Johannesburg - Dual listed Central Rand Gold (CRG) plunged 30 percent on the JSE yesterday after it said that it had not yet reached an agreement for the acquisition of its wholly-owned subsidiary, CRG Netherlands Antilles.
The mining company fell as much as 30.23 percent to R3, which valued it at R261.54 million.
CRG is a JSE and London Stock Exchange listed gold exploration and production company operating on Johannesburg’s southern outskirts.
The decline of the share was the latest indication that the market was uncomfortable at the disposal of the Netherlands Antilles subsidiary to China-based companies Huili Resources and Hiria Group.
“The board cautions that at this time 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), or any other transaction will be completed,” the company said yesterday.
Target
CRG has previously extended the target of the completion date for the acquisition twice to allow the Huili Resources and Hiria Group to complete outstanding the due diligence processes. The latest deadline expired on Wednesday.
CRG said its talks with Huili and Hiria were now focused on commercial and structural issues. “Central Rand Gold is exploring a number of structural alternatives with Hiria and Hangzhou Everbright which range from the acquisition of Central Rand Gold (Netherlands Antilles) to a strategic investment into the company,” CRG said.
CRG said the discussions had been focused around various technical due diligence items largely focused on the future dewatering of the Central Basin 225 metres below the surface and surrounding surface and open pit resource opportunities.
“The discussions continue to progress towards completion and the company will advise shareholders once a resolution is achieved,” the company said.
CRG said it has worked closely with Hiria over the past four weeks to resolve both technical due diligence and commercial items. The company confirmed that Huili’s right of first purchase, within 21 days of a third party offer being received for Central Rand Gold (Netherlands Antilles) remained in place.
CRG was linked to controversial businessmen Kenny Kunene and former convict Gayton Mackenzie, who both had minority shareholding in the company. McKenzie was employed at CRG from April 2007 to December 2010. Kunene was employed there from August 2007 until February 2011.
The company had run into trouble with the government when the Department of Mineral Resources in 2011 cancelled CRG’s mining licence.
Business Report