Peninsular Gold Limited Raub Operations, Trading Update and Suspension (6394Y)

TIDMPGL

RNS Number : 6394Y

Peninsular Gold Limited

02 December 2014

PENINSULAR GOLD LIMITED

('Peninsular' or the 'Company')

Raub Operations and Trading Update

and

Suspension from trading on AIM

Peninsular Gold Limited announces that it has requested a suspension of trading of its shares on the AIM Market pending clarification of its financial position. The suspension was effective as of 7:50am on 2 December 2014.

Financing and Suspension of Trading on AIM

The Company is currently reviewing its working capital requirements during the proposed care and maintenance period at Raub (as outlined below). As at 30 November, 2014 Peninsular has available funds of approximately GBP320,000 and is currently looking to raise additional funds to finance its operations.

The Group currently has GBP1.2m convertible loan notes which are due for repayment on 22 December 2014, as well as debt facilities with its Malaysian banking partners (Bank Rakyat Kerjasama Rakyat Malaysia Bhd. ("Bank Rakyat") and Alkhair International Islamic Bank Ltd. ("Alkhair") who have c.GBP18m of outstanding loans and require servicing in the region of GBP140,000 per month. The first Alkhair quarterly repayment instalment of US$750,000 is due during December 2014. The first principal repayment instalment of the Bank Raykyat loan is currently scheduled for June 2015. The Group will be entering into negotiations with its banking syndicate, trade creditors and other creditors. These negotiations may include suspension of capital and/or interest payments. In the event that the Group is not able to either agree appropriate terms with its creditors and/or raise new funds, then the Group would not be in a position to meet its financial obligations.

At this stage, there can be no certainty as to the outcome of these discussions. As a result of the financial uncertainty regarding the Group, the Board has requested that trading in the Company's shares be suspended on the AIM Market, pending clarification of the Group financial position. The Board continues to explore all alternatives available. The Company will make further announcements in respect of the financial condition and its expectations as soon as practicable.

Update on Raub Operations

The Company is providing an update on the operations of Raub Australian Gold Mining Sdn. Bhd. ("RAGM"), its wholly owned subsidiary, which operates the Company's Raub gold mine.

RAGM has been in discussions with the Malaysian environmental authorities regarding additional operational requirements which the authorities have sought to attach to the current environmental consent which governs operations at its Raub project. In particular the authorities have requested changes relating to the location of RAGM's tailings storage facilities which would require significant changes to its tailings management plan. RAGM remains in discussion with the authorities as to the requirement for this new condition and whether it may be reviewed or appealed. In the meantime, RAGM has taken the decision to halt gold production at Raub pending resolution of this issue in order to ensure continuing compliance with the revised tailings management requirements. Given the onset of the monsoon season, when tailings management is particularly important, this is considered a prudent course of action under the circumstances.

Whilst this is an unexpected development, suspension of production will enable RAGM to undertake important plant maintenance and improvement work during the monsoon season, which should enable a future increase in throughput and productivity. This will better position the business to operate more efficiently in light of the continuing low gold price. It is currently anticipated that operations could re-commence at Raub for Q2 2015 should there be satisfactory resolution of this situation.

The Company is currently reviewing its operational base at Raub to manage the maintenance programme and reduce overheads during the cessation of operations. This review is ongoing and further announcements in relation to Raub will be made in due course.

Trading Update

Production for the quarter to 30 June 2014 was 4,679 ozs bringing the total for the financial year to 20,948 ozs (2013: 22,383 ozs). Performance in the 2(nd) half of the financial year was similar to the 1(st) half and revenue for the financial year to 30 June 2014 was c. GBP16 million (2013: GBP23 million). As previously announced, due to the continuing low gold price, the Company will be posting a loss for the financial year ended 30 June 2014.

Due to the current market conditions and the potential impact of revised environmental requirements, production for the 4 months from July 2014 (since the end of the financial year) to the end of October 2014 was 1,107 ozs.

Update on Company's Annual Report

The Company's financial statements for the year to 30 June 2014 are being prepared, however due to the current circumstances, it is anticipated that there will be a delay in the publication of these while the Company resolves its negotiations with its funding partners. Under the AIM Rules for Companies, the Company is required to publish its annual audited accounts by 31 December 2014. Depending on the timescale of resolution of negotiations, the Company may not be a position to publish by 31 December 2014 which itself could lead to a suspension of trading in the Company's shares on AIM pending such publication.

For further information:

 
                         Dato' Sri Andrew TY Kam         Patrick Watson 
                           Chairman and Chief Executive    Finance Director 
                           Peninsular Gold Limited         Peninsular Gold Ltd. 
                           Tel: [phone]         Tel: [phone] 
                          Samantha Harrison               Colin Rowbury 
                           Nominated Advisor               Broker 
                           RFC Ambrian Limited             Daniel Stewart & Co. Ltd. 
                           Tel: [phone]        Tel: [phone] 
                                                         --------------------------- 
 

This information is provided by RNS

The company news service from the London Stock Exchange

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