Central Rand Gold Limited Industrial Relations Update and Iprop Dispute (4097F)
17 May 2017 - 6:50PM
UK Regulatory
TIDMCRND
RNS Number : 4097F
Central Rand Gold Limited
17 May 2017
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")
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Industrial Relations Update and Iprop Dispute
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Industrial Relations Update
The Company is pleased to announce that following robust
negotiations, it has reached agreement with union representatives
that the industrial action, as announced to shareholders on 10 May
2017, will now cease.
The Company has agreed that, a bonus payment in the form of a
"13th cheque" will be paid in December 2017. This bonus payment
will be equivalent to 50% of each employee's basic pay.
The Company has been informed that union representatives have
notified their members of the aforementioned, and that all
employees have returned to work today.
Whilst this is clearly positive news for the Company,
approximately 11 days of production have been lost. Some time is
therefore required for operations to resume at usual levels and for
management to assess the consequences of the strike on the
Company's plant.
IPOP Dispute
On 1 January 2005, Central Rand Gold South Africa Proprietary
Limited ("CRGSA") acquired the entire shareholding of Ferreira
Estate Investment Company Limited ("FEIC") from IPROP Proprietary
Limited ("IPROP"), and IPROP's subsidiary, Industrial Zone
Proprietary Limited ("INZO"). FEIC is the holder of the mining
right which the Company currently holds, and which is under
renewal. In order to use this right, FEIC required the use of
certain surface areas owned by INZO. As a consequence, CRGSA
entered into certain lease agreements with INZO for the lease of
areas of INZO/IPROP's land (the "Lease Agreements").
IPROP contends that a dispute arose in 2009 between the parties
as to the Lease Agreements, which culminated in a settlement
agreement (the "Agreement") entered into on or around 9 November
2009. As part of the settlement terms, and apart from any payment
entitlements, IPROP was entitled to have the Agreement made an
order of Court. IPROP does not immediately allege a pecuniary debt
owed in terms of the Agreement, however it does appear that a
dispute in relation to the conclusion of future leases emanating
from the Agreement subsists.
The present application seeks to have the Agreement ratified by
Court order, the effect of which would be to make the terms of the
Agreement enforceable and to the extent that any pecuniary debts
remain unpaid, making those immediately recoverable.
The Court hearing is scheduled for 19 May 2017. The Company
continues to negotiate with IPROP and hopes to reach a commercially
satisfactory arrangement. However, the outcome cannot be
guaranteed.
The Company's cash position remains extremely challenging, and
whilst the directors of the Company ("Directors") continue to make
every effort to secure financing solutions, no guarantee can be
made that these negotiations will be concluded successfully. The
Directors are therefore considering a number of solutions, which
include the sale of the Company's operating assets. As a
consequence, further to the announcement of 11 May 2017 the
Company's shares will remain suspended for the time being pending
further developments.
For further information, please contact:
Central Rand Gold +27 (0) 87 310 4400
Lola Trollip
ZAI Corporate Finance Ltd - Nominated Adviser & Broker +44
(0) 20 7060 2220
John Treacy
Brandon Hill Capital Limited - Broker +44 (0) 20 3463 5000
Jonathan Evans / Wei Jiao
Merchantec Capital - JSE Sponsor +27 (0) 11 325 6363
Monique Martinez / Marcel Goncalves
Johannesburg
17 May 2017
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
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