TIDMCAN
RNS Number : 1649R
Central African Gold PLC
17 August 2010
Central African Gold Plc / Ticker: CAN / Market: AIM / Sub-sector: Gold Mining
17 August 2010
Central African Gold Plc ('CAG' or 'the Company')
New Dawn Q3 2010 Trading Update
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 16 August 2010, which holds a 88.6% equity interest in CAG, relating
to New Dawn's financial results for the quarter ended 30 June 2010.
"New Dawn Mining Corp. Reports Financial Results and Major Developments for the
Quarter Ended June 30, 2010
$3.55 Million in Revenue from the
Sale of 2,974 Ounces of Gold for the Quarter
Closes Investment in June 2010 to Acquire an 89%
Controlling Interest in AIM-listed Central African Gold Plc
Q3 Fiscal 2010 - Quarter Ended June 30, 2010 Highlights
(All amounts are in US dollars)
· $3,549,786 in revenue from gold sales from Turk Mine for the quarter ended
June 30, 2010, as compared to $3,801,780 of revenue from gold sales for the
quarter ended March 31, 2010
· New Dawn makes a major investment to acquire an 89% controlling interest in
AIM-listed Central African Gold Plc ("CAG"), which owns an extensive portfolio
of gold mining properties in Zimbabwe
o Property, plant and equipment increases by $22 Million
o Now targeting 50,000 to 60,000 ounces of consolidated annualized gold
production within 18 to 24 months
· $4,949,542 of cash at June 30, 2010, as compared to $4,527,033 of cash at
March 31, 2010
· Diesel Generators to be installed and operational at Turk Mine in September
2010
TORONTO, Ontario, August 16, 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 quarter ended June 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 U.S. Dollars and
in accordance with Canadian Generally Accepted Accounting Principles.
HIGHLIGHTS OF Q3 FISCAL 2010 FINANCIAL RESULTS
Selected unaudited quarterly financial information is presented below.
+---------------------+--------+--------+-------------+-------------+-------------+
| Fiscal 2010 |
| Quarters Ended |
+---------------------------------------------------------------------------------+
| | | | June | March | December |
| | | | 30, 2010 | 31, 2010 | 31, 2009 |
+---------------------+--------+--------+-------------+-------------+-------------+
| | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Operations | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Revenue | | | $3,549,786 | $3,801,780 | $3,969,038 |
| | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Net income | | | (150,969) | (461,372) | $927,494 |
| (loss) for the | | | | | |
| period | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Basic and diluted | | | | | |
| earnings (loss) per | | | (0.00) | ($0.02) | $0.03 |
| share | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Balance sheet | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Total assets | | | $43,493,749 | $19,620,871 | $18,628,285 |
+---------------------+--------+--------+-------------+-------------+-------------+
| Total liabilities | | | 16,813,687 | 5,302,744 | $3,971,871 |
+---------------------+--------+--------+-------------+-------------+-------------+
| | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Cash dividends per | | | Nil | Nil | Nil |
| share | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Other measures | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Quantity of gold | | | 3,243 | 3,395 | 3,239 |
| produced (oz) | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Quantity of gold | | | 2,974 | 3,427 | 3,604 |
| sold (oz) | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Intercompany loan | | | | | |
| repayments from | | | - | $436,455 | $2,500,000 |
| Zimbabwe | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Cash cost per oz | | | $747 | $653 | $580 |
| (1) | | | | | |
+---------------------+--------+--------+-------------+-------------+-------------+
| Adjusted EBITDA(2) | | | $380,702 | $1,063,935 | $1,439,065 |
+---------------------+--------+--------+-------------+-------------+-------------+
(1) Cash cost per ounce is a non-GAAP measure as more fully described in
the discussion at the end of MD&A entitled Non-GAAP Measures.
(2) Adjusted EBITDA is a non-GAAP measure as more fully described in the
discussion at the end of MD&A entitled Non-GAAP Measures.
Three Months Ended June 30, 2010
Operating comparisons presented above are for the quarter ended June 30, 2010,
as compared to the quarter ended March 31, 2010.
REVENUE
During the quarter ended June 30, 2010, the Company reported revenue of
$3,549,786 from the sale of 2,974 ounces of gold, as compared to revenue of
$3,801,480 from the sale of 3,427 ounces of gold for the quarter ended March 31,
2010.
All gold sales were received in US Dollars and all gold sold was produced from
the Company's Turk Mine in Zimbabwe.
The Company received an average of $1,194 per ounce of gold sold during the
quarter ended June 30, 2010, as compared to $1,109 per ounce of gold sold during
the quarter ended March 31, 2010.
GOLD PRODUCTION
During the quarter ended June 30, 2010, New Dawn produced 3,243 ounces of gold,
as compared to 3,395 ounces of gold produced during the quarter ended March 31,
2010.
During the quarter ended June 30, 2010, gold production was reduced over the
base production rate as a result of five statutory holidays during April 2010, a
five day strike in May 2010, major repairs to equipment, and the ongoing
unscheduled power cuts during the quarter. Had these impediments not occurred,
gold production would have increased quarter over quarter.
The power situation at Turk Mine will be stabilized with the installation of
diesel generators expected to be installed and operational in September 2010.
At June 30, 2010 quarter end, an additional 836 ounces or 26 kg's of gold
awaited export documentation for sale in South Africa, and were included in July
2010 sales.
