Central Asian Minerals and Resources PLC
LSE : CMRP

March 31, 2011 04:00 ET

Proposed Acquisition of Gulf International Minerals Limited

                                                                                                 31 March 2011
                                                                                                  IM00B61FM981
                                                       
                                   Central Asian Minerals and Resources PLC
                                          ("CAMAR" or the "Company")
                          Proposed Acquisition of Gulf International Minerals Limited
                                           Notice of General Meeting
                                                      and
                                        Re-Admission to trading on PLUS

1.      INTRODUCTION

It  was  announced on 24 March 2011 that the Company had entered into a conditional agreement to  acquire  the
entire issued share capital of Gulf UK, which, together with the Ministry, is the joint owner of Aprelevka,  a
mining  company which is licensed to operate and is currently operating the Aprelevka gold mine in Tajikistan.
The  consideration  payable for the Acquisition is £2,303,448 which will be satisfied  by  the  issue  of  the
4,188,087 Consideration Shares, representing 42.3 per cent. of the Issued Share Capital, to Gulf Canada.

Three  of  the  Company's  Directors, Christine Melian, Thomas Marti and  Lawrence  Snee,  are  deemed  to  be
interested in the Acquisition as a result of their interests in the Gulf Incentive Loan Notes, as described in
more  detail in "Principal Terms of the Acquisition" in paragraph 7 below  and in the Admission Document. John
Leech has therefore been appointed as the Independent Director to consider the Acquisition.

The  Acquisition  will  give  rise to a fundamental change to the business and voting  control  of  CAMAR  and
constitutes  a reverse takeover under the PLUS Rules which therefore requires Shareholders' approval.  Trading
in  the  Ordinary Shares on PLUS was suspended on 14 October 2010 following the announcement that the  Company
was in discussions regarding the possible acquisition of Gulf Canada's joint venture interest in the Aprelevka
Mine  and  trading  is  expected to remain suspended until Shareholder approval for the Acquisition  has  been
received.

Accordingly,  a  General Meeting of the Company is being convened at which resolutions will  be  proposed:  to
approve  the  Acquisition; to authorise the Company to allot Ordinary Shares pursuant to the  Acquisition;  to
suspend one of the Articles to ensure that there is a quorum at meetings of Directors convened to consider the
Acquisition; and to disapply pre-emption rights. The Resolutions are set out in full in the notice of  General
Meeting in the Admission Document.

A  circular  comprising an Admission Document is being posted to shareholders in CAMAR today  to  explain  the
background to and reasons for the Proposals and to explain why the Independent Director considers them  to  be
in  the  best interests of the Company and Shareholders as a whole and to seek Shareholders' approval for  the
Resolutions to be proposed at the General Meeting.

2.      BACKGROUND INFORMATION ON CAMAR

CAMAR  was  established  as  an  Investment Vehicle in 2009 to identify investment  opportunities  within  the
minerals  and  resources sector, principally within the developing countries of central  Asia.  The  Directors
anticipated  that  the principal minerals on which the Company would focus would be precious  metals  and,  in
particular,  gold.  In  order to preserve the Company's cash resources, CAMAR proposed to  acquire  stakes  in
target companies in return for the provision of the services, expertise and advice of its Directors.
In  pursuit of its Investment Strategy, on 20 February 2010, the Company entered into an agreement  with  Gulf
Canada,  which, together with Altin-Topkan, was then the joint owner of Aprelevka, a mining company  which  is
licensed  to  operate and is currently operating the Aprelevka gold mine in Tajikistan. Pursuant to  the  Gulf
Canada Agreement, CAMAR currently provides the services of Christine Melian and Thomas Marti, both of whom are
directors of the Company, in order to protect and further Gulf Canada's interest in the jointly-owned  company
and  Aprelevka's licence to operate the Aprelevka Mine. Under the Gulf Canada Agreement, CAMAR receives a  fee
of  US$25,000  per month in respect of the services of Christine Melian and Thomas Marti; CAMAR  also  has  an
option to acquire a shareholding of up to 5 per cent. in Gulf Canada for a consideration of US$1.0 million.
On  26 March 2010, CAMAR entered into the White Poplar Agreement, pursuant to which it acquired certain mining
equipment  located in Tajikistan which it believed would assist CAMAR in fulfilling its obligations under  the
Gulf  Canada Agreement. On 30 March 2010, CAMAR entered into an agreement with Gulf Canada pursuant  to  which
Gulf  Canada pays a specified daily rate to CAMAR for the use of that equipment as and when it is used at  the
Aprelevka Mine.

In  September 2010, the Company raised £1.02 million in the 2010 Fundraising. On 21 October 2010, the  Company
entered  into  a  loan agreement with Gulf Canada whereby the Company agreed to provide Gulf  Canada  with  an
unsecured  term loan facility of up to US$750,000 at an interest rate of 3 per cent. above the  base  rate  of
National  Westminster Bank plc. On 21 December 2010, this loan was assigned to Gulf UK and amended  to  become
interest free.

In  March 2011, certain investors agreed to subscribe for a total of 1,533,199 Subscription Shares at a  price
of  60p per share. 1,016,533 Subscription Shares have already been issued. The Subscription will complete  and
the remaining 516,666 Subscription Shares will be issued after the date of the Admission Document but prior to
Admission.  Every two Ordinary Shares issued in the Subscription have one 2011 Warrant attached entitling  the
holder  to  subscribe  for  one additional Ordinary Share at a price of 75p per share.  The  proceeds  of  the
Subscription,  amounting  to approximately £919,920 (gross of expenses), will be used  to  provide  additional
working capital for the Company.

3.      REASONS FOR THE ACQUISITION

In performing its duties under the Gulf Canada Agreement, CAMAR has been able to undertake a direct assessment
of  the Aprelevka Mine and its potential. The Company believes that the Aprelevka Mine's reserves of gold  and
silver,  as  evidenced  by  the Competent Person's Report in the Admission Document, could  generate  material
returns  for  the  owners  of the mine if that resource is efficiently exploited. The  Company  has  therefore
conditionally  agreed  to  acquire Gulf UK, which now owns the 49 per cent. interest in  Aprelevka  previously
owned by Gulf Canada, in order to secure a share of those possible returns for Shareholders.

