Central Rand Gold mulls $150m Chinese offer, suspends underground mining
London- and Johannesburg-listed gold mining company Central Rand Gold, which is considering selling out to Hiria, of Hong Kong, for $150-million cash, has temporarily suspended water-challenged underground mining to focus on mothballed opencast targets.
The company’s nonbinding memorandum of understanding provides for the potential disposal of all its shares in the wholly owned Central Rand Gold Netherlands subsidiary and due diligence by both companies on each other until March 31, the target date for the execution of the sale.
As the agreement is not exclusive, Central Rand Gold, headed by CEO Johan du Toit, will continue to engage with other parties wanting to acquire its gold operations, where State water organisation Trans-Caledon Tunnel Authority is demanding an upgrade to the company’s high-density sludge plant that lowers underground water levels.
Until that upgrade has been completed, which is expected in early 2015, the company will suspend underground mining and focus on opencast targets, where mechanical ripping and other rock-breaking technology provide access to between 91 000 t and 350 000 t of gold-bearing reef with grades of up to 2.5 g/t.
Once the final upgrade of the sludge plant thickeners is completed and the water table lowered, a return to the high-grade underground working areas will be reassessed.
Meanwhile, head office and board pay has been cut by 15% and overtime costs by 72% through efficiency improvements and more rigorous scheduled maintenance.
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