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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Central Rand | LSE:CRND | London | Ordinary Share | GG00B92NXM24 | ORD 1P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.425 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
TIDMCRND
RNS Number : 0007L
Central Rand Gold Limited
28 September 2016
Hot Features
Premium
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 2007/0192231/10)
ISIN: GG00B92NXM24
LSE share code: CRND JSE share code: CRD
("Central Rand Gold" or the "Company" or the "Group")
--------------------------------------------------------
2016 Interim Report
--------------------------------------------------------
Central Rand Gold today announces its unaudited Interim Results for the six months ended 30 June 2016 ("period under review"). The full set of results is available on the Company's website: www.centralrandgold.com.
For further information, please contact:
Central Rand Gold +27 (0) 87 310 4400
Lola Trollip / Nathan Taylor
Panmure Gordon (UK) Limited - Nominated Adviser & Broker +44 (0) 20 7886 2500
Adam James / James Greenwood
Merchantec Capital - JSE Sponsor +27 (0) 11 325 6363
Monique Martinez / Marcel Goncalves
28 September 2016
Johannesburg
Forward-looking statements
This Interim Report contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Central Rand Gold Group. The words "intend", "aim", "project", "anticipate", "estimate", "plan", "believe", "expect", "may", "should", "will", or similar expressions, commonly identify such forward-looking statements. Examples of forward-looking statements in this Interim Report include those regarding estimated Ore Reserves, anticipated production or construction dates, costs, outputs and productive lives of assets or similar factors. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors set forth in this Interim Report that are beyond the Group's control. For example, future Ore Reserves will be based in part on market prices that may vary significantly from current levels. These may materially affect the timing and feasibility of particular developments. Other factors include the ability to produce and transport products profitably, demand for our products, the effect of foreign currency exchange rates on market prices and operating costs, and activities by governmental authorities, such as changes in taxation or regulation, and political uncertainty.
In light of these risks, uncertainties and assumptions, actual results could be materially different from any future results expressed or implied by these forward-looking statements, which speak only as at the date of this Interim Report. Except as required by applicable regulations or by law, the Group does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, or future events. The Group cannot guarantee that its forward-looking statements will not differ materially from actual results.
Non-executive Chairman's report
Introduction
The Company had three key objectives during the first six months of 2016, namely to:
-- continue necessary capital works in relation to the Company's metallurgical plant, in particular the repair of Mill No 1;
-- stabilise the operations of the Company; and -- progress discussions with capital providers.
Key salient features during the first six months of the year
-- Loss before interest, tax and depreciation of US$1.9 million (2015: US$0.7 million) for the period;
-- The rate of dewatering has stabilised, and the levels underground are gradually reducing; -- A Toll Treatment Agreement was concluded with a third party; and
-- Post the period end and as previously announced, the Company have identified opportunities to raise additional funding from a number of parties in order to pursue growth opportunities identified and to continue as a going concern.
Safety
Safety statistics
Type of injury Six months Six months
ended ended
30 June 2016 30 June 2015
---------------- -------------- --------------
Dressing cases 2 -
---------------- -------------- --------------
Lost-time
injuries 3 2
---------------- -------------- --------------
Fatalities - -
---------------- -------------- --------------
Safety remains a key focus for the Company, irrespective of the environment in which it is operating. There were two dressing cases in the six months ended 30 June 2016 compared to zero for the same period in 2015 and three lost-time injuries in the six months ended 30 June 2016 compared to two for the same period in 2015. The Company has embarked on a number of safety campaigns to invigorate the safety culture in the Company.
Acid Mine Drainage ("AMD")
The High Density Sludge ("HDS") plant, operated by the Trans Caledon Tunnel Authority ("TCTA"), has been operational since mid-2014. The Company continues to monitor the water level at its mining operations as well as the daily discharge pumped out of the Central Basin from the HDS plant. The Company has observed that when the flow rate is maintained at approximately 60 million litres per day ("mlpd"), which equates to approximately 80% of nameplate capacity, a reduction in the water level occurs, as indicated in the following table:
Average daily Water level
pumping rate below surface
Month (mlpd) (mbs)
--------------- -------------- ---------------
January 2016 35 143.57
--------------- -------------- ---------------
February 2016 33 141.40
--------------- -------------- ---------------
March 2016 70 143.20
--------------- -------------- ---------------
April 2016 66 145.13
--------------- -------------- ---------------
May 2016 65 147.92
--------------- -------------- ---------------
June 2016 65 148.60
--------------- -------------- ---------------
July 2016 65 147.58
--------------- -------------- ---------------
August 2016 59 152.48
--------------- -------------- ---------------
The above table provides an overview of the average daily pumping rate and the resultant impact on the water table. Due to maintenance on one of the Ritz submersible pumps, pumping was limited to only one pumping station during January and February 2016. As the pumps are imported, and a standby pump was not available, a replacement submersible pump, from another pump station, was installed at the end of February 2016, and an immediate drop in the water table was observed. Since then the submersible pumps have been pumping at a rate exceeding 60 mlpd, which has resulted in the water table dropping by approximately 11 vertical meters since the end of February 2016.
Various projects are being undertaken by the Company in order to evaluate the possibility of expediting the water pumping, and of mining underground, using different mine plans and methodologies.
Mining
Mineral Resources
The Mineral Resources remain unchanged as of June 2015 due to the cessation of underground workings. Surface operations are classified as 'Exploration Target' in terms of the SAMREC code.
The temporary cessation of underground mining in September 2014, due to the rising water levels, precipitated a dramatic shift in the mining operations. Consequently, the Company focussed its attention and resources on exploiting lower grade open cast mining and surface dumps, which had a significant impact on the Company.
