| Mon 7 Jun 2010, 7:05 | | CRD - Central Rand Gold Limited - Details of the firm placing and placing and |
|
CRD
CRD
CRD - Central Rand Gold Limited - Details of the firm placing and placing and
open offer
Central Rand Gold Limited
(Incorporated as a company with limited liability under the laws of Guernsey,
Company Number 45108)
(Incorporated as an external company with limited liability under the laws of
South Africa, registration number 2007/019223/10)
ISIN: GG00B24HM601
Share code on LSE: CRND
Share code on JSE: CRD
("CRG" or the "Company" or the "Group")
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
OR FROM THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN. PLEASE SEE THE IMPORTANT
NOTICE BELOW
DETAILS OF THE FIRM PLACING AND PLACING AND OPEN OFFER
Firm Placing of 649,042,335 New Shares and Placing and Open Offer of 679,029,025
New Shares of 1 pence each, in each case at 2 pence (ZAR0.224) per New Share and
Notice of Extraordinary General Meeting
A Prospectus containing details of the Firm Placing and Placing and Open Offer
and convening an Extraordinary General Meeting to approve certain matters
necessary to implement the Firm Placing and Placing and Open Offer is expected
to be posted to Shareholders shortly and will be available on the Company`s
website, www.centralrandgold.com.
HIGHLIGHTS
- Net $35m fund raise to achieve a positive cash generating operation by the end
of 2013
- Trial mining successfully completed, de-risking the CMR West gold project
- CMR West Reserve base 482,000oz,
- Strategy to ramp up additional gold production from CRG`s contiguous license
areas along strike remains intact
The presentation utilised by the Company as part of its recent institutional
road show is available on the Company`s website: www.centralrandgold.com.
DETAILS OF THE FIRM PLACING AND PLACING AND OPEN OFFER ("THE CAPITAL RAISING")
Under the Firm Placing and Placing and Open Offer, Central Rand Gold intends to
issue 1,328,071,380 New Shares, comprising:
- 649,042,355 Firm Placed Shares (representing gross proceeds of GBP12,980,847
million), pursuant to the Firm Placing; and
- 679,029,025 Open Offer Shares (representing gross proceeds of GBP13,580,580
million) to be made available to Qualifying Shareholders pursuant to the Open
Offer.
Under the Open Offer, Qualifying Shareholders have a basic entitlement of 5 Open
Offer Shares for every 2 Existing Shares registered in their name on the Record
Date and are also being offered the opportunity, provided they take up their
Open Offer Entitlement in full, to apply for a maximum number of additional Open
Offer Shares equal to the number of Open Offer Shares comprised in their Open
Offer Entitlement through the Excess Application Facility.
Johan du Toit, Chief Executive, said:
"Having spent the last year establishing the optimum mine plan for developing
CRG`s substantial asset base through trial mining, we now have the required
working capital to commence commercial production from our first mine, CMR West.
I would like to thank our long term shareholders for their support and welcome
our new shareholders. Although the past 18 months have seen many challenges for
CRG, the successful placing means that we can start exploiting our resource base
to create value for all stakeholders."
7 June 2010
For further information, please contact:
Central Rand Gold +27 (0) 11 551 4000
Johan du Toit / Patrick Malaza
Evolution Securities Limited +44 (0) 20 7071 4300
Simon Edwards / Chris Sim / Neil Elliot
Macquarie First South Advisers (Pty) Limited +27 (0) 11 583 2000
Annerie Britz / Melanie de Nysschen / Manisha Ramlakhan
Buchanan Communications +44 (0) 20 7466 5000
Bobby Morse / Katharine Sutton
Jenni Newman Public Relations (Pty) Limited +27 (0) 11 506 7300
Jenni Newman / Megann Outram
Evolution Securities, which is authorised and regulated in the United Kingdom by
the FSA and Macquarie First South, which is authorised and regulated by the
South African Financial Services Board, are acting exclusively for the Company
and no one else in connection with the Capital Raising and will not regard any
other person (whether or not a recipient of this announcement) as their client
in relation to the Capital Raising and will not be responsible to anyone other
than the Company for providing the protections afforded to their respective
clients or for providing advice in relation to the Capital Raising or any
matters referred to in this announcement.
Macquarie is acting as a financial adviser to the Company and not as an
underwriter, in relation to the Capital Raising.
This announcement has been issued by, and is the sole responsibility of, Central
Rand Gold Limited. Apart from the responsibilities and liabilities, if any,
which may be imposed by the FSMA, neither Evolution or Macquarie nor any of
their affiliates, parent undertakings, subsidiary undertakings or subsidiaries
of their parent undertakings or any of their respective directors, officers,
employees or advisers or any other person accepts any responsibility whatsoever
and makes no representation or warranty, express or implied, for or in respect
of the contents of this announcement or as to the accuracy or completeness or
fairness of the information or opinions contained in this announcement and,
without prejudice to the generality of the foregoing, no responsibility or
liability is accepted by any of them for any such information or opinions or for
any errors or omissions.
Cautionary note regarding forward looking statements
This announcement contains forward-looking statements which reflect the current
view of the Company or, as appropriate, of the Directors with respect to
financial performance, business strategy, plans and objectives of management for
future operations (including development plans relating to the Group`s products
and services).
These forward-looking statements relate to the Group and the sectors and
industries in which the Group operates. Statements which include the words
"expects", "intends", "plans", "believes", "projects", "anticipates", "will",
"targets", "aims", "may", "would", "could", "continue" and similar statements of
a future or forward-looking nature identify forward-looking statements for
purposes of the US federal securities laws or otherwise.