The  Directors  understand that at the time that the Gulf Canada Agreement was entered into, Gulf  Canada  was
primarily focused on refinancing itself and was unable either to actively manage its interest in the Aprelevka
Mine or to purchase necessary equipment. This remains the case. The Existing Directors therefore consider that
securing a direct interest in the Aprelevka Mine through the Acquisition, rather than an indirect interest  by
exercising its option to acquire shares in Gulf Canada, will provide greater benefit to Shareholders.

On  Completion,  CAMAR  will cease to be an Investment Vehicle and will be solely focused  on  the  successful
development and exploitation of the Aprelevka Mine.

4.      INFORMATION ON GULF UK AND THE APRELEVKA MINE
4.1   Gulf UK

      Gulf  UK  was  incorporated on 23 April 2010 under the UK Companies Act 2006 and is now a  wholly  owned
      subsidiary  of  Gulf Canada. Gulf UK has an issued share capital of £1,000 divided into  1,000  ordinary
      shares of £1 each, registered in the name of Gulf Canada.
      
      On  12  February 2011, Gulf UK entered into a new Foundation Agreement and Charter with the Ministry  in
      relation  to  the mining company, Aprelevka, as a result of which, Gulf UK has a beneficial interest  in
      the  Aprelevka  Asset  in Tajikistan. Gulf UK will acquire a legal interest in the  Aprelevka  Asset  in
      Tajikistan  once the name of Gulf UK has been entered into the Unified State Register in place  of  Gulf
      Canada  as the owner of a 49 per cent. interest in the Aprelevka Asset. The Company has received  advice
      from its lawyers in Tajikistan that the Tajik authorities do not have any right to refuse an application
      to  enter  Gulf  UK on the Unified State Register provided that such application is submitted  with  the
      correct  supporting  documents and made within the prescribed time. In any  event,  it  is  a  condition
      precedent to Completion that Gulf UK is entered on the Unified State Register and so Admission will  not
      take place until Gulf UK has been entered on to the Unified State Register.
      
      Under  the  Charter, Aprelevka has 10 directors, 5 nominated by Gulf UK and 5 nominated by the Ministry.
      The  Chairman  of the Aprelevka board, who has a casting vote, will be nominated by Gulf UK  until  such
      time  as  Gulf  UK  has  recovered, by way of dividend, an amount equal to  its  capital  investment  in
      Aprelevka.
      
      The  total capital invested in Aprelevka is deemed by the Charter to be $17,643,000, of which Gulf  UK's
      share  is  $8,645,070 (49 per cent.) and the Ministry's share is $8,997,930 (51 per  cent.).  Under  the
      Foundation  Agreement,  Gulf UK is required to make additional contributions  of  up  to  $5,088,408  to
      Aprelevka's funds in accordance with an approved schedule and within 14 months of the approval  of  such
      schedule. Any additional contributions may be made, at Gulf UK's option, in cash or non-cash assets.  It
      is  CAMAR's  intention  that  Gulf  UK  will, in due course, make  the  additional  cash  and  non  cash
      contributions  required to maintain Gulf UK's interest in Aprelevka at 49 per cent. To the  extent  that
      additional cash contributions are required and cannot be funded from Gulf UK's share of the income  from
      Aprelevka, CAMAR will be required to raise additional funds. There can be no assurance that such funding
      will be available to the Company.
      
      Additional information on the Charter and the Foundation Agreement is set out in the Admission Document.
      
      As at 30 March 2011, Gulf UK owed CAMAR a total of $847,153 under the loan agreement assigned to Gulf UK
      on 21 December 2010.
      
4.2   Tajikistan
      Tajikistan  is  a  mountainous, landlocked country in Central Asia, with a land  area  of  approximately
      143,000  square  kilometres  and  a  population of approximately seven  million  people.  Tajikistan  is
      bordered  by Afghanistan to the south, Uzbekistan to the west, Kyrgyzstan to the north and the  People's
      Republic  of  China  to  the  east. Tajikistan also lies adjacent to Pakistan and  the  Gilgit-Baltistan
      region, separated by the narrow Wakhan Corridor.
      
      Tajikistan  became a constituent republic of the Soviet Union in the 20th century, known  as  the  Tajik
      Soviet  Socialist  Republic  (Tajik SSR). After gaining independence on  9  September  1991,  Tajikistan
      suffered  from  a civil war which lasted from 1992 to 1997. Since the end of the war, newly  established
      political  stability  and  foreign aid have allowed the country's economy to grow,  principally  through
      trade in commodities such as cotton and aluminium.

4.3   History of the Aprelevka Mine
      For  a  period  of approximately 20 years from the early 1960s, the Union of Soviet Socialist  Republics
      (USSR)  conducted extensive exploration programmes throughout Central Asia, including in the then  Tajik
      SSR.  In  1982,  Soviet geologists generated comprehensive reports on gold, silver and  base  metals  in
      Northern  Tajikistan, indicating a centralised vein system containing Measured and  Indicated  Resources
      of  approximately  455,000 Au Oz at Aprelevka itself and a further 267,000 Au Oz  at  Burgunda,  another
      area where Aprelevka has a mining licence.
      
      The USSR commenced open-pit production at the Aprelevka Mine in 1986, but production ceased in 1994.  In
      1995,  Gulf  Canada  and  the  Government of Tajikistan established  the  Joint  Tajik-Canadian  company
      "Aprelevka"  to  restart  production. Aprelevka has continued to conduct mining  operations  since  that
      date,  but  the financial problems incurred by Gulf Canada in 2004 have meant that a number of  licensed
      mining areas have effectively been mothballed.

5.    COMPETENT PERSON'S REPORT ON THE APRELEVKA MINE

A  report  by Alinco GeoServices, Inc. is set out in the Admission Document. The CPR indicates that there  are
Indicated,  Inferred and Measured Resources amounting to more than 360,000 ounces of gold and 88.7  tonnes  of
silver  at  the  Aprelevka Mine. The CPR puts a value of US$26.53 million on Gulf UK's 49 per cent.  share  of
these resources.

The  mining  areas  where  Aprelevka is licensed to operate are at Aprelevka  itself,  Burgunda,  Kizil-Cheku,
Ikkijilon  and  the  Kansai concentrating facility and nearby mill tailings. Each of these deposits  has  been
exploited to a greater or lesser extent and presently has Aprelevka personnel on site.

