Notice of General Meeting

 

TIDMCAN 
 
RNS Number : 1446X 
Central African Gold PLC 
01 December 2010 
 

 Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining 
1 December 2010 
                Central African Gold Plc ('CAG' or 'the Company') 
 
    Announcement of posting of Circular and Notice of General Meeting to seek 
      approval for proposed cancellation of admission to trading on AIM and 
   announcement of NDM's Third-Party Trading Facility to offer to acquire the 
  shares of minority shareholders, at a price of 0.6 pence per Ordinary Share 
 
Summary 
 
Central African Gold Plc, the AIM quoted gold mining and exploration company, 
today announces that a General Meeting ('General Meeting' or 'GM') will be held 
at the offices of Memery Crystal LLP, 44 Southampton Buildings, London, WC2A 
1AP, on 22 December 2010 at 10.00 a.m. to seek approval from Shareholders of the 
Company for the cancellation of admission of the Company's Ordinary Shares of 
0.1 pence each to trading on AIM ('the De-listing') and to re-register as a 
private limited company ('the Re-registration'). 
 
CAG has today posted a circular ('the Circular') and notice of GM along with the 
form of proxy to Shareholders. Shareholders will be asked to approve the 
Resolutions in respect of, inter alia, the cancellation of the Company's 
Ordinary Shares to trading on AIM and re-registration as a private limited 
company either in person or by proxy at the GM. Under the AIM Rules, the 
De-listing can only become effective after the relevant Resolution has been 
passed by not less than 75 per cent. of the votes cast by Shareholders. 
 
This announcement provides details on the background to and reasons for the 
proposed De-listing and Re-registration and the principal effects of the 
proposed De-listing and Re-registration. 
 
In accordance with Rule 41 of the AIM Rules, the Company has today notified the 
London Stock Exchange of the proposed De-listing. This notice is conditional 
upon not less than 75 per cent. of votes cast by Shareholders (in person or by 
proxy) at the General Meeting voting in favour of the Resolutions.  Subject to 
requisite Shareholder approval, the De-listing is expected to be effective from 
8.00 a.m. on 31 December 2010. 
 
The Company has received irrevocable undertakings to vote in favour of the 
Resolutions at the General Meeting from NDM, the Company's majority shareholder, 
and Roy Pitchford, the Independent Director, in respect of, in aggregate, 
893,412,258 Ordinary Shares, representing approximately 88.98 per cent. of the 
issued Ordinary Shares at the date of the Circular. 
 
The Board and NDM recognise that the De-listing will make it considerably more 
difficult for the Minority Shareholders to sell or buy Ordinary Shares and, 
accordingly, NDM has agreed to employ the services of HB Markets to operate a 
trading facility to acquire, on behalf of NDM, Ordinary Shares held by the 
Minority Shareholders, for a period of two months from the date of the Circular, 
ending on 1 February 2011, at a set price in cash of 0.6 pence per Ordinary 
Share ('the Third-Party Trading Facility'). 
 
Unless the context otherwise requires, the defined terms used in this 
announcement shall have the meanings given to them in the Circular, which is 
available on the Company's website at www.centralafricangold.com. 
 
Background to, and reasons for, the De-listing and Re-registration 
 
The principal reasons for the Listing were to provide the Company with the 
ability to access capital in order to fund the implementation of its business 
strategy and to use its Ordinary Shares to fund acquisitions of producing 
assets. 
 
On 16 June 2010, a subsidiary of New Dawn Mining Corp. (TSX: ND), NDM, acquired 
890,412,258 Ordinary Shares, representing approximately 88.68 per cent. of the 
Company's issued Ordinary Shares at the date of this document. 
 
Having subsequently undertaken a strategic review, the Board does not believe 
that the Company will receive significant benefits from maintaining its 
admission to trading on AIM. 
 
The Company's share price performance since Listing has been unsatisfactory, 
particularly over the last two years, reflecting the Company's recent 
disappointing operating history and troubled financial condition. Trading 
volumes and liquidity in the Ordinary Shares have also deteriorated, with a very 
limited proportion of the issued Ordinary Shares currently remaining in public 
hands, after the various distressed financings that the Company found necessary 
to undertake over the past few years. 
 
Accordingly, the Board does not believe that the Company would be able to 
independently raise the significant funds the Company requires to develop its 
portfolio of mining assets in Zimbabwe at an acceptable price and structure, in 
particular through further issues of Ordinary Shares to investors in the 
foreseeable future. 
 
