TIDMCRND
RNS Number : 0182Z
Central Rand Gold Limited
15 September 2015
Central Rand Gold Limited
(Incorporated as a company with limited liability
under the laws of Guernsey,
Company Number 45108)
(Incorporated as an external company with limited
liability under the laws of South Africa,
Registration number 2007/0192231/10)
ISIN: GG00B92NXM24
LSE share code: CRND JSE share code: CRD
("Central Rand Gold" or the "Company" or the "Group")
--------------------------------------------------------
2015 Interim Report
--------------------------------------------------------
Central Rand Gold, the South African gold mining and exploration
holding company, today announces its unaudited condensed
consolidated Interim Results for the six months ended 30 June 2015
("period under review"). The full set of results is available on
the Company's website: www.centralrandgold.com.
For further information, please contact:
Central Rand Gold +27 (0) 87 310 4400
Johan du Toit / Nathan Taylor
Panmure Gordon (UK) Limited +44 (0) 20 7886 2500
Mark Taylor
Merchantec Capital +27 (0) 11 325 6363
Monique Martinez / Marcel Goncalves
15 September 2015
Johannesburg
Forward-looking statements
This Interim Report contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of the Central Rand Gold Group. The words "intend", "aim",
"project", "anticipate", "estimate", "plan", "believe", "expect",
"may", "should", "will", or similar expressions, commonly identify
such forward-looking statements. Examples of forward-looking
statements in this Interim Report include those regarding estimated
Ore Reserves, anticipated production or construction dates, costs,
outputs and productive lives of assets or similar factors.
Forward-looking statements involve known and unknown risks,
uncertainties, assumptions and other factors set forth in this
Interim Report that are beyond the Group's control. For example,
future Ore Reserves will be based in part on market prices that may
vary significantly from current levels. These may materially affect
the timing and feasibility of particular developments. Other
factors include the ability to produce and transport products
profitably, demand for our products, the effect of foreign currency
exchange rates on market prices and operating costs, and activities
by governmental authorities, such as changes in taxation or
regulation, and political uncertainty.
In light of these risks, uncertainties and assumptions, actual
results could be materially different from any future results
expressed or implied by these forward-looking statements, which
speak only as at the date of this Interim Report. Except as
required by applicable regulations or by law, the Group does not
undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
or future events. The Group cannot guarantee that its
forward-looking statements will not differ materially from actual
results.
Chief Executive Officer's report
Introduction
The Company had two key objectives during the first six months
of 2015, namely to continue with discussions with the various
investors for the acquisition of Central Rand Gold (Netherlands
Antilles) N.V. and to stabilise the operations of the Company.
Key salient features during the first six months of the year
-- Negotiations continued with Asian suitors regarding a
potential transaction with Central Rand Gold and a conclusion is
expected shortly;
-- Loss before interest, tax and depreciation reduced in the
period to US$0.7 million (2014: US$2.6 million);
-- Significant reduction in cost structure for the Central Rand
Group, with overall costs reducing by 40%;
-- The rate of dewatering suggests that underground operations
could resume in approximately 18 months; and
-- Sufficient surface material identified and evaluated to
compensate for cessation of underground mining.
Safety
Safety Statistics
Type of injury Six months Six months
ended ended
30 June 2015 30 June 2014
---------------- -------------- --------------
Dressing cases - 6
---------------- -------------- --------------
Lost-time
injuries 2 4
---------------- -------------- --------------
Fatalities - 1
---------------- -------------- --------------
Safety remains a key focus for the Company, irrespective of the
environment in which it is operating. Positively the Company posted
a reduction in all levels of safety incidents, with two lost-time
injuries incurred versus four for the previous period.
Potential sale of Central Rand Gold (Netherlands Antilles)
N.V.
