JOHANNESBURG (miningweekly.com) – Gold miner Central Rand Gold (CRG) on Friday announced that it was undertaking a placing, subscription and open offer to raise up to £1.69-million through the issue of up to 19.2-million open shares at 8.78p apiece.

Pursuant to the terms of the placing and the subscription, about 12.75-million open offer shares had been conditionally placed with investors subject to clawback by existing shareholders under the open offer.

In addition, should the open offer be fully taken up, Redstone Capital, to which CRG issued loan notes to the value of $7.25-million in September, also had the right to subscribe to a maximum of 32.6-million new ordinary shares under an option agreement, which would allow CRG to raise an additional £2.85-million.

The additional funds would strengthen CRG’s balance sheet, while also allowing it to continue with the expansion of the resource base on its Consolidated Main Reef (CMR) tenement through underground development.

“This development will provide the company with new mining areas and it is also expected that it will intercept a high-grade payshoot with grades estimated above 4 g/t,” CRG said.

The current resource base for CMR estimated an average grade of 3.5 g/t.

The funds would also enable CRG to complete economic studies to mine down to 900 m below surface, the objective being to increase the company’s Joint Ore Reserves Committee-compliant resource and reserve base, while also allowing CRG to conduct additional feasibility studies of its tenement areas, and to further reduce operational costs through ownership rather than the leasing of mining and processing equipment.

“CRG has made significant progress with the planned upgrades and we are looking forward to continuing the improvements to our operations. The funds raised will allow the company to set a clear strategy of deliverables, continuing with underground development to access additional mining areas, increasing CRG’s resources and reserves base and creating true value for our shareholders,” CRG CEO Johan du Toit commented.