Annoucement
Falcon Investment Holdings Societe Anonyme
(Incorporated in Luxembourg - R.C. Number B39773)
Share Cde: FLC ISIN Code: LU0042254812
("the Company")
Registered Office
6 rue Adolphe Fischer,
L-1520, Luxembourg
Renewal of Cautionary Announcement
Further to the cautionary announcement dated the 19 March 2002, where
reference was made to the cautionary announcement released by the Company's
subsidiary Falcon Gold Zimbabwe Limited on the 5 March 2002 where
shareholders were advised that:
""Preliminary negotiations have commenced in respect of a transaction which,
if the negotiations result in agreement, will give rise to presentation of
proposals to an Extraordinary General Meeting of Shareholders of Falcon Gold
Zimbabwe Limited, and which could impact significantly upon Shareholder
interests."
Shareholders were therefore advised to exercise caution in any dealings in
the Company's shares. Shareholders were further advised that "Contingent
upon the outcome of the negotiations, a comprehensive statement would be
released at the earliest opportunity," and that Shareholders "will be kept
informed as to the progress of the negotiations".
The Directors advise that although the said negotiations are continuing, no
conclusion has yet been reached, and it is not yet possible to foreshadow
whether or not there will be a successful outcome to the negotiations,
enabling the presentation of proposals to Shareholders for their
consideration. It is probable that a further approximately two months must
necessarily elapse before a substantive result can be forthcoming from the
negotiations, then enabling the Directors to advise Shareholders of detailed
proposals. Shareholders are, therefore, again advised to exercise caution,
in any dealings in the Company's shares, pending further advices.
Recent media speculation as to the nature of the negotiations cannot, in the
interests of third party confidentiality requirements, be confirmed or
denied. However, it is pertinent to note that such speculation has included
comment that "over the past two years Falcon Gold has experienced a massive
decline in production". It should be noted that the causes of reduced
production are as fully addressed in the Company's Annual Reports to
Shareholders, being primarily notwithstanding the introduction by the
Reserve Bank of Zimbabwe of a Gold Support Floor Price, viability and
profitability cannot be attained for so long as operational costs continue
to soar in Zimbabwe's hyperinflationary environment without a commensurate
devaluation of the Zimbabwean Dollar. This has imposed severe constraints
upon levels of production, which could and would be significantly increased
when restoration to a realistic Zimbabwean Dollar gold price is achieved."
In light of the above, shareholders in Falcon Investment Holdings S.A. are
advised to continue to exercise caution and consult their professional
advisors when dealing in the company's shares.
Sponsor
PricewaterhouseCoopers Corporate Finance (Pty) Ltd
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