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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 : 9939T
Central Rand Gold Limited
18 October 2017
Hot Features
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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")
--------------------------------------------------------------------------------
2017 Interim Report
--------------------------------------------------------------------------------
Central Rand Gold today announces its unaudited Interim Results for the six months ended 30 June 2017 ("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
ZAI Corporate Finance Ltd - Nominated Adviser +44 (0) 20 7060 2220
John Treacy
Peterhouse Corporate Finance Limited - Broker +44 (0) 20 7469 0930
Lucy Williams / Fungai Ndoro
Merchantec Capital - JSE Sponsor +27 (0) 11 325 6363
Monique Martinez / Marcel Goncalves
18 October 2017
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.
Condensed Group Statement of Financial Position
as at 30 June 2017
30 June 31 December 30 June
2017 2016 2016
Notes US$ '000 US$ '000 US$ '000
(Unaudited) (Audited) (Unaudited)
----------------------------- ----- ----------- ----------- -----------
ASSETS
Non-current assets
Plant and equipment 5 1,385 1,354 2,194
Intangible assets 1,257 1,430 2,219
Security deposits and
guarantees 55 52 49
Environmental guarantee
investment 2,934 2,659 2,712
Loans receivable 6 8,646 7,706 8,071
----------- ----------- -----------
14,277 13,201 15,245
----------- ----------- -----------
Current assets
Security deposits and
guarantees 30 29 26
Prepayments and other
receivables 657 361 508
Inventories 7 66 28 79
Cash and cash equivalents 413 489 435
1,166 907 1,048
----------- ----------- -----------
Total assets 15,443 14,108 16,293
=========== =========== ===========
EQUITY
Attributable to equity
holders of the parent
Share capital 8 29,467 28,372 27,283
Share premium 8 224,892 225,289 225,255
Share-based compensation
reserve 28,238 28,238 28,238
Treasury shares (6) (6) (6)
Foreign currency translation
reserve (25,984) (27,234) (27,501)
Accumulated losses (269,612) (266,189) (264,080)
----------- ----------- -----------
(13,005) (11,530) (10,811)
Non-controlling interest - - -
----------- ----------- -----------
Total equity (13,005) (11,530) (10,811)
----------- ----------- -----------
LIABILITIES
Non-current liabilities
Environmental rehabilitation 3,460 3,281 3,858
Loan payable 9 8,646 7,706 8,071
----------- ----------- -----------
12,106 10,987 11,929
----------- ----------- -----------
Current liabilities
Trade and other payables 8,031 6,767 6,981
Royalties taxation payable 198 188 147
Loan payable 9 7,939 7,522 7,400
Derivative liability 174 174 647
----------- ----------- -----------
16,342 14,651 15,175
----------- ----------- -----------
Total liabilities 28,448 25,638 27,104
----------- ----------- -----------
Total equity and liabilities 15,443 14,108 16,293
=========== =========== ===========
Condensed Group Statement of Profit or Loss and Other
Comprehensive Income
for the six months ended 30 June 2017
Six months 12 months Six months
ended ended ended
30 June 31 December 30 June
2017 2016 2016
Notes US$ '000 US$ '000 US$ '000
(Unaudited) (Audited) (Unaudited)
----------------------------------- ----- ------------ ----------- -----------
Revenue 10 2,653 4,825 1,765
Production costs 11 (1,504) (1,684) (1,553)
Employee benefits expense (1,087) (2,071) (907)
Directors' emoluments 12 (36) (254) (124)
Operating lease expense (331) (1,252) (285)
Operational expenses 13 (249) (443) (138)
Other expenses 14 (650) (2,388) (665)
Other income and gains 15 10 169 5
Foreign exchange transaction
(losses)/gains (77) (49) 16
------------ ----------- -----------
Loss before interest,
tax, depreciation and
impairment (1,271) (3,147) (1,886)
Depreciation and amortisation
