The Board of Central Asia Gold AB (publ) ("CAG" or "the Company") proposes, at
the Company´s AGM, that the shareholders consider a guaranteed rights issue of
226 MSEK ("the Offer").
Summary:
• The issue of new shares via a rights issue to existing shareholders with a
total offer size of 226 MSEK.
• An oversubscription option of 40 MSEK (to be decided upon by the Board if the
Offer is over-subscribed).
• One (1) share will entitle the holder to subscribe for eight (8) new shares
• Subscription price of 1,60 SEK per share
• The Offer is 100 percent secured through conditional subscription
undertakings by the main shareholder Bertil Holdings Ltd., a holding company of
the CEO of CAG Preston Haskell, and the Chairman of the Board Lars Guldstrand
as well as guarantees by a consortium of external investors including,
indirectly, the Chairman of the Board Lars Guldstrand.
• The Company will be applying for a listing on the NASDAQ OMX First North
Premier as a first step towards a listing on the NASDAQ OMX Main Market
Background and reasons
In March 2009, Central Asia Gold completed the merger with the Russian gold
mining group, formerly known as NMC Group ("NMC"), by way of an issue in kind.
As a result of the acquisition, CAG became the parent company of an enlarged
group of Russian gold mining subsidiaries. The merger also resulted in the
previous shareholders of NMC, primarily the American entrepreneur Preston
Haskell, becoming the main owner of the Company. The Company has also appointed
a new management team with extensive experience in the mining business with
Preston Haskell as CEO.
Throughout 2009 CAG completed a review of its activities and in doing so has
developed a new and robust strategy for the future. The new strategy will mean
that CAG is to reduce its focus on alluvial gold production whilst increasing
the production of gold from the processing of ore from existing and established
mineral reserves. Furthermore the Company will concentrate its resources on a
systematic exploration program to develop those areas contained within the
Company's license geography.
CAG is expected to increase the gold production in 2010 by more than 50
percent, to approximately 32 000 oz (1 000 kg), following total production in
2009 of 21 000 oz (666 kg). CAG's current gold reserves are estimated at around
800 000 oz (25 tons).
CAG, via this round of capital raising, will focus on expanding the current
business, including:
• Setting up a new heap leach plant in Tardan with annual production capacity
of 39 000 oz (1 200 kg) and re-commencing operations in Solcocon which will
result in an additional increased annual production.
• Continuing alluvial production in the regions of Irkutsk and Chita
• Resume exploration of the Company's large license areas
• Evaluation of acquisition opportunities in the Russian gold mining industry
with a focus on early stage exploration.
The additional funding will also be used to strengthen CAG´s balance sheet and
to obtain a more robust financial platform.
Via implementation of the new strategy CAG intends to strengthen its liquidity
and increase its working capital via the Offering. This is an important step to
allow for additional value creation in the business but also to reduce the
Company´s dependency on the main shareholder.
As a result of this placing the Company will apply for a listing on the NASDAQ
OMX First North Premier, as a step to towards a listing on the NASDAQ OMX Main
Market. This will allow for greater international capital market exposure and
institutional investor coverage and allow for CAG to further progress its
intention to grow as a gold producer in Russia.
For additional information, see the prospectus which will be publicly available
around July 9, 2010, given the approval of the AGM.
The main shareholder and CEO of CAG Preston Haskell says in a comment regarding
the transaction:
"All the actions taken in 2009 have provided us with a strong platform for
additional value creation in our business. I am very optimistic about the
future with respect to CAG's current projects, especially those in Tardan and
Solcocon, and in the further exploration of our licensed targets and the joint
exploration with Centerra Gold.
The capital injection and the strengthening of the balance sheet in connection
with the rights issue, in combination with our excellent team, will allow for
the company to realize the first phase of a longer term strategy to take CAG to
large volume gold production.
With our excellent team and the strengthened financial platform, we will have a
solid foundation to further increase the production volumes and our reserves.
We will also be ready to take the next step towards a listing on NASDAQ OMX
Main Market. A listing on the Main Market will allow us to be more attractive
to institutional as well as international investors and thereby increase the
liquidity in the share as well as to obtain a more fair valuation of the
company.
We are now turning the page and have commenced our journey towards stability
and growth and we welcome you all to participate!"
Commitments from major shareholders and underwriting agreements
The Company´s main shareholder Bertil Holdings Ltd., a holding company of the
CEO Preston Haskell, and the Chairman of the Board Lars Guldstrand have in
writing undertaken to subscribe for their respective preferential rights,
amounting to 64 percent of the Offer, corresponding to 145 MSEK. It should be
noted that the undertaking to subscribe for shares entered into by Bertil
Holdings Ltd. is conditional upon it being afforded the opportunity to pay for
the shares through conversion of loans provided to the Company. The Chairman of
the Board Lars Guldstrand together with a consortium of external investors will
guarantee the remaining 36 percent of the Offer, corresponding to 81 MSEK. This
means that the Offer is 100 percent guaranteed.
