CRG raises £200m for upgrading surface mining
CENTRAL Rand Gold ( CRG) strengthened 15 percent on the JSE on Friday morning on news that it had raised £200 million (R3.8 billion) by issuing 2 million shares at 10p each in a subscription to beef up its balance sheet.
CRG is a London- and JSElisted exploration and production group that focuses on mining assets on the southern outskirts of Johannesburg.
The company’s operations underground stopped last year after flooding and rising acid mine drainage levels in the central rand gold basin.
CRG has recommenced with surface operations as stateowned Trans-Caledon Tunnel Authority. It manages dewatering facilities and has made progress decanting the water in the area.
“The proceeds of the subscription will be used primarily to strengthen the company’s balance sheet and to provide working capital to undertake continued surface mining operations, together with the programmed plant upgrades and efficient process improvements,” the company said on Friday.
Upgrades
Analysts said previously that only the high-grade, underground ore remained temporarily locked out but when the water level dropped to between 15m and 20m, CRG would perform well.
CRG said the upgrades and improved efficiencies were likely to improve plant availability and recovery rates.
“The proceeds will also be used to repay trade creditor balances relating to the closure of the company’s underground mining operations, and complete the disposal of Central Rand Gold (Netherlands Antilles).”
CRG has signed a non-binding memorandum of understanding with Huili Resources for the sale of its CRG Netherlands Antilles.
On Thursday, the company extended the date for the execution of its binding agreement with Huili and Hiria Group Company, both of whom are in the final phase of their internal processes.
The CRG board said it believed it was in the best interests of shareholders to accom- modate this request given the advanced nature of commercial negotiations with both Huili and Hiria.
Huili is a listed Hong Kong Exchange investment holding company whose subsidiaries focus on processing and sales of nickel, copper, zinc and gold products in China.
China is eyeing mining interests in South Africa as part of that country’s plan to acquire strategic minerals. Early this month, Chinese-based private equity firm Heaven Sent Capital closed a deal in which it took over platinum and gold producer Village Main Reef for R637 million.
Last November, Eastern Platinum said it had agreed to sell its South African platinum assets to Chinese company Hebei Zhongbo, in a cash deal worth $225m (R2,73bn).
China is eyeing South African mining interests as part of a plan to acquire strategic minerals