All forward-looking statements included in this announcement address matters
that involve known and unknown risks and uncertainties. Accordingly, there are
or will be important factors that could cause the Group`s actual results to
differ materially from those indicated in these statements. These factors
include but are not limited to those described in the section of the Prospectus
on Risk Factors, which should be read in conjunction with the other cautionary
statements that are included in this announcement. Although the Company and the
Directors have attempted to identify all factors that may influence the accuracy
of any forward-looking statement there remain factors which are impossible to
foresee and which may cause results or events to differ materially from those
predicted. Any forward-looking statements in this announcement reflect the
Company`s and Directors` current views with respect to future events and are
subject to these and other risks, uncertainties and assumptions relating to the
Group`s operations, results of operations, growth strategy and liquidity.
Any forward-looking statements speak only as of the date of this announcement.
Subject to any obligations under the Prospectus Rules, the Listing Rules, the
Disclosure and Transparency Rules and the JSE Listings Requirements, the Company
undertakes no obligation to update publicly or review any forward-looking
statement, whether as a result of new information, future developments or
otherwise. All subsequent written and oral forward-looking statements
attributable to the Company, the Directors, or any member of the Group or
individuals acting on behalf of the Group are expressly qualified in their
entirety by this paragraph.
Prospective investors should specifically consider the factors identified in the
prospectus which could cause actual results to differ before making an
investment decision.
Important notice
THIS ANNOUNCEMENT IS AN ADVERTISEMENT. IT IS NOT A PROSPECTUS AND INVESTORS
SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SHARES REFERRED TO IN THIS ANNOUNCEMENT
EXCEPT ON THE BASIS OF INFORMATION CONTAINED IN THE PROSPECTUS WHICH IS TO BE
PUBLISHED IN DUE COURSE. THE PROSPECTUS, WHEN PUBLISHED, WILL BE MADE AVAILABLE
ON CENTRAL RAND GOLD`S WEBSITE AND WILL BE AVAILABLE FOR INSPECTION AT THE UK
LISTING AUTHORITY`S DOCUMENT VIEWING FACILITY.
Neither the content of the Company`s website nor any website accessible by
hyperlinks on the Company`s website is incorporated in, or forms part of, this
announcement.
General
This announcement does not constitute an offer to sell, or the solicitation of
an offer to subscribe for or buy, New Shares in any jurisdiction in which such
offer or solicitation is unlawful and is not for distribution in or into the
Restricted Territories. In particular, the New Shares offered by this prospectus
have not been and will not be registered under the applicable securities laws of
the United States of America, Canada, or Japan and, may not be offered or sold
directly, or indirectly, in or into the United States of America, Canada, or
Japan, or to any person resident in the United States of America, Canada, or
Japan.
No action has been or will be taken in any jurisdiction, other than the United
Kingdom and South Africa that would permit a public offering of the New Shares,
or possession or distribution of this announcement or any other offering
material, in any country or jurisdiction where action for that purpose is
required. Accordingly, the New Shares may not be offered or sold, directly or
indirectly, and neither this announcement nor any other offering material or
advertisement in connection with the New Shares may be distributed or published
in or from any country or jurisdiction except under circumstances that will
result in compliance with any applicable rules and regulations of any such
country or jurisdiction.
The distribution of this announcement and the offer of the New Shares in certain
jurisdictions may be restricted by law and therefore persons into whose
possession this announcement comes should inform themselves about and observe
any restrictions, including those set out in the Prospectus. Any failure to
comply with these restrictions may constitute a violation of the securities laws
of any such jurisdiction. This announcement does not constitute an offer to
subscribe for or buy any of the New Shares offered hereby to any person in any
jurisdiction to whom it is unlawful to make such offer or solicitation in such
jurisdiction.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO
OR FROM THE UNITED STATES, THE REPUBLIC OF SOUTH AFRICA, AUSTRALIA, CANADA OR
JAPAN. PLEASE SEE THE IMPORTANT NOTICE IN THIS ANNOUNCEMENT
Central Rand Gold Limited
("Central Rand Gold" or "CRG" or the "Company")
Firm Placing of 649,042,355 New Shares and Placing and Open Offer of
679,029,025 New Shares of 1 pence each, in each case at 2 pence (ZAR0.224) per
New Share and Notice of Extraordinary General Meeting
1. Introduction and Overview
CRG proposes to undertake the Capital Raising to raise approximately GBP24
million (net of expenses) by the issue of 1,328,071,380 New Shares (representing
approximately 488.96 per cent. of the existing issued share capital and 83.02
per cent. of the enlarged share capital immediately following completion of the
Capital Raising) at the Issue Price of 2 pence per New Share. 649,042,355 New
Shares will be issued through the Firm Placing and 679,029,025 New Shares will
be issued through the Placing and Open Offer representing 238.96 per cent. and
250 per cent. respectively of the current issued share capital of the Company.
The purpose of the Capital Raising is to fund Central Rand Gold`s transition
from the successful completion of its trial mining and processing stage to the
establishment of the first sustainable, profitable and cash positive mine on its
extensive mineral holdings.
The Issue Price of 2 pence (ZAR0.224) per New Share represents a discount of
approximately 57 per cent. to the Closing Price of 4.6 pence per Share on 3 June
2010 (being the last dealing day prior to the announcement of the Capital
Raising). This discount has been set based on the Directors` assessment of
market conditions following discussions with a number of institutional investors
and has been determined in order to obtain the level of funds required by the
Company under the Capital Raising.
Mark Creasy, who holds approximately 10.40 per cent. of the Company`s Shares and
is deemed to be a Related Party under the Listing Rules due to him being a
Substantial Shareholder, has undertaken to take up 16,771,120 New Shares in the
Firm Placing and 17,545,970 New Shares pursuant to his entitlements under the
Open Offer. Mr Creasy has also undertaken to vote in favour of the Resolutions
at the Extraordinary General Meeting with the exception of Resolution 1.
