JOHANNESBURG (miningweekly.com) – South African miner Central Rand Gold (CRG) has raised gross proceeds of £1.22-million, through the proposed issue of 34.5-million new ordinary shares, at an issue price of 3.5p apiece.

The proceeds would be used to further its surface mining strategy, identify and source further plant feed material and facilitate a programme of plant upgrades and efficiency processes to further improve plant availability and recovery rates.

In December, the CRG board terminated discussions with four Asian investor groups in relation to the potential sale of its Central Rand Gold Netherlands Antilles NV (CRGNV) subsidiary. 

The company noted that 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, meant that no unconditional and appropriately valued proposals had been received for CRGNV. 

The board considered that the continuation of the process would have unnecessarily prolonged shareholder uncertainty with no immediate prospect of a satisfactory outcome.

However, CRG continued to negotiate with Chinese suitor Huili Resources to sell the operations for $150-million, to further provide funding to pursue growth opportunities.

The gold miner’s shares on the LSE plummeted by 13.16% from 4.75p apiece at its close on Thursday to 4.12p apiece on Friday afternoon.

ACID MINE DRAINAGE
In December, CRG also completed an upgrade to its high-density sludge (HDS) plant, with the pumping rate having now increased from 72-million litres a day to 84-million litres a day.

Last month the water table measured at the miner’s operations was at about 143 m below surface, with the company anticipating that it would be able to access its underground mining areas when the water table was at about 185 m below surface, which following a period of rehabilitation, should enable CRG’s underground mining operations to restart during 2017.

CRG produced 7 188 oz of gold in 2015, up from the 6 646 oz it produced in 2014.

Gold production was impacted by the head grade reducing from 1.88 g/t to 1.79 g/t in 2015, which was also as a consequence of the closure of the underground operations.