With New Dawn having acquired a controlling interest in CAG on June 16, 2010,
New Dawn is now targeting 50,000 to 60,000 ounces of consolidated annualized
gold production within 18 to 24 months.
CASH COSTS
The cash cost per ounce of gold produced at the Turk Mine during the quarter
ended June 30, 2010 was US$747 per ounce, as compared to $653 per ounce for the
quarter ended March 31, 2010. The continued unreliable power supply negatively
affected cash costs per ounce during the most recent quarter, as economies of
scale are lost given the significant amount of fixed costs. Additionally, in
the near term, power supply uncertainties may cause gold production output to
vary monthly.
Additional factors that negatively impacted cash costs were five statutory
holidays during April 2010, a five day strike in May 2010, and major repairs to
equipment.
As production levels increase, cash costs are expected to decrease to historical
normalized levels. Previously normalized cash cost were less than $600 per
ounce of gold produced.
OTHER OPERATING EXPENSES
Corporate and administrative overhead for the quarter ended June 30, 2010
remained relatively consistent with the quarter ended March 31, 2010 on an
aggregate basis. Corporate and administrative overhead increased in the quarter
ended June 30, 2010, as compared to the quarter ended June 30, 2009, primarily
as a result of the expansion of the comprehensive investor relations/public
relations program that the Company initiated in January 2009 and stock-based
compensation costs relating to stock options granted in October 2009.
With the acquisition of the Company's controlling interest in CAG during the
quarter ended June 30, 2010, the Company's portfolio of gold mining assets in
Zimbabwe now includes CAG's mining properties, all of which were on care and
maintenance at June 30, 2010. Operating expenses for the quarter ended June 30,
2010 included significant non-recurring expenses related to the CAG transaction
aggregating $481,048. Subsequent to June 30, 2010, two of CAG's mines resumed
limited production.
EARNINGS
Net loss for the quarter ended June 30, 2010 was $150,969 or $0.00 per share, as
compared to a loss for the quarter ended March 31, 2010 of $461,372 or $0.02 per
share.
Net loss for the comparative quarter ended June 30, 2009 was $2,054,054 or $0.07
per share, including a charge of $2,559,260 or $0.09 per share related to the
write-down of the Blue Dot project in South Africa.
INSTALLATION OF DIESEL GENERATORS
As previously announced, the power situation at Turk Mine is being stabilized
with the installation of diesel generators. Generators with a capacity of 3MVA
are being installed and are expected to provide electrical capacity sufficient
for New Dawn to be able to reach and maintain its next production target at Turk
Mine of 22,000 to 23,000 ounces of annualized gold production. Installation of
the generators is expected to be completed during September 2010.
CASH RESOURCES and LIQUIDITY
At June 30, 2010, cash and cash equivalents were $4,949,542, as compared to
$4,506,446 at March 31, 2010.
At June 30, 2010, the Company has working capital of $3,349,406, as compared to
$6,864,288 at March 31, 2010.
INVESTMENT IN CENTRAL AFRICAN GOLD Plc
On June 16, 2010, New Dawn made an investment resulting in the acquisition of an
approximate 89% controlling interest in Central African Gold Plc ("CAG"). 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.
The Company has commenced 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 this regard, during August 2010, the Company entered into an agreement with
CAG to provide a demand loan facility in the amount of $2,000,000, and CAG has
provided a similar loan facility to its Zimbabwe subsidiaries.
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.
About New Dawn Mining ...
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 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.
New Dawn's plans with respect to CAG's assets and operations will be developed
and implemented taking into account New Dawn's ongoing discussions with and
submissions to the Zimbabwe authorities.
Further information on New Dawn can be obtained at the Company's website at
www.newdawnmining.com or in the Company's filings on SEDAR at www.sedar.com.
About Central African Gold...
Central African Gold Plc is a gold mining company with a portfolio of
production, development and exploration assets in Zimbabwe which operates
through two subsidiaries, Falcon Gold Zimbabwe Limited (84.7% owned) and Olympus
Gold Mines Limited (100% owned). Through these subsidiaries, CAG has four main
gold properties, the Dalny, Old Nic, Golden Quarry and Camperdown mines, which
are located in the highly prospective Kadoma, Shurugwi and Bulawayo gold regions
in Zimbabwe.
The TSX has not reviewed and does not accept responsibility for the adequacy or
the accuracy of this release. Statements in this press release regarding the
Company's business which are not historical facts are "forward-looking
statements" that involve risks and uncertainties, such as estimates and
statements that describe the Company's future plans, objectives or goals,
including words to the effect that the Company or management expects a stated
condition or result to occur. Since forward-looking statements address future
events and conditions, by their very nature, they involve inherent risks and
uncertainties. Actual results in each case could differ materially from those
currently anticipated in such statements.
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
E-mail us at: info@newdawnmining.com
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.comor contact:
+-------------+------------------------+---------------------+
| Roy | Central African Gold | Tel: +44(0)77 9390 |
| Pitchford | Plc | 9985 |
+-------------+------------------------+---------------------+
| Stuart | Strand Hanson Limited | Tel: +44(0)20 7409 |
| Faulkner / | | 3494 |
| James | | |
| Spinney | | |
+-------------+------------------------+---------------------+
| Hugo de | St Brides Media and | Tel: +44(0)20 7236 |
| 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 primarily 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 TSX listed New Dawn Mining Corp. a gold
company with a broad portfolio of production and exploration assets also in
Zimbabwe. NDM 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 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 by
2014, and then ultimately to 200,000 to 250,000 ounces.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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