Following a sustained period of marketing in Asia during 2014,
the Company was able to engage in the discussions with four Asian
Companies to acquire 100% of the share capital of Central Rand Gold
(Netherlands Antilles) N.V.("CRGNV"). The four Asian Companies are
Hiria Group Company Limited ("Hiria"), Beijing Ankong Investment
("Ankong"), Shengbang Jiabo (Beijing) Consulting Company Limited
("Shengbang") and Huili Resources Group Limited ("Huili"). All
parties signed a similar Memorandum of Understanding ("MOU"), which
set out the timing and terms for the negotiations and due diligence
process. Huili's MOU includes a unique provision which entitles
Huili to the right of first purchase within 21 days of a third
party offer being received for the subsidiary.
Extensive desk top due diligence coupled with various site
visits assisted in the due diligence process largely being
completed by the end of June 2015. On 15 June 2015, the Company
announced the decision to discontinue discussions with both Ankong
and Shengbang. The Board is focused on ensuring that any
transaction presented to shareholders must be as free from
conditions as possible and be in a form which can be delivered on
and be completed timeously. These considerations remain guiding
principles of the Board, which will be applied when considering the
various alternatives.
Discussions with Hiria and its financial partner, Hangzhou
Everbright Private Equity Investment Management ("Hangzhou
Everbright") are ongoing with various commercial structural
alternatives being considered. The discussions have largely
progressed along the lines of a significant initial strategic
investment in Central Rand Gold Limited. This investment will
provide the Group with the ability to increase its production
capacity, upgrade its resource base and to re-capitalise the
balance sheet. The Board believes that this alternative will
provide the Company with a real opportunity to maximise the
extraction of its vast resource base, thereby enhancing future
shareholder return and value.
Discussions with Huili remain ongoing with a range of commercial
issues and technical matters, largely focused on the continued
dewatering of the Central Basin, being discussed and
progressed.
The Company continues to caution that there can be no certainty
that the discussions with both Huili or Hiria will lead to a
binding agreement being entered into by either party, nor that the
potential sale of Central Rand Gold (Netherlands Antilles) N.V., or
any other transaction will be completed.
Acid Mine Drainage ("AMD")
The High Density Sludge ("HDS") plant has been operational since
mid-2014. The Company continues to monitor the water level at its
mining operations as well as the daily discharge pumped out of the
Central Basin from the HDS plant. The Company has observed that
when the flow rate is maintained at approximately 60 million litres
per day ("mlpd"), which equates to approximately 80% of nameplate
capacity, a reduction in the water level occurs, as indicated in
the table below:
Average Water level
daily pumping below surface
rate (metres
Month (mlpd) below surface)
------------ --------------- ----------------
January
2015 35 144
------------ --------------- ----------------
February
2015 33 140
------------ --------------- ----------------
March 2015 70 142
------------ --------------- ----------------
April 2015 66 143
------------ --------------- ----------------
May 2015 65 145
------------ --------------- ----------------
June 2015 65 149
------------ --------------- ----------------
July 2015 65 151
------------ --------------- ----------------
August
2015 59 153
------------ --------------- ----------------
The above table provides an overview of the average daily
pumping rate and the resultant impact on the water table. Due to
maintenance on one of the Ritz submersible pumps, pumping was
limited to only one pumping station during January and February
2015. A replacement submersible pump was installed at the end of
February 2015, and an immediate drop in the water table was
observed. Since then the submersible pumps have been pumping at a
rate exceeding 60 mlpd, which has resulted in the water table
dropping by approximately 13 vertical meters since the end of
February 2015.
(MORE TO FOLLOW) Dow Jones Newswires
September 15, 2015 02:00 ET (06:00 GMT)
Based on the current performance, and taking into account the
potentially faster dewatering during the dry winter months, it is
believed that the underground mining areas will become accessible
between September 2016 and February 2017.
Mining
Mineral Resources
The Mineral Resources remain unchanged as of June 2015 due to
the cessation of underground workings. Surface operations are
classified as 'Exploration Target' in terms of the SAMREC code.
The temporary cessation of underground mining in September 2014,
due to the rising water levels, precipitated a dramatic shift in
the mining operations. The Company started moving away from open
cast mining to target the higher grade underground ore body. The
shift back to surface did have a significant impact on the
Company.
Open pit mining was stepped up and additional reclamation
sources of ore were sourced, evaluated and exploited. The Company's
aim was to secure sufficient resource base to enable the surface
operations to continue, whilst dewatering of the underground mine
occurred.