The Aprelevka deposit consists of two pits (Aprelevka East and Aprelevka West) about 70 km by road to the east
of  Kansai  and  was  classified by the Soviet geologists as a centralized vein system  of  primarily  quartz-
carbonate  composition.  The Burgunda deposit is a single open pit which lies almost  90  km  by  road  north-
northwest of the Kansai mill. It was classified by Soviet geologists as a steeply dipping epithermal  sulfide-
vein  system.  The Kizil-Cheku deposit consists of two pits about 18 km by road northeast of  Kansai  and  was
classified  by  Soviet geologists as part of the group of deposits with complicated geological structure.  The
Ikkijilon  deposit  is an inactive tunnel that was drifted along a gold-bearing sulfide vein  and  is  located
approximately  60 km from the Kansai mill by paved road. The Kansai mill Tailings deposit is located  adjacent
to  the  Kansai mill and comprises the mill waste from lead-zinc and gold milling operations that  took  place
between 1982 and 1995.

The CPR makes the following general and specific recommendations with regard to the Aprelevka Mine:

*     Despite extensive  and comprehensive  Soviet data, the  relatively high cut-off grades employed  by  the
      Soviets make it difficult to ascertain the  extent  and amount of lower grade ore both in the ground and 
      in the waste piles. Modern  exploration needs  to be carried out  in order  to define  the  lower  grade 
      reserves.

*     Soviet  mineralisation  models  were  based  on relatively high grade ore  body  considerations  and  on
      mineral deposit theory of more than  30  years ago. The records indicate that more careful evaluation of 
      the ore-deposit models for each area must be done. For example, the presence of adularia at Aprelevka may 
      indicate a low sulfidation porphyry system. If so, this  suggests  the  possibility of a larger but lower 
      grade deposit than envisaged by the Soviet data.

*     The  resources  at the  mine were  calculated  by the Soviets and have not been confirmed by  independent
      drilling and other geologic  methods by  Gulf Canada. However, the Aprelevka Mine has been producing gold 
      and silver for many years, indicating  the existence of these resources. CAMAR'S first priority should be  
      to undertake  due diligence of the remaining resources in order to define them according to internationally
      accepted categories.

*     No comprehensive data  are available  to  evaluate  the resource potential for commodities such as copper,
      lead, zinc, bismuth, rare earth elements, tellurium, etc. Abundant reference is made to these elements in
      metallurgical  studies done by the Soviets as well as  their regional exploration  studies.  Again,  more
      investigation and future exploration need to be conducted  to determine the size and potential  of  these
      resources.

*     Extensive ancient tailings  exist throughout  the  Aprelevka Mine area. Little is known of their tonnages
      and grades. These tailings need to be checked for gold content and may be very important for future heap-
      leaching operations.

*     The  Aprelevka,  Burgunda,  Ikkijilon  Kizil-Cheku  and  Ikkijilon  deposits  in   the  short  term  need
      relatively small exploration programmes of their pits, underground mining and waste piles to define their 
      ore reserves. In particular, the east pits of both Aprelevka and Kizil-Cheku  should  undergo geochemical 
      surveys,  using  trenching,  auger  and diamond drilling as well as some surface geochemical surveying of 
      nearby areas in order  to define their potentials. If possible, at Burgunda the mining should be suspended 
      and a careful evaluation  of  all  existing  data, reports,  and  information  be  reviewed  to define its 
      mineralisation model and to  determine  appropriate exploration and resource estimation of the deposit. In 
      all  cases, ground  geophysical  surveys  are  necessary to image the underground extent of the ore bodies, 
      define structural controls, and identify unknown anomalies that may indicate additional ore at depth.

*     An  assessment  of  the  Burgunda heap-leach facility is necessary. The heap-leach facility could serve as
      a model for all project areas and could be expanded at Burgunda as well. According to the project manager the
      Burgunda facility is fairly profitable. It is run very efficiently. The future prospects of all the licensed
      areas will improve if supplemented with heap leaching of lower-grade mineralization.

*     Abundant  reserves  exist  in the old Kansai mill tailings, but it is not clear  that  their  current
      processing through the Kansai mill is very efficient. An assessment of this processing should be carried 
      out. The possibility of in situ leaching of gold from mill tailings should be explored.

6.      THE OPPORTUNITY AT APRELEVKA

Historically, the Kansai mill has processed ore from the open pit mining operations at Aprelevka West,  Kizil-
Cheku  and  Burgunda. The ore bodies at the three mining sites have different characteristics. Aprelevka  West
has 6.4 g Au/t of ore, which allows gold recoveries of 85 per cent. or higher from the milling process. Kizil-
Cheku  is a low grade ore body, with average grades of 1.5 g Au/t, which is added as a blend to the ores  from
Burgunda and Aprelevka West. At Burgunda, Aprelevka initially mined oxide ore with an average grade of  4.5  g
Au/t.  Today,  however,  mainly sulfides are mined at Burgunda. Sulfides are more  complex  and  expensive  to
process  due  to  their  copper content - 0.2 per cent. per MT of ore - which requires double  the  amount  of
cyanide in the Carbon-in-Leach (CIL) process.

Various combinations of ore feeds have been tested at the Kansai mill over the last 30 years. Initially,  only
an  ore  feed  with mainly quartz carbonate material, such as the high yielding ore from Aprelevka  West,  was
processed,  as  this  produced  an  acceptable rate of recovery  at  times  of  relatively  low  gold  prices.
Consequently, Aprelevka West was mined first, allowing Aprelevka to operate profitably between 2002 and  2004,
notwithstanding  the  relatively low price of gold during that period (a range of  between  $300  -  $350  per
ounce).

More  recently, with the price of gold at higher levels, Aprelevka has been able to process more complex  ores
at  Kansai,  using  the  sulfides  from Burgunda, and still generate acceptable  returns  despite  the  higher
processing  cost  of sulfides. Over the past 3 years, approximately 70 per cent. of the ore processed  at  the
Kansai mill has come from Burgunda, 15 per cent. from Kizil-Cheku and 15 per cent. from Aprelevka West. In the
last  12  months, however, the proportion of ore processed from Aprelevka West has declined to  below  10  per
cent. of the total, as Aprelevka West is nearly mined out and mining activity there is limited.

