Holding(s) in Company

 

TIDMCAN 
 
RNS Number : 7829N 
Central African Gold PLC 
17 June 2010 
 

 Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining 
17 June 2010 
                Central African Gold Plc ('CAG' or 'the Company') 
                              Holdings in Company 
 
The board of directors of CAG ('the Board') was today notified that, on 16 June 
2010, the Company's three major shareholders, being ECP Africa Fund II PCC 
('ECP'), HBD Zim Investments Limited ('HBD') and Investec Asset Management (Pty) 
Limited ('IAM'), have sold the entirety of their respective shareholdings in 
CAG, being 502,242,493; 282,985,496 and 105,184,269 ordinary shares of 0.5p each 
in the Company ('Ordinary Shares') respectively, representing in aggregate 
approximately 88.7 per cent. of the issued Ordinary Share capital of the 
Company, to New Dawn Mining Corp. (TSX:ND) ('New Dawn') ('the Transaction'). 
 
The Company would like to confirm that the Transaction was undertaken without 
the involvement or knowledge of the Board. 
 
CAG is yet to receive a formal TR-1 notification from New Dawn, but the Company 
is actively seeking its provision from New Dawn on an expedited basis. 
 
The Board has not yet had any meaningful discussions with New Dawn or its 
representatives, but has received a letter requesting, inter alia, the 
appointment of two directors, representing New Dawn, to the Board as soon as 
practicable ('the Appointments'). 
 
The Board is seeking a meeting with New Dawn to discuss, inter alia, the 
Appointments, which would be subject to the AIM Rules, and to understand New 
Dawn's plans for CAG, its businesses, employees and shareholders. 
 
A further announcement will be made in due course. 
 
New Dawn released the following announcement on 16 June 2010 on the Toronto 
Stock Exchange: 
 
                   "New Dawn Makes Major Investment to Expand 
                    Position in Zimbabwe Gold Mining Industry 
 
                Acquires 89% Controlling Interest in AIM-Quoted 
                            Central African Gold Plc 
 
                Central African Gold PLC Owns Extensive Portfolio 
                of Gold Mining Assets and Operations in Zimbabwe 
 
 
Highlights: 
 
·    Targeted objective is to reach consolidated annualized gold production of - 
 
o 50,000 to 60,000 ounces within 18 to 24 months 
 
o 100,000 ounces within 4 to 5 years 
 
·    Ultimate goal is to reach 200,000 to 250,000 ounces of annualized gold 
production and become a mid-tier gold producer 
 
·    Investment represents - 
 
o Substantial increase in New Dawn's gold mining business 
 
o Focus on and commitment to gold mining in Zimbabwe 
 
Toronto, Ontario, June 16, 2010 - New Dawn Mining Corp. (TSX:ND) ("New Dawn" or 
the "Company") reported that effective June 16, 2010, it had made an investment 
resulting in the acquisition (the "Acquisition") of an approximately 89% 
controlling interest in Central African Gold Plc ("CAG") from the three largest 
shareholders of CAG (the "Sellers").  CAG is a gold mining company with 
operations in Zimbabwe, the shares of which are admitted to AIM, a market 
operated by the London Stock Exchange plc. 
 
New Dawn also contemporaneously completed a purchase, by way of Deeds of 
Assignment, of the convertible and non-convertible debt (the "Debt"), consisting 
of both principal and accrued interest, owed by CAG to the Sellers amounting to 
approximately US$7,080,000 (equivalent to approximately Cdn$7,316,000) (the 
"Assignment"), the result of which is that the Debt is now owed to New Dawn by 
CAG. 
 
The Acquisition and the Assignment were accomplished through New Dawn's 
wholly-owned subsidiary, NDM (UK) Ltd. 
 
CAG, through its wholly-owned subsidiary, Falcon Mines Holdings SA (Luxembourg), 
owns an approximate 84.7% interest in Falcon Gold Zimbabwe Limited ("Falgold"), 
a company currently listed and trading on the Zimbabwe Stock Exchange, and a 
100% interest in Olympus Gold Mines Limited ("Olympus"), a private Zimbabwe 
company. 
 
The completion of the Acquisition is consistent with New Dawn's stated business 
objective to become a mid-tier gold producer and the 'in-country consolidator' 
of gold mining assets in Zimbabwe.  With this investment in CAG, New Dawn has 
taken a major step towards realizing this objective.  Through this transaction, 
New Dawn is increasing its gold resource base and associated mining capability 
to support a consolidated annualized production of 50,000 to 60,000 ounces of 
gold within the next 18 to 24 months, followed by an increase to 100,000 ounces 
of gold within four to five years, with the ultimate goal of reaching a 
consolidated annualized production target of 200,000 to 250,000 ounces of gold. 
 