There has been a considerable amount of work undertaken to
identify sufficient surface material for processing. The below
table provides the current surface target areas:
Target Tonnage range Approximate
Slot area Reef Dip V. Depth (t) grade
-------- ----------- ---------- -------- --------- -------------- ------------
Slot Pits 1 64 000 to
5 to 3 White 40 deg 30m 125 900 2.8g/t
-------- ----------- ---------- -------- --------- -------------- ------------
Slot 60 000 to
7 Main Pit White 45 deg 30m 174 000 2.7g/t
-------- ----------- ---------- -------- --------- -------------- ------------
Slot 5 000 to
4 K7 Top Kimberly 45 deg 10m 22 000 1.7g/t
-------- ----------- ---------- -------- --------- -------------- ------------
Slot 5 000 to
4 K7 Middle Kimberly 45 deg 10m 20 000 1.8g/t
-------- ----------- ---------- -------- --------- -------------- ------------
Slot 5 000 to
4 K7 Bottom Kimberly 45 deg 10m 15 000 1.7g/t
-------- ----------- ---------- -------- --------- -------------- ------------
Pits 1, 30 000 to
NASREC 2 and 3 Main 45 deg 40m 37 800 2.7g/t
-------- ----------- ---------- -------- --------- -------------- ------------
170 000 to
395 000 2.6g/t
---------------------------------------- --------- -------------- ------------
The potential quantity and grade described by the term
"Exploration Target" is conceptual in nature and there has been
insufficient exploration to define a Mineral Resource and it is
uncertain if further exploration will result in the definition of a
Resource. Further exploration work is ongoing, and includes trial
mining and processing of this shallow target to establish grade and
ore body continuity, mineability, dilution and throughput
characteristics.
NOTE: The information in this statement relating to Mineral
Resources and geology has been reviewed and approved by Mr Keith
Matier, BSc (Hons), GDE, PrSci Nat, who is a Competent Person in
terms of the SAMREC code. Mr Matier is the Geology Manager of
Central Rand Gold South Africa (Pty) Limited and has over 21 years'
experience in exploration, mineral resource management and mineral
evaluation.
The Company considers the above table to be a conservative
estimate of available material and is presently conducting testwork
to determine if the Exploration Target can be increased. Further,
the above table does not include surrounding sand and slimes
resources which the Company has sourced.
Production statistics
30 June 30 June Variance
2015 2014
tonnes tonnes
------------- -------- -------- ---------
Underground - 66 085 (66 085)
------------- -------- -------- ---------
Surface 62 856 22 076 40 780
------------- -------- -------- ---------
Reclamation 33 356 - 33 356
------------- -------- -------- ---------
Total 96 212 88 161 8 051
------------- -------- -------- ---------
Surface mining was largely focused at slots 5 and 7. Current
pits have been mined down to a depth of approximately 15 metres.
The average belt grade for these pits to date is 2.13g/t. It is
believed that conventional drilling and cushion blasting will allow
the existing pits to be further pushed back allowing mining at
twice the current operating depths.
With over 100 years of significant mining in the Johannesburg
region, there remains a significant amount of old rock and slimes
dumps, which surround the Company's metallurgical plant. Where
economical grades have been identified and with the consent of the
resource owners, the Company has removed this material and
processed it through its metallurgical plant. This activity has an
added benefit of rehabilitating the surrounding area.