The below table provides the current surface areas available for mining:
Location Viable Tonnes Estimated Average Estimated Reef
strike grade thickness ounces package
length
(m) (t) (g/t) (cm) (oz)
--------------- -------- -------- ---------- ----------- ---------- ----------
Slot 1 420 35,310 1.52 124 1,721 Kimberley
--------------- -------- -------- ---------- ----------- ---------- ----------
N1 Bypass 1,380 77,764 1.40 84 3,496 Bird
--------------- -------- -------- ---------- ----------- ---------- ----------
Slot 6 450 85,068 2.17 113 5,929 Kimberly
--------------- -------- -------- ---------- ----------- ---------- ----------
Slot 5 Nasrec 120 13,191 1.29 72 548 Bird
--------------- -------- -------- ---------- ----------- ---------- ----------
Slot 5 CW
Road 1,300 130,317 0.54 72 2,247 Bird
--------------- -------- -------- ---------- ----------- ---------- ----------
Slot 10 460 89,050 - 123 - Kimberley
--------------- -------- -------- ---------- ----------- ---------- ----------
Slot 11
West 820 288,302 1.98 360 18,311 Bird
--------------- -------- -------- ---------- ----------- ---------- ----------
Slot 11
East 345 125,491 1.98 131 7,970 Bird
--------------- -------- -------- ---------- ----------- ---------- ----------
Slot 11
A west 650 70,589 1.98 131 4,483 Bird --------------- -------- -------- ---------- ----------- ---------- ---------- Slot 11 A east 470 130,188 0.18 47 771 Bird --------------- -------- -------- ---------- ----------- ---------- ---------- Slot 12 460 90,283 1.29 123 3,747 Kimberley --------------- -------- -------- ---------- ----------- ---------- ---------- Slot 4 836 60,162 1.83 132 3,540 Kimberley --------------- -------- -------- ---------- ----------- ---------- ---------- Slot 5 406,000 49,015 2.12 92 3,342 Bird --------------- -------- -------- ---------- ----------- ---------- ---------- Slot 7 190,460 150,708 2.23 189 10,786 Bird --------------- -------- -------- ---------- ----------- ---------- ----------
The quantity and grade described above has been derived from historical sampling data, together with current information gathered and verified by both the Mining Engineer, and the Geologists at Central Rand Gold.
The above table does not include surrounding sand and slimes resources which the Company has sourced, and earmarked for Research and Developmental projects together with the Zhejiang Golden Machinery Plant ("ZGMP") in China.
Production statistics
30 June 2016 30 June 2015 Variance
tonnes tonnes
------------- ------------- ------------- ---------
Underground - - -
------------- ------------- ------------- ---------
Surface 33,424 62,856 (29,432)
------------- ------------- ------------- ---------
Reclamation 36,892 33,356 3,536
------------- ------------- ------------- ---------
Total 70,316 96,212 (25,896)
------------- ------------- ------------- ---------
Surface mining was largely focused at slots 5, 7 and 4. Current pits have been mined down to a depth of approximately 30 metres. The average belt grade for these pits to date is 1.94g/t. The pits were put on care and maintenance in April 2016, until the mining strategy has been revised. Focus is now being put on to the rehabilitation of open and mined out pits.
With over 100 years of significant mining in the Johannesburg region, there remains a significant amount of old rock and slimes dumps, which surround the Company's metallurgical plant. Where economical grades have been identified and with the consent of the resource owners, the Company has removed this material and processed it through its metallurgical plant. This activity has an added benefit of rehabilitating the surrounding area. A project has been undertaken with ZGMP to test a metallurgical process, on the slimes/sands, and the outcome of this test work is anticipated to ultimately result in a larger plant being built at Central Rand Gold SA, which will then be able to process the dump material expediently.
Metallurgy
Production statistics
2016 2015
---------------------------------- --------- ---------
- January January
to June to June
---------------------------------- --------- ---------
* Internal
---------------------------------- --------- ---------
* Tonnes processed (t) 18,824 87,895
---------------------------------- --------- ---------
* Built up head grade (g/t) 2.12 1.45
---------------------------------- --------- ---------
* Fine gold produced (oz) 1,394 3,435
---------------------------------- --------- ---------
External (Toll
treatment)
---------------------------------- --------- ---------
* Tonnes processed (t) - 6,721
---------------------------------- --------- ---------
* Delivered grade (g/t) - 1.04
---------------------------------- --------- ---------
* Fine gold produced (oz) - 244
---------------------------------- --------- ---------
Total tonnes
processed (t) 18,824 94,616
---------------------------------- --------- ---------
Total gold produced
(oz) 1,394 3,679
---------------------------------- --------- ---------
Internal gold production for 2016 H1 was below that of 2015, being that the Mill No 1 was irreparable after a breakdown, and the Company had to source another Mill. The Company also took the opportunity to cleanse the full circuit, in preparation of the new Toll-milling contract. A second-hand Mill was purchased, repaired and installed in September 2016. The aim is to reach an average throughput of 20,000 tonnes per month, by the end of October 2016 (the updated deadline). The anticipated deliveries and processing rates are conditional upon the Company having sufficient working capital to fund operations.
Financial update
Results
The loss before interest, tax and depreciation for the period under review amounted to US$1.9 million, which is higher than the prior year period operational loss of US$0.7 million. The increase in loss is largely attributed to the cessation of open pit mining in March 2016. As a result, internal gold production decreased by 23% to 2,637 ozs (2015: 3,435 ozs) and overall revenue decreased from US$4.4 million to US$1.8 million. The Company entered into a Tolling Agreement in July 2016 with a third party, Nikkel Mining, who will provide product to be treated through the plant. The Tolling agreement is in the form of a value per tonne of throughput in the plant, which is anticipated to raise income for Central Rand Gold SA. This in turn will assist in the Company being right-sized and refocused. Cash and cash equivalents at 30 June 2016 was US$0.4 million.
There remains a material uncertainty in respect of the Company's ability to continue as a going concern. For further consideration, please refer to the basis of preparation set out in note 2 of the financial statements.