Furthermore, the Board has considered the ongoing costs, management time and 
regulatory and reporting requirements of maintaining the Company's admission to 
AIM, and believe that these costs and administrative requirements can no longer 
be justified, particularly in light of the current liquidity and market 
capitalisation of the Company and the existence of a super-majority (greater 
than 75 per cent.) shareholder, NDM, on the Company's shareholder register. 
 
For the reasons outlined above, the Board, including Roy Pitchford, as 
Independent Director, believes that the De-listing and Re-registration are in 
the best interests of the Company and its Shareholders as a whole. 
 
The General Meeting 
 
The General Meeting is to be held at 10.00 a.m. on 22 December 2010 for the 
purpose of seeking Shareholders' approval to the Resolutions. 
 
In accordance with Rule 41 of the AIM Rules, the Company has today notified the 
London Stock Exchange of the proposed De-listing. This notice is conditional 
upon not less than 75 per cent. of votes cast by Shareholders (in person or by 
proxy) at the General Meeting voting in favour of the Resolutions.  Subject to 
requisite Shareholder approval, the De-listing is expected to be effective from 
8.00 a.m. on 31 December 2010. 
 
In accordance with section 97(1) of the Companies Act 2006, the Re-registration 
of the Company as a private company requires not less than 75 per cent. of votes 
cast by Shareholders (in person or by proxy) at the General Meeting voting in 
favour of the Resolutions. 
 
NDM, the Company's majority shareholder, owns 890,412,258 Ordinary Shares, 
representing approximately 88.68 per cent. of the Company's issued share capital 
as at the date of the Circular and has irrevocably agreed to vote in favour of 
the Resolutions at the General Meeting.  In addition, Roy Pitchford, as the 
Independent Director, has irrevocably undertaken to vote in favour of the 
Resolutions at the General Meeting in respect of his own shareholding of 
3,000,000 Ordinary Shares, representing approximately 0.30 per cent. of the 
issued Ordinary Shares at the date of the Circular.  Therefore, the Company has 
received irrevocable undertakings to vote favour of the Resolutions at the 
General Meeting in respect of, in aggregate, 893,412,258 Ordinary Shares, 
representing approximately 88.98 per cent. of the issued Ordinary Shares at the 
date of the Circular. 
 
Accordingly, it is anticipated that the De-listing will be effective from 31 
December 2010, and the Company has notified the London Stock Exchange 
accordingly. 
 
Principal effects of the De-listing and Re-registration 
 
The principal effects of the De-listing and Re-registration, and the factors to 
take into consideration when deciding whether to vote in favour of the 
Resolutions, include the following: 
 
·    there will be no public market or trading facility on any recognised 
investment exchange for the Ordinary Shares and, consequently, there can be no 
guarantee that a Shareholder will be able to purchase or sell any Ordinary 
Shares, and hence the opportunity for Shareholders to realise their investment 
in the Company will be more limited; 
 
·    the regulatory and financial reporting regime applicable to companies whose 
shares are admitted to trading on AIM will no longer apply. The Company will 
therefore achieve immediate cost savings as a result of no longer being subject 
to the provisions of this regime; 
 
·    Shareholders will no longer be afforded the protections given by the AIM 
Rules, such as the requirement to be notified of certain events, including 
substantial transactions, financing transactions, related party transactions and 
fundamental changes in the Company's business, including certain acquisitions 
and disposals; 
 
·    it is probable that the liquidity and marketability of the Ordinary Shares 
will be significantly reduced and the value of such shares may be adversely 
affected as a consequence; 
 
·    as a private limited company, the Company will be subject to fewer 
operational restrictions than as a public company, and will no longer be 
required to, among other things, hold annual general meetings; lay accounts 
before a general meeting; or retain a company secretary.  In addition, as a 
private limited company, the Company will be subject to less stringent 
accounting requirements; and 
 
·    the Company will cease to have an independent financial and nominated 
adviser and broker. 
 
Strategy following the De-listing 
 
Following the De-listing, the Board intends to continue its efforts to develop 
its mining assets in a proper and orderly fashion, and to access the additional 
capital necessary to fund such business activities. In light of these 
developments, on completion of the De-listing, Roy Pitchford intends to resign 
as both Chief Executive Officer and Acting Chairman of the Company, but intends 
to remain on the Board as a non-executive director. 
 