Metallurgy
Production Statistics
2015 2014
---------------------------------- --------- ---------
- January January
to June to June
---------------------------------- --------- ---------
* Internal
---------------------------------- --------- ---------
* Tonnes processed (t) 87 895 80 749
---------------------------------- --------- ---------
* Built up head grade (g/t) 1.45 1.77
---------------------------------- --------- ---------
* Fine gold produced (oz) 3 435 3 205
---------------------------------- --------- ---------
External (Toll
treatment)
---------------------------------- --------- ---------
* Tonnes processed (t) 6 721 13 902
---------------------------------- --------- ---------
* Delivered grade (g/t) 1.04 2.35
---------------------------------- --------- ---------
* Fine gold produced (oz) 244 944
---------------------------------- --------- ---------
Total tonnes processed
(t) 94 616 94 651
---------------------------------- --------- ---------
Total gold produced
(oz) 3 679 4 149
---------------------------------- --------- ---------
Internal gold production for 2015 H1 was on par with 2014 H1 on
a gold output context with the lower feed grade being compensated
by higher tonnage throughput, as a result of recent plant upgrades
The benefit of the plant upgrades have resulted in an improvement
in plant performance with 18,532 wet tonnes being processed through
the plant in August 2015. The aim is to reach 20,000 tonnes by end
October 2015.The external tolling was impacted both by lower
tonnage and lower delivered grades. This is a direct result of the
new low grade Joint Venture entered into with neighbouring producer
Mintails Proprietary Limited ("Mintails").
Mine Call Factor
During H1 2015, the Mine Call Factor ("MCF") continued on the
same positive trajectory seen during 2014. The "face to pour" MCF
reconciliation averaged at 81% for the period, with the belt MCF
averaging 94%. This compares very favourably to the MCF industry
average of 74%.
Dry tonnes Face
processed Belt to pour
Date (t) MCF MCF
----------- ----------- ----- ---------
January
2015 11 759 91% 84%
----------- ----------- ----- ---------
February
2015 15 300 93% 77%
----------- ----------- ----- ---------
March
2015 14 306 96% 89%
----------- ----------- ----- ---------
April
2015 14 634 101% 78%
----------- ----------- ----- ---------
May 2015 15 587 96% 85%
----------- ----------- ----- ---------
June 2015 16 309 90% 70%
----------- ----------- ----- ---------
Total 87 895 94% 81%
----------- ----------- ----- ---------
Plant improvement
The focus remains on improving plant efficiency. One of the
highlights of the first half of 2015 was the construction and
commissioning of the new 243 m(3) leach tank in June 2015. The new
tank will increase the leach residence time from 14 hours to 22
hours, resulting in a significant drop in gold in tailings and
corresponding increase in gold production.
Financial update
Results
(MORE TO FOLLOW) Dow Jones Newswires
September 15, 2015 02:00 ET (06:00 GMT)
The loss before interest, tax and depreciation for the period
under review amounted to US$0.7m, which is a significant
improvement on prior year period operational loss of US$2.6m.
Revenue from internal gold production is up by 7% to 3 435 ozs
(2014: 3 205 ozs), despite the average grade dropping from 1.77g/t
to 1.45g/t. Overall revenue is down from US$5.8m to US$4.3m due to
the Company sending less material for toll treatment by Mintails
and the reduction in gold price. Significant restructuring occurred
within the Company to realign the business to its new focus on
surface mining resulting in a reduction of 40% in the Group's cost
base. These savings were not only reported through the elimination
of underground mining costs but also as a result of the
re-negotiation of key contracts, improving operational processes
and eliminating inefficiencies in consumable usage. A key example
is the reduction in the average cost per tonne for surface mining
reducing from US$19 per tonne to US$11 per tonne, a 42%
improvement. Although the trend is positive the key focus remains
to move the organisation into sustainable cash generative and
profitable position. Cash and cash equivalents at 30 June 2015 was
$1.1m. Cash generated from operations will be utilised to further
upgrade the metallurgical plant and to further reduce the Company's
net working capital position.
Looking forward
The focus over the next six months is to build on the momentum
gained during the first half of 2015, with the following areas
being the main focus for the Company:
-- Finalise the negotiations with Hiria and Huili;
-- Continue to identify and mine sufficient surface material
until underground mining operations are recommenced; and
-- Continual improvement of the Group's operational processes
thereby ensuring the efficiency of spend.