charge (343) (698) (192)
Impairment of assets (1,602) (1,380) -
Fair value movement in
embedded derivative (40) 1,194 -
Finance and investment
income 635 1,205 463
Finance costs (802) (1,650) (752)
------------ ----------- -----------
Loss before income tax (3,423) (4,476) (2,367)
Income tax expense 16 - - -
------------ ----------- -----------
Loss for the period (3,423) (4,476) (2,367)
------------ ----------- -----------
Loss for the period is
attributable to:
Non-controlling interest - - -
Equity holders of the
parent (3,423) (4,476) (2,367)
------------ ----------- -----------
(3,423) (4,476) (2,367)
------------ ----------- -----------
Shares in issue 299,833,285 207,750,698 141,400,341
Weighted average number
of ordinary shares in
issue 261,267,512 146,401,981 109,517,964
Fully diluted weighted
average number of ordinary
shares in issue 261,267,512 146,665,981 110,121,964
Basic (loss)/earnings
per share (US cents per
share) 18 (1.31) (3.06) (2.16)
Diluted loss per share
(US cents per share) 18 (0.70) (3.05) (2.15)
Condensed Group Statement of Profit or Loss and Other
Comprehensive Income (continued)
for the six months ended 30 June 2017
Six months 12 months Six months
ended ended ended
30 June 31 December 30 June
2017 2016 2016
US$ '000 US$ '000 US$ '000
(Unaudited) (Audited) (Unaudited)
----------------------------------- ----- ------------ ----------- -----------
(Loss)/profit for the
period (3,423) (4,476) (2,367)
------------ ----------- -----------
Other comprehensive (loss)/income:
Item that may be reclassified
subsequently to profit
and loss
Exchange differences
on translating foreign
operations 1,250 687 420
------------ ----------- -----------
Other comprehensive (loss)/income
for the period, net of
tax 1,250 687 420
------------ ----------- -----------
Total comprehensive (loss)/income
for the period (2,173) (3,789) (1,947)
------------ ----------- -----------
Total comprehensive (loss)/income
is attributable to:
Non-controlling interest - - -
Equity holders of the
parent (2,173) (3,789) (1,947)
------------ ----------- -----------
(2,173) (3,789) (1,947)
------------ ----------- -----------
Condensed Group Statement of Changes in Equity
for the six months ended 30 June 2017
Attributable to equity holders of the Group
---------------------------------------------------------------------
Foreign
Ordinary Share-based currency
share Share compensation Treasury translation Accumulated Total
Notes capital premium reserve shares reserve losses equity
US$ '000 US$ '000 US$ '000 US$ '000 US$ '000 US$ '000 US$ '000
---------------- ----- ---------- --------- ------------ --------- ----------- ----------- ---------
Balance at 31
December
2015 -
previously
reported 26,617 224,037 28,238 (6) (28,993) (260,117) (10,224)
Adjustments -
prior
period errors 19 - - - - 1,072 (1,596) (524)
---------- --------- ------------ --------- ----------- ----------- ---------
Balance at 31
December
2015 - restated 26,617 224,037 28,238 (6) (27,921) (261,713) (10,748)
Total
comprehensive
income for the
period
ended 30 June
2016
Loss for the
period - - - - - (2,367) (2,367)
Other
comprehensive
income
Foreign currency
adjustments - - - - 420 - 420
Transactions
with owners,
recorded
directly in
equity
Issue of Shares:
Capital raising 8 666 1,218 - - - - 1,884
Balance at 30
June
2016 27,283 225,255 28,238 (6) (27,501) (264,080) (10,811)
---------- --------- ------------ --------- ----------- ----------- ---------
Attributable to equity holders of the Group
---------------------------------------------------------------------
Foreign
Ordinary Share-based currency
share Share compensation Treasury translation Accumulated Total
Notes capital premium reserve shares reserve losses equity
US$ '000 US$ '000 US$ '000 US$ '000 US$ '000 US$ '000 US$ '000
---------------- ----- ---------- ---------- ------------- ---------- ------------ ------------ ----------
