Investment underscores ECP's leadership in the African Natural Resources
Sector
WASHINGTON, Jan. 31 /PRNewswire-FirstCall/ -- Emerging Capital Partners
(ECP), an international private equity firm focused on investing across the
African continent, today announced a U.S. $15.2 million investment in Central
African Gold (CAG) (AIM: CAN). CAG is an emerging gold producer with
operations in Ghana and Zimbabwe along with advanced exploration properties in
Mali and Botswana. Since March 2006, the company has increased its total gold
resources to approximately 5.6 million ounces within their highly prospective
areas of operation through both acquisition and exploration activity. ECP's
investment, which makes it the largest single shareholder, was made as a
cornerstone investor in a private placement of shares.
The African mining sector is undergoing significant change as a result of
consolidation in the industry, under-exploration and under-development during
the past several decades, and current strong commodity prices buoyed by demand
from China and India. These factors are creating opportunities for focused
junior mining companies to acquire mature, producing properties from majors
and to add value through cost effective mine development and focused
exploration programs. CAG exemplified this dynamic by acquiring the Bibiani
Gold Mine from Anglo Ashanti where it has been able to quadruple underground
gold reserves to approximately 1 million ounces.
"ECP views CAG as an excellent investment vehicle in the African natural
resources sector," said Tom Gibian, chief executive officer of ECP. "CAG's
management team has depth of experience in both gold exploration and mine
development within Africa. The combination of strong management, projected
acceleration in gold production, and the current positive market conditions
for gold give CAG the makings of a high-growth company."
"ECP's investment in the short term will support the full-scale start up
of the underground mining operation at the Bibiani gold mine in Ghana, as well
as further exploration, both within the Bibiani concession and in Mali where
the company has already established over 500,000 ounces of gold resources,"
said Navaid Burney, ECP managing director. "In the longer term, we intend to
help the company develop its portfolio of exploration and production assets
and achieve its objective of becoming a leading mid-tier gold producer by
introducing potential opportunities for growth and by supporting future
acquisitions."
ECP's natural resources investments have spanned both the mining and oil
and gas sectors. CAG is ECP's fourth investment in the mining sector preceded
by investments in OSEAD Maroc Mining, Mineral Deposits Limited and Anvil
Mining. ECP's oil and gas investments have included Artumas Group, PanAfrican
Energy, Petroci/Foxtrot and Ocean & Oil Investments. While Africa holds vast
quantities of the world's natural resources, the continent has traditionally
had low production relative to global supply, despite growing international
demand. Expected continued strong international demand combined with Africa's
richness in natural resources creates significant opportunity for well-managed
companies in the sector to expand.
The investment in CAG was made through ECP's $523 million EMP Africa Fund
II. The fund was established in December 2005 to capitalize on the numerous
investment opportunities throughout Africa in sectors such as telecom, natural
resources, financial services, agribusiness, transportation, and power and
water.
ABOUT ECP
Emerging Capital Partners (ECP) is the first private equity firm to raise
more than USD $1.2 billion to invest in companies across the African
continent. The ECP team has a seven-year track record of pan-African
investing through five successful funds. The firm's investment strategy is
focused on delivering consistently above-market returns to investors that are
uncorrelated to the U.S. and other global economies. For more information,
please see www.ecpinvestments.com.
SOURCE Emerging Capital Partners
Jennifer Gill of FD, +1-212-850-5691, jennifer.gill@fd.com, for ECP