Looking forward
The focus over the next six months is to:
-- finalise the US$4 million investment from an existing shareholder of the Company; -- continue to toll treat material through the Company's metallurgical plant;
-- process additional surface material, which the Company has sourced, through a Third Party metallurgical plant;
-- ensure that the Research and Developmental test work is successful for the acquisition of further gold bearing surface material which is proximal to the Company's existing metallurgical plant; and
-- commence rehabilitation of the Company's mined out open pit areas.
Various opportunities have been brought to the attention of Central Rand Gold, and project and task teams have been formed to evaluate each one, and make recommendations to the Board for possible Joint Ventures, Mergers and/or Mining opportunities.
As previously announced, the Company has been pursuing discussions with a number of sources over the availability of both debt and equity funding to provide working capital and funding for growth initiatives at the Company.
The Company is presently pursing a transaction with one existing shareholder of the Company for an investment of US$4,000,000 (the "Strategic Investment"). The Strategic Investment currently envisages the investment into the Company's wholly owned immediate subsidiary Central Rand Gold (Netherlands Antilles) N.V. ("CRG NV"). The final terms and structure of the Strategic Investment which remain subject to amendment, will be announced to shareholders as soon as finalised, however the Company expects that the Strategic Investment will result in the Company retaining a majority shareholding (in excess of 50 per cent. of the issued shares) and the full management control of CRG NV and that the Group will continue to fully consolidate the Company's subsidiaries and operations. As part of the Strategic Investment, the Company is engaged in discussions with Redstone Capital Limited to extend the expiry date of the US$7.25m Senior Secured Convertible Loan Notes.
The future period will also see board renewal at Central Rand Gold Limited. The Company's Board will be re-compositioned over the coming weeks due to external changes in the professional working arrangements of myself and Mark Austin. The Board has identified and invited two individuals to join the Board as Non-Executive Directors as soon as the necessary on-boarding paperwork has been completed. The two individuals have strong mining backgrounds as well as financial experience.
Nathan Taylor
Non-executive Chairman
Mark Austin, Non-Executive Director of the Company with over thirty five years' experience in the exploration and mining industry, has read and approved the geological disclosure in this regulatory announcement. Mr Austin holds a B.Sc. Hons. in Geology, is a registered Natural Scientist ('SACNASP') and a Fellow of the Geological Society of South Africa and is currently serving on the Steering Committees of the South African Code for the Reporting of Exploration Results, Mineral Resources And Mineral Reserves ('SAMREC') and the South African Code for the Reporting of Mineral Asset Valuation ('SAMVAL').
The information communicated in this document is inside information for the purposes of Article 7 of Market Abuse Regulation 596/2014 ("MAR").
Condensed Group Statement of Financial Position
as at 30 June 2016
30 June 31 December 30 June
2016 2015 2015
Notes US$ '000 US$ '000 US$ '000
(Unaudited) (Audited) (Unaudited)
-------------------------------------------------- ----- ------------ ----------- -----------
ASSETS
Non-current assets
Property, plant and equipment 5 2,194 2,271 3,172
Intangible assets 2,219 2,114 2,669
Security deposits and
guarantees 49 46 59
Environmental guarantee
investment 2,712 2,584 3,119
Loans receivable 6 8,071 7,236 8,619
------------ ----------- -----------
15,245 14,251 17,638
------------ ----------- -----------
Current assets
Security deposits and
guarantees 26 26 32
Prepayments and other
receivables 508 480 712
Inventories 7 79 120 112
Cash and cash equivalents 435 556 1,177
Derivative asset - - 720
------------ ----------- -----------
1,048 1,182 2,753
------------ ----------- -----------
Total assets 16,293 15,433 20,391
============ =========== ===========
EQUITY
Attributable to equity
holders of the parent
Share capital 8 27,283 26,617 26,617
Share premium 8 225,255 224,037 224,048
Share-based compensation
reserve 28,238 28,238 28,187
Treasury shares (6) (6) (6)
Foreign currency translation
reserve (29,097) (28,993) (29,433)
Accumulated losses (262,484) (260,117) (262,743)
------------ ----------- -----------
(10,811) (10,224) (13,330)
Non-controlling interest - - -
------------ ----------- -----------
Total equity (10,811) (10,224) (13,330)
------------ ----------- -----------
LIABILITIES
Non-current liabilities
Environmental rehabilitation 3,858 3,676 4,622
Loan payable 9 8,071 7,236 14,392
------------ ----------- -----------
11,929 10,912 19,014
------------ ----------- -----------
Current liabilities
Trade and other payables 6,981 6,999 6,078
Royalties taxation payable 147 140 181
Loan payable 9 7,400 6,959 -
Derivative liability 647 647 8,448
------------ ----------- -----------
15,175 14,745 14,707
------------ ----------- -----------
Total liabilities 27,104 25,657 33,721
------------ ----------- -----------
Total equity and liabilities 16,293 15,433 20,391
============ =========== ===========
Condensed Group Statement of Profit or Loss
for the six months ended 30 June 2016
Six months 12 months Six months
ended ended ended
30 June 31 December 30 June
2016 2015 2015
Notes US$ '000 US$ '000 US$ '000
(Unaudited) (Audited) (Unaudited)
-------------------------------------------------- ----- ------------ ----------- -----------
Revenue 10 1,765 8,093 4,352
Production costs 11 (1,553) (6,079) (2,776)
Employee benefits expense (907) (2,252) (1,293)
Directors' emoluments 12 (124) (468) (103)
Operating lease expense (285) (872) (250)
Operational expenses 13 (138) (505) (174)
Other expenses 14 (665) (1,098) (560)
Other income and gains 15 5 305 107
Foreign exchange transaction
gains/(losses) 16 (75) (16)
------------ ----------- -----------