The  Burgunda  ore is currently blended with ore from Aprelevka West and Kizil-Cheku to offset the  relatively
high  processing cost of the Burgunda ore and to make up for any shortfall when power shortages or  logistical
difficulties limit the direct supply from Burgunda. As the ore feed from Aprelevka West has declined, however,
the ore feed from tailings has been increased in order to maintain production levels. The re-processing of ore
from  the  tailings commenced in 2003 and is today an integral part of the mine plan, with 750 MT of  material
now being processed per annum.

However,  despite efforts to mitigate the costs of processing ore from Burgunda, current mining and processing
costs  at  the  Aprelevka  Mine  amount to approximately US$750 per Au Oz, significantly  above  the  industry
standard cost of approximately US$600 perAu Oz for smaller scale gold producers. Addressing these historically
high operating costs represents a major challenge and opportunity for CAMAR.

The  current high costs are driven by a number of factors. In particular, the operation at Burgunda, where  an
equivalent  of  142,010 Au Oz are left to be mined, is facing various problems. Firstly, the mining  equipment
needs to be replaced as it is generally old and maintenance costs are prohibitive. Secondly, a long term  mine
plan  needs  to be established, which will require further exploration and mine development to be  undertaken.
This  will  be  a  priority for CAMAR. Lastly, as referred to above, the ore from Burgunda  is  difficult  and
expensive to process and, because of the copper present in the ore, the end product is a gold concentrate with
copper  by-product,  rather than pure gold. CAMAR therefore intends that the feed of Burgunda  ore  should  be
gradually  reduced  to  a fraction of its current levels. In order to maintain production  levels  while  this
reduction is implemented, Aprelevka intends to commission an underground mine at Aprelevka East.

Mining  at the Aprelevka East underground mine is expected to start in the third quarter of 2012. The two  ore
bodies   at  Aprelevka  East  consist  of  quartz-carbonate  veins  and  zones  of  intense  vein-disseminated
mineralization  with  379,000 tonnes at 8.34 g Au/t and 86.6 g Ag/t. The ore bodies have a  relatively  simple
structure, consisting of quartz carbonate (70-96 per cent.), carbonates (5-30 per cent.) and feldspar (15  per
cent.). More importantly, the Aprelevka East ore has a maximum 5 per cent. sulfides content, compared  to  the
ore  at  Burgunda  which has a content of up to 80-95 per cent. sulfides and is consequently harder  and  more
costly to process.

To increase efficiency at the Aprelevka Mine, CAMAR therefore intends that 70 per cent. of the future ore feed
for  the  Kansai  mill  will  come from Aprelevka East. The Directors believe that  this  strategic  shift  in
operations will materially enhance the operating efficiency of the Aprelevka Mine.

CAMAR  also  intends  to modernize the Kansai mill, which commenced operating in 1938. The Directors  believes
that  operating  costs at the Kansai mill can be reduced significantly, to a level equal to or below  industry
benchmarks. The Directors believe that this reduction would allow Aprelevka to generate sufficient  cash  flow
to  sustain  mining  activities,  fund  the expenditure required to replace  old  equipment  and  conduct  the
additional exploration in the Burgunda, Aprelevka, Kizil-Cheku and Ikkijilon areas recommended by the CPR.

In  addition, CAMAR intends that Aprelevka will, in due course, apply for additional mining licences in  areas
contiguous to the Aprelevka Mine.

The  Directors  are therefore confident that the acquisition of Gulf UK has the potential to produce  material
benefits to CAMAR and its Shareholders.

7.      PRINCIPAL TERMS OF THE ACQUISITION

The  Company  entered  into  a  conditional agreement on 24 March 2011 with Gulf  Canada  in  respect  of  the
Acquisition.  The  consideration  to  be paid for the Gulf UK shares is £2,303,448  to  be  satisfied  by  the
allotment  and issue of the 4,188,087 Consideration Shares. The Acquisition is conditional upon,  inter  alia,
(i)  the passing of the Resolutions; (ii) approval of the Acquisition by the shareholders of Gulf Canada, such
approval to be obtained from a majority of at least 66 and two thirds per cent. of those voting at the general
meeting  of  Gulf  Canada; (iii) approval of the holders of the Gulf Incentive Loan Notes and (iv)  Admission.
Additional information on the Acquisition Agreement is set out in the Admission Document.

A  circular convening a general meeting of Gulf Canada for 10.00 a.m. (Toronto time) on 21 April 2011 is being
posted  to  shareholders of Gulf Canada today. At that meeting, a resolution will be proposed to  approve  the
disposal of Gulf UK to CAMAR.

As  part  of Gulf Canada's ongoing re-financing exercise during 2010, a number of parties, including Christine
Melian  and  companies  associated with Thomas Marti and Lawrence Snee, subscribed for  a  total  of  £100,000
nominal  of  Gulf  Incentive Loan Notes, which, the Directors believe, inter alia, provided Gulf  Canada  with
funds  required  to meet its obligations to CAMAR under the Gulf Canada Agreement. One of  the  terms  of  the
subscription for the Gulf Incentive Loan Notes is that the approval of the holders of the Gulf Incentive  Loan
Notes  is  required  for  the disposal by Gulf Canada or Gulf UK of the Aprelevka  Asset.  On  Admission,  the
outstanding Gulf Incentive Loan Notes will automatically convert into 1.5 million Gulf Incentive Warrants  and
375,000 Further Subscription Rights in the capital of the Company, as set out in the Admission Document.

On  Completion, the Gulf Canada Agreement (including CAMAR's option to acquire a 5 per cent. interest in  Gulf
Canada) and the White Poplar Lease Agreement will be terminated.

8.      DIRECTORS

Following Completion, the Board of Directors of the Company will be as follows:

8.1   Christine Melian, Finance Director (aged 48)
      Christine  is a financial consultant with over 17 years experience in the overseas banking  and  finance
      industry.  In  this time, she has led strategic projects at Credit Suisse in asset reporting  and  asset
      management  as  well  as  custody  and investment banking trading and clearing  processes  and  directed
      divisions of investment companies. Her previous employers include Credit Suisse, Merck & Co. Inc.,  BT&T
      Asset  Management AG in Zurich, and Interactive Investor International plc, London. In  2000,  Christine
      founded  FTDM, which specialises in strategic consulting, financial engineering, hedge funds and private
      equity. Her clients include Credit Suisse, the Directorate of Finances of Canton of Zurich and a  number
      of  private investors and investment consulting firms. Christine holds degrees from Switzerland and  the
      US in finance and modern languages.

