* The Company has no significant debt repayment obligations in the short term. The
liability to Investec Bank has been settled. Repayment of the convertible loan
notes, deferred until the sale of the Mali assets or April 2010, whichever is
the earlier, has been deferred to April 2011.
* The major shareholders have committed additional funding to the Company in the
form of new convertible loan notes.
* CAG has disposed of its Mali assets as announced on 18 December 2009 for a
consideration of $5 million.
The Board have held informal discussions with a number of the Company's
shareholders and, in light of the value of the Company's gold reserves and the
independent confirmation that those reserves can be successfully recovered, are
confident of the continuing support of shareholders and therefore the continued
funding of the business.
However, there is no assurance that the Group will be successful in these
actions. These financial statements do not reflect the adjustments, which could
be material, to the carrying value of assets and liabilities, the reported
revenues, expenses and balance sheet classifications that would be necessary
were the going concern assumption to be inappropriate.
New standards, amendments and interpretations that are relevant to the Group but
have not yet been adopted
A number of new standards, amendments to standards and interpretations are not
yet effective for the period ended 30 June 2009, and have not been applied in
preparing these condensed consolidated interim financial statements. The new
standards that management believes will have an effect on the financial
statements in future are as follows:
IAS 1 - Presentation of Financial Statements
The changes made require information in financial statements to be aggregated on
the basis of shared characteristics and to introduce a statement of
comprehensive income. This will enable readers to analyse changes in a company's
equity resulting from transactions with owners in their capacity as owners
separately from "non-owners" changes. The revision also includes changes in the
titles of some of the financial statements to reflect their function more
clearly.
IAS 23 - Borrowing Costs (revised)
The main change from the previous version is the removal of the option of
immediately recognising as an expense borrowing costs that relate to assets that
take a substantial period of time to get ready for use or sale.
IFRS 8 - Operating Segments
This standard introduces the "management approach" to segment reporting. IFRS 8,
which becomes mandatory for the Group's 2010 financial statements, will require
the disclosure of segment information based on the internal reports regularly
reviewed by the Group's Chief Operating Decision Maker in order to assess each
segment's performance and to allocate resources to them. Currently the Group
presents segment information by geographical location.
The Group does not expect the adoption of other new, or revisions to existing,
standards or interpretations, issued by the IASB but not listed above, to have a
material impact on the consolidated results or financial position of the Group.
2.Segmental information
+------------------------------------------+-------------+------------+-------------+
| Ghana | Unaudited | Unaudited | Audited |
| In thousands of pounds sterling | Six months | Six months | Twelve |
| | ended | ended | months |
| | 30 June | 30 June | ended |
| | 2009 | 2008 | 31 December |
| | | | 2008 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Revenue | - | 6,674 | 13,490 |
+------------------------------------------+-------------+------------+-------------+
| Profit / (loss) before tax | - | (4,102) | (26,541) |
+------------------------------------------+-------------+------------+-------------+
| Income tax | - | 72 | 471 |
+------------------------------------------+-------------+------------+-------------+
| Profit / (loss) for the period | - | (4,030) | (26,070) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Segment assets | - | 42,854 | 37,369 |
+------------------------------------------+-------------+------------+-------------+
| Segment liabilities | - | (21,293) | (37,617) |
+------------------------------------------+-------------+------------+-------------+
| Total net assets | - | 21,561 | (248) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Additions to non-current assets | - | 7,279 | 4,608 |
+------------------------------------------+-------------+------------+-------------+
| Depreciation | - | 1,138 | 1,895 |
+------------------------------------------+-------------+------------+-------------+
| Impairments | (7,156) | - | 14,450 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Zimbabwe | Unaudited | Unaudited | Audited |
| In thousands of pounds sterling | Six months | Six months | Twelve |
| | ended | ended | months |
| | 30 June | 30 June | ended |
| | 2009 | 2008 | 31 December |
| | | | 2008 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Revenue | 293 | 1,946 | 611 |
+------------------------------------------+-------------+------------+-------------+
| Profit / (loss) before tax | (1,001) | 588 | (683) |
+------------------------------------------+-------------+------------+-------------+
| Income tax | - | (5) | (22) |
+------------------------------------------+-------------+------------+-------------+
| Profit / (loss) for the period | (1,001) | 583 | (705) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Segment assets | 4,684 | 882 | 6,268 |
+------------------------------------------+-------------+------------+-------------+
| Segment liabilities | (2,104) | (681) | (1,464) |
+------------------------------------------+-------------+------------+-------------+
| Total net assets | 2,580 | 201 | 3,347 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Additions to non-current assets | - | 243 | 1 |
+------------------------------------------+-------------+------------+-------------+
| Depreciation | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| Impairments | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
+------------------------------------------+-------------+------------+-------------+
| Mali | Unaudited | Unaudited | Audited |
| In thousands of pounds sterling | Six months | Six months | Twelve |
| | ended | ended | months |
| | 30 June | 30 June | ended |
| | 2009 | 2008 | 31 December |