Resolution 1 relates to the approval of the Creasy Firm Placing, which when
aggregated with Mr Creasy`s participation in the Cash Box Placing is a related
party transaction requiring the approval of the Independent Shareholders under
the Listing Rules. Mr Creasy has also undertaken to take all reasonable steps to
ensure that his associates (as defined in the Listing Rules) will not vote on
this resolution. As the Capital Raising is conditional on the passing of all
Resolutions, if Resolution 1 is not approved by the Independent Shareholders,
the Capital Raising will not proceed.
Resolution 2 relates to the approval of the Issue Price of 2 pence (ZAR0.224)
per New Share and is required to enable the Directors to implement the Capital
Raising, including for the purposes of the Listing Rules, because the Issue
Price represents a discount of greater than 10 per cent. to the Closing Price on
3 June 2010.
Resolution 3 seeks to increase the authorised share capital of the Company to
4,000,000,000 ordinary shares of GBP0.01 par value each to facilitate the issue
of shares under the Capital Raising.
Resolution 4(a) seeks a new authority to enable the Directors to allot equity
securities for the purpose of the Capital Raising. Resolution 4(b) seeks a new
authority to disapply the pre-emption rights contained in the Articles in
connection with the Capital Raising. Resolution 4(c) seek to disapply the pre-
emption rights to enable the Directors to allot shares for cash up to a nominal
amount of GBP799,841.49, leaving headroom of 5 per cent. of the Enlarged Issued
Share Capital, as is normal for a company on the Official List and in line with
ABI guidelines. The Company does not currently have any plans to issue any
Shares other than pursuant to the Capital Raising. Resolution 4 is conditional
on the Placing and Open Offer Agreement having become unconditional in all
respects save for any condition relating to Admission having occurred and on the
passing of Resolutions 1, 2 and 3.
Pursuant to the Articles, the unalloted and unissued shares in the Company are
at the disposal of the Board save that, where the Board is proposing to issue
new Equity Securities, the Board must first offer such Equity Securities to
Shareholders in accordance with the terms of the Articles unless such rights are
first disapplied by extraordinary resolution of the Company. Accordingly an
extraordinary resolution of the Company is to be proposed at the Extraordinary
General Meeting disapplying the said rights of Shareholders in connection with
the proposed Capital Raising.
With the exception of Michael McMahon who continues to support the Company by
owning 0.08 per cent. of the current issued share capital of the Company, each
of the Directors intends to take up his full entitlement to acquire New Shares
in the Open Offer. In addition, Miklos Salamon has irrevocably undertaken to
apply for the maximum number of New Shares to which he is entitled under the
Excess Application Facility. All of the Directors have irrevocably undertaken to
vote in favour of the Resolutions at the Extraordinary General Meeting. The
Capital Raising is being fully underwritten by Evolution.
The Capital Raising is conditional upon, among other things, the passing of all
the Resolutions at the Extraordinary General Meeting convened for 11.00 a.m. UK
time on 5 July 2010 and the Placing and Open Offer Agreement becoming
unconditional in all respects. The notice convening the Extraordinary General
Meeting is set out at the end of the Prospectus.
Importance of Vote
All of the Resolutions must be passed by Shareholders at the Extraordinary
General Meeting in order for the Capital Raising to proceed. Without all of the
Resolutions being passed, the Board would have to consider the future financial
viability of the Company in its current form and this would lead to an immediate
cessation of mining and exploration activities, reduction of staff and
management to a minimum level and either a piecemeal asset disposal programme
(subject to the availability of willing buyers of the Company`s assets) or, in
the event that this is unsuccessful, outright closure of the Company as the
Company would be unable to fund its ongoing activities resulting in minimal
funds, if any, being available for Shareholders.
2. History and Background of the Company
CRG is the listed holding company for a group of companies engaged in a gold
mining and exploration project that is seeking to bring commercial gold mining
back to the city of Johannesburg.
The Central Rand Goldfield contains many separate and parallel ore-bodies (or
reefs). The founding premise of the Company is that the now defunct gold mining
companies that operated in the Central Basin of the Witwatersrand Goldfield in
South Africa over the last 100 years mined only those particular ore-bodies that
were economic at the time.
The "pegged rate" currency regime that came into place at the Bretton Woods
Conference in July 1944, and the associated fixing of the price of gold at US$35
per ounce (which lasted until August 1971) worked against the basics of mining
economics, where unit costs inevitably rise as higher grades are depleted and as
mines go deeper. The "real" price of gold, since it was decoupled from the
dollar in 1971 (by which time the last of the Central Rand mines were on the
verge of closing) has since trebled, rendering reefs previously uneconomic at 4
to 6 g/t attractive and economically viable today.
The enabling features of the founding of this company were:
- The vision and effort of the Viljoen brothers (pre-eminent geologists in
Johannesburg in the 1970s and 1980`s) in seeing and assessing the potential.
- The entrepreneurial spirit and support of RQS (the corporate vehicle used to
collate CRG`s tenement areas).
- Changing mineral rights legislation in South Africa, which enabled the release
and commercialisation of mineral rights under new "use it or lose it"
provisions.
This alignment of interest, opportunity and support led to the pronouncement of
contiguous Prospecting Applications, over a strike length of approximately 40
kilometres, from Roodepoort on the West Rand, through the southern edge of
Johannesburg to Germiston on the East Rand. More information on the geological
background to the project is included in the prospectus.
Following the approval of the Prospecting Applications and the granting of
Prospecting Rights the Company listed on the Official List of the UKLA and was
admitted to trading on the Main Market of the LSE and the Main Board of JSE
Limited on 8 November 2007. The IPO raised GBP75 million (US$150.8 million).