Johan du Toit
Chief Executive Officer
Condensed Group Statement of Financial Position
as at 30 June 2015
30 June 31 December 30 June
2015 2014 2014
Notes US$ '000 US$ '000 US$ '000
(Unaudited) (Audited) (Unaudited)
--------------------------------- ----- ----------- ----------- -----------
ASSETS
Non-current assets
Property, plant and equipment 5 3 172 3 592 4 763
Intangible assets 2 669 2 830 3 104
Security deposits and
guarantees 59 191 210
Environmental guarantee
investment 3 119 3 177 3 361
Loans receivable 6 8 619 8 646 8 961
17 638 18 436 20 399
----------- ----------- -----------
Current assets
Security deposits and
guarantees 32 65 71
Prepayments and other
receivables 712 1 239 1 004
Inventories 7 112 76 813
Cash and cash equivalents 1 177 914 4 389
Non-current assets held-for-sale 8 - - -
Derivative asset 720 720 -
2 753 3 014 6 277
----------- ----------- -----------
Total assets 20 391 21 450 26 676
=========== =========== ===========
EQUITY
Attributable to equity
holders of the parent
Share capital 9 26 617 26 490 26 314
Share premium 9 224 048 222 963 218 630
Share-based compensation
reserve 28 187 28 238 28 187
Treasury shares (6) (6) (6)
Foreign currency translation
reserve (29 433) (29 534) (29 348)
(249
Accumulated losses (262 743) (261 559) 133)
----------- ----------- -----------
(13 330) (13 408) (5 356)
Non-controlling interest - - -
Total equity (13 330) (13 408) (5 356)
----------- ----------- -----------
LIABILITIES
Non-current liabilities
Environmental rehabilitation 4 622 4 904 5 904
Loan payable 10 14 392 14 418 19 336
19 014 19 322 25 240
----------- ----------- -----------
Current liabilities
Trade and other payables 6 078 6 911 6 792
Taxation payable 181 177 -
Derivative liability 8 448 8 448 -
14 707 15 536 6 792
----------- ----------- -----------
Total liabilities 33 721 34 858 32 032
----------- ----------- -----------
Total equity and liabilities 20 391 21 450 26 676
=========== =========== ===========
Condensed Group Statement of Profit or Loss
for the six months ended 30 June 2015
Six months 12 months Six months
ended ended ended
30 June 31 December 30 June
2015 2014 2014
Notes US$ '000 US$ '000 US$ '000
(Unaudited) (Audited) (Unaudited)
----------------------------- ----- ----------- ----------- -----------
Revenue 11 4 352 8 212 5 774
Production costs 12 (2 776) (9 844) (4 856)
Employee benefits expense (1 293) (3 223) (1 607)
Directors' emoluments 13 (103) (717) (434)
Inventory write-down - (705) (40)
Operating lease expense (250) (787) (304)
Operational expenses 14 (174) (502) (639)
Other expenses 15 (560) (1 702) (882)
Other income and gains 16 107 543 131
Foreign exchange transaction
(losses)/gains (16) 129 261
----------- ----------- -----------
Loss before interest,
tax and depreciation (713) (8 596) (2 596)
Depreciation (229) (460) (226)
Impairment of assets - (158) -
Loss on fair value of
convertible loan note - (5 108) -
Finance income 546 1 233 456
Finance costs (788) (2 179) (476)
----------- ----------- -----------
Loss before income tax (1 184) (15 268) (2 842)
Income tax expense 17 - - -
----------- ----------- -----------
Loss for the period (1 184) (15 268) (2 842)
----------- ----------- -----------
Loss is attributable
to:
Non-controlling interest - - -
Equity holders of the
parent (1 184) (15 268) (2 842)
(1 184) (15 268) (2 842)
----------- ----------- -----------
95 195 87 180 75 180
Shares in issue 808 808 808
Weighted average number
of ordinary shares in 95 195 87 180 75 180
issue 808 808 808
Fully diluted weighted
average number of ordinary 95 195 87 180 75 180
shares in issue 808 808 808
Basic loss per share
(US cents per share) 19 (1.24) (17.51) (3.78)
Diluted loss per share
(US cents per share) 19 (1.24) (17.51) (3.78)
Condensed Group Statement of Comprehensive Income
for the six months ended 30 June 2015
Six months 12 months Six months
ended ended ended
30 June 31 December 30 June
2015 2014 2014
(MORE TO FOLLOW) Dow Jones Newswires
September 15, 2015 02:00 ET (06:00 GMT)
US$ '000 US$ '000 US$ '000
(Unaudited) (Audited) (Unaudited)
----------------------------------- ----------- ----------- -----------
