CENTRAL Rand Gold ( CRND ) Bidders Circling

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Gold/Mining/Energy
CENTRAL Rand Gold ( CRND ) Bidders Circling

An SI Board Since August 2015

Posts	SubjectMarks	Bans	Symbol
0	0	0	CRND

Emcee: miningoz	Type: Moderated

Introduction Market Data Compact

Chinese Group Hiria is interested in buying the company for $150m.

JOHAN DU TOIT: We’ve been marketing … last year we had quite a big injection from an Asian company called Redstone Capital which is our biggest shareholder at the moment. Really on the back of that the company has always been looking at getting additional capital into the company. And so we’ve been doing a lot of marketing out in China. We’ve had a lot of Chinese interest in the company. We’ve been marketing it and had a lot of site visits here, so it’s been coming. And the Hiria Group has been one of those that we’ve had discussions with, they’ve seen all the public information and on the back of that they’ve been quite happy.

If you take a longer term view of the resource base and what the new HDS (high density sludge) plant that’s been implemented in the market can do, it shows that the water basin table can be de-watered, and that’s what we’ve seen.
So there’s a lot of confidence that we have over the medium to long-term that this basin can be de-watered, and these resource bases can be re-accessed.

We are beginning to see the plant starting to run more consistently. It’s only running at about 60% capacity and even through that you’re starting to see the water level stabilise, so there’s greater confidence that in time, we expect by 2015, the plant to be fully commissioned and fully operational, that it can then start running at 72-to 84-million litres per day and through that we expect the water table to drop quite significantly, it gives us our reserves back down to 450m, that’s about 10-million ounces, that’s the capacity, remember, we gave the pumps to the project and we said as a first phase of this project let’s get it down to 450m below surface and so we can get down to that level and then in years to come, we can then drop it down further if we wanted to. We can drop down to 900, even further if we wanted to.

$150m, is a fair price tag would you say for Central Rand Gold?

It’s a huge upliftment as you said from the current share price. However if you look at the Competent Persons Report that we’ve done over the last few years, and if you look at the valuation of the reserves, it comes into that range…so it’s not way out if you just look at the asset base, and that’s really what they’re buying. They’re not buying the listed entity, they’re actually buying the asset from Central Rand Gold Limited. So it’s in and around some of the valuations that were done in the past.

Central Rand CEO Johan du Toit said the company had directly benefited from the removal of mine dumps immediately south of Johannesburg by DRDGold because outcropping gold-bearing reefs had been exposed for the first time in decades.

Central Rand, which is traded on Johannesburg’s AltX and London’s AIM boards, had tackled these deposits, digging pits up to 30m deep to extract the reef before filling in the holes and rehabilitating the land, he said on Wednesday.

"One of the benefits has been the elimination of illegal mining at these areas once the areas have been rehabilitated, which is great for the communities," he said.

The open pits gave it enough material for 18 months of production.

Central Rand is the subject of offers by Chinese companies wanting to buy its assets, which are primarily defunct mining areas south of Johannesburg. Its business strategy was to mine reefs left behind because they were of a relatively low grade.

The assets could be sold for up to $150m, the proceeds of the sale would probably be distributed to shareholders of the parent.

Central Rand hopes to resume underground mining in the second half of next year once water levels have been reduced from the prevailing level of 144m below surface.

Mining had been conducted at about 160m below surface.

Pumping of water out of the Central Basin of the Witwatersrand gold formation has reached a steady state of 72-million litres a day since March. Water levels fell 1.8m in March and April and that was matched in the first two weeks of this month.

Central Rand has also turned its attention to re-treating tailings and rock dumps as well as toll treating material from Mintails. To advance this strategy, Central Rand is issuing shares at a 27% discount to the 13.75p share price on May 19.

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