These funds were intended;
- to upgrade and add to the Company`s Mineral Resources;
- to identify the optimal area to begin a new mine;
- to obtain a New Order Mining Right including that area; and
- to commence mining.
It was always expected, as set out in the IPO prospectus, that further funding
would be required in late 2009 to accelerate the development of the Company, but
there is no doubt that a combination of over-optimistic planning, disappointing
mining progression early in 2009 and poor metallurgical recoveries from the
opencast surface material caused the Company to be in a different position today
to that envisaged at the time of the IPO.
3. Progress since the IPO
The Company received its first New Order Mining Right from the South African
Department of Minerals and Energy on 17 September 2008. This licenses CRG to
mine gold at its Consolidated Main Reef ("CMR"), Langlaagte and Crown Mines
mining right. In February 2009 these New Order Mining Rights together with
Prospecting Rights over six other areas were executed in terms of Section 11 of
South Africa`s Mineral and Petroleum Resources Development Act of 2002.
At the same time, the Company was also granted additional Prospecting Rights by
the renamed Department of Mineral Resources ("DMR") - namely Western Areas A, B
and E covering 58 square kilometres in the western extension of the Central Rand
Basin, south of Roodepoort. This brought the number of prospecting rights
accessible to the Company to six, covering a total of 178 square kilometres.
The Company has further invested in its long-term future by applying for a
Prospecting Permit over a large area almost as wide as the full strike length of
the Company`s existing licences, and down dip of the current areas of interest,
known as South Deeps.
The Company has established:
- A JORC and SAMREC compliant Inferred and Indicated Resource of 36.7 million
ounces of gold.
- A JORC and SAMREC compliant Probable Reserve of 482,000 ounces of gold (3.73
million tonnes at 4.0g/t) within the Main Reef on the CMR tenement. This site
was chosen from the overall portfolio as it represented the most immediately
accessible and viable site within which to test CRG`s planned mining
methodology. This initial Ore Reserve Statement did not attribute any reserve
figures to additional material such as sweepings and vampings, which the
Directors anticipate to be significant.
To provide immediate cash flow and to provide material for commissioning and
testing its metallurgical plants the Company embarked on a programme of surface
opencast "slot" mining. While the mining went much to plan the difficulties of
handling this clay-like material and of achieving reasonable recoveries from the
oxidised and contaminated material were much underestimated. Nevertheless these
difficulties and the research to overcome them had much to do with the recent
optimisation of the plants, their "normal" performance at present, and a recent
decision to re-commence this opencast mining while underground production builds
up.
Sub-surface trial mining operations at CMR began in March 2009 with the sinking
of a trackless decline shaft. Following the successful completion in March 2010
of the initial trial stoping and as run-of-mine development progresses, CRG will
be able to extend this initial Ore Reserve and will also be able to establish
and grow other ore reserves within areas subsequently licensed as New Order
Mining Rights.
Regrettably, the Company has found itself at odds with its Broad Based Black
Economic Empowerment Partner, Puno, who has 26 per cent. of CRGSA. Dispute has
arisen over the funding of CRGSA, which the Directors believe is quite clearly
determined in the Shareholders` Agreement of that company to be a pro rata
affair. While the details of this dispute, and other issues that surround it,
are described in the prospectus, Information on the Group, shareholders should
note that the Company`s Prospecting Rights, Mineral Rights and compliance with
the relevant Mining and Empowerment legislation are not under question or
threat.
4. Development of the Mining Method
Since the target reefs outcrop on surface, the intention was always to access
the ore body via footwall (i.e. in the ground below the reef) decline shafts.
The Main Reef is the targeted reef on the initial CMR mine. It underlies the
historically excavated Main Reef Leader with a parting between the two of an
average of approximately one metre.
It was always CRG`s intention to avoid the labour-intensive and potentially
hazardous historical practice of hand-held in-stope drilling and scraper winch
cleaning. Drawing on its Australian roots, CRG proposed to employ highly
mechanised mining methods common in Western Australia, although largely untested
in South Africa.
Initial progress when sinking the mechanised footwall access decline in early
2009 was extremely disappointing and resulted in management changes at the top
level of the Company and replacement of the local contractor with Australian
Contract Mining Pty Ltd. ("ACM"), a Perth based contracting company. There is no
doubt that this hiatus, which took six months to identify, analyse and correct,
cost time and money and was the major factor in the Company requiring further
funds before its trial-mining programme was complete.
Progress on-mine has dramatically improved since ACM commenced operations. The
footwall decline development rates, in terms of metres advanced per month, have
improved four-fold from less than one half of that required by the mine plan to
almost double.
Following the management and contractor changes in mid 2009, the incoming Head
of Operations, Don Harper, an experienced Australian hard-rock mining engineer,
and his team determined that stoping of the relatively narrow reef seams that
occur on the CMR property is best effected by a methodology known as "long-hole
stoping". This technology specifically avoids the hazards of mining below
previously worked out stopes.
This methodology, which is common in Australia, but is untested on the
Witwatersrand was accepted by Snowden as economically viable and efficient
within the CMR tenement and formed the basis of the CPR report, which
underpinned the Company`s first JORC and SAMREC compliant Ore Reserve announced
in August 2009.
It was specifically concluded that "trial mining" of the selected methodology,
at an appropriate (and relatively cautious) size was necessary. While this
deviation from the main development plan set out at the time of the IPO was
disappointing, the success of this process has been significant and the
Directors believe that it positions the Company for a solid mining future.
5. Board and Management Changes
The demands on Directors and Executives, and the required skills sets, change as
Companies move from concept through design to delivery. The previous Chairman,
Alastair Walton, and Non-Executive Director Bob Kirkby, having led the Company
from before the IPO and having guided the Group through to "proof of concept"
stage concluded that a Board re-alignment in favour of local skills and
operational expertise was now appropriate. On release of the announcement dated
14 April 2010 covering the success of trial mining and presentation of an
updated CPR by Snowden they accordingly stood down from the Board. The grateful
thanks of the Board and the management team go with them.