Balance at 31
December
2016 28,372 225,289 28,238 (6) (27,234) (266,189) (11,530)
Total
comprehensive
income for the
period
ended 30 June
2017
Loss for the
period - - - - - (3,423) (3,423)
Other
comprehensive
income
Foreign currency
adjustments - - - - 1,250 - 1,250
Transactions
with owners,
recorded
directly in
equity
Issue of Shares:
Capital raising 8 1,095 (397) - - - - 698
---------- ---------- ------------- ---------- ------------ ------------ ----------
Balance at 30
June
2016 29,467 224,892 28,238 (6) (25,984) (269,612) (13,005)
---------- ---------- ------------- ---------- ------------ ------------ ----------
Condensed Group Statement of Cash Flow
for the six months ended 30 June 2017
Six months 12 months Six months
ended ended ended
30 June 31 December 30 June
2017 2016 2016
US$ '000 US$ '000 US$ '000
(Unaudited) (Audited) (Unaudited)
------------------------------ ----- ----------- ----------- -----------
CASH FLOWS FROM OPERATING
ACTIVITIES Notes
Loss before tax (3,423) (4,476) (2,367)
Adjusted for :
Depreciation and amortisation 343 698 192
Loss on disposal of plant
and equipment - 892 -
Profit on disposal of
shares - (3) -
Revaluation of investment - (54) -
Impairment of assets 1,602 1,380 -
Net loss/(gain) on foreign
exchange 77 49 (16)
Finance income (635) (1,205) (463)
Finance costs 802 1,650 752
Fair value movement in
embedded derivative 40 (1,194) -
Changes in working capital
(Increase)/decrease in
prepayments and other
receivables (296) 84 (28)
(Increase)/decrease in
inventory (38) 92 41
Increase/(decrease) in
trade and other payables 1,264 (172) (18)
Decrease in provisions - (1,294) -
----------- ----------- -----------
Cash flows used in operations (264) (3,553) (1,907)
Finance income 4 195 4
Finance costs (289) - (289)
----------- ----------- -----------
Net cash used in operating
activities (549) (3,358) (2,192)
----------- ----------- -----------
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of plant and
equipment 5 (50) (9) -
Withdrawal of capital
on guarantee investment - 422 -
----------- ----------- -----------
Net cash (used in)/from
investing activities (50) 413 -
----------- ----------- -----------
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issue of
shares for cash 698 3,185 2,062
Cost relating to the
issue of shares - (178) (178)
Net proceeds from issue
of convertible notes 200 - 441
----------- ----------- -----------
Net cash from financing
activities 898 3,007 2,325
----------- ----------- -----------
Net (decrease)/increase
in cash and cash equivalents 299 62 133
Cash and cash equivalents
at 1 January 489 556 556
Effects of exchange rate
fluctuations on cash
balances (375) (129) (254)
----------- ----------- -----------
Cash and cash equivalents
at end of period 413 489 435
=========== =========== ===========
Notes to the Condensed Interim Group Financial Statements
for the six months ended 30 June 2017
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 2016 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 2017 and 30 June 2016 is unaudited and
does not constitute statutory financial information.
The comparatives for the full year ended 31 December
2016 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 2016 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
The Group had net current liabilities at 30 June 2017
of US$15.6 million, including US$8.3 million of loan
notes (and interest), with Redstone Capital Limited
and Mr Wang, and US$8.0 million of trade and other
payables. The ability of the Group to continue as
a going concern is dependent on the Group securing
access to sufficient additional funding and extending
the repayment terms of existing loan notes or the
loan note holders converting the loan notes into equity,
to support the Group's cash flow projections.