The main terms and time table for the Offer
The Board of CAG proposes, at the Company´s AGM, that the shareholders consider
a guaranteed rights issue of up to 141 225 000 shares. Subject to the rights
issue being fully subscribed, the share capital will after the rights issue
amount to at most 178 737 891 SEK and the proceeds from the right issue will
amount to 226 MSEK before deduction of commissions and other fees.
The AGM will also consider the granting of an option to the Board of CAG to
issue an additional 25 000 000 shares, corresponding to 40 MSEK before
deduction of commissions and other fees, in order to cover an oversubscription
in connection with the Offer.
Those who are registered as shareholders of CAG on the record date, 9 July
2010, shall have preferential rights to subscribe for eight (8) new shares for
one (1) existing share at a subscription price of 1,60 SEK. Shareholders will
receive one (1) subscription right for each share held on the record date. One
(1) subscription right will be required to subscribe for eight (8) new shares.
The subscription period commences on July 19, 2010 and expires on August 4,
2010.
Below are the terms in summary and the time table for the rights issue
June 28, 2010: Annual General Meeting, formal decision on the rights issue
July 7, 2010: Final date for trading in the CAG share including preferential
rights to participate in the rights issue.
July 9, 2010: Record date to participate in the rights issue. The shareholders
who are registered on this date in CAG´s register of shareholders will receive
subscription rights to participate in the rights issue.
July 9, 2010: Preliminary date for publication of the Prospectus
15 July 2010: Estimated start of distribution of the issue report with
accompanying application slip to shareholders.
July 19, 2010: Preliminary first day of trading on First North Premier
July 19-30, 2010: Trading in subscription rights on First North Premier
July 19 - August 4, 2010: Subscription period for the Offer
August 10, 2010: Preliminary date for publication of the outcome of the rights
issue.
Preconditions for the implementation of the Offer
The implementation of the Offer requires a decision at the AGM and is subject
to the necessary changes in the Company´s Articles of Association. For further
information please see the invitation to CAG´s Annual General Meeting.
Financial Advisor
Mangold Fondkommission is the financial advisor in connection with the Offer
Investor Meeting
An investor meeting for existing shareholders and external investors interested
to take part in the issue will be held on June 7, 2010. The meeting will be
held at 15:00 at Mangold Fondkommission, Engelbrektsplan 2, 4 tr, SE 114 34
Stockholm.
Chairman of the Board Lars Guldstrand, Chief Executive Officer Preston Haskell
and Chief Operating Officer Pavel Olishevskiy will participate in this meeting.
To participate in the meeting, please respond by email to info@mangold.se no
later than 15:00 on June 3, 2010.
Central Asia Gold AB (publ)
The Board of Directors
Additional information:
Short name: CAG
ISIN-code: SE0001337213
For more information, please contact:
Lars Guldstrand, Chairman of the Board, phone +46 70 528 8181
e-mail: lars.guldstrand@centralasiagold.se
Preston Haskell, CEO, phone +46 768 90 55 49
e-mail: preston.haskell@centralasiagold.se
Website: www.centralasiagold.se, Postal and visiting address: Engelbrektsplan
2, 4tr
SE-114 34 Stockholm
Central Asia Gold AB is a Swedish mining company focused on gold production and
exploration in Russia in the central parts of Asia. The gold production was
initiated in late January 2005 and the assets were as at end of 2008 estimated
to encompass some 800,000 oz of C1/ C2 Russian gold reserves.
Cautionary Statement: Statements and assumptions made in this report with
respect to Central Asia Gold AB's ("CAG") current plans, estimates, strategies
and beliefs, and other statements that are not historical facts, are
forward-looking statements about the future performance of CAG. Forward-looking
statements include, but are not limited to, those using words such as "may",
"might", "seeks", "expects", "anticipates", "estimates", "believes",
"projects", "plans", strategy", "forecast" and similar expressions. These
statements reflect management's expectations and assumptions in light of
currently available information. They are subject to a number of risks and
uncertainties, including, but not limited to, (i) changes in the economic,
regulatory and political environments in the countries where CAG operates; (ii)
changes relating to the geological information available in respect of the
various projects undertaken; (iii) CAG's continued ability to secure enough
financing to carry on its operations as a going concern; (iv) the success of
its potential joint ventures and alliances, if any; (v) exchange rates,
particularly between the Russian rouble and the U.S. dollar. In the light of
the many risks and uncertainties surrounding any gold production and
exploration company at an early stage of its development, the actual results
could differ materially from those presented and forecast in this report. CAG
assumes no unconditional obligation to immediately update any such statements
and/or forecasts
This press release shall not, directly or indirectly, be released, published or
distributed in or to the United States, Australia Japan, Canada, New Zealand,
Hong Kong, South Africa or other country where such action as a whole or in
part is subject to legal restrictions. Nothing in this press release should be
considered as an offer to invest or otherwise trade in shares of Central Asia
Gold AB (publ). The proposed issue will not be directed at residents or those
living in the United States, Australia, Japan, Canada, New Zealand, Hong Kong,
South Africa or other country where such action would require further
prospectus, other offering documentation, registration or other measures beyond
those required by Swedish law. No securities will be registered under the
United States Securities Act of 1933, a similar law in any state in the United
States, or under any provincial law in Canada, nor under the applicable law of
another country.