The Board will continue to keep Shareholders informed of the Company's progress 
through updates on the Company's website www.centralafricangold.com.  In 
addition, the Board will continue sending Shareholders copies of the Company's 
accounts and holding general meetings, in accordance with applicable statutory 
requirements and the Articles. 
 
Transactions in Ordinary Shares following the De-listing and the Re-registration 
 
As at the close of business on 30 November 2010, the Company's Minority 
Shareholders held, in aggregate, 113,673,710 Ordinary Shares (representing 11.32 
per cent. of the Company's issued share capital). 
 
The Board and NDM continue to have significant regard for the situation of the 
Minority Shareholders and recognise that the De-listing will make it 
considerably more difficult for the Minority Shareholders to sell or buy 
Ordinary Shares. 
 
Accordingly, in order to assist Minority Shareholders who wish to dispose of 
their Ordinary Shares and realise their investment in the Company, NDM has 
agreed to employ the services of HB Markets to operate a trading facility to 
acquire, on behalf of NDM, Ordinary Shares held by the Minority Shareholders, 
for a period of two months from the date of the Circular, ending on 1 February 
2011 (subject to extension by NDM, acting in its absolute discretion). 
 
Under this Third-Party Trading Facility, Minority Shareholders are invited to 
leave an instruction ('a Sale Notice') with HB Markets, as the Third-Party 
Trading Facility provider, that they are prepared to sell their Ordinary Shares 
to NDM at a set price in cash of 0.6 pence per Ordinary Share (being the closing 
mid-market price per Ordinary Share on 16 June 2010, the date prior to which the 
Company announced that NDM had acquired its majority interest in the Company). 
 
This price represents a 106.9 per cent. increase on the price of 0.29 pence per 
Ordinary Share paid by NDM for its majority interest in the Company on that 
date, which was satisfied by the issue of equity in the parent company of NDM, 
New Dawn Mining Corp. (TSX: ND). 
 
Following receipt of a Sale Notice, HB Markets will contact both NDM and the 
relevant Minority Shareholder and then effect the transaction. In these 
circumstances, Minority Shareholders who do not have their own broker may need 
to register with HB Markets as a new client (subject to HB Markets usual terms 
and conditions which are available on HB Market's website www.hbmarkets.com). 
Such registration can take a certain period of time to process and, accordingly, 
Minority Shareholders who consider they are likely to use the Third-Party 
Trading Facility are encouraged to commence registration at the earliest 
opportunity.  The service provided by HB Markets will cost each Minority 
Shareholder the sum of GBP20 per trade. 
 
Following the expiration of the period during which the Third-Party Trading 
Facility is available, any Minority Shareholders who subsequently wish to buy or 
sell their Ordinary Shares should notify the Board, which will, where possible, 
seek to match potential purchasers and sellers. 
 
Further details of the Third-Party Trading Facility will be made available on 
the Company's website (www.centralafricangold.com) and posted to those Minority 
Shareholders whose addresses are set out on the Company's shareholder register. 
 
If Minority Shareholders wish to buy or sell Ordinary Shares on AIM, they must 
do so prior to the De-listing becoming effective. As noted above, the last day 
of dealing in the Ordinary Shares on AIM will be 30 December 2010 and the 
De-listing will be effective from 8.00 a.m. on 31 December 2010. 
 
If Minority Shareholders wish to effect a transfer of Ordinary Shares pursuant 
to the Third-Party Trading Facility, Minority Shareholders will need to provide 
HB Markets with (for Ordinary Shares held in certificated form only) the 
relevant share certificate(s) or, (for Ordinary Shares held in uncertificated 
form only (that is, in CREST)) the relevant CREST details. 
 
Further details can be provided by contacting HB Markets directly on 020 7382 
8311 or [e-mail] (please quote reference 'Central African 
Gold'). 
 
Following the De-listing, transfers of Ordinary Shares (whether pursuant to the 
Third-Party Trading Facility or otherwise) may only be effected in accordance 
with those provisions of the Articles concerning off-market transfers of 
Ordinary Shares. 
 
Recommendation 
 
For the reasons set out above, the Board, including Roy Pitchford as the 
Independent Director, considers both the De-listing and the Re-registration to 
be in the best interests of the Company and its Shareholders as a whole. 
 
