Central Rand Gold Limited Industrial Relations Update and Iprop Dispute (4097F)

TIDMCRND

RNS Number : 4097F

Central Rand Gold Limited

17 May 2017

 
             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 2007/019223/10) 
                 ISIN: GG00B92NXM24 
      LSE share code: CRND JSE share code: CRD 
       ("Central Rand Gold" or the "Company") 
--------------------------------------------------- 
   Industrial Relations Update and Iprop Dispute 
--------------------------------------------------- 
 

Industrial Relations Update

The Company is pleased to announce that following robust negotiations, it has reached agreement with union representatives that the industrial action, as announced to shareholders on 10 May 2017, will now cease.

The Company has agreed that, a bonus payment in the form of a "13th cheque" will be paid in December 2017. This bonus payment will be equivalent to 50% of each employee's basic pay.

The Company has been informed that union representatives have notified their members of the aforementioned, and that all employees have returned to work today.

Whilst this is clearly positive news for the Company, approximately 11 days of production have been lost. Some time is therefore required for operations to resume at usual levels and for management to assess the consequences of the strike on the Company's plant.

IPOP Dispute

On 1 January 2005, Central Rand Gold South Africa Proprietary Limited ("CRGSA") acquired the entire shareholding of Ferreira Estate Investment Company Limited ("FEIC") from IPROP Proprietary Limited ("IPROP"), and IPROP's subsidiary, Industrial Zone Proprietary Limited ("INZO"). FEIC is the holder of the mining right which the Company currently holds, and which is under renewal. In order to use this right, FEIC required the use of certain surface areas owned by INZO. As a consequence, CRGSA entered into certain lease agreements with INZO for the lease of areas of INZO/IPROP's land (the "Lease Agreements").

IPROP contends that a dispute arose in 2009 between the parties as to the Lease Agreements, which culminated in a settlement agreement (the "Agreement") entered into on or around 9 November 2009. As part of the settlement terms, and apart from any payment entitlements, IPROP was entitled to have the Agreement made an order of Court. IPROP does not immediately allege a pecuniary debt owed in terms of the Agreement, however it does appear that a dispute in relation to the conclusion of future leases emanating from the Agreement subsists.

The present application seeks to have the Agreement ratified by Court order, the effect of which would be to make the terms of the Agreement enforceable and to the extent that any pecuniary debts remain unpaid, making those immediately recoverable.

The Court hearing is scheduled for 19 May 2017. The Company continues to negotiate with IPROP and hopes to reach a commercially satisfactory arrangement. However, the outcome cannot be guaranteed.

The Company's cash position remains extremely challenging, and whilst the directors of the Company ("Directors") continue to make every effort to secure financing solutions, no guarantee can be made that these negotiations will be concluded successfully. The Directors are therefore considering a number of solutions, which include the sale of the Company's operating assets. As a consequence, further to the announcement of 11 May 2017 the Company's shares will remain suspended for the time being pending further developments.

For further information, please contact:

Central Rand Gold [phone]

Lola Trollip

ZAI Corporate Finance Ltd - Nominated Adviser & Broker [phone]

John Treacy

Brandon Hill Capital Limited - Broker [phone] Jonathan Evans / Wei Jiao

Merchantec Capital - JSE Sponsor [phone]

Monique Martinez / Marcel Goncalves

Johannesburg

17 May 2017

The information communicated in this announcement is inside information for the purposes of Article 7 of Market Abuse Regulation 596/2014 ("MAR").

This information is provided by RNS

The company news service from the London Stock Exchange

END

STRVDLBFDEFZBBL

(END) Dow Jones Newswires

May 17, 2017 04:50 ET (08:50 GMT)