Banele Ginindza
CENTRAL Rand Gold’s (CRG) best laid plans in the financial year to December 2014 were dampened by the flooding of its shafts leaving it to scramble together plans for impromptu surface mining operations and hanging future prospects on acquisition by any one of four Asian companies.
In its financial report released yesterday, CRG said it has subsequently dismissed two of the Asian suitors and is pinning its hopes on fruitful negotiations with either Huili Resources or Hiria Group, though all four had submitted eerily similar proposals of not more than $150 million (R1.83 billion).
“We eagerly await the completion of the final negotiation processes with the knowledge that an acquisition and subsequent cash injection will finally allow the CRG project to reach its very significant potential,” chairman Nathan Taylor said.
Similar offers
Taylor said the three Asian companies, Hiria Group, Beijing Ankong Investment and Shengbang Jiabo (Beijing) Consulting Company (Shengbang) submitted substantively similar offers with a target date for completion of March 31, 2015.
He said this target date was subsequently extended to June 12, 2015, to accommodate a fourth interested party, Huili Resources (Huili), who put forward a further memorandum of understanding (MOU) on February 12, 2015, which again contained substantively similar terms to the previously announced MOUs.
In June 2015, after the completion of the due diligence processes, both Huili and Hiria requested a one-month extension to July 15, 2015, to enable them both to complete their respective internal processes.
Further, the board decided not to continue discussions with Ankong and Shengbang at that time, to enable it to focus on discussions and negotiations with Huili and Hiria.
In order to strengthen its balance sheet and in pursuit of achieving its stated mine plan, CRG completed fundraising through a share placement on June 17, 2015, of 6.015 million new ordinary shares at 10p per ordinary share, which raised £602 000 (R11.56 million).
A further share placement on June 18, 2015, of 2 million new ordinary shares at 10p per ordinary share, raised £200 000.
Taylor said CRG embarked on an intense and systematic exploration and evaluation programme to identify and secure sufficient surface material to sustain operations across the short- to mid-term after an unfortunate delay in commencement of pumping and the initial teething issues forced the company to cease underground mining due to a rising water table.
Reduced cost
The identification of more than 390 000 tons of ore on surface, coupled with a number of third party toll treatment transactions, has enabled the company to not only continue to “fill the mills”, but to do so at a reduced cost.
CRG chief executive Johan du Toit said the transition from underground mining to surface mining was undoubtedly a painful process during 2014.
He said the exploration work undergone in 2014 has put the company on a steady footing while it waits to re-commence underground mining.
He said the the company has plans to further increasing its metallurgical capacity, which should come on line during the second half of 2015.
CRG shares on the JSE ended unchanged at R2.70 yesterday.