PEARL GOLD AG

Update on Pearl Gold's situation

Business news for the stock market

Frankfurt (pta022/20.02.2015/15:12) - 20.02.2015 - The Supervisory and Management Boards of Pearl Gold have been working hard during the past months to find a solution to save Pearl Gold AG as well as its only investment, i.e. 25% shareholding in the company Wassoul'Or SA in Mali. Here, various unexpected obstacles have had to be faced.

On the one hand, Pearl Gold had reached an agreement with one of its major shareholders regarding the financing of its cash requirements. Unfortunately, the company Martagon Investments Ltd., a company controlled by a former member of the Supervisory Board, has not honoured its obligations and has left Pearl Gold AG in a critical financial situation. This situation would have led to the filing of insolvency if Pearl Gold's current board had not found alternative financing for the coming months.

On the other hand, the management of Wassoul'Or SA was neither able to complete the construction of the mine and to put the mine into regular and commercial production nor to assure the financing of Wassoul'Or SA. Consequently, it was obliged to file for a special procedure called "règlement préventif" at the Tribunal de Commerce, in Bamako. This is a procedure comparable to Chapter 11 in the United States. According to the information we obtained in Bamako, Wassoul'Or SA is considered to be insolvent and over indebted. The company is also in a situation of "cessation des paiements" (French equivalent of insolvency) and only receives funds from a company called Mansa Moussa Gold Coins, which is once again controlled by the President of Wassoul'Or SA. With these funds, the company has been able to pay part of the salaries owed to the employees, who did not receive payment for the last eight months. There have been several other financial transactions with this company in the past.

We filed lawsuits against Wassoul'Or SA after several illicit general Shareholder Meetings were held where the President of Wassoul'Or attempted to dilute our participation in Wassoul'Or by submitting the accounts for 2011 to 2013 for approval without sufficient prior information, or notice. Largely, these accounts are not based on legal grounds as they intend to confirm unjustified shareholder loans in favour of the President of Wassoul'Or SA and several of his companies for tens of millions of Euros.