Central Rand Gold (CRG) announced on Wednesday that it is undertaking a placing and subscription to raise R1.1 million, or £600 000, through the placing of 2.55 million new ordinary shares and the subscription of 3.46 million new ordinary shares at a price of R1.85, or 10 pence, per ordinary share.
The company, which currently has a cash balance of $700 000, says the proceeds of the placing and subscription will be used primarily to strengthen the company’s balance sheet and provide working capital in order to undertake continued surface mining operations and programme of plant upgrades and efficiency processes.
The placing will also be used to repay trade creditor balances relating to the closure of its underground mining operations in October last year, as a result of the delay in full commissioning of the high density sludge plant, while also being used to complete the disposal of its Central Rand Gold Netherlands Antilles (CRGNV) subsidiary.
Over the last 15 months, CRG has been involved in a significant marketing campaign, of the Central Rand Gold asset base, to a predominately Asian audience and has resultantly entered into four separate non-binding memoranda of understanding (MOUs) with Huili Resources, Hiria Group, Beijing Ankong Investment and Shengbang Jiabo Consulting Company.
The MOUs are all on substantively consistent terms and contemplate the potential 100% disposal of the shares held by CRG in its wholly-owned CRGNV subsidiary, for a cash consideration of up to $150 million.