Loss before interest,
tax and depreciation (1,886) (2,951) (713)
Depreciation (192) (425) (229)
Impairment of assets - (346) -
Fair value movement in
embedded derivative - 7,081 -
Finance and investment
income 463 1,149 546
Finance costs (752) (3,066) (788)
------------ ----------- -----------
(Loss)/profit before
income tax (2,367) 1,442 (1,184)
Income tax expense 16 - - -
------------ ----------- -----------
(Loss)/profit for the
period (2,367) 1,442 (1,184)
------------ ----------- -----------
(Loss)/profit for the
period is attributable
to:
Non-controlling interest - - -
Equity holders of the
parent (2,367) 1,442 (1,184)
------------ ----------- -----------
(2,367) 1,442 (1,184)
------------ ----------- -----------
Shares in issue 141,400,341 95,195,808 95,195,808
Weighted average number
of ordinary shares in
issue 109,517,964 91,501,233 95,195,808
Fully diluted weighted
average number of ordinary
shares in issue 110,121,964 258,689,069 95,195,808
Basic (loss)/earnings
per share (US cents per
share) 18 (2.16) 1.58 (1.24)
Diluted loss per share
(US cents per share) 18 (2.15) (2.23) (1.24)
Condensed Group Statement of Comprehensive Income
for the six months ended 30 June 2016
Six months 12 months Six months
ended ended ended
30 June 31 December 30 June
2016 2015 2015
US$ '000 US$ '000 US$ '000
(Unaudited) (Audited) (Unaudited)
-------------------------------------------------- ----- ------------ ----------- -----------
(Loss)/profit for the
period (2,367) 1,442 (1,184)
------------ ----------- -----------
Other comprehensive (loss)/income:
Item that may be reclassified
subsequently to profit
and loss
Exchange differences
on translating foreign
operations (104) 541 101
------------ ----------- -----------
Other comprehensive (loss)/income
for the period, net of
tax (104) 541 101
------------ ----------- -----------
Total comprehensive (loss)/income
for the period (2,471) 1,983 (1,083)
------------ ----------- -----------
Total comprehensive (loss)/income
is attributable to:
Non-controlling interest - - -
Equity holders of the
parent (2,471) 1,983 (1,083)
------------ ----------- -----------
(2,471) 1,983 (1,083)
------------ ----------- -----------
Condensed Group Statement of Changes in Equity
for the six months ended 30 June 2016
Attributable to equity holders of the Group
-------------------------------------------------------------------------------
Foreign
Ordinary Share-based currency
share Share compensation Treasury translation Accumulated Non-controlling Total
Notes capital premium reserve shares reserve losses Total interest equity
US$ US$ US$ US$ US$ US$
'000 '000 US$ '000 '000 '000 US$ '000 '000 US$ '000 '000
-------------- ----- -------- -------- ------------ -------- ----------- ----------- --------- --------------- ---------
Balance at 31
December 2014 26,490 222,963 28,238 (6) (29,534) (261,559) (13,408) - (13,408)
Total
comprehensive
income for the
period ended
30
June 2015
Loss for the
period - - - - - (1,184) (1,184) - (1,184)
Other
comprehensive
income
Foreign
currency
adjustments - - - - 101 - 101 - 101
Transactions
with
owners,
recorded
directly in
equity
Issue of
Shares:
Capital
raising 8 127 1,085 - - - - 1,212 - 1,212
Employees' and
Directors'
shares-based
payments 20 - - (51) - - - (51) - (51)
-------- -------- ------------ -------- ----------- ----------- --------- --------------- ---------
Balance at 30
June 2015 26,617 224,048 28,187 (6) (29,433) (262,743) (13,330) - (13,330)
-------- -------- ------------ -------- ----------- ----------- --------- --------------- ---------
Attributable to equity holders of the Group
-------------------------------------------------------------------------------
Foreign
Ordinary Share-based currency
share Share compensation Treasury translation Accumulated Non-controlling Total
Notes capital premium reserve shares reserve losses Total interest equity
US$ US$ US$ US$ US$ US$
'000 '000 US$ '000 '000 '000 US$ '000 '000 US$ '000 '000
-------------- ----- -------- -------- ------------ -------- ----------- ----------- --------- --------------- ---------
Balance at 31
December 2015 26,617 224,037 28,238 (6) (28,993) (260,117) (10,224) - (10,224)
Total
comprehensive
income for the
period ended
30
June 2016
Loss for the
period - - - - - (2,367) (2,367) - (2,367)
Other
comprehensive
income
Foreign
currency
adjustments - - - - (104) - (104) - (104)
Transactions
with
owners,
recorded
directly in
equity
Issue of
Shares:
Capital
raising 8 666 1,218 - - - - 1,884 - 1,884
-------- -------- ------------ -------- ----------- ----------- --------- --------------- ---------
Balance at 30
June 2016 27,283 225,255 28,238 (6) (29,097) (262,484) (10,811) - (10,811)
-------- -------- ------------ -------- ----------- ----------- --------- --------------- ---------
Condensed Group Statement of Cash Flow
for the six months ended 30 June 2016
Six months 12 months Six months
ended ended ended
31
30 June December 30 June
2016 2015 2015
US$ '000 US$ '000 US$ '000
(Unaudited) (Audited) (Unaudited)
------------------------ ----- ----------- --------- -----------
CASH FLOWS FROM
OPERATING
ACTIVITIES Notes
(Loss)/profit before
tax (2,367) 1,442 (1,184)
Adjusted for :
Depreciation 192 425 229
Employment benefit
expenditure
(share-based payments) - - (51)
Profit on disposal and
scrapping of property,
plant and equipment - (146) (9)
Impairment of assets - 346 -
Net (gain)/loss on
foreign
exchange (16) 75 16
Finance income (463) (1,149) (546)
Finance costs 752 3,066 788
Fair value movement in
embedded derivative - (7,081) -
Changes in working
capital
(Increase)/decrease in
prepayments and other
receivables (28) 689 527
Decrease/(increase) in
inventory 41 (44) (36)
(Decrease)/increase in
trade and other
payables (18) 173 (833)
Decrease in provisions - - (282)
----------- --------- -----------
Cash flows used in
operations (1,907) (2,204) (1,381)
Finance income 4 203 66
Finance costs (289) 580 -
----------- --------- -----------
Net cash used in
operating
activities (2,192) (1,421) (1,315)
----------- --------- -----------
CASH FLOWS FROM
INVESTING
ACTIVITIES
Purchases of property,
plant and equipment 5 - (92) (5)
Proceeds from disposal
