Central Rand Gold ( CRND )close to agreeing a deal with Chinese...

Central Rand Gold ( CRND )close to agreeing a deal with Chinese Group Hiria is interested in buying the company for $150m. Chinese Group Hiria is interested in buying the company for $150m.


The company said the board and executive committee had spent much of the year marketing to investors and strategic partners in South Africa, London and Asia in the hope of attracting capital to better exploit the company’s vast gold reserves and resources. It had originally received approaches from three different parties in Asia, the board was now focusing on two of the parties and a decision was imminent, an acquisition and subsequent cash injection will finally allow the CRG project to reach its very significant potential.

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.