Loss for the period (1 184) (15 268) (2 842)
----------- ----------- -----------
Other comprehensive income/(loss):
Item that may be reclassified
subsequently to profit
and loss
Exchange differences
on translating foreign
operations 101 (91) 94
Other comprehensive income/(loss)
for the period, net of
tax 101 (91) 94
----------- ----------- -----------
Total comprehensive loss
for the period (1 083) (15 359) (2 748)
----------- ----------- -----------
Total comprehensive loss
is attributable to:
Non-controlling interest - - -
Equity holders of the
parent (1 083) (15 359) (2 748)
(1 083) (15 359) (2 748)
----------- ----------- -----------
Condensed Group Statement of Changes in Equity
for the six months ended 30 June 2015
Attributable to equity holders of the Group
----------------------------------------------------------------------------------
Foreign
Ordinary Share-based currency
share Share compensation Treasury translation Accumulated Non-controlling Total
Notes capital premium reserve shares reserve losses Total interest equity
US$
US$ '000 US$ '000 US$ '000 US$ '000 US$ '000 US$ '000 US$ '000 '000 US$ '000
-------------- ------- --------- --------- ------------ --------- ----------- ----------- --------- --------------- ---------
Balance at 31 (246
December 2013 25 604 213 377 28 224 (6) (29 442) 291) (8 534) - (8 534)
Total
comprehensive
income for the
period ended
30 June 2014
Loss for the
period - - - - - (2 842) (2 842) - (2 842)
Other
comprehensive
income
Foreign currency
adjustments - - - - 94 - 94 - 94
Transactions
with owners,
recorded
directly
in equity
Issue of
Shares:
Capital raising 710 5 253 - - - - 5 963 - 5 963
Employee Share
Option Scheme:
Share-based
payments: Employees'
and Directors'
shares and options - - (37) - - - (37) - (37)
Balance at 30 (249
June 2014 26 314 218 630 28 187 (6) (29 348) 133) (5 356) - (5 356)
--------- --------- ------------ --------- ----------- ----------- --------- --------------- ---------
Attributable to equity holders of the Group
---------------------------------------------------------------------------------
Foreign
Ordinary Share-based currency
share Share compensation Treasury translation Accumulated Non-controlling Total
Notes capital premium reserve shares reserve losses Total interest equity
US$ US$ US$
US$ '000 US$ '000 US$ '000 '000 '000 US$ '000 US$ '000 US$ '000 '000
-------------- ----- --------- --------- ------------ -------- ----------- ----------- --------- --------------- --------
Balance at 31 (29 (261 (13
December 2014 26 490 222 963 28 238 (6) 534) 559) (13 408) - 408)
Total
comprehensive
income for the
period ended
30
June 2015
Loss for the
period - - - - - (1 184) (1 184) - (1 184)
Other
comprehensive
income
Foreign
currency
adjustments - - - - 101 - 101 - 101
Transactions
with
owners,
recorded
directly in
equity
Issue of
Shares:
Capital
raising 9 127 1 085 - - - - 1 212 - 1 212
Employee Share
Option Scheme:
Share-based
payments:
Employees'
and
Directors'
shares
and options 21 - - (51) - - - (51) - (51)
Balance at 30 (29 (262 (13
June 2015 26 617 224 048 28 187 (6) 433) 743) (13 330) - 330)
--------- --------- ------------ -------- ----------- ----------- --------- --------------- --------
Condensed Group Statement of Cash Flow
for the six months ended 30 June 2015
Six months 12 months Six months
ended ended ended
30 June 31 December 30 June
2015 2014 2014
US$
US$ '000 US$ '000 '000
(Unaudited) (Audited) (Unaudited)
------------------------------- ----- ----------- ----------- -----------
CASH FLOWS FROM OPERATING
ACTIVITIES Notes
Loss before tax (1 184) (15 268) (2 842)
Adjusted for :
Depreciation 229 460 226
Employment benefit expenditure
(share-based payments) (51) 14 (37)
(Profit)/loss on disposal
and scrapping of property,
plant and equipment (9) (17) 9
Impairment of inventory 7 - 705 40
Impairment of assets - 158 -
Net loss/(gain) on foreign
exchange 16 (129) (261)
Finance income (546) (1 233) (456)
Finance costs 788 2 179 476
Loss on fair value of
convertible loan note - 5 108 -
Changes in working capital
Decrease/(increase) in
prepayments and other
receivables 527 (325) (90)
