New Dawn's Year End Financial Results (5706Y)

TIDMCAN

RNS Number : 5706Y

Central African Gold PLC

24 December 2010

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

24 December 2010

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

New Dawn Publishes Financial Results for Year Ended 30 September 2010

Record High Consolidated Gold Sales

Central African Gold Plc, the AIM quoted gold mining and exploration company, notes the following announcement made by New Dawn Mining Corp (TSX:ND) ('New Dawn') on 23 December 2010, which holds a 88.6% equity interest in CAG, regarding New Dawn's Financial Results for the year ended 30 September 2010.

"Highlights:

-- US$16.4 Million in Revenues from Gold Sales ($16.3 Million Attributable)

-- US$4.0 Million Adjusted EBITDA from Gold Mining Operations

-- 14,018 Ounces of Gold Produced (13,900 Ounces Attributable)

-- 92% Increase to Attributable Measured and Indicated Gold Resources (Inclusive of Reserves)

-- 3 Gold Mines Operational and in Production

-- Advancing an Additional Gold Mine into Production in 2011

-- Advancing 3 Open Pit Gold Exploration Targets on a Priority Basis in 2011

-- Targeting 38,000 to 40,000 Ounces of Annualized Consolidated Gold Production by the Fourth Calendar Quarter of 2011

-- Mid-term Target of 100,000 Ounces of Annualized Consolidated Gold Production by 2014-2015

TORONTO, Ontario, December 23, 2010 - New Dawn Mining Corp. (TSX: ND) ("New Dawn" or the "Company") announced that its financial results and corresponding Management's Discussion and Analysis for the year ended September 30, 2010 have now been filed on SEDAR and are also available to view on the Company's website at www.newdawnmining.com.

The Company prepares its consolidated financial statements in United States dollars and in accordance with Canadian Generally Accepted Accounting Principles ("GAAP").

Attributable ounces are the ounces calculated on the basis of the Company's proportionate ownership of such ounces, after adjusting for the minority interests' share of gold production from the Central African Gold Plc ("CAG") properties (see discussion of "Total and Attributable Ounces" below).

OVERVIEW

Fiscal 2010 was a successful year of growth and development for the Company, both internally and externally. The Company generated net income before income taxes of $1,303,676 and completed the acquisition of an 88.7% controlling interest in CAG, which owns substantial gold mining properties in Zimbabwe.

Adjusted EBITDA, a non-GAAP measurement, totaled $4,003,453 for the fiscal year ended September 30, 2010 (see table under "Non-GAAP Measures" below).

Offsetting these positive results were the significant period costs related to the acquisition of the 88.7% interest in CAG, together with the substantial costs associated with stabilizing CAG's operations in Zimbabwe and implementing the re-engineering of management structures, process and reporting systems. The Company expects that these costs will abate and/or normalize during 2011.

The acquisition of CAG, discussed in more detail in the September 30, 2010 Management's Discussion and Analysis, has substantially increased the Company's potential, increasing measured and indicated resources by 92%, (inclusive of reserves) and bringing under the Company's control five mining properties and a large portfolio of exploration properties in Zimbabwe. The upside potential of these assets, to be developed and operated using New Dawn's established knowledge, experience and operating methods has, in the view of Company's management, provided a substantial step towards realizing the Company' s goal of becoming a mid-tier gold producer.

At September 30, 2010, New Dawn had three gold mines in operation, consisting of its 100%-owned Turk Mine, and the Old Nic Mine and the Dalny Mine that New Dawn acquired as part of the CAG transaction in June 2010, which resumed production during the quarter ended September 30, 2010.

Looking forward to 2011, New Dawn expects to resume production at one additional mine acquired in the CAG transaction, the Golden Quarry Mine in the Gweru gold camp. New Dawn is targeting 38,000 to 40,000 ounces of consolidated annualized gold production from all of its mines by the fourth calendar quarter of 2011, and has a mid-term target of 100,000 ounces of consolidated annualized gold production by 2014-2015.

"In fiscal 2010, New Dawn recorded increasing revenues from gold produced primarily by the Turk Mine in Zimbabwe. The most notable event in the past year occurred in June 2010, when New Dawn acquired an 89% controlling interest in Central African Gold Plc, which is a transformational event for New Dawn. With the completion of the CAG transaction, New Dawn increased its gold reserves/resources by over 90% with the acquisition of 5 past producing mines and a portfolio of highly prospective exploration ground in Zimbabwe. New Dawn currently has 3 gold mines in production, and is planning on restarting operations at one additional mine owned by CAG which was a past producer, in the coming year. New Dawn is targeting on doubling its run rate by late 2011 to 38,000 to 40,000 ounces of consolidated annualized gold production," commented Ian R. Saunders, President and CEO.