8.2   Thomas Marti, Executive Director (aged 43)
      Thomas  Marti  has  a  background in banking and finance. Most recently he has been  engaged  in  mining
      related  project  finance and commodity trading operations at Marc Rich + Co Investment  AG.  Previously
      Thomas  Marti worked on various projects, including the establishment in 2004 of his own metals  trading
      business,  XitosAG in Zug. Between 2000 and 2004, Thomas was engaged in various start  up  projects  and
      focused  on venture capital financing. In addition, he was CEO of Outlettel AG, a telecom company  being
      restructured  following  the dotcom boom. Prior to this, Thomas was a financial  editor  for  two  large
      Swiss  newspapers. Thomas started his career in Investment Bank at Swiss Bank Corporation  in  Bern  and
      Basel as well as and Bank Rothschild in Zürich.

8.3   Lawrence ("Larry") Snee, Executive Director (aged 63)
      Lawrence  W.  Snee,  Ph.D.,  is a Certified Professional Geologist, CPG #11085  (American  Institute  of
      Professional Geologists, AIPG) and recognized as a Qualified Person according to the Canadian  Institute
      of  Mining  (CIM)  NI43-101  standards. Dr. Snee received his Ph.D.  in  geology  from  The  Ohio  State
      University  in  1982,  his  M.S. in geology from The Ohio State University in  1977,  and  his  B.S.  in
      geology,  biology  and  chemistry from Florida State University in 1974. Larry  retired  as  a  research
      geologist  from  the U.S. Geological Survey in 2006 after 25 years of service and is currently  emeritus
      geologist  with  the  USGS.  He  has  been involved in precious  metals  and  gemstone  exploration  and
      development  subsequent to his retirement and has served as Vice President, Exploration  and  consultant
      for  other  exploration  and  mining companies. He also serves on the Advisory  Board  of  the  Timeless
      Precious Metals Fund, Switzerland. Larry is owner and president of Global Gems and Geology, LLC.

8.4   John Leech, Non-executive Director (aged 44)
      John  graduated  from the University of Lancaster in Accounting and Finance and trained as  a  Chartered
      Accountant  with Coopers & Lybrand in the Isle of Man. He is now a Fellow of the Institute of  Chartered
      Accountants  in England & Wales. John has over 20 years experience in the offshore finance industry,  17
      of  which have been spent in the fiduciary services sector. He is a founding director of Cavendish Trust
      Company  Limited, Licensed by the Isle of Man Financial Supervision Commission as a Corporate and  Trust
      Service Provider.

8.5   Oliver Vaughan, Proposed Chairman (aged 65)
      In  1966 Oliver Vaughan and his brother, Thomas, co-founded Juliana's Holdings Plc, which floated on the
      Official  List of the London Stock Exchange in 1983. Following its sale for over £30 million to  Wembley
      Leisure  Plc  ("WLP") in 1988, Oliver became an executive director of WLP. In 1994 Oliver was  appointed
      chief  executive of Gander Holdings Plc, a London based property company specialising in the acquisition
      and  development  of  Kensington and Chelsea residential real estate. Gander was one  of  the  first  15
      companies  to join AIM. Oliver was a founder director of what is currently The Evolution Group  plc  and
      served  as  a  director of that company from 1997 to 2006. Oliver is currently chairman  of  AIM  quoted
      Evolve Capital plc and has been a director of a number of AIM quoted investment companies.

9.      PRINCIPAL SHAREHOLDERS

Following Completion, the principal Shareholders in the Company are expected to be as follows:

                                                                                  Number of      % of Issued
                                                                                   Ordinary         Share
Name                                                                                 Shares        Capital
Gulf Canada                                                                       4,188,087          42.3
Timeless                                                                          2,000,000          20.2
Lynchwood Nominees Limited*                                                         780,330          7.9
Peter Zihlmann                                                                      166,667          1.7
*Includes 166,667 Ordinary Shares held by Peter Zihlmann

9.1   Gulf Canada
      Gulf  Canada  was  established and listed on the Toronto Stock Exchange in January 2004.  Its  principal
      asset  was  the  49  per  cent. interest in the Aprelevka mine. Subsequent to its listing,  Gulf  Canada
      encountered  financial  difficulties and it was de-listed from the Toronto Stock  Exchange  in  February
      2006, since when it has been largely dormant.
      
      On  Completion, Oliver Vaughan, the Chairman of Gulf Canada, will be appointed as Chairman of CAMAR. Mr.
      Vaughan is also a director of Evolve Capital plc, which owns 100 per cent. of St Helens Capital, CAMAR's
      PLUS  Corporate Adviser. In order to ensure that there is no conflict of interest following  Completion,
      Mr.  Vaughan  will  have  no involvement in the provision of regulatory advice to  CAMAR  by  St  Helens
      Capital. PLUS Stock Exchange has agreed that, in these circumstances, St Helens Capital may continue  as
      the Company's PLUS Corporate Adviser following Completion.

9.2   Timeless
      Timeless  is  a  multiclass  investment company incorporated under Maltese law  on  16  July  2004.  The
      investing  policy  of  Timeless  is to achieve value and capital growth through  investments  in  listed
      companies  producing,  potentially  producing or exploring for precious  metals.  On  22  October  2009,
      Timeless subscribed US$500,000 in return for the issue to it by CAMAR of US$500,000 of CAMAR Loan Notes.
      The CAMAR Loan Notes were converted on 5 March 2010 into 750,000 Ordinary Shares. Further details of the
      CAMAR  Loan  Notes  are  set out in the Admission Document. In addition, as part of  Gulf  Canada's  re-
      financing  exercise, Timeless has also subscribed CAD 1,000,000 for Gulf Canada Loan Notes,  which,  the
      Directors  believe,  inter alia, provided Gulf Canada with the funds required to  meet  its  obligations
      under the Gulf Canada Agreement.