(Increase)/decrease in
inventory (36) 129 57
Decrease in trade and
other payables (833) (60) (179)
(Decrease)/increase in
provisions (282) 809 258
-----------
Cash flows used in operations (1 381) (7 470) (2 799)
Finance income 66 273 -
Finance costs - - (15)
Sundry income - (1 204) -
Net cash used in operating
activities (1 315) (8 401) (2 814)
----------- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of property,
plant and equipment 5 (5) (1 049) (2 022)
Proceeds from disposal
of property, plant and
equipment - 186 -
Increase in environmental
guarantee deposit (17) (53) (54)
Net cash used in investing
activities (22) (916) (2 076)
----------- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of
shares for cash 1 260 4 254 -
Cost relating to the
(MORE TO FOLLOW) Dow Jones Newswires
September 15, 2015 02:00 ET (06:00 GMT)
issue of shares (48) (257) -
Net proceeds from exercise
of share options - 3 732 -
Net proceeds from issue
of share capital - - 5 963
Net cash from financing
activities 1 212 7 729 5 963
----------- ----------- -----------
Net (decrease)/increase
in cash and cash equivalents (125) (1 588) 1 073
Cash and cash equivalents
at 1 January 914 2 475 2 475
Effects of exchange rate
fluctuations on cash
balances 388 27 841
Cash and cash equivalents
at end of period 1 177 914 4 389
=========== =========== ===========
Notes to the Condensed Interim Group Financial Statements
for the six months ended 30 June 2015
1. Basis of preparation
This condensed set of consolidated financial statements
have been prepared in accordance with IAS 34 Interim
Financial Reporting as adopted by the EU. The annual
Financial Statements of the Group are prepared in
accordance with International Financial Reporting
Standards and Interpretations (collectively "IFRS")
issued by the International Accounting Standards
Board ("IASB") as adopted by the European Union
("EU"). The condensed interim Group financial statements
have been prepared applying the accounting policies
and presentation that were applied in the preparation
of the Company's published consolidated financial
statements for the year ended 31 December 2014 except
for the changes described in note 2.
The consolidated financial statements are presented
in United States Dollars ("US$" or "US Dollar")
and rounded to the nearest thousand. The functional
currency of the parent company, Central Rand Gold
Limited, changed during the prior year from the
British Pound to the US Dollar as its main source
of funding is now the US Dollar. The functional
currency of its principal subsidiary, Central Rand
Gold South Africa Proprietary Limited ("CRGSA")
is the South African Rand ("ZAR" or "Rand").
Going concern
REQUESTED FROM PATRICK. PER PATRICK, THIS ALL DEPENDS
ON THE REVISED
The Directors have prepared the condensed interim
Group financial statements on the going concern
basis notwithstanding net current liabilities at
30 June 2015 of US$12.0 million, having considered
the current operations, the current funding position
and the projected funding requirements for the business
for at least 12 months from the date of approval
of the financial statements as detailed below. Since
the 2014 year end the Group has continued with its
surface mining operations and processing of third
party ore and has also raised a further US$1.2 million
from share placements in June 2015.
The Directors have prepared cash flow projections
until December 2016 that reflect the current mine
plan adopted by the Directors. The mine plan is
based on surface mining only as the underground
mine remains on care and maintenance until the water
level reduces following the re-commissioning of
the dewatering plant. The mining plan assumes that
the upgrades will increase processing plant capacity
from 16 000 tonnes per month to 20 000 tonnes per
month from January 2016. These projections show
that the Group has sufficient funding for at least
the next 12 months from the date of approval of
these condensed interim Group financial statements
and hence the Directors have prepared the condensed
interim Group financial statements on a going concern
basis.