of property, plant and
equipment - 180 -
Increase in
environmental
guarantee deposit - 65 (17)
----------- --------- -----------
Net cash from/(used in)
investing activities - 153 (22)
----------- --------- -----------
CASH FLOWS FROM
FINANCING
ACTIVITIES
Proceeds from issue of
shares for cash 2,062 1,261 1,260
Cost relating to the
issue of shares (178) (60) (48)
Net proceeds from issue
of convertible notes 441 - -
----------- --------- -----------
Net cash from financing
activities 2,325 1,201 1,212
----------- --------- -----------
Net increase/(decrease)
in cash and cash
equivalents 133 (67) (125)
Cash and cash
equivalents
at 1 January 556 914 914
Effects of exchange rate
fluctuations on cash
balances (254) (291) 388
----------- --------- -----------
Cash and cash
equivalents
at end of period 435 556 1,177
=========== ========= ===========
Notes to the Condensed Interim Group Financial Statements
for the six months ended 30 June 2016
1. Basis of preparation
This condensed set of financial statements has been
prepared in accordance with IAS 34 Interim Financial
Reporting as adopted by the EU. The annual Financial
Statements of the Group are prepared in accordance
with International Financial Reporting Standards and
Interpretations (collectively "IFRS") issued by the
International Accounting Standards Board ("IASB")
as adopted by the European Union ("EU"). The condensed
interim Group financial statements have been prepared
applying the accounting policies and presentation
that were applied in the preparation of the Company's
published consolidated financial statements for the
year ended 31 December 2015 except for the changes
described in note 2.
The consolidated financial statements are presented
in United States Dollars ("US$" or "US Dollar") and
rounded to the nearest thousand. The functional currency
of the parent company, Central Rand Gold Limited,
is the US Dollar. The functional currency of its principal
subsidiary, Central Rand Gold SA is the South African
Rand ("ZAR" or "Rand").
The interim financial information for the six months
to 30 June 2016 and 30 June 2015 is unaudited and
does not constitute statutory financial information.
The comparatives for the full year ended 31 December
2015 are not the Group's full statutory accounts for
that year. It does not include all disclosures that
would otherwise be required in a complete set of financial
statements and should be read in conjunction with
the 2015 Annual Report. The auditor's report on those
accounts was (i) unqualified, (ii) included an emphasis
of matter in respect of going concern and (iii) did
not contain a statement under section 498 (2) or (3)
of the Companies Act 2006.
Going concern
REQUESTED FROM PATRICK. PER PATRICK, THIS ALL DEPS
ON THE REVISED
The Board has prepared the condensed interim Group
financial statements on the going concern basis notwithstanding
net current liabilities at 30 June 2016 of US$14.1
million, having considered the current operations,
the current funding position and the projected funding
requirements for the business for at least 12 months
from the date of approval of the financial statements
as detailed below. Since the 2015 year end, the Group
ceased open pit mining operations and will instead
temporarily focus on toll treatment operations under
a binding tolling agreement with a third party which
is expected to be cash flow generative to Central
Rand Gold SA. The Group has also raised a further
US$1.9 million from share placements that took place
during the period under review. Furthermore, the Company
have identified opportunities to raise additional
funding from a number of parties and expect to enter
into binding documentation shortly.
Central Rand Gold entered into an agreement with Redstone
Capital Limited to extend both the maturity of the
Loan Notes and the expiry date of the Warrants to
31 October 2016 which will enable the Company to continue
to progress the capital raising work stream. All other
terms of the Loan Notes and Warrants remained the
same.
The Board has prepared cash flow projections until
30 September 2017 that reflect the current toll treating
plan adopted by the Directors. This updated plan is
based on a contract concluded with Nikkel Mining,
and is valid for a period of one year, with an option
to extend the contract and terms beyond that period.
The tolling plan incorporates the upgrade to Mill
number 1, and is based on an average capacity of 19,000
tonnes per month, as from October 2016. The Company
is presently pursing a transaction with one existing
shareholder of the Company for an investment of US$4,000,000
(the "Strategic Investment") into the Company's wholly
owned immediate subsidiary Central Rand Gold (Netherlands
Antilles) N.V. ("CRG NV"). The final terms and structure
of the Strategic Investment have not been finalised
yet. There are current fund-raising initiatives within
the Group, and the Board will direct the monies to
various projects, as well as to the working costs
of the Group. Some of the material uncertainties that
existed as at 31 December 2015 have been addressed
during the period under review, while others still
exist. Therefore, there still is doubt on the Group's
ability to continue as a going concern. Nevertheless,
after taking account the Group's cash flow projections,
these projections show that the Group has sufficient
funding for at least the next 12 months from the date
of approval of these condensed interim Group financial
statements and hence the Board has prepared the condensed
interim Group financial statements on a going concern
basis.
The Board is optimistic about the future of the Company
with agreements for tolling in place, as well as the
various initiatives on acquisitions and joint venture
projects. The Board believes that this will collectively
improve the Company's position in the market.
2. Accounting policies
Except as described below, the accounting policies
applied by the Group in these condensed interim Group
financial statements are the same as those applied
by the Group in its consolidated financial statements
as at and for the year ended 31 December 2015, as
described in those consolidated financial statements.
