TIDMCRND
RNS Number : 8365J
Central Rand Gold Limited
22 December 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")
OPERATIONAL UPDATE AND BOARD CHANGES
Central Rand Gold, the South African gold mining and exploration
holding company, announces an operational update and changes to the
board of directors of Central Rand Gold (the "Board").
Central Rand Gold Limited has previously announced that it had
launched a process to review various strategic and funding options
(the "Process") available to it, which followed approaches made by
four individual Asian investors groups ("Asian Investor
Groups").
Much of the engagement from the Asian Investor Groups focused on
a potential sale of Central Rand Gold (Netherlands Antilles) N.V.,
although in recent months the concept of a strategic investment has
also been contemplated.
The Company conducted a thorough review and has been encouraged
by the significant level of interest from, and engagement with, the
Asian Investor Groups, along with other counter-parties throughout
the Process. In particular, the Company is pleased with the receipt
of indicative proposals from Hiria Group Company Limited and Huili
Resources Group Limited which the Company has sought to clarify and
finalise over recent months. However, the significant uncertainty
caused by falling commodity prices and difficult market conditions
across the junior mining sector, along with company specific
factors such as the continued dewatering of the Central Basin, has
meant that to date no unconditional and appropriately valued
proposals have been received which the Board believes might lead to
a transaction which could be completed within a reasonable period
of time.
Specifically, the gold price has fallen in recent times along
with a wide spread sell off in junior gold miners, which has
resulted in companies across the sector reducing capital
expenditure and delaying investment decisions pending an
improvement in underlying market conditions.
Consequently, the Board has terminated the Process relating to
the sale of Central Rand Gold (Netherlands Antilles) N.V. with
immediate effect as it believes its continuation will unnecessarily
prolong shareholder uncertainty with no immediate prospect of a
satisfactory outcome. The Company will continue to engage with the
Asian Investor Groups should the prospects for the completion of a
transaction involving the sale of Central Rand Gold (Netherlands
Antilles) N.V. improve.
The Company continues to negotiate with one Asian Investor
regarding a strategic investment into Central Rand Gold Limited.
This negotiation will continue in parallel with discussions with
other third party investors, to provide funding in order to pursue
growth opportunities for the Company.
The Company remains well positioned to benefit from the
improvements and upgrades made to the Company's metallurgical plant
during 2014 and 2015 and the identification of internal and
external sources of economic surface and open pit gold bearing
material.
OPERATIONAL UPDATE
Dewatering of the Central Basin and access to the significant
underground reserves remains a key focus in realising the long term
objectives of the Company. During 2015, the water table has receded
13 vertical meters to approximately 143 meters below surface.
Recent upgrades to the water treatment plant have largely been
completed and the water table rate of decline is expected to
increase during 2016.
In the interim, an extensive surface exploration program has
been undertaken and a number of near surface opencast opportunities
have been identified. The Company is presently mining two opencast
slots (namely Slot 5 and Slot 7) and plans to develop an additional
opencast slot in 2016. Having additional sources of open pit
material will make the delivery of ore to the metallurgical plant
more reliable and consistent.
The Company expects that the already identified opencast
operations will provide sufficient material at an acceptable grade
so as to allow for continued operation of the mine for a number of
years. The management team remains optimistic regarding the
viability of the surface mining strategy and is committed to
optimise this further. This is however, seen as an interim measure
whilst dewatering of the underground operations continues.
The Company continues to identify and source additional material
from external sources to supplement the opencast operations. The
opportunity to secure material from external sources is significant
and the Company continues to advance discussions with various
parties involving significant quantities of ore bearing
material.
The metallurgical plant continues to operate satisfactorily with
continual sustainable improvements being realized. Furthermore, the
cost structure of Central Rand Gold's operations continues to be
reviewed with emphasis on unit efficiencies, a flatter management
structure and improving production output. Recent changes to the
management team are already indicating improved results and further
optimisation is planned.
BOARD AND MANAGEMENT CHANGES
The Board has today announced the resignation of Johan du Toit
as Chief Executive Officer effective from 31 December 2015. Mr. du
Toit has decided to resign from the Board to pursue other
opportunities.
Over the past three months Mr. Allen Phillips, Non Executive
Director of the Company, has been performing a more hands-on role
in the operations of the Company, and will be appointed Interim
Chief Executive, whilst the Company undertakes a search to identify
a new Chief Executive in 2016. Mr. Phillips joined the Board in May
2014 and has continued to advise the Company on the continued
refinement of the Company's metallurgical plant during the latter
half of 2014 and throughout 2015. These improvements have increased
plant availability and gold recoveries which have translated into
improved economic performance of the Company over this period.
The Company is also pleased to announce the appointment of Mr.
Mark Austin as a Non-Executive Director to the Board. As the
Company continues to look at opencast and surface opportunities in
order to expand gold production, it has strengthened the
operational and technical expertise of the Board with this
appointment.
Mr. Austin has enjoyed a distinguished career as a senior mining
executive with a specific focus on operating gold assets throughout
Africa. Mr. Austin is Senior Partner at Applied Geology and Mining
Proprietary Limited and previously had been chief executive officer
of Kilimapesa Gold Limited, a subsidiary of Goldplat Plc from 2007
to 2013.
The Company is also pleased to announce the appointment of Miss
Lola Trollip as Chief Financial Officer and member of the Executive
Committee of the Company, which reports to the Board of Central
Rand Gold. Miss Trollip was previously a Senior Finance Executive
with Norilsk Nickel Africa where she was responsible for the
finance discipline of all the Norilsk Nickel African operations
which included the Nkomati Mine, Tati Mine and Norilsk Nickel
Burundi.
Commenting on Mr. Austin's appointment, Nathan Taylor, the
interim Chairman, said "I'd like to welcome Mark to the Central
Rand Gold Board. As the Company continues to build its production
profile, both organically and through acquisition, Mark's
comprehensive technical knowledge and extensive operating
experience throughout Africa will be invaluable in assisting
Central Rand Gold achieve our vision of building an emerging
mid-tier gold mining company.
Central Rand Gold's Interim Chairman, Nathan Taylor, commented
"The Company is appreciative of the contribution and service Mr. du
Toit has made to the Company over his 7 years of service. We wish
him all the best for his future endeavours. We are very excited
about the more direct role Mr. Phillips will play in the Company.
Allen has been instrumental in the significant improvement of the
metallurgical plant and we look forward to his increased level of
involvement going forward throughout this interim period.
AIM Rule 17
Save for the information below, there are no further disclosures
to be made in accordance with Rule 17, Schedule Two paragraph (g)
of the AIM Rules for Companies in respect of the appointment of
Mark Austin, who is aged 57.
Current directorships:
Applied Geology & Mining Proprietary Limited
Crimson King Properties 361 Proprietary Limited
Past Directorships (within 5 years):
Kilimapesa Gold Proprietary Limited
Ausmin Consulting CC
Enquiries:
For further information, please contact:
Central Rand Gold +27 (0) 87 310 4400
Nathan Taylor / Allen Phillips
Panmure Gordon (UK) Limited +44 (0) 20 7886 2500
Mark Taylor / James Greenwood
Merchantec Capital +27 (0) 11 325 6363
Monique Martinez / Marcel Goncalves
Johannesburg
22 December 2015
Sponsor
Merchantec Capital
This information is provided by RNS
The company news service from the London Stock Exchange
END
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