During the period under review, the Group raised US$1.6
million (net) through share placements and drawn down
US$0.6 million of bridge finance under a convertible
loan note facility ('CLN') with Bergen Global Opportunity
Fund, LP ('Bergen') for working capital purposes.
Under the terms of the agreement, the Group can draw
down up to US$4.0 million subject to agreement by
both parties.
Whilst CRGSA's operations have by and large stabilised
operationally in 2017, the financial and operational
positions remain fragile and there is a very thin
working capital position at the operating company
level with a negative position within the Company,
as mentioned above. The Company's production for the
period January 2017 to 30 June 2017 was 2 320 Troy
Ounces. The Company's overall financial position is
accordingly negative and the directors are now actively
exploring urgent financing options. In order to remain
a listed, operational mining group, in steady state
and with a view to achieving medium term profitability,
the directors consider a cash injection of not less
than US$ 20 million would be required to be made.
The directors consider that this is unlikely to be
forthcoming in the near future or at all. Accordingly
the directors are actively pursuing options which
would involve retaining its listings but the disposal
of the Company's interests in its immediate subsidiary
company, Central Rand Gold (Netherlands Antilles)
N.V., unless it is able to secure sufficient alternative
finance at the required level in the very near future.
The Group's Senior Secured Loan Notes of US$7.25 million
principal ('the Notes'), held by the Group's largest
shareholder Redstone Capital Limited ('Redstone'),
fell due for maturity in September 2016. Redstone
has provided a written undertaking to extend the maturity
of the Notes to at least December 2018 subject to
concluding negotiations regarding revisions to the
terms of conversion in the coming months. The Directors,
based on discussions with representatives of Redstone,
fully expect that the Notes will ultimately be converted
rather than called for payment.
The Directors have prepared cash flow forecasts for
a period of at least 12 months from the date these
financial statements were approved, which show that
the Group is able to meet its liabilities as they
fall due. However, the cash flow forecasts are dependent
upon the Group successfully concluding the sale of
the operating listed entity, and, by novating the
loans to the operating entities, privatising those
operations.
The Directors have concluded that the above circumstances
give rise to a material uncertainty that may cast
significant doubt on the Group's ability to continue
as a going concern and it may therefore be unable
to realise its assets and discharge its liabilities
in the normal course of business. Nevertheless, after
taking account of the Group's plans to sell off some
of the assets, and having considered the risks and
uncertainties associated with the forecasts, the Directors
have a realistic expectation that the Group will have
adequate resources to continue in operational existence
for at least 12 months from the date of approval of
these financial statements. For these reasons, the
Directors continue to prepare the financial statements
on a going concern basis, and the financial statements
do not include any adjustments that would result from
the going concern basis of preparation being inappropriate.
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 2016, 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 2017:
-- IFRS 2: Share-based Payment
-- IFRS 12: Disclosure of Interests in Other Entities
-- IFRS 15: Revenue from Contracts with Customers
-- IAS 7: Statement of Cash Flows
-- IAS 12: Income Taxes
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
2016.
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 2016.
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:
2017 2016 2016
Six months Six months
to Year ended to
31
30 June December 30 June
Closing Average Closing Average Closing Average
South
African
Rand 0.08 0.08 0.07 0.07 0.07 0.07
Pound
Sterling 1.30 1.26 1.23 1.27 1.34 1.43
Australian
Dollar 0.77 0.76 0.72 0.75 0.74 0.74
5. Property, plant and equipment
During the six months ended 30 June 2017, the Group
spent US$50,081 to purchase other items of plant and
equipment (2016: US$0).
6. Loans receivable
Puno Gold Investments Proprietary Limited ("Puno")
Since the last report for the year ended 31 December
2016 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, the appeal judgement was handed down
and the appellants i.e. the Central Rand Gold companies
were wholly successful in that a full bench of the
appeal court ruled that the court of first instance
had erred in its findings.
Costs in the appeal, including wasted costs pertaining
to the preliminary argument were granted against Puno.
