Further Re: Disposal

 

TIDMCGM 
 
RNS Number : 0306G 
China Goldmines PLC 
25 January 2010 
 

China Goldmines PLC 
Friday, 22 January 2010 
 
?China Goldmines plc 
('the Company' or 'CGM')(AIM:CGM) 
  *  USD 2.2m further payment received from the disposal of Westralian Resources Pty. 
  Ltd. ('WES') 
  *  USD23m (approx) unaudited cash position following receipt of further payment 
    *  USD 25.7m in total now received from Cosmos Castle Management Limited ('Cosmos') 
    following disposal 
    *  The Company will finalise the reorganisation of the Group once the 31 December 
    2009 audit is completed by the re-structuring of Global Resource Ventures Ltd 
 
  *  Strategic review, managed by new Chairman, Robert Adair, in process 
    *  The Board will update on the investment targeting process shortly 
 
 
The Company today announces that pursuant to the sale and purchase agreement 
entered into with Cosmos dated 26 August 2009 (the 'Sale and Purchase 
Agreement') it has received a further payment of USD 2.2m. 
As described in the Company's circular dated 1 September 2009, the sum of USD 
2.9m was withheld from the upfront payment made by Cosmos and held pursuant to 
custodian arrangements pending the payment of outstanding liabilities and 
employment related termination costs and the resolution of any claims and legal 
proceedings. Of the USD2.9m, the sum of USD 421khas been released to Cosmos to 
cover outstanding accounts payable and contingent liabilities at the date of the 
disposal of WES. A further sum of USD 200k has been released to Cosmos for a 
period of six months to enable it to meet potential liabilities from pending 
court actions in China which relate, predominately, to employment matters. At 
the end of the six month period it is intended that CGM and Cosmos will verify 
and reconcile the total amount expended to meet the liabilities arising from 
these court actions. .  The gross consideration received by the Company for the 
acquisition was USD26.35m. Warranties, indemnities and CGM's parent guarantee in 
respect of the disposal were capped at USD10m and expire on 29 September 2010. 
These warranties as set out in the circular dated 1 September 2009 and relate 
principally to title, financial position and accuracy of accounts: the Company 
is currently not aware of anything which may lead to a claim. Of the gross 
consideration China Goldmines has now received cash proceeds of USD 25.7m. 
As of today the Company now has an unaudited cash position of approximately 
USD23m and is in the process of a strategic review to assess how best to serve 
shareholders in its current status as an investing company. In December 2009 Mr 
Robert Adair was appointed to the board of CGM as Non-executive Chairman. Mr 
Adair, a UK national with significant PLC experience, is currently undertaking a 
strategic review of CGM's options on how best to achieve maximum value for 
existing shareholders. 
Commenting today Mr Robert Adair, Chairman, said: "We have now successfully 
secured cash proceeds of USD 25.7m from the disposal of WES. This has removed a 
substantial area of uncertainty for the Company and, as a result, the Company 
now has net assets of approximately USD 23m (approximately 29p per share), 
practically all in cash with minimal liabilities other than those associated 
with the Sale and Purchase Agreement described above.  Following my appointment 
as Chairman in December of last year I am now working closely with management 
and shareholders in order to look at the options available to maximise 
shareholder value from CGM's strong cash position. These include acquiring 
businesses or assets: in this we are unlikely to restrict our search solely to 
the resources sector and will consider other business areas. If we do not find 
anything suitable then we would look to return the funds to shareholders." 
 
 
For further information, call: 
+----------------+------------------+ 
| China          |                  | 
| Goldmines      |                  | 
| plc            |                  | 
+----------------+------------------+ 
| Robert         | Mobile:          | 
| Adair          | 07872-930114     | 
|                | Office:          | 
|                | 01845-537037     | 
+----------------+------------------+ 
| Frank          | [phone]    | 
| Vanspeybroeck  |                  | 
| (CEO)          |                  | 
+----------------+------------------+ 
| Marinko        | [phone]  | 
| Vidovich       |                  | 
| (CFO)          |                  | 
+----------------+------------------+ 
|                |                  | 
+----------------+------------------+ 
| Brewin         |                  | 
| Dolphin        |                  | 
| Ltd            |                  | 
| (Nominated     |                  | 
| Adviser)       |                  | 
+----------------+------------------+ 
| Alex           | [phone] | 
| Dewar          |                  | 
|                |                  | 
+----------------+------------------+ 
| Threadneedle   | +44              | 
| Communications | (0)20            | 
| Laurence       | 7653 9855        | 
| Read/Beth      |                  | 
| Harris         |                  | 
+----------------+------------------+ 
 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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