| | | | 2008 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Revenue | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| Profit / (loss) before tax | (411) | 133 | 749 |
+------------------------------------------+-------------+------------+-------------+
| Income tax | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| Profit / (loss) for the period | ( 411) | 133 | 749 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Segment assets | 3,702 | 3,994 | 4,715 |
+------------------------------------------+-------------+------------+-------------+
| Segment liabilities | (65) | (4,170) | (61) |
+------------------------------------------+-------------+------------+-------------+
| Total net assets | 3,637 | (176) | 4,654 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Additions to non-current assets | 199 | 793 | 1,377 |
+------------------------------------------+-------------+------------+-------------+
| Depreciation | 26 | 25 | 53 |
+------------------------------------------+-------------+------------+-------------+
| Impairments | - | - | - |
+------------------------------------------+-------------+------------+-------------+
+------------------------------------------+-------------+------------+-------------+
| Botswana | Unaudited | Unaudited | Audited |
| In thousands of pounds sterling | Six months | Six months | Twelve |
| | ended | ended | months |
| | 30 June | 30 June | ended |
| | 2009 | 2008 | 31 December |
| | | | 2008 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Revenue | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| Profit / (loss) before tax | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| Income tax | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| Profit / (loss) for the period | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Segment assets | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| Segment liabilities | (8) | (150) | (8) |
+------------------------------------------+-------------+------------+-------------+
| Total net assets | (8) | (150) | (8) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Additions to non-current assets | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| Depreciation | - | - | - |
+------------------------------------------+-------------+------------+-------------+
| Impairments | - | - | - |
+------------------------------------------+-------------+------------+-------------+
+------------------------------------------+-------------+-------------+-------------+
| Corporate | Unaudited | Unaudited | Audited |
| In thousands of pounds sterling | Six months | Six months | Twelve |
| | ended | ended | months |
| | 30 June | 30 June | ended |
| | 2009 | 2008 | 31 December |
| | | | 2008 |
+------------------------------------------+-------------+-------------+-------------+
| | | | |
+------------------------------------------+-------------+-------------+-------------+
| Revenue | - | - | - |
+------------------------------------------+-------------+-------------+-------------+
| Profit / (loss) before tax | 327 | (2,582) | (508) |
+------------------------------------------+-------------+-------------+-------------+
| Income tax | - | - | - |
+------------------------------------------+-------------+-------------+-------------+
| Profit / (loss) for the period | 327 | (2,582) | (508) |
+------------------------------------------+-------------+-------------+-------------+
| | | | |
+------------------------------------------+-------------+-------------+-------------+
| Segment assets | 1,195 | 3,020 | 528 |
+------------------------------------------+-------------+-------------+-------------+
| Segment liabilities | (3,131) | (426) | (6,016) |
+------------------------------------------+-------------+-------------+-------------+
| Total net assets | (1,936) | 2,594 | (5,488) |
+------------------------------------------+-------------+-------------+-------------+
| | | | |
+------------------------------------------+-------------+-------------+-------------+
| Additions to non-current assets | - | 22 | 25 |
+------------------------------------------+-------------+-------------+-------------+
| Depreciation | - | 88 | 136 |
+------------------------------------------+-------------+-------------+-------------+
| Impairments | - | - | 170 |
+------------------------------------------+-------------+-------------+-------------+
+------------------------------------------+-------------+------------+-------------+
| Group | Unaudited | Unaudited | Audited |
| In thousands of pounds sterling | Six months | Six months | Twelve |
| | ended | ended | months |
| | 30 June | 30 June | ended |
| | 2009 | 2008 | 31 December |
| | | | 2008 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Revenue | 293 | 8,620 | 14,101 |
+------------------------------------------+-------------+------------+-------------+
| Profit / (loss) before tax | (1,085) | (5,963) | (26,983) |
+------------------------------------------+-------------+------------+-------------+
| Income tax | - | 67 | 449 |
+------------------------------------------+-------------+------------+-------------+
| Profit / (loss) for the period | (1,085) | (5,896) | (26,534) |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Segment assets | 9,581 | 50,750 | 48,880 |
+------------------------------------------+-------------+------------+-------------+
| Segment liabilities | (5,308) | (26,723) | (45,106) |
+------------------------------------------+-------------+------------+-------------+
| Total net assets | 4,273 | 24,027 | 3,714 |
+------------------------------------------+-------------+------------+-------------+
| | | | |
+------------------------------------------+-------------+------------+-------------+
| Additions to non-current assets | 158 | 8,337 | 6,011 |
+------------------------------------------+-------------+------------+-------------+
| Depreciation | 114 | 123 | 2,084 |
+------------------------------------------+-------------+------------+-------------+
| Impairments | (7,156) | - | 14,620 |
+------------------------------------------+-------------+------------+-------------+
3.Basic and diluted loss per share
Basic and diluted loss per share was based on the loss attributable to ordinary
equity holders of the Company of GBP5.2 million (June 2008: GBP5.8 million) and
the weighted average number of ordinary shares outstanding during the period of
495,319,139 (June 2008: 164,557,783).