Although a large portion of these costs were recovered
in 2017 with a portion amounting to US$65,073 still
being outstanding, Puno has brought a further application
seeking to overturn a portion of the costs lawfully
taxed and awarded by the taxing master.
The remainder of the arguments pertaining to the merits
of the matter have been referred back to the judge
of first instance for reconsideration and a fresh
judgement is to be delivered by the court of first
instance. The Central Rand Gold companies have taken
the necessary steps for the matter to be referred
and the parties are advised that the judge of first
instance is presently engaged in the drafting of a
new judgement.
Aside from the above, on 29 April 2016, Puno served
on Central Rand Gold SA an application premised upon
sections 344(f) and 345 of the Companies Act, for
an order to wind up (seek the liquidation of) Central
Rand Gold SA. These virulent proceedings are bewildering
in that they entail Puno (as minority shareholder,
yet BEE partner in terms of the Mining Charter) seeking
to liquidate the company in which it holds a valuable
financial stake.
Central Rand Gold SA has opposed the application and
lodged answering affidavits which set out the baselessness
of the application brought. The time period for Puno
to file any replying affidavit lapsed on 22 June 2016
and Puno has taken no further steps to progress this
application or indeed withdraw it. Central Rand Gold
SA 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 any loss-making
situation.
Further to the above, and on 4 November 2016, Puno
has issued a further application citing thirteen respondents
including not only the Central Rand Gold group of
companies, but also the current Minister of Mineral
Resources, the Director General of the Department
of Mineral Resources, the Regional Manager of the
Gauteng Region of the Department of Mineral Resources,
the Reserve Bank of South Africa, the group's former
legal advisors and attorneys.
As part of this fresh litigation on the part of Puno
it seeks an order before the High Court that a string
of non-existent agreements be declared void. Further
to this, Puno has sought to implicate the aforementioned
parties in an elaborate fraudulent scheme which resulted
in Central Rand Gold SA having been awarded certain
prospecting and mining rights. In spite of these sweeping
allegations and the far reaching scheme conjured by
Puno's application, it has been established that Puno
has failed to serve its application on all the cited
parties and hence the particular application is hamstrung.
Equally, Puno's ability to progress such application
is hamstrung by interlocutory disputes which it must
also address.
On 13 June 2017, the High Court of South Africa, (Gauteng
Division, Pretoria) handed down judgment on the matter
initiated by the Company, CRGNV and CRGSA against
Puno on 25 November 2011. The judgment delivered was
in favour of the Company, Central Rand Gold (Netherlands
Antilles) N.V. and Central Rand Gold SA. The Court
upheld the views of these entities and rejected the
defences proffered by Puno. This judgment has definitively
and positively pronounced on the validity and enforceability
of the funding call, and found that such funding call
was made in accordance with the overarching law and
the Shareholders Agreement. The Court provided an
Order that the funding call directed by the first
and second applicant (Central Rand Gold SA and Central
Rand Gold (Netherlands Antilles) N.V.) to the respondent
(Puno) on or about 17 September 2008, for payment
by the respondent for ZAR72,326,573.47 was declared
valid and enforceable; the respondent was ordered
to pay the costs of the application; the respondent
was ordered to pay the costs of the application; and
both cost orders include the costs of senior and junior
counsel. Puno retains interest in Central Rand Gold
SA but owes Central Rand Gold SA and Central Rand
Gold (Netherlands Antilles) N.V. ZAR72,326,573 (approximately
US$5,537,033 being the original loan amount plus compound
interest).
The Group still believes that ultimately their position
will prevail. The Board is still of the opinion that
this will not have any material consequences in respect
of the consolidated accounts of the Group.
The loan payable to Puno contains the same allocations
referred to above.