The Board will move forward one less in number, with only one replacement in the
form of Jerome Brauns, who joined formally on 14 April 2010. Jerome is a
prominent South African advocate and a member of the Black Lawyer`s Association.
It is intended that Jerome succeed Michael McMahon as Chairman of CRGSA.
In December 2008 Alastair voluntarily reduced his Chairman`s Fees by one third.
Certainly until the Company is more established and self-reliant, Michael
McMahon will continue to draw this reduced level of fee.
In order to ensure that the appropriate skills are present within the Company,
there has been almost a complete change at Executive level in the last eighteen
months.
- Johan du Toit joined as Finance Director in August 2008 and was subsequently
made CEO in December 2008.
- Patrick Malaza joined as CFO in July 2009, and was appointed as Finance
Director in February 2010.
- Don Harper, a highly experienced Australian hard-rock miner, with exactly the
expertise and experience CRG requires, took over as Head of Mining in June 2009.
- Keith Matier, a geologist with 17 years experience in mining exploration
became Head of Geology in July 2009. Keith is a "Competent Person" in terms of
JORC and SAMREC Codes.
- Peter ("PG") Hurter, a consultant metallurgist from Western Australia, but
with South African roots and experience, has been on semi-permanent secondment
to CRG since September 2009 and was the catalyst in the recent improvement in
our metallurgical performance.
Certainly CRG have had our disappointments as the project transitioned from
desktop to reality, but this current team has successfully developed the revised
mining method and delivered the trial-mine. It has demonstrated a sure-footed
capacity to run and grow this Company.
6. Trial Mining
At the time of the IPO, it was stated that CRG would raise debt and/or further
equity capital in 2009 of US$156 million to enable the Company to accelerate the
underground development of the mine. The financial crisis of late 2008 caused
such ambitions to evaporate and forced the Company to review its position and
prospects.
The two key outcomes were;
- a scaling back of ambition and expenditure and an effort to maximise what
could be achieved with the balance of the remaining capital from the IPO; and
- a target to deliver "proof of concept" within this financial limit, meaning:
- proven ability to develop footwall declines efficiently;
- proven ability to develop on-reef drives, with their upper edges traversing
the voids from old mining, safely and efficiently;
- proven ability to support and mine stopes on the Main Reef safely and
efficiently;
- re-evaluate the Reserve status in terms of further exploration and underground
performance;
- proven ability to process ore efficiently; and
- the sum of this performance generating an updated Competent Person`s Report
("CPR") in support of further fund-raising.
Collectively this process is known as "trial mining". It is common for start-up
operations, even those without financial constraints and managed by far larger
companies than CRG, to go through this process before committing to full-scale
production.
On 14 April 2010 the Company announced the successful achievement of all of took
receipt of an updated Competent Persons` Report from Snowden, the Company`s
designated independent technical consultant.
In delivering this successful mining performance the mining team has delivered:
- world-class underground mechanised development rates;
- successful execution of a highly mechanised long-hole stoping methodology of a
type common in Australia but new to the Witwatersrand; and
- a 79 per cent. uplift in Proven and Probable Reserves.
Details of this performance and the full CPR are included in the prospectus.
7.The Underground Water Table
For economic and safety reasons East Rand Proprietary Mines (part of the DRD
Group) ceased pumping water in October 2008 from its SWV1 shaft. This pump
station had served the purpose of maintaining the water level in the whole
Central Rand Basin, in which CRG sits.
The water in the basin rises at between 0.4 and 0.9 metres a day and by the end
of 2008 had flooded the pump station. Unchecked, this water will eventually rise
to the natural ground level generating a major environmental risk in terms of
Acid Mine Water Drainage in the immediate vicinity of downtown Johannesburg.
There are a variety of interested and affected parties who would not wish this
to happen:
- Government has environmental concerns, is interested in a supply of clean
water and has publicly committed itself to participation;
- DRD has an interest in a supply of water to its ERGO mine tailings retreatment
operations;
- The Water Utility Corporation (WUC) has a commercial interest in processing
and onward selling clean water to water authorities and others;
- CRG obviously wishes to protect its underground workings; and
- Peripheral mines who currently decant from the adjoining West and East Rand
Basins into the Central Basin need this Basin to continue pumping.
Straightforward solutions have been engineered and costed to high levels of
confidence.
The parties are all committed to solving this problem and are currently in the
final stages of negotiation as to the appropriate sharing mechanisms in terms of
capital and future operating costs. CRG has committed 20 per cent. of the
capital costs of the proposed new pumping station and another mining company has
verbally agreed to a similar quantum. Other mining companies, participants,
interested parties and government agencies, such as the Department of Water
Affairs and the Department of Mineral Resources, are currently in the process of
negotiating the level of their funding commitments to ensure that the full
capital cost of the pumping station is appropriately covered between all the
interested parties. Currently, all commitments and negotiations are subject to
contract, but all parties accept the importance of reaching an agreed position
as soon as possible.
If there are significant delays in the funding or construction of the water pump
station the water table will rise and will progressively threaten the mine from
its lower reaches. Up to a point the mine plan can be amended to mine
selectively from the upper areas, but the full life-of-mine requires this
project to proceed and the water table to be lowered to 900 m below surface.
Under the current estimates water will ingress into the Company`s planned mining
area in the first half of 2012. Final negotiations are expected to be concluded
by July 2010.