Accordingly, the Board, including Roy Pitchford, as the Independent Director, 
recommends that Shareholders vote in favour of the Resolutions to be proposed at 
the General Meeting, as Roy Pitchford has irrevocably undertaken to do in 
respect of his own shareholding of 3,000,000 Ordinary Shares, representing 
approximately 0.30 per cent. of the issued Ordinary Shares at the date of the 
Circular. 
 
NDM has given an irrevocable undertaking to vote in favour of the Resolutions in 
respect of its holding in the Company, which amounts to 890,412,258 Ordinary 
Shares, and represents approximately 88.68 per cent. of the issued Ordinary 
Shares at the date of the Circular. In addition, Roy Pitchford, as the 
Independent Director, has irrevocably undertaken to vote in favour of the 
Resolutions at the General Meeting in respect of his own shareholding of 
3,000,000 Ordinary Shares, representing approximately 0.30 per cent. of the 
issued Ordinary Shares at the date of the Circular.  Therefore, the Company has 
received irrevocable undertakings to vote favour of the Resolutions at the 
General Meeting in respect of, in aggregate, 893,412,258 Ordinary Shares, 
representing approximately 88.98 per cent. of the issued Ordinary Shares at the 
date of the Circular.. 
 
Strand Hanson Limited, having taken into the account the commercial assessment 
of the Board, including those of the Independent Director, considers the terms 
of the Third-Party Trading Facility to be fair and reasonable.  The Board, 
including the Independent Director, recommends that, given the effects of the 
De-listing and Re-registration (as set above) the Minority Shareholders dispose 
of their Ordinary Shares on the terms offered under the Third-Party Trading 
Facility. 
 
Expected timetable of principal events 
 
+-------------------------------------+--------------------------+ 
| Publication of the Circular and     |          1 December 2010 | 
| notice to the London Stock Exchange |                          | 
| to cancel admission to trading on   |                          | 
| AIM of the Company's Ordinary       |                          | 
| Shares                              |                          | 
|                                     |                          | 
+-------------------------------------+--------------------------+ 
| Latest time and date for receipt of |            10.00 a.m. 20 | 
| Forms of Proxy in respect of the    |            December 2010 | 
| General Meeting                     |                          | 
|                                     |                          | 
+-------------------------------------+--------------------------+ 
| General Meeting                     |   10.00 a.m. 22 December | 
|                                     |                     2010 | 
+-------------------------------------+--------------------------+ 
| Last day of dealings in the         |         30 December 2010 | 
| Ordinary Shares                     |                          | 
|                                     |                          | 
+-------------------------------------+--------------------------+ 
| Cancellation of the Company's AIM   |         31 December 2010 | 
| trading facility expected to be     |                          | 
| effective                           |                          | 
+-------------------------------------+--------------------------+ 
 
All references to times of day in this announcement are to London time unless 
otherwise stated. 
 
 
                                  * * ENDS * * 
 
For further information please visit www.centralafricangold.comor contact: 
 
+-------------+------------------------+---------------------+ 
| Roy         | Central African Gold   | Tel: [phone]  | 
| Pitchford   | Plc                    | 9985                | 
+-------------+------------------------+---------------------+ 
|             |                        |                     | 
| Stuart      | Strand Hanson Limited  | Tel: [phone]  | 
| Faulkner /  |                        | 3494                | 
| James       |                        |                     | 
| Spinney     |                        |                     | 
+-------------+------------------------+---------------------+ 
|             |                        |                     | 
| Hugo de     | St Brides Media and    | Tel: [phone]  | 
| Salis /     | Finance Ltd            | 1177                | 
| Felicity    |                        |                     | 
| 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 five main gold mines, the Dalny, Old Nic, Golden Quarry, 
Venice and Camperdown mines, which are located in the highly prospective Kadoma, 
Shurugwi and Bulawayo gold regions in Zimbabwe. 
 
NDM 
The Company's 88.68% shareholder is NDM (UK) Limited, a subsidiary of Toronto 
Stock Exchange listed New Dawn Mining Corp. ('New Dawn'), a gold company with a 
broad portfolio of production and exploration assets also in Zimbabwe.   New 
Dawn owns and operates the Turk and Angelus Mines in the upper southwest area of 
Zimbabwe, which it believes have the potential to produce an estimated 35,000 to 
50,000 ounces of gold per annum.  It is New Dawn'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 4 to 5 
years. 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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