TIDMCRND
RNS Number : 5350J
Central Rand Gold Limited
12 September 2016
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 2007/019223/10)
ISIN: GG00B92NXM24
LSE share code: CRND JSE share code: CRD
("Central Rand Gold" or the "Company")
----------------------------------------------------
Operational and Strategic Investment Update
Intended Board Changes
Intention to Disapply Pre-emption Rights
----------------------------------------------------
Further to the announcements dated 29 July 2016 and 22 August
2016, the board of directors of Central Rand Gold is pleased to
provide the following update to shareholders.
1. Current Trading and Market Update
Mining and Metallurgical Update
With the water level at approximately 153.46 metres below
surface ("mbs"), underground mining remains suspended. As announced
in June 2016, the Company has discontinued open pit mining
operations and is now focussing on the Joint Venture Tolling
Agreement ("Tolling Joint Venture") with a third party supplier of
gold bearing material.
As previously announced, the Company continues to receive and
process gold bearing material under the Tolling Joint Venture. The
Tolling Joint Venture partner is delivering at rates of up to 5,000
tonnes per week to the Company's metallurgical plant. This rate of
weekly delivery will increase in the coming weeks, allowing the
Tolling Joint Venture parties to achieve their stated objective of
processing an average of 19,000 tonnes per month which will be
achieved in the fourth quarter of 2016. The anticipated deliveries
and processing rates are conditional upon the Company having
sufficient working capital to fund operations.
The Company is working closely with the Tolling Joint Venture
partner. The Company, in consultation with the Tolling Joint
Venture partner, has conducted survey, sampling and metallurgical
testwork programmes (together the "Testwork Programme") on the rock
dump source currently being processed ("Rock Dump"). Through the
Testwork Programme, the Company has confirmed an average head grade
of 1.8g/t with no contaminants identified. Further, the Testwork
Programme has confirmed that there is approximately 6 million
tonnes of gold-bearing material in the Rock Dump, which is expected
to be processed under the Tolling Joint Venture. Consequently, the
Tolling Joint Venture has the potential to maintain the operations
of the Company's metallurgical plant for many years.
The refurbishment of Mill 1 has been completed. As previously
stated, the Company will primarily treat the gold bearing material
through Mills 1 and 3, and will utilise Mill 2 as additional
capacity as and when required.
Additional Tailings Deposit Joint Venture Opportunity
The Company is progressing discussions with the owner of a
tailings deposit located in close proximity to the Company's
metallurgical plant ("Target Tailings Deposit"). The Target
Tailings Deposit is considered to host several million tonnes of
gold bearing material. The Company has conducted testwork on the
Target Tailings Deposit material and is expected to be in a
position to announce these testwork results, along with the final
commercial terms of the agreement relating to the Target Tailings
Deposit, in the short term. The Company is contemplating a
transaction structure that will allow both the existing Tolling
Joint Venture and the Target Tailings Deposit to operate
concurrently however the Board highlights that no assurances can be
given with respect to the Target Tailings Deposit at this
stage.
Water
Since the beginning of July 2016, Central Rand Gold has seen a
gradual decrease in the water table and a reduction of
approximately 11 metres has been reported to date, with the current
water level at approximately 153.46 mbs. Whilst the rate of
de-watering is slow, the gradual decrease in the water table is
encouraging as it illustrates that the Central Basin can be
de-watered. The Board will continue to monitor the underground
water levels, so that it can establish when it can re-commence
underground operations.
2. Intended Board Changes
The Board of Directors will be re-compositioned over the coming
weeks due to external changes in the professional working
arrangements of Nathan Taylor and Mark Austin.
Nathan Taylor has accepted an executive role at a financial
institution in Sydney, Australia that will require him to
relinquish all public company directorships in the very near term.
Mr. Taylor will remain an indirect shareholder of the Company
through his shareholding of Redstone Capital Limited, which is a
significant shareholder of the Company and the holder of the
US$7.25m Senior Secured Convertible Note.
Mark Austin has indicated his intention to resign in the short
term due to a potential conflict of interest with one of his
clients. Whilst Mark will relinquish his directorship, the Company
will retain his ongoing geological services via a consulting
agreement.