The Directors are optimistic about the future of
the Company and the dewatering may give the Company
improved access to deeper mining levels over time.
However, the risks inherent in any single metal
mining operation remain for the longer term.
2. Accounting policies
Except as described below, the accounting policies
applied by the Group in these condensed interim
Group financial statements are the same as those
applied by the Group in its consolidated financial
statements as at and for the year ended 31 December
2014, as described in those consolidated financial
statements.
The Group has adopted the following standards and
amendments to standards, including any consequential
amendments to other standards, with a date of initial
application of 1 January 2015:
-- IFRS 9: Financial Instruments
The adoption of these standards is not expected
to have a significant impact upon the Group's net
results, net assets or disclosures.
Taxes on income in the interim periods are accrued
using the tax rate that would be applicable to expected
total annual earnings.
3. Estimates and judgements
The preparation of condensed interim Group financial
statements requires management to make judgements,
estimates and assumptions that affect the application
of accounting policies and the reported amounts
of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing this condensed interim Group financial
statements, the significant judgements made by management
in applying the Group's accounting policies and
the key sources of estimation uncertainty were the
same as those that applied to the consolidated annual
financial statements as at and for the year ended
31 December 2014.
4. Financial risk management
The Group's financial risk management objectives
and policies are consistent with those disclosed
in the consolidated annual financial statements
as at and for the year ended 31 December 2014.
Fair value
The aggregate net fair values of all current financial
assets and financial liabilities, as well as non-current
receivables, instalment sales and finance leases
approximate the carrying amounts at the financial
reporting date.
Foreign currency rates
The US Dollar rates of exchange applicable to the
period are as follows:
2015 2014 2014
Six months Six months
to Year ended to
30 June 31 December 30 June
Closing Closing
Average Average Closing Average
South African Rand 0.08 0.08 0.09 0.09 0.09 0.09
Pound Sterling 1.57 1.52 1.55 1.65 1.70 1.67
5. Property, plant and equipment
During the six months ended 30 June 2015, the Group
spent US$5 280 to purchase other items of property,
plant and equipment. In the six month period ending
30 June 2014, the Group spent US$1 894 534 to upgrade
the plant and US$127 634 to purchase other items
of property, plant and equipment.
6. Loans receivable
Puno Gold Investments Proprietary Limited ("Puno")
Since the last report for the year ended 31 December
2014 there has been no resolution to the dispute
relating to alleged procedural breaches of the Central
Rand Gold South Africa (Proprietary) Limited ("CRGSA")
Shareholders' Agreement between CRGSA and its current
Black Economic Empowerment ("BEE") shareholder,
Puno. The dispute surrounds the allocation of intercompany
loans which fund the budget and work programme and
the incurring of, and level of, certain costs.
During the previous financial year, the Company
was granted the right to appeal the December 2013
ruling.
The Group still believes that ultimately their position
will prevail. The Board is still of the opinion
that this will not have any material consequences
in respect of the consolidated accounts of the Group.
The loan payable to Puno contains the same allocations
referred to above.
7. Inventories
Group
June December
2015 2014
US$ '000 US$ '000
Consumables 39 30
Ore stockpiles 73 46
Total inventories 112 76
========= ====================
The amount of the write-down of ore stockpiles to
net realisable value, and recognised as an expense
is US$0 (2014: US$881 109).
8. Non-current assets held-for-sale
During the previous financial year, the Group disposed
the flotation plant for US$168 265, resulting in
a loss of US$9 220. No additional items were classified
as held-for-sale during the period under review.
9. Share capital and share premium
On 17 June 2015, the Company allotted and issued
6 015 000 New Ordinary Shares at 10 pence, which
raised US$0.94 million (GBP0.60 million). On 18
June 2015, the Company allotted and issued a further
2 000 000 New Ordinary Shares at 10 pence, which
raised US$0.32 (GBP0.20 million).
10. Loan payable
Group
June December
2015 2014
US$ '000 US$ '000
Loan payable consists of the following:
Puno Gold Investments Proprietary
Limited 8 620 8 646
Redstone Capital Limited 5 772 5 772
14 392 14 418
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