Significant properties owned by CAG and its subsidiaries are summarized below. 
These properties are currently conducting limited operations or are under care 
and maintenance.  The following factual information was included in a 2007 
Competent Person's report commissioned by CAG and prepared in accordance with 
the Australian JORC rules. 
 
1.   The Dalny Mine is situated 36km north of Kadoma in the Chakari district, 
approximately 175km southwest of the capital, Harare.  The Dalny Mine consists 
of greater than 3,500 claims covering a strike length of some 25 kilometers. 
Historical production (to 2006) was 2.44 Million oz of gold from 10.2 Million 
tonnes of ore treated at a grade of 7.42 g/t.  The claims are 100% attributable 
to Falgold.  The mine complex consists of an underground operation with an 
associated ore treatment plant and the potential for gold recovery from tailings 
material. 
 
2.   The Golden Quarry Mine is situated approximately 30km southeast of the town 
of Gweru, which is approximately 180km northeast of Bulawayo.  The Golden Quarry 
Mine consists of over 1,250 claims.  The claims are 100% attributable to 
Falgold.  The mine complex consists of an underground operation with a dedicated 
milling circuit and beneficiation plant. 
 
3.   The Venice Mine is situated approximately 28km south of Kadoma.  The Venice 
Mine consists of over 2,500 claims that have numerous exploration targets. 
Historical production (to 2002) was 0.318 Million oz of gold from 2.5 Million 
tonnes of ore treated at a grade of 3.77 g/t.  The claims are 100% attributable 
to Falgold.  The mine complex has a metallurgical facility that has capacity to 
process 18,000 tonnes of ore per month. 
 
4.   The Camperdown Mine is situated to the northeast of Shurugwi, approximately 
30km southeast of Gweru.  The Camperdown Mine consists of 9 claims.  The claims 
are 100% attributable to Olympus.  The ore body previously produced ore material 
from both a dual open pit and an underground mining operation. 
 
5.   The Old Nic Mine is situated on the eastern part of Bulawayo, and is one of 
the oldest gold mines in Matabeleland.  The Old Nic Mine consists of 17 claims. 
The claims are 100% attributable to Olympus.  Historical production (to 2006) 
was 0.290 Million oz of gold from 0.98 Million tonnes of ore treated at a grade 
of 9.44 g/t. 
 
The Company expects to file a technical report to the standards of NI 43-101 
with reserve and resource estimates for these properties in due course. 
 
Exploration - Falgold and Olympus have significant additional ground holdings in 
various parts of Zimbabwe which are considered to be geologically prospective. 
 
The transaction was structured in two parts: 
 
·    The Acquisition 
 
Under the terms of the Acquisition, NDM (UK) LTD acquired 890,412,258 ordinary 
shares in CAG, representing an approximate 89% interest in CAG (as at the date 
of the Acquisition) owned by the Sellers, in exchange for the issuance of 
3,543,329 shares of New Dawn common stock (valued at Cdn$1.14 per share based on 
volume-adjusted market prices for the previous 10 days).  The Acquisition 
resulted in an effective price of Cdn$0.0044 or GBP0.0029 (based on Cdn$1.5026/GBP 
1.00) for each ordinary share of CAG. 
 
·    The Assignment 
 
Under the terms of the Assignment, the Sellers assigned to New Dawn their 
interests in and benefits of the Debt owed by CAG to the Sellers,  in exchange 
for the issuance of 5,324,560 shares of New Dawn common stock (valued at 
Cdn$1.14 per share based on volume-adjusted market prices for the previous 10 
days) and four-year warrants entitling the Sellers to subscribe for 2,216,972 
shares of New Dawn common stock exercisable at Cdn$2.00 per share (valued at 
Cdn$0.62 per warrant based on Black-Scholes option-pricing model). 
 
As a result of the Acquisition and Assignment transactions, New Dawn has issued 
a total of 8,867,889 common shares, and four-year warrants which, if exercised, 
will result in the issuance of an additional 2,216,972 common shares of New 
Dawn.  In conformance with the rules of the Toronto Stock Exchange, the Company 
obtained written shareholder consents from its three major shareholders, which 
in the aggregate own 61.7% of the Company's issued and outstanding shares, 
approving the issuance of the common shares and warrants as consideration for 
the Acquisition and Assignment transactions. 
 