7. Inventories
Group
June December June
2017 2016 2016
US$ '000 US$ '000 US$ '000
Consumables 66 28 42
Ore
stockpiles - - 37
---------------------- ---------------------- ----------------------
Total
inventories 66 28 79
====================== ====================== ======================
There was no write-down of ore stockpiles to net realisable
value, and recognised as an expense during the financial
year under review (2016: US$0).
8. Share capital and share premium
The Company issued the following shares during the
period under review:
* Subsequent to the appointment of Brandon Hill Capital
Limited as the Company's broker on 23 January 2017,
Central Rand Gold issued 936,330 ordinary shares in
the Company as part consideration of their fee, in
accordance with the terms of their engagement letter.
* A share placement on 23 March 2017 of 60,000,000 new
ordinary shares at 0.5 pence, which raised GBP0.30
million.
* A bridge funding (the "Bridge Funding") through a
combined convertible securities with Bergen. The
Bridge Funding raised US$240,000. The Convertible
Securities were (subject to the satisfaction of
certain customary conditions) issued in tranches and
were fully converted into 26,946,257 new Ordinary
Shares by 2 May 2017.
* On 8 May 2017, the Company issued 4,200,000 ordinary
shares to a creditor in lieu of a fee due by the
Company.
9. Loan payable
Group
June December June
2017 2016 2016
US$ '000 US$ '000 US$ '000
Non-current 8,646 7,706 8,071
Current 7,939 7,522 7,400
--------- --------- ---------
16,585 15,228 15,471
========= ========= =========
Loan payable
consists of
the following:
Group
June December June
2017 2016 2016
US$ '000 US$ '000 US$ '000
Puno Gold
Investments
Proprietary
Limited 8,646 7,706 8,071
Redstone Capital
Limited 6,340 6,923 6,959
Bergen Global
Opportunity
Fund, LP - - 441
Loans from
investors 1,599 599 -
16,585 15,228 15,471
========= ========= =========
10. Revenue
Group
June December June
2017 2016 2016
US$ '000 US$ '000 US$ '000
Gold sales 2,596 3,353 1,764
Toll treatment 56 1,471 -
Other by-product
sales 1 1 1
--------- ---------- ---------
2,653 4,825 1,765
========= ========== =========
The revenue relates to the sale of gold derived from
mining activities that take place in South Africa,
tolling revenue and the sale of other by-products.
2,320 (30 June 2016: 1,417) ounces (inclusive of gold
arising from the toll treatment) of gold was sold.
11. Production costs
Group
June December June
2017 2016 2016
US$ '000 US$ '000 US$ '000
Production costs
comprise
the following
items:
- Consumables 414 626 347
- Utilities 551 (475) 452
- Plant hire 428 646 534
- Labour hire 5 174 131
- Toll treatment 106 1,970 89
- Environmental
rehabilitation
provision fair
value adjustment - (1,294) -
- Other - 37 -
--------- ---------- ---------
1,504 1,684 1,553
========= ========== =========
12. Changes to the Board
On 10 January 2017, Mr N Taylor and Mr M Austin resigned
as Directors of the Group and Mr S Charles, Mr W Zhuang
and Ms L Trollip were appointed as Directors of the
Group.
13. Operational expenses
Group
June December June
2017 2016 2016
US$ '000 US$ '000 US$ '000
Operational expenditure comprises the following items:
- Assaying costs 48 64 41
- Consulting
services 205 351 93
- Environmental
costs (4) 28 4
249 443 138
========= ========== =========
14. Other expenses
Group
June December June
2017 2016 2016
US$ '000 US$ '000 US$ '000
Auditor's
remuneration 8 122 113
Corporate social
investment - 15 13
Legal costs 75 15 64
Loss on disposal of
plant
and equipment - 892 -
Travel and
accommodation 2 24 12
Telecommunications 48 96 42
Other expenses 517 1,224 421
--------- --------- ---------
650 2,388 665
========= ========= =========
15. Other income and gains
Group
June December June
2017 2016 2016
US$ '000 US$ '000 US$ '000
Sundry income 10 169 5
========= =========== ==========
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 2017 is 0% (2016: 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
As at 30 June 2017, there were fees to the amount
of US$91,867 payable to iProp. In addition, there
was US$9,187 outstanding in respect of the concentrator
circuit payable in one year from the date of being
commissioned.
