Johan du Toit
Photo by: Duane Daws
JOHANNESBURG (miningweekly.com) – London- and Johannesburg-listed gold-mining company Central Rand Gold, which is currently being courted by three Chinese suitors, is taking steps to raise $1.85-million in equity capital to boost surface mining production, bring idled underground equipment to surface and reduce staff.
The focus of the company, headed by CEO Johan du Toit, is to feed surface material to the metallurgical plant at its capacity of 25 000 t a month.
Underground mining will not resume until the water table falls below 180 m below surface, which is not expected to happen until late 2015 or early 2016.
The suspension of underground operations took place after State water organisation Trans-Caledon Tunnel Authority called for an upgrade to the company’s high-density sludge plant, which lowers underground water levels.
Central Rand Gold said on Wednesday that the additional capital would enable it to become cash positive while at the same time protecting its idled underground resource until the water table had been lowered sufficiently to allow underground mining to resume.
It has conditionally placed shares at a 20.79% discount to raise $1.60-million (£1.02 million) and intends selling warrants to bring in the remaining $0.25-million (£0.16-million).
The average grade of material to the metallurgical plant has improved to 2.21g/t and sufficient ore has reportedly been identified to sustain the existing operation at production levels of up to 20 000 t a month for at least the next 12 to 18 months.
In addition, a study has identified accessible mining operations outside Central Rand Gold's existing mining right areas, which have the potential to take the metallurgical plant to full capacity.
The potential all-in cash have been estimated at between $800/oz to $900/oz.
The three Chinese suitors interested in acquiring the asset – Shengbang, Hiria and
Ankong – are all offering around $150-million cash for the company’s asset-owning Netherlands subsidiary.