The Group has adopted the following standards and
amendments to standards, including any consequential
amendments to other standards, with a date of initial
application of 1 January 2016:
-- IFRS 5: Non-current Assets Held for Sale and Discontinued
Operations
-- IFRS 7: Financial Instruments: Disclosures
-- IFRS 10: Consolidated Financial Statements
-- IAS 1: Presentation of Financial Statements
-- IAS 16: Property, Plant and Equipment
-- IAS 19: Employee Benefits
-- IAS 27: Separate Financial Statements
-- IAS 34: Interim Financial Reporting
-- IAS 38: Intangible Assets
The adoption of these Standards is not expected to
have a significant impact upon the Group's net results,
net assets or disclosures.
Taxes on income in the interim periods are accrued
using the tax rate that would be applicable to expected
total annual earnings.
3. Estimates and judgements
The preparation of condensed interim Group financial
statements requires management to make judgements,
estimates and assumptions that affect the application
of accounting policies and the reported amounts of
assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing this condensed interim Group financial
statements, the significant judgements made by management
in applying the Group's accounting policies and the
key sources of estimation uncertainty were the same
as those that applied to the consolidated annual financial
statements as at and for the year ended 31 December
2015.
4. Financial risk management
The Group's financial risk management objectives and
policies are consistent with those disclosed in the
consolidated annual financial statements as at and
for the year ended 31 December 2015.
Fair value
The aggregate net fair values of all current financial
assets and financial liabilities, as well as non-current
receivables, instalment sales and finance leases approximate
the carrying amounts at the financial reporting date.
Foreign currency rates
The US Dollar rates of exchange applicable to the
period are as follows:
2016 2015 2015
Six months Year Six months
to ended to
31
30 June December 30 June
Closing Closing Closing
Average Average Average
0.08
South African Rand 0.07 0.07 0.08 0.08 0.08
1.48
Pound Sterling 1.34 1.43 1.53 1.57 1.52
0.73
Australian Dollar 0.74 0.74 0.75 0.77 0.78
5. Property, plant and equipment
During the six months ended 30 June 2016, the Group
did not purchase any items of property, plant and
equipment (2015: US$5,280).
6. Loans receivable
Puno Gold Investments Proprietary Limited ("Puno")
Since the last report for the year ended 31 December
2015 there has been no resolution to the dispute relating
to alleged procedural breaches of the Central Rand
Gold SA Shareholders' Agreement between Central Rand
Gold SA and its current Black Economic Empowerment
("BEE") shareholder, Puno. The dispute surrounds the
allocation of intercompany loans which fund the budget
and work programme and the incurring of, and level
of, certain costs.
On 1 April 2016 judgment was handed down in the appeal
and Central Rand Gold SA was successful in so far
as the preliminary points were concerned. Costs in
the appeal, including wasted costs pertaining to the
preliminary points have been granted against Puno
which are currently in the process of being 'taxed'
legally before the taxing masters of the relevant
courts and will be recovered from Puno. The remainder
of the arguments pertaining to the merits of the matter
need to be addressed by the court of first instance.
Central Rand Gold SA took the necessary steps for
the matter to be referred back to the Judge in order
to give judgment on the remainder of the issues.
On 29 April 2016, Puno served on Central Rand Gold
SA an application on the basis of sections 344(f)
and 345 of the Companies Act 2008, (Act 71 of 2008),
as amended, for an order to wind up (liquidation)
Central Rand Gold SA. Upon advice from Central Rand
Gold SA's legal advisors, Central Rand Gold SA is
opposing the application and lodged answering affidavits.
The time period for Puno to file their replying affidavit
lapsed on 22 June 2016. Puno's opportunity to file
further affidavits has now lapsed and Central Rand
Gold SA awaits Puno's confirmation whether they intend
to persist in their application. The Company is of
the opinion that, as a subsidiary of a listed Company,
it has sufficient support from the Holding Company
to successfully trade out of the loss making situation.
The Group still believes that ultimately their position
will prevail. The Board is still of the opinion that
this will not have any material consequences in respect
of the consolidated accounts of the Group.
The loan payable to Puno contains the same allocations
referred to above.
7. Inventories
Group
June December June
2016 2015 2015
US$ '000 US$ '000 US$ '000
Consumables 42 29 39
Ore stockpiles 37 91 73
------------------ --------- -----------
Total inventories 79 120 112
================== ========= ===========
8. Share capital and share premium
The Company issued the following shares during the
period under review:
* A first share placement on 9 February 2016 of
14,279,371 new ordinary shares at 3.5 pence, which
raised US$0.72 million (GBP0.50 million).
* A second share placement on 9 March 2016 of
20,719,644 new ordinary shares at 3.5 pence, which
raised US$1.05 million (GBP0.73 million).
* A subscription of 4,620,005 new ordinary shares on 7
June 2016 at an issue price of 3 pence each, which
raised US$0.20 million (GBP0.14 million).
* 6,585,513 new ordinary shares were issued to Bergen
Global Opportunity Fund, LP on 7 June 2016 at par
value, which raised US$0.09 (GBP0.07 million).
9. Loan payable
2.61
3.36
Net proceeds (USD million)
Group
June December June
2016 2015 2015
US$ '000 US$ '000 US$ '000
Non-current 8,071 7,236 14,392
Current 7,400 6,959 -
------------------ --------- -----------
15,471 14,195 14,392
================== ========= ===========
Loan payable consists of
the following:
Group
June December June
2016 2015 2015
US$ '000 US$ '000 US$ '000
Puno Gold Investments
Proprietary
Limited 8,071 7,236 8,620
Redstone Capital Limited 6,959 6,959 5,772
Bergen Global
Opportunity
Fund, LP 441 - -
15,471 14,195 14,392
================== ========= ===========
10. Revenue
Group
June December June
2016 2015 2015
US$ '000 US$ '000 US$ '000
Gold sales 1,764 8,056 4,314
Other by-product sales 1 37 38
------------------ --------- -----------
1,765 8,093 4,352
================== ========= ===========
The revenue relates to the sale of gold derived from
mining activities that take place in South Africa
and the sale of other by-products. 1,417 (30 June
2015: 4,316) ounces of gold was sold.