8. The "Cash Box" and Future Funding
In November 2009 it became clear that the Company was not going to reach the
conclusion of the trial mining process within the balance of the unused IPO
funds (assuming a reserve was maintained in terms of current liabilities). The
primary reasons were the disappointing mining progress in early 2009 and the
poor metallurgical recoveries from the surface ore material.
While corrective action means that operational performance now is exactly where
the Board expected it to be, costs were incurred and revenue not realised, with
a negative impact on cash resources.
It was obvious to the Board that any significant further capital raising must be
underpinned by the higher levels of technical and financial certainty expected
from the end of the trial mining and the generation of an updated CPR. The costs
associated with achieving these higher levels of certainty would require
bridging finance.
On 22 January 2010 the Company put this bridging finance in place by raising
US$6 million in a "Cash Box" placing of 9.99 per cent. of its share capital. The
Company is grateful to the shareholders who supported this issue.
Working from the base case in the CPR, the Company has determined that net
proceeds of US$35 million are required to put the operational phase of its first
mine into a cash positive, stable and sustainable position. Cash flow
projections on a "project base" are included in the CPR report in the
prospectus.
Cash flow projections on a "total company" base, i.e. adding the corporate
overhead to the Snowden CPR base, are included in the prospectus.
9. Going Concern
In presenting their unqualified opinion on the Group`s Financial Statements for
the year 31 December 2009, the Auditors (KPMG) have noted that there are
material uncertainties over the "going concern" status of the Company.
The first of these (quite obviously) is the need for success in this
fundraising. The second is a timeous and reasonable conclusion to the
negotiations on the funding and cost sharing of the new Central Rand Basin water
pumping facility. The Board believes that this is probable and that the working
capital provisions in this regard are appropriate. The Directors have structured
the fundraising accordingly.
10. Use of Proceeds and Future Plan
The Directors intend to use the net proceeds of US$35 million as follows (in
order of priority):
- US$13.3 million will be utilised for further decline and reef development;
- US$7.4 million will be utilised for the acquisition of further mining
equipment needed to implement the Company`s mine plan;
- US$2.5 million will be utilised to further develop and optimise the Company`s
metallurgical processing plants in order that gold recoveries are maximised;
- US$4.6 million is needed to fund CRG`s share of the construction costs of the
pumping station required to maintain the water table at 400 metres below
surface;
- US$2.0 million will fund further exploration activities on the Company`s Crown
Mines tenement in order that further mining targets can be identified; and
- US$5.2 million will be utilised to fund the Company`s overheads until such
time as the Company becomes cash generative.
With the completion of trial mining, immediate underground activities are now
concentrated on decline and reef development in line with the mine plan in the
updated CPR, in expectation of this capital raising being successful.
With the completion of the recent plant reconfiguration, the plant will utilise
capacity, over and above that needed to process underground ore, to process
surface stockpiles, highgrade tailings deposited on the DRD tailings dam during
a period of sub-optimal plant performance, and further surface ore from open
cast operations.
Continuation on the plan outlined in the CPR, after receipts of the proceeds
will move the Company from trial mining to full scale commercial production at
an annualized rate of 45,000 oz by the end of 2013. Medium and long-term
strategic development for the Company will focus on the systematic establishment
of mining operations across the entire 40km strike length of the Company`s
mining and prospecting rights. The current and ongoing development of the CMR
west and central areas will be used as a template for operating and capital
costs, as well as providing a proving ground for mechanised mining techniques
that will be used in the development of new operations along strike.
The next development target is the adjacent Crown Mine West block. Substantial
work has already been undertaken here by CRG and mineable JORC and SAMREC
compliant resources have been identified. A 8,000m programme of confirmatory
drilling has been designed with the aim of increasing the confidence in the
shallow (sub 300m) resource areas to allow for the conversion to Ore Reserves.
This programme is to be carried out during 2010 and in to 2011. Prior to mining
development in these adjacent mining blocks, feasibility level studies will be
undertaken to ensure the criteria for a production decision are met. The current
work planned to take place during 2010 and 2011 on Crown Mine West is expected
to cost $2 million.
Thereafter Resource development and Reserve conversion will proceed
systematically east through the Village Main and Robinson Deep Prospecting
rights, the City Deep Prospecting Rights and the Simmer & Jack Prospecting
Rights.
The Directors believe that a number of operations similar to that currently
established at CMR west are feasible and can commence development over the next
five to ten years.
11. Comparative Costs
Reference is made in the prospectus to the recently published GFMS "Gold Survey
2010", widely regarded as the benchmark analysis of the world`s gold mining
industry. This survey contains an analysis of worldwide production costs in the
industry. By aligning information contained in the Competent Person`s Report and
the Illustrative Projections with GFMS definitions, CRG can be positioned on the
GFMS cost curves as shown in the table below.
The "Base Case", as defined in the CPR, is the foundation of this Capital
Raising. It excludes (because the components cannot be statistically defined)
the potential upside identified for this first mine in the Snowden CPR. This is
a secure platform from which to consider the upside potential and the benefits
of further growth at CRG:
- The Illustrative Projections, on which the auditors have reported in
accordance with Paragraph 133(b)(ii) of the CESR recommendations, postulate that
realisation of just the Middlings, vampings and sweepings (Mining Upside) listed
in the upside potential identified in the CPR, on just the first mine, could
reduce working costs by $94 per ounce.
- CRG`s All-in Cost is prejudiced by the relatively high corporate overhead of
$126 per ounce based upon the production schedule set out in the CPR. This
figure is capable of supporting (with little or no increase) at least one
further parallel mine. One more mine of a similar size to the mine currently
being developed is expected to reduce the All-in Cost position, in both "Base
Case" and "Mining Upside", by about 15 percentile points.
