HomeGoldCentral African Gold loses Bibiani mine

Central African Gold loses Bibiani mine

CAG’s Bibiani gold
mine in Ghana, which
has been taken over
by Investec
London, England — MININGREVIEW.COM — 20 January 2009 – The Bibiani gold mine in Ghana – formerly owned by AIM-listed Central African Gold (CAG) – has now become the legal property of Investec Bank.

A CAG announcement here revealed that company subsidiary, Central African Gold Ghana Limited, had received a notice of default from Investec Bank Limited regarding the non-payment of monies due on the Investec Bank project loan facility agreement, and the non-payment of monies due under various gold forward transaction agreements with Investec Bank.

The notice required that CAG Ghana repay the full amounts outstanding, which total just under US$21 million (R216 million).

The CAG announcement emphasised that while Investec Bank might seek repayment of all the outstanding monies from CAG, it was the board’s view that it was liable for no more than US$5 million (R51.5 million), plus any capitalised interest which might be due to be paid to Investec Bank.

CAG explained that, as security for the monies advanced by Investec, the company had created a charge over its 90 000 shares in CAG Ghana – which owns the company’s main gold producing asset, the Bibiani mine – in favour of Investec Bank.

The company revealed that it had now received notice from Investec Bank that it had invoked its power of attorney under the charge, and had transferred the 90 000 shares in CAG Ghana to Investec Bank. As a result Investec Bank was now the legal owner of Bibiani.

CAG confirmed that the board was consulting with its legal and financial advisers, and that a further announcement would be made in due course.