JOHANNESBURG (miningweekly.com) – Junior miner Central Rand Gold (CRG) on Thursday reported that the South Gauteng High Court had dismissed the urgent interdict, sought by black-empowered Puno Gold Investments, to halt trial mining at the Consolidated Main Reef, Langlaagte, City Deep and Crown Mines tenements.

In addition, Puno was required to pay all legal costs associated with this dispute.

Reacting to the Court’s decision, CRG’s CEO Johan du Toit said that the company was pleased that this “unnecessary distraction” caused by Puno has now been dismissed in its entirety by the independent court.

“The court case has not delayed the development of our assets and we look forward to progressing with trial mining, which is the springboard towards full-scale commercial gold-mining in our Johannesburg mining right area.”

CRG was awarded its first new-order mining rights in August 2008, and trial mining began in September 2009 at slot 8, situated at its Consolidated Main Reef tenement, in southern Johannesburg.

The dispute between CRG and Puno arose around the interpretation of the provisions of the shareholders agreement entered into between Puno and Central Rand Gold Netherlands Antilles (CRGNV) in respect of CRG South Africa (CRGSA).

The shareholders agreement provided for the completion of, and timeframe within which, a bankable feasibility study was to be prepared in respect of the anticipated mining of the tenements.

In February, CRGNV said it would exercise a call option to buy Puno’s 26% stake in CRGSA, after Puno failed to fulfil the funding obligations stipulated in the shareholders agreement.

Puno instituted an urgent application with the South Gauteng High Court in Johannesburg, in April, to prevent CRGSA and CRGNV from proceeding with the exercise of the call option, pending final determination by arbitration, or a court order, of the viability and enforceability of the funding call by CRGSA and the call option furnished by Puno in favour of CRGNV in respect of its shares in Central Rand Gold.

The dispute was then referred to an arbitration process, in the hopes of obtaining a final resolution more quickly.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.