CRG unit 2010 Restated to Percentile on cost curve
costs cost/oz 2009
Base Case Base Case + Mining
(calculated) (postulated) Upside
Total Cash $545 $529 68th 38th
Cost
Total $685 $665 62nd 30th
Production
Cost
All-in $811 $787 72nd 44th
Cost
- The relevant operating and on-going capital figures for CRG are the "steady-
state" figures in table 16.2 of the CPR; i.e. from 2013 and onwards, once the
mine has reached full production.
- The relevant overhead and corporate figure for CRG is the "Corporate and
mining support expenditure" figure for 2013 in the Illustrative Projections.
- GFMS Total Cash Cost is the same as the "Operating Cost" in table 16.2 of the
CPR. From and including 2013 this is $545 per ounce.
- GFMS Total Production Cost (Cash Cost plus amortisation and depreciation) is
approximated by adding the CRG average from 2013 for on-going capex of $140 per
ounce and the item listed as "Other" in table 3.1 of the Illustrative
Projections, which is Head Office Capital, essentially for I.T. expenditure and
which averages approximately $4 per ounce.
- A GFMS All-in Cost is harder to arrive at in the somewhat artificial construct
of a single mine excluding upside. In that scenario the Corporate Costs, from
the first "steady-state" year of 2013 ($8.3m per table 2.1 in Illustrative
Projections) fall, over the life of the Mine to less than half that. This is
primarily due to the front-loaded royalty arrangements with i-Prop and the
tailing off of on-mine geological expenditure. The resultant cost per ounce for
Corporate Costs to be added to "Total Production Costs" are $180 per ounce in
2013, but average $126 per ounce over the steady-state period of the Mine.
- CRG costs, which are based upon 2010 prices, must be deflated to bring them
into line with the 2009 levels published by GFMS. The above table uses the GFMS
quoted 2008-2009 escalation (presumed typical) of 3 per cent. for Cash Costs.
12. Outlook
Clearly the immediate objectives of a cash positive sustainable operation at an
annual rate of 45,000 oz.p.a. deliver a low volume and relatively high cost
operation. This is some way short of the aspirations in the original IPO. Part
of this is due inevitably, to any "trial mine" being at the wrong end of
economies of scale, particularly in terms of fixed costs and overheads. The
Board believes that the Company`s mining and metallurgical methodologies can be
implemented across its entire tenement area, requiring, at worst, minimal
adjustment to and re-testing of its mining methods to suit local conditions, and
in particular reef widths, before full-scale mine development can commence. The
"vision" in this sense is intact, and there is no doubt that overall unit costs
will decline as fixed costs are carried over a larger base and as the mining
crews increase efficiencies with experience.
While the CPR confirms this prospect of future mines on the Main Reef as a
continuation of the current theme (with variations), the as yet unproven, but
exciting prospects of further mines on the Bird and Kimberley Reefs form part of
our development strategy. The possibility of mining these Reefs as a single
package have been considerably enhanced by the advent of the optical ore-sorter,
which has the potential to remove much of the middling between the individual
components of each reef.
This is some way in the future, but the prospect of immediate upside to the CPR
"Base Case" upon which all formal projections are based is real. The prospectus
lists expectations that are not yet included in the base case and can reasonably
be expected from:
- extraction of the Main Reef and the parting between it and the Main Reef
Leader void above it, together with sweepings and vampings from the old workings
lying on top of the parting, as a single package;
- the mining, with the Main Reef and its parting, of Main Reef Leader pillars
and remnants;
- optical ore-sorting of development reef to upgrade it as a feedstock to the
metallurgical plant;
- optical ore-sorting of stoping ore to separate plant feed into higher and
lower grade streams with optimised processing; and
- further upgrading of the process flow sheet, and in particular of the carbon-
in-pulp plant.
The potential mining benefits have been acknowledged by Snowden in the CPR as
real and reasonable, but they could not be included in the base case analysis,
as there is no statistical basis for analysing or forecasting their value, i.e.
for including the potential in Reserves. This upside list has the potential to
dramatically lower the Company`s position on the cost curve.
If this can be combined with the economies of scale as the Company expands
significant value will be created for Shareholders. The achievements in securing
the Mining Rights and in successful trial mining and processing should not be
under-estimated. It has taken longer than was thought, has delivered a smaller
first mine than initially proposed and has cost more than expected to do that,
but:
- the concept has been proven;
- an Ore Reserve has been declared;
- they can be efficiently and safely mined and processed;
- without any of the potential upside built-in, and with a relatively small
scale first operation, there will be a profitable and cash generating mine;
- the upside potential is significant; and
- the vision of developing and building a major gold operation is intact.
The Board believes that the opportunity (and historical investment) that would
be wasted were the Company to falter at this stage is huge.
13. Dividends and Dividend Policy
The Group continues to make significant investments in its mining business and
continues to be loss making. For this reason and to preserve financial
flexibility, the Company has never paid a dividend. It is the Board`s intention
that the Company will review this policy when the Group is generating
sustainable cash flows and the trading performance and financial resources of
the Group permit.
14. Details of the Capital Raising Structure
The Directors have given consideration to how to structure the proposed equity
fundraising, having paid regard to the current market conditions, the
composition of the Company`s Shareholder register, the level of the Company`s
share price and the importance of pre-emption rights to Shareholders. After
considering these factors, the Directors have concluded that the structure of
the Capital Raising by way of the Firm Placing and the Placing and Open Offer is
the most suitable option available to the Company and its Shareholders as a
whole. The Open Offer provides an opportunity for all Qualifying Shareholders to
participate in the fundraising by acquiring Open Offer Shares pro rata to their
current holding of Shares.