"Additionally, in 2011, we have established an aggressive exploration budget for 3 high priority targets exhibiting significant open pit potential near the surface in the oxide zones of former producers. We expect that 2011 will be a very exciting time for our Company, and we look forward to reporting continuing progress to our shareholders."

ANNUAL RESULTS

The following table sets forth selected consolidated financial information for the Company for the fiscal years ended September 30, 2010, 2009 and 2008, prepared in United States dollars and in accordance with Canadian generally accepted accounting principles. This selected financial information should be read in conjunction with the Company's consolidated financial statements, including the notes thereto.

 
 Fiscal Years Ended September 30, 
 
-----------------------------------------------------------------------  -------------- 
                                        2010                2009              2008 
--------------------------------  ----------------  -------------------  -------------- 
 Operations 
--------------------------------  ----------------  -------------------  -------------- 
  Revenue                              $16,380,508           $5,644,977      $7,480,925 
--------------------------------  ----------------  -------------------  -------------- 
  Net loss for the year                  (786,123)          (3,737,594)     (2,471,066) 
--------------------------------  ----------------  -------------------  -------------- 
  Basic and diluted loss per 
   common share                             (0.02)               (0.13)          (0.09) 
--------------------------------  ----------------  -------------------  -------------- 
 
 Balance sheet 
--------------------------------  ----------------  -------------------  -------------- 
  Total assets                         $44,820,031          $19,238,732     $21,383,249 
--------------------------------  ----------------  -------------------  -------------- 
  Total liabilities                     19,245,119            5,646,869       4,160,911 
--------------------------------  ----------------  -------------------  -------------- 
  Cash dividends per share                     Nil                  Nil             Nil 
--------------------------------  ----------------  -------------------  -------------- 
 
 Other measures 
--------------------------------  ----------------  -------------------  -------------- 
    Quantity of gold produced 
     (oz)                                   14,018                6,967        8,651 
--------------------------------  ----------------  -------------------  -------------- 
    Quantity of gold sold (oz)              14,089                6,029        8,651 
--------------------------------  ----------------  -------------------  -------------- 
    Intercompany loan repayments 
     paid from Zimbabwe                 $2,936,455             $395,105        $150,000 
--------------------------------  ----------------  -------------------  -------------- 
    Cash costs per oz                         $671                 $622            $641 
--------------------------------  ----------------  -------------------  -------------- 
    Adjusted EBITDA                     $4,003,453           $(477,997)        $109,915 
--------------------------------  ----------------  -------------------  -------------- 
 
    Attributable 
--------------------------------  ----------------  -------------------  -------------- 
    Revenue                            $16,270,999           $5,644,977      $7,480,925 
--------------------------------  ----------------  -------------------  -------------- 
    Quantity of gold produced 
     (oz)                                   13,900                6,967        8,651 
--------------------------------  ----------------  -------------------  -------------- 
    Quantity of gold sold (oz)              14,004                6,029        8,651 
--------------------------------  ----------------  -------------------  -------------- 
 
 

(1) Cash costs per ounce, adjusted EBITDA and attributable measures are non-GAAP measures, as more fully described in the discussion below entitled "Non-GAAP measures".

Non-GAAP Measures

The Company has included within this press release and its MD&A, EBITDA, adjusted EBITDA, cash costs per ounce and attributable measures, which are non-GAAP performance measures. These non-GAAP performance measures do not have any standardized meaning prescribed by GAAP and, therefore, are unlikely to be comparable to similar measures presented by other companies.

The Company believes that, in addition to conventional measures prepared in accordance with GAAP, certain investors may find this information useful in their evaluation of the Company's performance. Accordingly, these non-GAAP measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP.

Set out below are definitions for these performance measures and reconciliations of the non-GAAP measures to reported GAAP measures.

Total and Attributable Ounces

Total ounces represent the total ounces under the control of the Company and its subsidiaries and includes 100% of such ounces. Total ounces are presented consistent with the method of consolidation of the accounting information provided in the Company's consolidated financial statements, in which the Company and its subsidiaries, both wholly-owned and partly-owned, are considered an operating unit with adjustment for the minority interest based on income after provision for income taxes.

Attributable ounces are the ounces calculated on the basis of the Company's proportionate ownership of such ounces, after adjusting for the minority interests' share of gold production from the CAG properties. Accordingly, any financial information based on attributable ounces is a non-GAAP measure.

The information shown below is for the fiscal year ended September 30, 2010. For the fiscal year ended September 30, 2009, as all properties were 100% owned by the Company, total and attributable ounces were the same.

