CGM.L Regulatory News (CGM)

3 Jul 2007 13:34

China Goldmines PLC03 July 2007 3 July 2007 Update on Agreement China Goldmines (AIM: CGM) is pleased to announce that it has finalised andexecuted the transfer agreements to acquire eight existing gold mines in theGuanzhuang Gold Project. Further to the announcement dated 12 April 2007, China Goldmines has finalisedand executed: • All eight Transfer Agreements with each individual miner. • A subsequent Supplementary Agreement with The Peoples Government of Yuanling County, Huaihua City, Hunan Province. China Goldmines will acquire from each individual miner their Mining Licence,the Mining Rights, Mine Development Infrastructure, Capital Fixed Assets and anyIntangible Assets. The Company has successfully renegotiated the settlement date to the 1stNovember 2007 for the transfer of the eight mines for a total cash considerationfor 180m RMB (approximately £12m). Commenting on the Agreement both Executive Officers of the Company, CEO FrankVanspeybroeck and CFO Marinko Vidovich:- "We are extremely pleased to finalise the Agreements with the eight miners andthe Company will now focus on strategic equity and financing options inconjunction with the existing cash flow of the eight operating mines, to fundthe acquisition of the mines and future mine development." In accordance with the Supplementary Agreement:- A deposit of 2m RMB (approximately £134,000 ) was paid on the 1st May and afurther 10m RMB (approximately £670,000 ) representing the transfer fees, stampduty and taxes is due for payment (50% on the 9th July and 50% on the 25thJuly). The Government of Yuanling County agrees as part of the Supplementary Agreementthat:- • It guarantees the Mining Licences be transferred with all valid permits and licences to meet the requirement of land use, mining, environmental protection approval, and other statutory requirements. China Goldmine's in-house engineering and geological study is presently nearingcompletion. This study will analyse the economics of the existing productionand report on the implications of developing a long-life underground operationconsolidating all mining operations in order to significantly increaseproduction from the Guanzhuang Gold Project. For further information on China Goldmines plc you are invited to visit theCompany's website at www.chinagoldmines.com or contact one of the following: Mr Frank Vanspeybroeck (CEO) Mobile: +61 041 116 6276Alex Worrall +44 207 788 7621Marinko Vidovich (CFO) Mobile: +61 041 997 4744Changsha Office +86 731 515 8211Alan Stewart, Brewin Dolphin Investment Banking (Nominated Adviser) +44 141 221 7733Clare Irvine/ Justine Howarth, Parkgreen Communications +44 207 851 7480 About China Goldmines plc China Goldmines plc listed on the Aim Board on the 7th February 2006 as a goldresources company focussed on the discovery and development of gold projects inthe Hunan Province, China. The Company is preparing a feasibility study on its Guanzhuang Gold Project,where a resource of + 1 million ounces within the top 325m from surface and overa strike distance of 1.5 km has been identified by our Joint Venture Partner,Brigade 407 of the Hunan Region Bureau of Geology and Mineral ResourcesExploration and Development. (This resource has not been validated by CGM andtherefore cannot be categorised to a specific resource as defined in JORC CodeStandards.) The Guanzhuang Gold Project consists of eight gold mines which the Company plansto consolidate. This could enhance the production potential to a vertical depthof 1000 metres from surface. This information is provided by RNS The company news service from the London Stock Exchange