Further Re: Disposal
January 25 2010 - 1:00AM
UK Regulatory
TIDMCGM
RNS Number : 0306G
China Goldmines PLC
25 January 2010
China Goldmines PLC
Friday, 22 January 2010
?China Goldmines plc
('the Company' or 'CGM')(AIM:CGM)
* USD 2.2m further payment received from the disposal of Westralian Resources Pty.
Ltd. ('WES')
* USD23m (approx) unaudited cash position following receipt of further payment
* USD 25.7m in total now received from Cosmos Castle Management Limited ('Cosmos')
following disposal
* The Company will finalise the reorganisation of the Group once the 31 December
2009 audit is completed by the re-structuring of Global Resource Ventures Ltd
* Strategic review, managed by new Chairman, Robert Adair, in process
* The Board will update on the investment targeting process shortly
The Company today announces that pursuant to the sale and purchase agreement
entered into with Cosmos dated 26 August 2009 (the 'Sale and Purchase
Agreement') it has received a further payment of USD 2.2m.
As described in the Company's circular dated 1 September 2009, the sum of USD
2.9m was withheld from the upfront payment made by Cosmos and held pursuant to
custodian arrangements pending the payment of outstanding liabilities and
employment related termination costs and the resolution of any claims and legal
proceedings. Of the USD2.9m, the sum of USD 421khas been released to Cosmos to
cover outstanding accounts payable and contingent liabilities at the date of the
disposal of WES. A further sum of USD 200k has been released to Cosmos for a
period of six months to enable it to meet potential liabilities from pending
court actions in China which relate, predominately, to employment matters. At
the end of the six month period it is intended that CGM and Cosmos will verify
and reconcile the total amount expended to meet the liabilities arising from
these court actions. . The gross consideration received by the Company for the
acquisition was USD26.35m. Warranties, indemnities and CGM's parent guarantee in
respect of the disposal were capped at USD10m and expire on 29 September 2010.
These warranties as set out in the circular dated 1 September 2009 and relate
principally to title, financial position and accuracy of accounts: the Company
is currently not aware of anything which may lead to a claim. Of the gross
consideration China Goldmines has now received cash proceeds of USD 25.7m.
As of today the Company now has an unaudited cash position of approximately
USD23m and is in the process of a strategic review to assess how best to serve
shareholders in its current status as an investing company. In December 2009 Mr
Robert Adair was appointed to the board of CGM as Non-executive Chairman. Mr
Adair, a UK national with significant PLC experience, is currently undertaking a
strategic review of CGM's options on how best to achieve maximum value for
existing shareholders.
Commenting today Mr Robert Adair, Chairman, said: "We have now successfully
secured cash proceeds of USD 25.7m from the disposal of WES. This has removed a
substantial area of uncertainty for the Company and, as a result, the Company
now has net assets of approximately USD 23m (approximately 29p per share),
practically all in cash with minimal liabilities other than those associated
with the Sale and Purchase Agreement described above. Following my appointment
as Chairman in December of last year I am now working closely with management
and shareholders in order to look at the options available to maximise
shareholder value from CGM's strong cash position. These include acquiring
businesses or assets: in this we are unlikely to restrict our search solely to
the resources sector and will consider other business areas. If we do not find
anything suitable then we would look to return the funds to shareholders."
For further information, call:
+----------------+------------------+
| China | |
| Goldmines | |
| plc | |
+----------------+------------------+
| Robert | Mobile: |
| Adair | 07872-930114 |
| | Office: |
| | 01845-537037 |
+----------------+------------------+
| Frank | +86 845 38531 |
| Vanspeybroeck | |
| (CEO) | |
+----------------+------------------+
| Marinko | +61 8 6216 5200 |
| Vidovich | |
| (CFO) | |
+----------------+------------------+
| | |
+----------------+------------------+
| Brewin | |
| Dolphin | |
| Ltd | |
| (Nominated | |
| Adviser) | |
+----------------+------------------+
| Alex | +44 131 529 0276 |
| Dewar | |
| | |
+----------------+------------------+
| Threadneedle | +44 |
| Communications | (0)20 |
| Laurence | 7653 9855 |
| Read/Beth | |
| Harris | |
+----------------+------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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