 
                    Casmyn      Falgold    Olympus       Total      Attributable 
---------------  ------------  ---------  ---------  ------------  ------------- 
 Proportionate 
  holding                100%        75%        89%             -              - 
---------------  ------------  ---------  ---------  ------------  ------------- 
 Ounces of gold 
  sold                 13,667        277        145        14,089         14,004 
---------------  ------------  ---------  ---------  ------------  ------------- 
 Ounces of gold 
  produced             13,447        391        180        14,018         13,900 
---------------  ------------  ---------  ---------  ------------  ------------- 
 Revenue          $15,841,538   $358,734   $180,236   $16,380,508    $16,270,999 
---------------  ------------  ---------  ---------  ------------  ------------- 
 

EBITDA and Adjusted EBITDA

Earnings before interest expense, income taxes, depreciation and amortization is a metric that is used by some readers to measure cash earnings without the distortion arising from both varying capital structures and different tax legislations that apply in different jurisdictions. It is different from cash flow from operations appearing in the consolidated statement of cash flows in that it does not take into account interest expense and tax payments or changes in non-cash working capital. It is also different from free cash flow in that it excludes the cash required to replace capital assets (capex).

The Company takes the view that stock-based compensation, impairment expense and impairment recovery, all of which are non-cash items, should also be excluded in arriving at this measure. Included in the table below is EBITDA as typically calculated, as well as Adjusted EBITDA that excludes certain additional items.

The reconciliation to EBITDA and Adjusted EBITDA starts at net loss for the period shown on the consolidated statement of operations.

 
 Years ended September 30, 
------------------------------------------------------------------------------ 
                                         2010          2009           2008 
-----------------------------------  -----------  -------------  ------------- 
 Net loss for the period              $(786,123)   $(3,737,594)   $(2,471,066) 
-----------------------------------  -----------  -------------  ------------- 
 Add (deduct): 
-----------------------------------  -----------  -------------  ------------- 
 Interest expense                         70,409         10,000              - 
-----------------------------------  -----------  -------------  ------------- 
 Income taxes                          2,264,465        100,192         45,557 
-----------------------------------  -----------  -------------  ------------- 
 Amortization and accretion              959,053        721,763      1,176,283 
-----------------------------------  -----------  -------------  ------------- 
 Allocation of loss to minority 
 interest                              (174,666)                             - 
-----------------------------------  -----------  -------------  ------------- 
 EBITDA                                2,333,138    (2,905,639)    (1,249,226) 
-----------------------------------  -----------  -------------  ------------- 
 Add: 
-----------------------------------  -----------  -------------  ------------- 
 Overhead of non-operational 
 properties                              713,047              -              - 
-----------------------------------  -----------  -------------  ------------- 
 Impairment expense                      435,000      2,320,523      1,211,500 
-----------------------------------  -----------  -------------  ------------- 
 Stock-based compensation                522,268        107,119        147,641 
-----------------------------------  -----------  -------------  ------------- 
 Adjusted EBITDA                      $4,003,453     $(477,997)   $109,915 
-----------------------------------  -----------  -------------  ------------- 
 

Cash costs per ounce

The Company has adopted the definitions that were published by the Gold Institute for operating costs per ounce in order to enhance comparability with other mining companies. Cash costs are derived from the statement of operations and include operating costs such as mining, milling, refining and transportation, by-product credits, royalties and production taxes but exclude exploration costs, depreciation and depletion, reclamation and mine closure costs, and gains and losses from foreign exchange. Costs are based upon production activity.

 
                                                                                                    Years ended 
                                                                                                    September 30, 
-------------------------------------------------------------------------------------------------------------------- 
                                                              2010                 2009                 2008 
---------------------------------------------------  ---------------------  ------------------  -------------------- 
 Quantity of gold produced (oz)                              14,018                6,967                8,651 
---------------------------------------------------  ---------------------  ------------------  -------------------- 
 Cash cost per ounce                                          $671                 $622                 $632 
---------------------------------------------------  ---------------------  ------------------  -------------------- 
 

(For additional information, see cash costs per ounce discussed in the section titled Non-GAAP Measures in the September 30, 2010 Management's Discussion and Analysis).

About New Dawn ...

New Dawn is a Zimbabwe-focused junior gold company currently expanding gold production at its wholly-owned Turk Mine and, with its June 2010 investment in which it acquired an 89% controlling interest in Central African Gold Plc ("CAG"), New Dawn is targeting consolidated annualized gold production of 50,000 to 60,000 ounces within the next 18 to 24 months, increasing to 100,000 ounces of consolidated annualized gold production within the next 4 to 5 years.

Having recently filed a new NI 43-101-compliant mineral reserve and resource estimate for the CAG properties, New Dawn's total attributable mineral reserves, including its Turk Mine, increased 32% to 220,000 ounces of gold grading 3.81 g/t from 1,785,000 tons of mineralized material. The attributable mineral reserves are comprised of attributable proven mineral reserves of 109,400 ounces of gold grading 3.69 g/t from 874,700 tons of mineralized material and attributable probable mineral reserves of 110,600 ounces of gold grading 3.78 g/t from 910,300 tons of mineralized material.