18. Loss per share
Group
June December June
2017 2016 2016
Headline loss per share
(US cents per share) (1.31) (2.45) (2.16)
Diluted headline loss per
share (US cents per share) (0.70) (2.44) (2.15)
Reconciliation between loss
attributable to the equity
holders of the Group and
the headline loss attributable
to the equity holders of
the Group:
Loss attributable to equity
holders of the Group (US$'000) (3,423) (4,476) (2,367)
Add: Loss on disposal of
plant and equipment (US$'000) - 892 -
--------- ---------- -------
Loss used in calculating
headline (loss)/earnings
per share (US$'000) (3,423) (3,584) (2,367)
========= ========== =======
19. Prior period errors
During the 2016 financial period, the Group discovered
a number of accounting errors relating to transactions
and balances that had not been recorded during the
years ended 31 December 2014 and 31 December 2015.
These errors have an impact on the 2016 Interim Results.
Please refer to the 2016 Annual Report, as announced
to Shareholders on 16 October 2017, for an explanation
of these errors.
20. 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.
21. Share-based payments
No additional shares and share options in the Company
were granted during the six months ended 30 June 2017.
22. Related parties
No disclosable related party transactions occurred
during the period.
23. Contingent liability
During the previous financial year, the following
contingent liability existed and still exists as at
30 June 2017:
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 a 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.
Open tax years
Central Rand Gold SA has entered into an Alternative
Dispute Resolution with the South African Revenue
Service relating to income tax returns submitted for
the years of assessments 2010 to 2012.
iProp claim
iProp, the landowner of various mining sites, has
lodged a claim for outstanding rentals and leases.
The amounts claimed are currently being reconciled,
in order to quantify the position.
24. Events occurring after reporting date
The following events have taken place subsequent to
30 June 2017:
Financing
The Directors have been actively exploring urgent
financing options. In order to remain a listed, operational
mining group, in steady state and with a view to achieving
medium-term profitability, the directors consider
that a cash injection of not less than US$20 million
would be required. The Directors consider that this
is very unlikely to be forthcoming in the near future
or at all. Accordingly, the Directors have been actively
pursuing options which would involve retaining its
listings but would require the disposal of the Company's interests in its immediate subsidiary company, Central Rand Gold (Netherlands Antilles) NV, unless it is able to secure sufficient alternative finance at the required level in the very near future. Puno dispute In July 2017, Puno Gold Investments Proprietary Limited withdrew the application for the winding up of Central Rand Gold SA on the basis that each party pays its own costs. This proposal was accepted by Central Rand Gold SA. Recapitalisation of the Company In September 2017, the Company appointed Peterhouse Corporate Finance Limited as its brokers, with a view to the Company undertaking a recapitalisation. Work is underway in relation to that process at the time of approval of these consolidated financial statements, in the context of the Company putting proposals to shareholders for the necessary authority to enable any such recapitalisation to occur and subsequent proposals to restructure the Company, to divest itself of its mining interests and related indebtedness but retaining its listings. iProp claim In October 2017, iProp issued a claim to the Company's subsidiary, regarding the recovery of outstanding leases and rentals. The claim includes late penalty charges and interest, which have not been accrued in these consolidated financial statements. This matter is with the Company's legal advisors. Resignation of Chief Executive Officer and director On 4 October 2017 Ms Trollip tendered her resignation as the Company's Chief Executive Officer, and as a director of the Company and relevant Group subsidiaries, effective on a date to be agreed on by the Board.
This information is provided by RNS
The company news service from the London Stock Exchange
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