The Board of Directors has identified and invited two
individuals to join the Board as Non-Executive Directors as soon as
the necessary on-boarding paperwork has been completed. The two
individuals have strong mining backgrounds as well as financial
experience.
Further announcements will be made as soon as possible in
regards the formal resignations of Mr. Taylor and Mr. Austin and of
the anticipated Board appointments.
3. Strategic Investment Update
As at 1 September 2016, the Company had cash reserves of
approximately GBP0.44 million (unaudited). As previously announced,
the Company has been pursuing discussions with a number of sources
over the availability of both debt and equity funding to provide
working capital and funding for growth initiatives such as the
Tolling Joint Venture and the Target Tailings Deposit.
In particular, the Company is presently pursing a transaction
with one existing shareholder of the Company for an investment of
up to US$4,000,000 (the "Strategic Investment"). The Strategic
Investment currently envisages the investment into the Company's
wholly owned immediate subsidiary Central Rand Gold (Netherlands
Antilles) N.V. ("CRG NV"). The final terms and structure of the
Strategic Investment. which remain subject to amendment, will be
announced to shareholders as soon as finalised, however the Company
expects that the Strategic Investment will result in the Company
retaining a majority shareholding (in excess of 50 per cent. of the
issued shares) and the full management control of CRG NV and that
the Group will continue to fully consolidate the Company's
subsidiaries and operations. The Board highlights that the
Strategic Investment remains subject to agreement and compliance
with applicable rules and regulations and that no assurances can be
given with respect to the Strategic Investment at this stage.
4. Background to and reasons for the Intended Disapplication of Pre-emption Rights
In addition to the Strategic Investment, the Company has
identified an opportunity to raise additional equity from third
party investors who have expressed interest in investing capital
into the Company. However, the Company presently does not have any
pre-emptive authority remaining. Further, the potential third party
investors have indicated that they would not be prepared to provide
this funding without a pre-approval by the Company's Shareholders
to disapply the pre-emption rights. Consequently, the Directors
will be issuing a Circular to disapply the pre-emption rights in
the near term.
The renewed authorities will enable the Directors to raise
urgently required additional working capital to remain trading as a
going concern. The Directors also believe that, in the context of
the current capital market environment, along with the variety of
growth opportunities the Company is pursuing, such as the Target
Tailing Deposit, the ability to rapidly access equity funding is
essential and in the best interests of Shareholders.
The Circular is presently with the regulators for approval and
will be released to Shareholders as soon as regulatory approval has
been received.
For further information, please contact:
Central Rand Gold +27(0) 87 310 4400
Lola Trollip / Nathan Taylor
Panmure Gordon (UK) Limited - Nominated Adviser & Broker +44
(0) 20 7886 2977
Adam James / James Greenwood
Merchantec Capital - JSE Sponsor +27 (0) 11 325 6363
Monique Martinez / Marcel Goncalves
Mark Austin, Non-Executive Director of the Company with over
thirty five years' experience in the exploration and mining
industry, has read and approved the geological disclosure in this
regulatory announcement. Mr Austin holds a B.Sc. Hons. in Geology,
is a registered Natural Scientist ('SACNASP') and a Fellow of the
Geological Society of South Africa and is currently serving on the
Steering Committees of the South African Code for the Reporting of
Exploration Results, Mineral Resources And Mineral Reserves
('SAMREC') and the South African Code for the Reporting of Mineral
Asset Valuation ('SAMVAL').
12 September 2016
The information communicated in this announcement is inside
information for the purposes of Article 7 of Market Abuse
Regulation 596/2014 ("MAR").
This information is provided by RNS
The company news service from the London Stock Exchange
END
TSTGMGMLNZMGVZG
(END) Dow Jones Newswires
September 12, 2016 03:30 ET (07:30 GMT)
Central Rand (LSE:CRND)
Historical Stock Chart
From Jun 2024 to Jul 2024
Central Rand (LSE:CRND)
Historical Stock Chart
From Jul 2023 to Jul 2024