Additionally, New Dawn's total attributable measured and indicated mineral resources (inclusive of attributable mineral reserves) increased by 92% to 1,558,400 ounces of gold grading 2.37 g/t from 20,436,000 tons of mineralized material and New Dawn's total attributable inferred mineral resources increased by 54% to 552,600 ounces of gold grading 4.95 g/t from 3,477,000 tons of mineralized material. (Reference: New Dawn press release dated October 19, 2010)

Presently, New Dawn operates 3 significant gold camps in Zimbabwe, where it owns 6 mines, 3 of which are currently producing gold and expanding production. Ultimately, New Dawn's objective is to become a leading gold mining company in Zimbabwe, active in both gold production and gold exploration, by employing modern mining techniques and deploying capital in a country that is geologically rich, highly prospective, and vastly under explored.

Additional information on New Dawn's gold reserve and resource estimates is included at the Company's website at www.newdawnmining.com or in the Company's filings on SEDAR at www.sedar.com.

The TSX has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.

The contents of this news release were supervised and reviewed by Ian R. Saunders, B.Sc., who is President, Chief Executive Officer, and a Director of New Dawn Mining Corp., and who is a Qualified Person within the meaning of NI 43-101.

For Further Information:

Investor Relations Contact: Richard Buzbuzian +1 416.585.7890

President and Chief Executive Officer: Ian R. Saunders +1 416.585.7890

Visit us on the internet: http://www.newdawnmining.com or

Email us at: [e-mail]

Special Note Regarding Forward-Looking Statements: Certain statements included or incorporated by reference in this news release, including information as to the future financial or operating performance of the Company, its subsidiaries and its projects, constitute forward-looking statements. The words "believe," "expect," "anticipate," "contemplate," "target," "plan," "intends," "continue," "budget," "estimate," "may," "schedule" and similar expressions identify forward-looking statements. Forward-looking statements include, among other things, statements regarding targets, estimates and assumptions in respect of gold production and prices, operating costs, results and capital expenditures mineral reserves and mineral resources and anticipated grades and recovery rates. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by the Company, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Such factors include, among others, risks relating to reserve and resource estimates, gold prices, exploration, development and operating risks, political and foreign risk uninsurable risks, competition, limited mining operations, production risks, environmental regulation and liability, government regulation, currency fluctuations, recent losses and write-downs and dependence on key employees. See "Risk Factors" in the Company's Annual Information Form - 2010. Due to risks and uncertainties, including the risks and uncertainties identified above, actual events may differ materially from current expectations. Investors are cautioned that forward-looking statements are not guarantees of future performance and, accordingly, investors are cautioned not to put undue reliance on forward-looking statements due to the inherent uncertainty therein. Forward-looking statements are made as of the date of this press release and the Company disclaims any intent or obligation to update publicly such forward-looking statements, whether as a result of new information, future events or results or otherwise."

**ENDS**

For further information please visit www.centralafricangold.comor contact:

 
 Roy Pitchford      Central African Gold Plc      Tel: [phone] 
  /                                                9985 
  Ian Saunders                                     Tel: +(263) 9 76826/7/8 
 Stuart Faulkner    Strand Hanson Limited         Tel: [phone] 
  / James Spinney                                  3494 
 Hugo de Salis      St Brides Media and Finance   Tel: [phone] 
  / Felicity         Ltd                           1177 
  Edwards 
 

Notes to Editors

CAG

Central African Gold Plc is a gold mining company with a portfolio of production, development and exploration assets in Zimbabwe, where the Company operates through two subsidiaries, Falcon Gold Zimbabwe Limited (84.7 per cent. owned) and Olympus Gold Mines Limited (100 per cent. owned). Through these subsidiaries, CAG has four main gold mines, the Dalny, Old Nic, Golden Quarry and Camperdown mines, which arelocated in the highly prospective Kadoma, Shurugwi and Bulawayo gold regions in Zimbabwe.

NDM

The Company's 88.68% shareholder is Toronto Stock Exchange listed New Dawn Mining Corp. ('NDM'), a gold mining company with a broad portfolio of production and exploration assets also in Zimbabwe. NDM owns and operates the Turk Mine in the upper southwest area of Zimbabwe, which it believes has the potential to produce an estimated 35,000 to 50,000 ounces of gold per annum. It is NDM's objective to orchestrate the development of CAG's mining operations and exploration portfolio, as well as its own, to become a mid-tier gold producer focussed in Zimbabwe with a consolidated annualised gold production to between 50,000 and 60 000 ounces within the next 18 to 24 months, increasing to 100,000 ounces within the next 4 to 5 years.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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