Result of Strategic Review
08 3월 2010 - 4:00PM
UK Regulatory
TIDMCGM
RNS Number : 1990I
China Goldmines PLC
08 March 2010
Result of Strategic Review
China Goldmines today announces the result of its strategic review led by Robert
Adair, Non-executive Chairman, which has been conducted following his
appointment in December 2009. It has been decided that the Company will assess
new projects within a clearly defined rationale to potentially acquire and build
value for shareholders utilising current funds of approximately $23 million. Any
decision regarding specific acquisitions will be subject to shareholder approval
and if a suitable proposition is not found a return of capital will be proposed
to shareholders.
Acquisition Strategy
The core principal of CGM's acquisition strategy is to examine projects where we
believe shareholder value can be created using the Company's existing funds of
$23m. While CGM's existing expertise is in mining the Company will also assess
assets within the oil and gas sector, given Robert Adair's significant track
record in the industry, and sectors outside of resources providing certain key
parameters are met. Based on the conclusions of the strategic review the
assessment framework for new projects is as follows:
Resource propositions (oil and gas or mining):
Producing or near production assets
Third party resource validation
Medium to low political risk
Non resource propositions:
Revenue generating
Profitable or near to profit
Market leader or recognised as one of the market leaders
High barriers to entry
Strong UK / European market position
While CGM is currently examining a range of options and approaches through its
own channels, proposals from outside the Company and its Advisors will be
considered providing the above criteria are met. Viable propositions with
incumbent management team are being sought with a view that a transaction might
be completed by the end of September 2010.
CGM post disposal of its gold mining subsidiary
Following the disposal of its gold mining subsidiary on 29 September 2009, CGM
is now classified under the AIM Rules as an investing company. Accordingly, the
Company is required to complete an acquisition or acquisitions (or otherwise
implement an investing strategy, (which will be subject to the approval of
shareholders) no later than 28 September 2010. The Company is not subject to the
Takeover Code as its securities are Admitted to AIM and its place of central
management and control is outside the United Kingdom.
As at 28 February 2010, the Company's assets were represented by a cash balance
of c. US $23m.. CGM is guarantor to warranties made to the acquirer of the
mining subsidiary with a maximum liability of $10m. These warranties expire at
the end of September 2010.
All material obligations, liabilities or responsibilities of the Company and its
subsidiary GRV expire on 28 September 2010, save for any antecedent breaches
claimed by the acquirer which have not been resolved. The aggregate liability of
the Company and GRV under the Share Purchase Agreement is limited to US$10m.
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. It is reassured
that it successfully negotiated the release of $2.2m as announced on 22nd
January 2010.
Commenting today Robert Adair, Chairman, of China Goldmines said: "Our clear
focus at CGM is to do the best thing for shareholders over the next twelve
months who we will look to keep fully informed. We shall work towards using the
funds returned to us, from the recent sale of our gold mining subsidiary, to
invest in a suitable project that could potentially derive higher value for our
investors than a return of cash. Our objective is to examine projects that could
quickly derive benefit from deployment of the funds we have at our disposal. We
are currently undergoing a process of review of assets with our Advisors but
look forward to receiving any proposal that meet our core criteria as outlined
above."
For indications of interest from parties:
Propositions should detail the nature of the business, the management
credentials, the existing shareholder structure and a 3 year financial
performance. Resource propositions should also detail the reserve / resource
base. The directors will consider propositions in the context of execution
risk.
All indications of initial interest should be made available by email to the
contacts detailed below at Brewin Dolphin Investment Banking with copies sent to
the Company at the following two email addresses robert.adair@chinagoldmines.com
and tanya@chinagoldmines.com.
Enquiries:
+---------------------+------------------------------------+
| China Goldmines |
+----------------------------------------------------------+
| Robert Adair | Tel:+44 1845-537037 |
| | Email: |
| | robert.adair@chinagoldmines,com |
+---------------------+------------------------------------+
| Marinko Vidovich | Tel:+61 8 6216 5200 |
| | Email: |
| | tanya@chinagoldmines.com |
+---------------------+------------------------------------+
| Brewin Dolphin | |
| (Nomad) | |
+---------------------+------------------------------------+
| Alexander Dewar | Tel:+44 131 529 0276 |
| | Fax:+44 131 529 0246 |
| | Email: |
| | alexander.dewar@brewinib.co.uk |
+---------------------+------------------------------------+
| Neil McDonald | Tel:+44 141 221 7733 |
| | Fax:+44 141 221 2666 |
| | Email: |
| | neil.mcdonald@brewinib.co.uk |
| | |
+---------------------+------------------------------------+
| Threadneedle | |
| Communications | |
+---------------------+------------------------------------+
| Laurence Read | Tel: +44 20 7653 9855 |
| | Email: |
| | Laurence.read@threadneedlepr.co.uk |
+---------------------+------------------------------------+
| Beth Harris | Tel: +44 20 7653 9853 |
| | Email: |
| | beth.harris@threadneedlepr.co.uk |
+---------------------+------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
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