9.3   Peter Zihlmann
      Peter  Zihlmann  is  a shareholder and manager of P. Zihlmann Investment Management  AG,  which  is  the
      Investment  Manager  of Timeless. P. Zihlmann Investment Management AG holds all the  voting  shares  in
      Timeless and Peter Zihlmann is chairman of Timeless. With effect from 8 September 2009, 166,667 Ordinary
      Shares were allotted and issued to Peter Zihlmann at a price of 2.25p per share. In addition, as part of
      Gulf Canada's refinancing exercise, Peter Zihlmann has subscribed £24,667 for Gulf Incentive Loan Notes,
      which,  the  Directors  believe,  inter alia, provided Gulf Canada  with  funds  required  to  meet  its
      obligations under the Gulf Canada Agreement. Further details of the Gulf Incentive Loan Note  Instrument
      are set out in the Admission Document.

9.4    Lynchwood Nominees Limited
      Lynchwood Nominees Limited acts as nominee holder for a number of individual Shareholders, one of  which
      is  Peter  Zihlmann. With the exception of Peter Zihlmann, none of these individual Shareholders  is  or
      will be interested in 3 per cent. or more of the Issued Share Capital.

Additional information about the principal Shareholders in the Company is set out in the Admission Document.

10.     LOCK-IN AGREEMENTS AND ORDERLY MARKET ARRANGEMENTS

On  Admission, Gulf Canada will hold 4,188,087 Ordinary Shares, representing approximately 42.3 per  cent.  of
the  Issued  Share  Capital,  Timeless and Peter Zihlmann will hold 2,166,667  Ordinary  Shares,  representing
approximately  21.9 per cent. of the Issued Share Capital and the Directors will, in aggregate,  hold  195,758
Ordinary  Shares, representing approximately 1.9 per cent. of the Issued Share Capital. Gulf Canada, Timeless,
Peter  Zihlmann and the Directors have each agreed with the Company and St Helens Capital, save as set out  or
referred  to  below, not to dispose of any interest in the Ordinary Shares held by them for  a  period  of  12
months following Admission.

The  provisions of the Lock-In Agreements will not apply in certain limited circumstances which include, among
other things:

*     in  acceptance of a general offer made to shareholders of the Company to acquire all the issued Ordinary
      Shares  (other than any Ordinary Shares which are already owned by the person making such offer and  any
      other person acting in concert with him) recommended by the board of directors of the Company; or

*     pursuant to an intervening court order; or

*     after the death of the relevant shareholder; or

*     with the prior consent of the Company's PLUS Corporate Adviser; or

*     as otherwise agreed to by PLUS.

In order to ensure that there is an orderly market in the Ordinary Shares following Admission, Cavendish Trust
Company  Limited, which is interested in 85,004 Ordinary Shares, has agreed to make such numbers  of  Ordinary
Shares available for sale as may be required from time to time in order to satisfy market demand.


11.     FINANCIAL INFORMATION

Set out below is a summary of Aprelevka's results for the three years ended 31 December 2010, derived from the
audited financial information on Aprelevka set out in the Admission Document.
                                                                        Year ended 31 December
                                                                       2008             2009             2010
                                                                          £                £                £
Turnover                                                          6,112,542        8,209,996       10,140,897
(Loss)/profit before taxation                                     (401,669)          741,230          566,062
(Loss)/profit after taxation                                      (462,838)          659,057          467,167

The  audit  reports  on  Aprelevka for the 3 years ended 31 December 2010 contain a number  of  qualifications
relating  to  certain  historical  financial information in respect of which appropriate  audit  evidence  was
unavailable.  These qualifications relate to balance sheet items which could not be verified by  the  auditors
and issues in respect of the adequacy of accounting systems and controls at Aprelevka. If these qualifications
persist following Completion, CAMAR's future accounts may themselves have to be qualified in relation  to  its
interest  in  Aprelevka.  CAMAR  therefore intends that the balance sheet of  Aprelevka  will  be  audited  at
Completion so that these, or similar, qualifications, are not repeated. At the date of the Admission Document,
there  can be no certainty that an unqualified report will be received on the balance sheet to be prepared  at
Completion.

There  are no exchange controls in place in Tajikistan which will hinder any future free flow of cash to  Gulf
UK arising from its interest in Aprelevka.

12.     THE CITY CODE

The  City  Code on Takeovers and Mergers (the "City Code"), which is issued and administered by the  Panel  on
Takeovers and Mergers (the "Panel"), applies to all takeover and merger transactions, however effected,  where
the  offeree  company  is, inter alia, a listed company or unlisted public company, quoted  or  unquoted,  and
resident  in  the  UK,  Jersey,  Guernsey or the Isle of Man (and to certain  categories  of  private  limited
companies). However, as CAMAR's place of central management and control is, and will continue to be, in Zurich
and  not  the  UK,  the Channels Islands or the Isle of Man, the City Code will not apply to the  Company  and
Shareholders will not be entitled to the protections afforded by the City Code.

Ordinarily,  under  Rule 9 of the City Code ("Rule 9"), where (i) any person acquires an  interest  in  shares
which,  when  taken together with shares in persons acting in concert with him are interested,  carry  30  per
cent. or more of the voting rights of a company subject to the City Code or (ii) any person who, together with
persons  acting  in concert with him, is interested in shares which in aggregate carry not less  than  30  per
cent.  but not more than 50 per cent. of the voting rights of a company and such person, or persons acting  in
concert  with him, acquires an interest in any other shares which increases the percentage of shares  carrying
voting  rights  in  which he is interested, that person is normally obliged to make a  general  offer  to  all
shareholders  to  purchase, in cash, their shares at the highest price paid by him, or any  person  acting  in
concert with him, within the preceding 12 months.

Under  the  City  Code,  a  concert party arises when persons who, pursuant to an agreement  or  understanding
(whether  formal  or informal), actively co-operate, through the acquisition by any of them  of  shares  in  a
company,  to  obtain or consolidate control of that company. Under the City Code, control means a holding,  or
aggregate holding, of shares carrying 30 per cent. or more of the voting rights of a company, irrespective  of
whether the holding or holdings gives de facto control.

From  Admission, Gulf Canada will be interested in 4,188,087 Ordinary Shares and, if and for as long  as  they
are treated as acting in concert, Peter Zihlmann and Timeless will between them hold 2,166,667 Ordinary Shares
representing  approximately 42.3 per cent. and approximately 21.9 per cent. respectively of the  Issued  Share
Capital and voting rights in the Company.