11. Production costs
Group
June December June
2016 2015 2015
US$ '000 US$ '000 US$ '000
Production costs
comprise
the following items:
- Consumables 347 1,864 791
- Utilities 452 1,153 404
- Plant hire 534 2,276 957
- Labour hire 131 467 199
- Toll treatment 89 649 425
- Environmental
rehabilitation
provision - (330) -
------------------ --------- -----------
1,553 6,079 2,776
================== ========= ===========
12. Changes to the Board
During the period under review, Mr A Phillips resigned
as a Director of the Group on 6 June 2016.
13. Operational expenses
Group
June December June
2016 2015 2015
US$ '000 US$ '000 US$ '000
Operational expenditure comprises the following items:
- Assaying costs 41 196 98
- Consulting services 93 293 58
- Environmental costs 4 7 3
- Mineral property
options
paid - 9 15
------------------ --------- -----------
138 505 174
================== ========= ===========
14. Other expenses
Group
June December June
2016 2015 2015
US$ '000 US$ '000 US$ '000
Auditor's remuneration 113 146 -
Accounting fees 126 - -
Corporate social investment 13 1 -
Legal costs 64 169 40
Travel and accommodation 12 40 26
Telecommunications 42 109 174
Other expenses 295 633 320
---------- ---------- ---------
665 1,098 560
========== ========== =========
15. Other income and gains
Group
June December June
2016 2015 2015
US$ '000 US$ '000 US$ '000
Sundry income 5 305 107
========== ========== =========
16. Income tax expense
Income tax expense is recognised based on management's
best estimate of the weighted average annual income
tax rate expected for the full financial year. The
estimated average annual tax rate used for the year
to 30 June 2016 is 0% (2015: 0%) due to assessable
losses available to Central Rand Gold SA and the Guernsey
resident status of Central Rand Gold resulting in
0% effective rates.
17. Commitments
There are no commitments outstanding at 30 June 2016.
18. Loss/earnings per share
Group
June December June
2016 2015 2015
Headline (loss)/earnings
per share (US cents per
share) (2.16) 1.42 (1.24)
Diluted headline loss per
share (US cents per share) (2.15) (2.29) (1.24)
Reconciliation between loss
attributable to the equity
holders of the Group and
the headline loss attributable
to the equity holders of
the Group:
(Loss)/profit attributable
to equity holders of the
Group (US$'000) (2,367) 1,442 (1,184)
Less: Profit on disposal
of property, plant and
equipment
(US$'000) - (146) (9)
---------- ---------- ---------
(Loss)/profit used in
calculating
headline (loss)/earnings
per share (US$'000) (2,367) 1,296 (1,193)
========== ========== =========
19. Segment reporting
An operating segment is a component of an entity that
engages in business activities from which it may earn
revenues and incur expenses, whose operating results
are regularly reviewed by the entity's chief operating
decision maker to make decisions about resources to
be allocated to the segment and assess its performance,
and for which discrete financial information is available.
The entity's chief operating decision maker reviews
information in one operating segment, being the acquisition
of mineral rights and data gathering in the Central
Rand Goldfield of South Africa, therefore management
has determined that there is only one reportable segment.
Accordingly, no analysis of segment revenue, results
or net assets has been presented. No corporate or
other assets are excluded from this segment.
20. Share-based payments
No additional shares and share options in the Company
were granted during the six months ended 30 June 2016.
21. Related parties
No disclosable related party transactions occurred
during the period.
22. Contingent liability
During the previous financial year, the following
contingent liability existed and still exists as at
30 June 2016:
Thin capitalisation
The tax legislation with regards to thin capitalisation
changed with effect from 1 April 2012 and is applicable
in respect of years of assessment commencing on or
after that date. The safe harbour ratio of 3:1 included
in the previous legislation was replaced with the
concept of "arm's length." In instances where the
loans are considered not to be on an arm's length
basis all or part of the interest charged could be
disallowed as a deduction. Any interest not allowed
as a deduction will be treated as an adjustment in
terms of Section 31 of the Income Tax Act. In terms
of Section 31(3) of the Income Tax Act, any adjusted
amount for transfer pricing and thin capitalisation
purposes, prior to 1 January 2015, constituted a deemed
loan. As per the amended law, should this amount,
plus interest deemed to have accrued on it, not have
been repaid to the taxpayer by the relevant non-resident
connected person by 31 December 2014, the outstanding
"deemed loan" must "be deemed to be a dividend consisting
of a distribution of an asset in specie, that was
declared and paid by that resident to that other person
on 1 January 2015". Such deemed dividend will be subject
to Dividends Withholding Tax ("DWT"), at a rate of
15%.
In prior years, management obtained legal opinion
based on which they concluded that there is no deemed
loan. In further assessing the impact of the amendments
on its intercompany loans, management concluded that
due to the lack in industry guidance pertaining to
the application of the "arm's length" concept, management
will be unable to confirm their conclusion without
finalising a full Transfer Pricing benchmarking study
applying OECD (Organisation for Economic Co-operation
and Development) principles.
23. Events occurring after reporting date
Operating
The Company has subsequent to 30 June 2016:
* Completed and executed the definitive documents which
govern the Joint Venture Tolling Agreement ("Tolling
Venture") with the third party supplier of gold
bearing ore ("Ore Supplier"). The Company has
received multiple deliveries of gold bearing ore from
the Ore Supplier and has commenced processing the
gold bearing ore.
* Continued to advance due diligence and negotiations
with additional third parties regarding a variety of
joint venture alternatives.