4.Subsequent events
Subsequent to the date of these financial statements, the Board conducted a
formal disposal process in respect of the Mali exploration portfolio, pursuant
to the statements issued in the circular to shareholders in March 2009. Whilst a
number of offers were received, the cash component of the offers was
considerably less than the Board anticipated. As a result, the Board believed
that the cash likely to be available to the Company, subsequent to the disposal,
would not be sufficient to repay the amounts due to Investec Asset Management
and ECP Africa under the new loan agreements, together with the other creditors
of the Company as they fell due.
To this end, CAG approached both Investec Asset Management Pty ('IAM') and ECP
Africa ('ECP') seeking a deferral of the Company's obligations under the new
loan agreements. IAM and ECP have agreed to extend the terms of the loans made
available to the Company as described in a circular sent to shareholders on 27
March 2009, amounting to US$2.2 million and US$1.8 million respectively. These
loans now have a new maturity date of 29 April 2011 (previously the earlier date
of 14 April 2010 or within five days of the receipt of funds by the Company from
the sale of its entire shareholding in Mali Goldfields SA and Songhoï Resources
SA).
Additionally, CAG has entered into new Convertible Loan Agreements ('the
Convertible Loan Agreements') with HBD Zim Investments Limited ('HBD'), ECP and
IAM, (together, 'the Lenders'). The Convertible Loan Agreements total circa
US$[1.35 million] (approximately GBP816,000) and amount to US$397,267 from HBD
(approximately GBP238,924), US$705,070 from EPC (approximately GBP424,048) and
US$250,000 from IAM (approximately GBP151,167). All loan amounts used the rate
of exchange prevailing on the date of the agreement). The funds received by the
Company under the Convertible Loan Agreements carry interest at 10 per cent. per
annum, compounded monthly in arrears with the full amount payable on the
maturity date, 29 April 2011. There is no penalty for early repayment of the
loans.
The terms of the Convertible Loan Agreements provide that the Lenders have the
right to convert all, but not part only, of the loans at the conversion price of
the lesser of 0.9 pence per ordinary share and ten (10) percent below the USD
equivalent of any price at which the Borrower issues Shares while any amount of
the Loan remains repayable to the Lender. Under the terms of the Convertible
Loan Agreements, each of the Lenders acknowledge that the Company does not have
the capacity to issue the full number of shares issuable should they wish to
convert the loans and that, should the Company not receive the required
shareholders approval needed to create and issue all of the shares issuable on
conversion, the Lenders shall only be able to exercise their conversion rights
to the extent that such shares exist and the directors have the relevant
authorities.
As announced on 18 December 2010, the Company has entered into a binding
agreement to dispose of its 80 per cent. equity interests in each of Mali
Goldfields SARL and Songhoï Resources SA (together 'the Malian Assets') ('the
Disposal') to Colonial Resources Limited ('Colonial') ('the Agreement') for a
total consideration of US$5.0 million ('the Consideration'). As at 31 December
2008, the Malian Assets, which are early stage gold exploration assets,
consisting of 17 prospective permits spanning circa 2,600km² of the Birimian
strata, were recorded as having a book value of GBP3.8 million.
5.Contingent liabilities
There were no contingent liabilities at 30 June 2009 required to be disclosed in
the Group's financial statements.
6.Approval of accounts
These interim financial statements were approved by the directors on 20 December
2009.
Responsibility statement of the directors in respect of the interim financial
report
The Board confirms that to the best of their knowledge:
* the condensed set of financial statements have been prepared in accordance with
IAS34 Interim Financial Reporting as adopted by the EU,
* the interim management report includes a fair review of the information required
by:
(a)DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of
important events that have occurred during the first six months of the financial
year and their impact on the condensed set of financial statements; and a
description of the principle risks and uncertainties for the remaining six
months of the year; and
(b)DTR 4.2.8R of the Disclosure and Transparency Rules, being related party
transactions that have taken place in the first six months of the current
financial year and that have materially affected the financial position or
performance of the entity during that period; and any changes in the related
party transactions described in the last annual report that could do so.
* * ENDS * *
For further information please visit www.centralafricangold.com or contact:
+----------------+------------------------------+-------------------------+
| Roy Pitchford | Central African Gold Plc | Tel: +44(0)77 9390 9985 |
| / Craig | | Tel: +27(0)11 317 3654 |
| Campbell | | |
| | | |
+----------------+------------------------------+-------------------------+
| Stuart | Strand Hanson Partners | Tel: +44(0)20 7409 3494 |
| Faulkner/ | Limited | |
| James | | |
| Spinney | | |
| | | |
+----------------+------------------------------+-------------------------+
| Hugo de | St Brides Media and Finance | Tel: +44(0)20 7236 1177 |
| Salis / | Ltd | |
| Felicity | | |
| Edwards | | |
+----------------+------------------------------+-------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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