13.     APPLICATION TO PLUS

The  Company  has  applied  for the Issued Share Capital to be admitted to trading on  PLUS,  subject  to  the
Resolutions  being  passed by Shareholders at the General Meeting. If the Resolutions  are  duly  passed,  the
Directors expect that Admission will take place on 26 April 2011.

The  New Ordinary Shares will, on Admission, rank pari passu in all respects with the Existing Ordinary Shares
and  will  rank  in full for all dividends and other distributions hereafter declared, paid  or  made  on  the
ordinary share capital of the Company.

14.     GENERAL MEETING

A  general  Meeting  of the Company is being convened for 11.00 a.m. (London time) on 21 April  2011.  At  the
General Meeting, resolutions will be proposed as follows:
    
    *   Special Resolution 1: to approve the Acquisition Agreement and authorise the Directors to allot shares
        in connection therewith;
    
    *   Special Resolution 2: to suspend the provisions of Article 120 of the Company's Articles;

    *   Special Resolution 3: to disapply pre-emption rights.

Special Resolution 2 is required to ensure that there is a quorum present at Board meetings to consider and/or
approve  the  Acquisition.  The  Company's Existing Directors, with the  exception  of  John  Leech,  are  all
considered  to  be  personally interested in the Acquisition and would otherwise be  precluded  from  counting
towards the quorum of any such board meetings in accordance with the provisions of Article 120.

The  Admission Document will be available on the PLUS Stock Exchange plc website - www.plus-sx.com - and until
30  April 2011 from the Company's PLUS Corporate Adviser, St Helens Capital Partners LLP, 223a Kensington High
Street, London W8 6SG.

The Company is expected to be classified in the Mining sector of PLUS Stock Exchange plc.

The Directors of CAMAR are responsible for the contents of this announcement.


Enquiries:
Central Asian Minerals and Resources PLC                                                  01624 679 000
Christine Melian or John Leech

St Helens Capital Partners LLP                                                            020 7368 6959
Mark Anwyl or Duncan Vasey

                                    EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Publication of this Document                                                                     31 March 2011

Latest time and date for receipt of Forms of Proxy                   11.00 a.m. (London time) on 19 April 2011

General Meeting of CAMAR                                             11.00 a.m. (London time) on 21 April 2011

General Meeting of Gulf Canada                                      10.00 a.m. (Toronto time) on 21 April 2011

Admission                                                                           8.00 a.m. on 26 April 2011


                                           SHARE CAPITAL INFORMATION
                                                       
Number of Ordinary Shares in issue at the date of this announcement                                   5,204,620

Number of Consideration Shares to be issued pursuant to the Acquisition                               4,188,087
                                                                                                               
Number of further Subscription Shares to be issued pursuant to the Subscription                         516,666
                                                                                                               
Number of Ordinary Shares in issue at Admission                                                       9,909,373
                                                                                                               
Market capitalisation at 60p per share                                                            £5.945million
                                                                                                               
PLUS Ticker                                                                                                CMRP
                                                                                                               
ISIN Number                                                                                        IM00B61FM981
DEFINITIONS
                                                       
The following definitions apply throughout this announcement unless the context requires otherwise:

"2006 Act"                     the Isle of Man Companies Act 2006, as amended
                               
"2010 Fundraising"             the  raising  in September 2010 of £1.02 million by the subscription  of
                               1,854,754   Ordinary Shares at 55p per share, each with a  2010  Warrant
                               attached
                               
"2010 Warrants"                the  1,854,754 warrants to subscribe for Ordinary Shares at a  price  of
                               55p per share issued pursuant to the 2010 Fundraising
                               
"2011 Warrants"                the 766, 599 warrants to subscribe for Ordinary Shares at a price of 75p
                               per share issued pursuant to the Subscription
                               
"Acquisition"                  the proposed acquisition by CAMAR of the entire issued share capital  of
                               Gulf UK in accordance with the terms of the Acquisition Agreement
                               
"Acquisition Agreement"        the  agreement dated 24 March 2011 between CAMAR and Gulf  Canada  under
                               which, subject to certain conditions, Gulf Canada has agreed to sell and
                               CAMAR has agreed  to acquire the entire issued share capital of Gulf UK,
                               further details of which are set out in the Admission Document
                               
"Admission" or "Re-            the  admission of the Issued Share Capital of the Company to trading  on
admission"                     PLUS becoming effective in accordance with the PLUS Rules
                               
"Altin-Topkan"                 the  Altin-Topkan  Mining  Management,  a  legal  entity  registered  in
                               accordance with the legislation of  the Republic of Tajikistan
                               
"Aprelevka"                    The Joint Tajik-Canadian Limited Liability Company, "Aprelevka"
                               
"Aprelevka Asset"              the  49   per cent. share in Aprelevka held by Gulf UK pursuant  to  the
                               Charter and the Foundation Agreement
"Aprelevka Mine"               the  areas  in  northern  Tajikistan  where  Aprelevka  is  licensed  to
                               undertake  mining  operations, namely Aprelevka, Burgunda,  Kizil-Cheku,
                               Ikkijilon and the Kansai Mill tailings
                               
"Articles" or "Articles of     the articles of association of the Company from time to time
Association"                   

"Board"                        the board of directors of the Company, as constituted from time to time
                               
"CAD"                          Canadian Dollars
"CAMAR Loan Notes"             the  US$500,000  Unsecured Convertible Loan Notes  2010  issued  by  the
                               Company to Timeless pursuant to the Loan Note Instrument created by  the
                               Company and dated 22 October 2009
                               
"Charter"                      the  document comprising the constitution of Aprelevka and entered  into
                               between Gulf UK and  the Ministry on 12 February 2011
                               
"City Code"                    the City Code on Takeovers and Mergers
                               
"Company" or "CAMAR"           Central Asian Minerals and Resources PLC
                               
"Completion"                   completion of the Acquisition on Admission
                               
"Competent Person's Report"    the report by Alinco GeoServices, Inc. set out in the Admission Document
or "CPR"

"Consideration Shares"         the  4,188,087 Ordinary Shares to be issued to Gulf Canada on  Admission
                               in  consideration of the acquisition of the entire issued share  capital
                               of Gulf UK
                               
"Directors"                    the Existing Directors and the Proposed Director
                               
"Existing Directors"           the  directors  of the Company at the date of this announcement,  namely
                               Christine Melian, Thomas Marti, Lawrence Snee and John Leech
                               
