· Net capital gain arises in Central Asia Gold as a result of the capital
attraction to the Kopylovskoye project
· Gold production season in the alluvial subsidiaries closes
· Encouraging news from the Kavkaz project
Net capital gain
Central Asia Gold in September 2007 received the first 35 million SEK ("MSEK")
of external financing amounting to in total 70 MSEK in respect of the
Kopylovskoye project. The second 35 MSEK tranch is due in the fourth quarter of
this year. In return the investor consortium receives 25% of the newly
incorporated Swedish subsidiary Kopylovskoye AB, to which the Russian
subsidiary OOO Kopylovsky containing the Kopylovskoye license has been
transferred. The transaction was approved by an Extraordinary Shareholders'
Meeting in spring 2007.
This transaction will result in a capital gain on the Central Asia Gold group
level. The capital gain is estimated at slightly more than 20 MSEK, and will
get recognized in the upcoming 9-month report due in the end of November.
At the same time, Central Asia Gold has decided to return the mining license in
respect of the Tomano placer project in Buryatiya. Given all other interesting
projects in the Central Asia Gold portfolio, it is too small to warrant an
investment program. This leads to a write-off amounting to some 3 MSEK in the
coming 9-month report 2007.
Gold production update
The two alluvial gold producing subsidiaries in the Central Asia Gold group
have now almost finished their production season in Siberia. Together they had
until the end of October 2007 produced 855 kg of gold (some 27,500 oz) divided
on 641 kg from Artelj Lena and 214 kg from Artelj Tyva. Most of this gold has
been sold during the third quarter.
The gold production continues in the processing plant of the subsidiary OOO
Tardan Gold. During July - September 2007 the plant processed some 20,000
tonnes of ore in a rising trend. During the third quarter ores were primarily
taken from the ore body 24 instead of from ore body 26, that was subject to
production during the second quarter. Therefore the incoming gold grade was
lower in the third quarter than during the second quarter. This resulted in
some 38 kg of gold concentrate produced during July - September 2007 compared
to 57 kg during April - June 2007.
The Central Asia Gold group 2007 gold production is now forecast to end in the
range 970 - 1,050 kg.
Encouraging news regarding the Kavkaz project
At this time of the year much of the geologic information gathering has taken
place on the various appraisal projects belonging to Central Asia Gold. The
bulk of the analysis work though still remains. More information will therefore
be released as soon at the test analyses have been obtained. A very encouraging
piece of news can however be released at this stage. It concerns the Kavkaz
project in the Irkutsk region. The historic geologic perception was that the
Kavkaz project contained certain high grade gold reserves in limited volumes
concentrated in quartz vein zones with a thickness of slightly more than one
meter. Central Asia Gold's geologists have all the time stated that they
believe the old data gathering methods underestimated the true gold grade as
they did not capture the bigger gold grains. During 2007 new data has been
gathered on the surface of the Kavkaz deposit primarily via surface trenches.
These samples have been analysed, and they reveal that the gold is present not
only in the quartz veins but also in the side rock. In the surface trenches
studied the ore zone has a thickness of up to 45 meters instead of one or a few
meters. This changes the whole perception of the Kavkaz project and makes it
resemble the Kopylovskoye deposit owned by Central Asia Gold.
For more information, please contact:
MD Torbjörn Ranta, tel: +46 (0)8 624 26 80, fax: +46 (0)8 624 37 20, mobile
phone: +46 (0)70 8 85 55 04, e-mail: torbjorn.ranta@centralasiagold.se,
Website: www.centralasiagold.se, Post- and visiting address: Brovägen 9, SE-182
76 Stocksund
Central Asia Gold AB is a Swedish mining company focused on gold production and
exploration in Russia and Mongolia in the central parts of Asia. The gold
production was initiated in late January 2005 and the assets today encompass
some 747,000 troy ounces (1 troy ounce = 31.1 g) of Russian gold reserves C1/
C2. CAG AB plans to produce approximately 1,000 kg of gold (32,000 oz) during
2007.
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.
