Central Rand Gold teetering
The curtain appears to be falling on Central Rand Gold, which has been unable to live up to the early promises of its directors and has lurched from crisis to crisis in the past decade.
The curtain appears to be falling on Central Rand Gold, which has been unable to live up to the early promises of its directors and has lurched from crisis to crisis in the past decade.
Central Rand Gold, set up to exploit defunct mines, warned shareholders on Wednesday the company’s financial position remained “extremely serious”.
It was in talks about refinancing the company and the result could be “significantly dilutive to shareholders.”
A potential funding deal could also “involve the company disposing of all or of a significant part of its operations to a third party better able to provide the capital required to provide a meaningful return from those operations, which are proving very difficult to achieve under the company’s current capital structure”.
The company’s share has been suspended from trading since May, making it difficult to gauge shareholder reaction to the news, which was inevitable.
Judging by the company’s annual reports since its listing in November 2007, the decline of the company was clearly in evidence as it grappled with rising water levels, unexpected voids where ore had been extracted but not recorded by previous owners, pumping costs and processing plant difficulties.
Central Rand came to the market with unrealistically lofty promises of 1-million ounces of gold production by 2012, a target it simply never came close to realising, struggling to get gold output above 10,000oz, let alone 20,000oz annually.
In 2010, then chairman Michael McMahon delivered possibly the most brutally honest assessment of Central Rand’s performance, conceding it could not deliver on its promise to be the “largest single gold mine in the world”. In the following years, Central Rand titillated investors with Chinese suitors, but these transactions fell through. With a steady turnover of senior staff, it marked the company out as a serial underperformer. Central Rand said in June that it would be unable to publish audited financials for its 2016 financial year by the deadline at end-June.