"Existing Ordinary Shares"     the  5,204,620  Ordinary  Shares  in  issue  as  at  the  date  of  this
                               announcement
                               
"Foundation Agreement"         the  document which determines the legal status and objects of Aprelevka
                               and  which  was  entered into between Gulf UK and  the  Ministry  on  12
                               February 2011
                               
"FSA"                          the Financial Services Authority
                               
"Further Subscription          the  further  subscription  rights arising on  conversion  of  the  Gulf
Rights" or "FSRs"              Incentive  Loan  Notes;  subject  to certain  conditions,  each  FSR  is
                               convertible  into one Ordinary Share and three Gulf Incentive  Warrants,
                               further details of which are set out in the Admission Document
                               
"General Meeting"              the  General  Meeting of the Company to be held at  11.00  a.m.  (London
                               time) on 21 April  2011 (or any adjournment thereof)
                               
"Group"                        CAMAR  and its subsidiary Gulf UK following the acquisition of  Gulf  UK
                               and "Group Company" shall mean any of them
                               
"Gulf Canada Agreement"        the  agreement dated 20 February 2010 between CAMAR (1) and Gulf  Canada
                               (2)  under  which CAMAR agreed to provide the services  of  two  of  its
                               Directors to Gulf Canada
                               
"Gulf Canada"                  Gulf  International Minerals Ltd, a corporation continued  into  British
                               Columbia under the Business Corporations Act (British Columbia)
                               
"Gulf Incentive Loan Notes"    the   £100,000 unsecured loan notes 2020 issued by Gulf Canada  pursuant
                               to the Gulf Incentive Loan Note Instrument
                               
"Gulf Incentive Loan Note      the loan note instrument created by Gulf Canada and dated 30 July 2010
Instrument"                    
"Gulf Incentive Warrants"      the  warrants  arising on conversion of the Gulf Incentive  Loan  Notes;
                               subject  to the satisfaction of certain conditions, each Gulf  Incentive
                               Warrant  is  convertible into one Ordinary Share at a price of  10p  per
                               share, further details of which are set out in the Admission Document
                               
"Gulf UK"                      Gulf  International Minerals Limited, a company incorporated in  England
                               and Wales with registered number 07233345
                               
"Independent Director"         John Leech
                               
"Investment Strategy"          the  investment  strategy of the Company as described in  the  Admission
                               Document
                               
"Investment Vehicle"           for  the  purposes of the PLUS Rules, an issuer whose actual or intended
                               principal  activity is to invest in the securities of  other  businesses
                               (whether  publicly traded or not), or to acquire a particular  business,
                               in accordance with specific investment criteria
                               
"Issued  Share Capital"        the  issued ordinary share capital of the Company immediately  following
                               Admission
                               
"Lock-In Agreements"           the  lock-in  agreements  that certain companies  and  individuals  have
                               entered into with the Company and St Helens Capital, further details  of
                               which are set out in the Admission Document
                               
"Ministry"                     the Ministry of Energy and Industry of the Republic of Tajikistan
                               
"New Ordinary Shares"          the Consideration Shares and the Subscription Shares
                               
"Ordinary Shares"              ordinary shares of no par value each in the capital of the Company
                               
"PLUS" or "PLUS-quoted         the  primary  market  for  unlisted securities operated  by  PLUS  Stock
Market"                        Exchange
"PLUS Stock Exchange"          PLUS  Stock Exchange plc, a recognised investment exchange under section
                               290 of FSMA, which is a subsidiary of PLUS Markets Group plc
                               
"PLUS Rules"                   the rules for the regulation of the PLUS-quoted Market published by PLUS
                               Stock Exchange, governing companies whose shares are admitted to trading
                               on PLUS or which seek to be admitted as such
                               
"Proposals"                    the Acquisition and Re-admission
                               
"Proposed Director"            Oliver Vaughan, the Chairman of Gulf Canada
                               
"Resolutions"                  the  resolutions to be proposed at the General Meeting which are set out
                               in the Notice in the Admission Document
                               
"Reverse Takeover"             an  acquisition by the Company which constitutes a reverse takeover  for
                               the purposes of the PLUS Rules
                               
"Shareholders"                 the  persons  who are registered as the holders of Ordinary Shares  from
                               time to time
                               
"Somoni" or "TJS"              Tajiki Sonomi, the  unit of currency in Tajikistan
                               
"St Helens Capital"            St  Helens Capital Partners LLP, PLUS Corporate Adviser to the  Company,
                               which is authorised and regulated by the FSA
                               
"Subscription"                 the  subscription of 1,533,199 new Ordinary Shares at a price of 60p per
                               share
                               
"Subscription Shares"          The 1,533,199 Ordinary Shares to be issued pursuant to the Subscription,
                               of  which 1,016,533 Ordinary Shares have already been issued and 516,666
                               Ordinary  Shares will be issued after the date of this announcement  but
                               prior to Admission
                               
"Tajikistan"                   The Republic of Tajikistan
                               
"Timeless"                     The Timeless Precious Metal Fund SICAV P.L.C.
                               
"UK"                           the United Kingdom of Great Britain and Northern Ireland
                               
"uncertificated" or "in        recorded  on  the  register  of  Ordinary  Shares  as  being   held   in
uncertificated form"           uncertificated  form in CREST, entitlement to which  by  virtue  of  the
                               CREST Regulations, may be transferred by means of CREST
                               
"Unified State Register"       the  Unified  State  Register  (in Tajikistan)  of  legal  entities  and
                               entrepreneurs
 "US$" or "$"                  United States Dollars, the currency of the United States of America
                               
"White Poplar"                 a company registered in the British Virgin Islands with registered
                               number 676806
"White Poplar Agreement"       the agreement dated 26 March 2010 between CAMAR (1) and White Poplar (2)
                               regarding  the  sale  and  purchase  of  mineral  exploration   drilling
                               equipment
                               
"White Poplar Lease            the  agreement dated 30 March 2010 between CAMAR (1) and Gulf Canada (2)
Agreement"`                    regarding  the lease by Gulf Canada of mineral exploration and  drilling
                               equipment from CAMAR.
Ends.

Contact Information

  • Central Asian Minerals and Resources PLC