The warrant terms provide that if during a period of 10 consecutive trading 
days, the closing price of New Dawn's common shares is not less than Cdn$3.00 
per share, New Dawn may at any time within 10 days following such period 
accelerate the expiration date of the warrants to a date which is not less than 
30 days from the date on which New Dawn provides the warrant holder notice of 
the acceleration. 
 
Taking into account the completion of the Acquisition and Assignment, New Dawn 
has 38,026,593 shares of common stock issued and outstanding.  The Sellers 
acquired a 23.3% interest in New Dawn, excluding the warrants, with Emerging 
Capital Partners holding a position greater than 10% in New Dawn at 12.8%. 
 
All shares and warrants issued or to be issued to the Sellers under the 
Acquisition and Assignment are subject to a one-year lock-up. 
 
The Company intends to seek representation on and control of the CAG Board of 
Directors in due course.  Once this has been achieved, the Company will commence 
a strategic review of all aspects of CAG's assets and operations, including 
reserves/resources, operations, management, control structures and systems, 
listing status, capital structure and future capital requirements.  In 
particular, the Company is evaluating CAG's short-term and long-term working 
capital requirements to fund the development and operations of CAG's gold mining 
assets, which the Company contemplates, will be addressed through a combination 
of internally generated funds and new debt and/or equity. 
 
In conjunction with this investment, Bryce Fort, a Managing Director and 
Founding Partner of Emerging Capital Partners ("ECP"), Washington, D.C., is 
expected to join the Board of Directors of New Dawn.  ECP has been investing in 
Africa since 2000, and was the first private equity group to raise more than 
$1.6 billion for investment in companies across the African continent.  ECP has 
a ten-year track-record of investing in Africa through six successful funds. 
Before Mr. Fort joined ECP in 2002, he worked for Deutsche Bank AG's European 
Healthcare Corporate Finance Group, which executed mergers and acquisitions, 
equity and debt financings for pharmaceutical, biotech and medical device 
companies.  Mr. Fort currently sits on the boards of directors of Cellcom Ltd. 
and Wananchi Group Holdings. 
 
About New Dawn 
 
New Dawn is a Zimbabwe-focused junior gold company currently expanding gold 
production at its Turk and Angelus Mines, exploring for gold, and identifying 
and pursuing other development projects, as well as actively assessing other 
value accretive acquisition opportunities in Zimbabwe. 
 
New Dawn owns and operates the Turk and Angelus Mines in the upper southwest 
area of Zimbabwe that has the potential to produce an estimated 35,000 to 50,000 
ounces of gold per annum.  New Dawn owns the property outright on which these 
mines are located. 
 
New Dawn is currently developing a revised and updated strategic business plan 
in light of its acquisition of a controlling interest in CAG, with a view 
towards reaching consolidated annualized gold production of 50,000 to 60,000 
ounces within the next 18 to 24 months, increasing to 100,000 ounces within four 
to five years, and then ultimately to 200,000 to 250,000 ounces. 
 
Additionally, the Company is reviewing and assessing CAG's extensive portfolio 
of exploration properties in Zimbabwe for future investment and development. 
 
For further information on New Dawn's gold reserves and resources, visit the 
Company's website at www.newdawnmining.com or 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 - 2009.  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.com or contact: 
 
+-------------+------------------------+-------------------------+ 
| Roy         | Central African Gold   | Tel: [phone]      | 
| Pitchford / | Plc                    | 9985                    | 
| Craig       |                        | Tel: [phone]       | 
| Campbell    |                        | 3654                    | 
|             |                        |                         | 
+-------------+------------------------+-------------------------+ 
| Stuart      | Strand Hanson Limited  | Tel: [phone]      | 
| Faulkner/   |                        | 3494                    | 
| James       |                        | www.strandhanson.co.uk  | 
| Spinney     |                        |                         | 
|             |                        |                         | 
+-------------+------------------------+-------------------------+ 
| Hugo de     | St Brides Media and    | Tel: [phone]      | 
| Salis /     | Finance Ltd            | 1177                    | 
| Felicity    |                        |                         | 
| Edwards     |                        |                         | 
+-------------+------------------------+-------------------------+ 
 
Notes to Editors 
Central African Gold Plc is an established gold mining company with a portfolio 
of production and exploration assets in Africa.  The Company has two 
subsidiaries in Zimbabwe: Falcon Gold Zimbabwe Limited (84.7 per cent. owned) 
and Olympus Gold Mines Limited (100 per cent. owned); and a subsidiary in 
southern Botswana with a licence covering 430.3km² of the extension of the 
Kraaipan greenstone belt from South Africa. 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
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