* Completed the refurbishment of Mill 1.
* Had discussions with the owner of a tailings deposit
located in close proximity to the Company's
metallurgical plant (the "Target Tailings Deposit").
The Target Tailings Deposit is considered to host
several million tonnes of gold bearing material. The
Company conducted test work on the Target Tailings
Deposit material, the results of which are not yet
available and the commercial terms of the agreement
relating to the Target Tailings Deposit have not been
finalised yet. The Company is contemplating a
transaction structure that will allow both the
Tolling JV and the Target Tailings Deposit to operate
concurrently however the Board highlights that no
assurances can be given with respect to the Target
Tailings Deposit at this stage.
Financing
The Company has subsequent to 30 June 2016:
* Issued a total of 12,959,882 new ordinary shares
("Conversion Shares") in respect of a total of
US$213,000 of convertible security pursuant to the
convertible securities issuance deed entered into
with Bergen Global Opportunity Fund, LP ("Bergen") on
7 June 2016.
* Issued a total of 20,642,637 ordinary shares in
respect of a partial exercise of the convertible
securities previously entered into with Bergen.
* Entered into an agreement with Redstone Capital to
extend both the maturity of the Loan Notes and the
expiry date of the Warrants to 31 October 2016 which
will enable the Company to continue to progress the
capital raising work stream. All other terms of the
Loan Notes and Warrants remained the same.
* Pursued a transaction with one existing shareholder
of the Company for an investment of up to
US$4,000,000 (the "Strategic Investment"). The
Strategic Investment envisages the investment into
the Company's wholly owned immediate subsidiary
Central Rand Gold (Netherlands Antilles) N.V. ("CRG
NV"). The final terms and structure of the Strategic
Investment are still to be finalised.
Intended Board changes
It is intended that Nathan Taylor and Mark Austin
will resign from the Board in the short term. The
Board has identified and invited two individuals to
join the Board as Non-executive Directors as soon
as the necessary on-boarding paperwork has been completed.
Company profile
Our business
Central Rand Gold Limited ("Central Rand Gold" or "the Company") is engaged in a gold mining and exploration project that aims to bring profitable and sustainable gold mining back to the City of Johannesburg, bringing many benefits to the City, the communities surrounding its mining operations, its staff, its shareholders and other stakeholders. The Company plans to extract all profitable gold from its resource base using appropriate mining, processing and environmentally friendly technologies. Once the mineralised areas are worked out, stabilised and rehabilitated, the land will become available for urban development.
Due to the flooding of the Central Basin, the Company suspended underground operations in October 2014 until the Central Basin water table reduces sufficiently to enable underground mining to recommence. The Company has subsequently focused on mining surface and open pit operations. However, due to the grade variability from the surface operations, the Company ceased open pit mining operations in May 2016 and its short term focus will be on the rehabilitation of opened up areas, as well as processing material under the Tolling Agreement (the "Tolling Agreement"), which commenced in July 2016, in order to maintain operations.
According to the Tolling Agreement, a third party supplier of ore will source and deliver gold-bearing material to Central Rand Gold's metallurgical plant for processing by Central Rand Gold. Under the Tolling Agreement, Central Rand Gold will receive a graduated fee for processing the material in accordance with the number of tonnes processed through the metallurgical plant.
History
Central Rand Gold is the holding company for a group of companies ("Group"). Central Rand Gold listed on the Official List of the UK Listing Authority and the Main Boards of both the London Stock Exchange ("LSE") and the JSE Limited ("JSE") in November 2007, after consolidating contiguous exploration permits covering approximately 138 square kilometres in the most prolific gold-producing area of the world - the Central Rand Goldfields on the southern outskirts of Johannesburg. On 18 September 2013, Central Rand Gold opted to transfer its listing to the alternative exchanges of AIM in London and to the AltX in Johannesburg.
Mining Rights and Prospecting Rights
Previously, the Group acquired seven New Order Prospecting Rights which constitute from west to east, Western Areas A, B and E, the three Cs (one Prospecting Right for Consolidated Main Reef, Crown Mines and City Deep), Anglo Deep, Village Main and Robinson Deep and the defunct Simmer and Jack Gold Mine. The Prospecting Rights extended over an area from west to east of approximately 40 kilometres and north to south of approximately seven kilometres (the "Central Rand Project"). The Southern Deeps New Order Prospecting Right Application (the "Prospecting Application"), which has been pending a decision since 2007, was refused by the Department of Mineral Resources ("DMR") in 2015. A letter disputing reasons for the refusal has been lodged with the Deputy Director General of Mineral Regulations with no updates as yet. Central Rand Gold South Africa Proprietary Limited ("Central Rand Gold SA") has decided not to pursue the matter. The South Deep Prospecting Right renewal, that was rejected on a technicality issue by the DMR, is still under appeal with
no outcome of the decision as yet.
Currently, there are five of the seven New Order Prospecting Rights that still remain active, namely the Western Areas A, B and E, Village Main and Robinson Deep and Simmer and Jack. The Western Areas A, B and E and Village Main and Robinson Deep Prospecting Rights are currently under renewal for an additional three year period. All Prospecting Rights, except for one, have since been transferred from Rand Quest Syndicate Limited ("RQS") to Central Rand Gold SA via Section 11 applications lodged with the DMR. A Section 11 application for the Simmer and Jack Prospecting Right has been lodged but is still pending approval by the DMR.
The Company received its first New Order Mining Right from the DMR on 17 September 2008. This Mining Right, which was awarded 14 months after the initial application, enables Central Rand Gold to mine gold at its Consolidated Main Reef, Langlaagte, Crown Mines and City Deep tenements. The Company's current mining right renewal has been submitted to the DMR, using the SAMRAD online application system. The renewal is for a period of 20 years. The Company has yet to receive notification in writing from the Regional Manager of Mineral Resources confirming the acceptance of the application.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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