CRG is proposing to raise approximately GBP24 million (net of expenses) by way
of the Capital Raising. The Issue Price of 2 pence per New Share represents a
discount of 2.6 pence (approximately 57 per cent.) to the Closing Price of 4.6
pence per Share on 3 June 2010 (being the last dealing day prior to announcement
of the Capital Raising). This discount has been set based on the Directors`
assessment of market conditions following discussions with a number of
institutional investors and has been determined in order to obtain the level of
funds required by the Company under the Capital Raising. Given that the Issue
Price represents a discount of greater than 10 per cent. to the Closing Price of
the Shares on 3 June 2010, the Company is required, under the Listing Rules, to
seek the approval of its Shareholders for the issue of the New Shares at the
Issue Price. Accordingly, the Extraordinary General Meeting will consider,
amongst other things, the approval of the amount of discount.
The Firm Placing and Placing and Open Offer is being underwritten by Evolution
pursuant to the Placing and Open Offer Agreement, the principal terms and
conditions of which are summarised in the prospectus.
Principal terms of the Firm Placing
CRG is proposing to issue 649,042,355 New Shares pursuant to the Firm Placing,
subject to the same conditions and termination rights that apply to the Placing
and Open Offer. The Firm Placed Shares are not subject to clawback from
Shareholders and do not form part of the Open Offer.
The Firm Placing includes the placing of 16,771,120 Firm Placed Shares to Mark
Creasy. Under the Listing Rules, Mr Creasy is a related party of the Company and
the Creasy Firm Placing, when aggregated with Mr Creasy`s participation in the
Cash Box Placing, is a related party transaction which will need the approval of
a simple majority of the Independent Shareholders. This approval is being sought
pursuant to Resolution 1 to be proposed at the Extraordinary General Meeting.
Principal terms of the Placing and Open Offer
Qualifying Shareholders, on and subject to the terms and conditions of the Open
Offer, are being given the opportunity to apply for the Open Offer Shares at the
Issue Price, pro rata to their holdings of Existing Shares on the Record Date,
on the basis of 5 Open Offer Shares for every 2 Existing Shares
Qualifying Shareholders are also being given the opportunity, provided they take
up their Open Offer Entitlement in full, to apply for a maximum number of
additional Open Offer Shares equal to the number of Open Offer Shares comprised
in their Open Offer Entitlement through the Excess Application Facility.
Fractions of Open Offer Shares will not be allotted to Qualifying Shareholders
in the Open Offer and fractional entitlements under the Open Offer will be
rounded down to the nearest whole number of Open Offer Shares.
Qualifying Shareholders may apply for any whole number of Open Offer Shares up
to their maximum entitlement which, in the case of Qualifying Non-CREST
Shareholders, is equal to the number of Open Offer Entitlements as shown in Box
B on their Application Form, or, in the case of Qualifying CREST Shareholders,
is equal to the number of Open Offer Entitlements standing to the credit of
their stock account in CREST. Qualifying CREST Shareholders will receive a
credit to their appropriate stock accounts in CREST in respect of their Open
Offer Entitlements at 8.00 a.m. on on 10 June 2010. Qualifying Shareholders with
holdings of Existing Shares in both certificated and uncertificated form will be
treated as having separate holdings for the purpose of calculating their
entitlements under the Open Offer, as will Qualifying Shareholders with holdings
under different designations or in different accounts. CRG is proposing to issue
679,029,025 Shares to Placees pursuant to the terms of the Placing and Open
Offer with the aggregate number of New Shares issued to such Placees being
reduced by the receipt of valid applications for Open Offer Shares from
Qualifying Shareholders.
Excess Application Facility
The Excess Application Facility will enable Qualifying Shareholders, provided
they take up their Open Offer Entitlement in full, to apply for a maximum number
of additional Open Offer Shares equal to the number of Open Offer Shares
comprised in their Open Offer Entitlement. Qualifying Non-CREST Shareholders who
wish to apply to acquire more than their Open Offer Entitlement should complete
the relevant sections on the Application Form. Qualifying CREST Shareholders
will have Excess CREST Open Offer Entitlements credited to their stock account
in CREST and should refer to the prospectus for information on how to apply for
Excess Shares pursuant to the Excess Application Facility. If applications under
the Excess Application Facility are received for more than the total number of
Open Offer Shares available following take up of Open Offer Entitlements, such
applications will be scaled back pro rata to the number of Excess Shares applied
for by Qualifying Shareholders under the Excess Application Facility.
The aggregate number of Open Offer Shares available for acquisition pursuant to
the Open Offer will not exceed 679,029,025 New Shares.
Effect of the Capital Raising
Upon completion of the Capital Raising, the New Shares will represent
approximately 488.96 per cent. of the Company`s existing issued ordinary share
capital and approximately 83.02 per cent. of the Company`s Enlarged Issued Share
Capital. New Shares issued through the Placing and Open Offer and New Shares
issued through the Firm Placing will account for approximately 51.13 per cent.
and 48.87 per cent. respectively of the total New Shares to be issued. The
Resolutions set out in the notice attached to this Prospectus must be passed at
the Extraordinary General Meeting in order for the Capital Raising to proceed.
Following the issue of the New Shares to be allotted pursuant to the Capital
Raising, Qualifying Shareholders who take up their full entitlements, excluding
any New Shares acquired through the Excess Application Facility, in respect of
the Open Offer will suffer a dilution of up to 41 per cent. to their interests
in the Company because of the Firm Placing. Qualifying Shareholders who do not
take up any of their entitlements in respect of the Open Offer will suffer a
more substantial dilution of approximately 83 per cent. to their interests in
the Company because of the Firm Placing and Open Offer.
Application for Admission
Application will be made for the Open Offer Entitlements (in respect of
Qualifying Crest Shareholders) and Excess CREST Open Offer Entitlements to be
admitted to CREST. It is expected that such Open Offer Entitlements and Excess
CREST Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on 10 June
2010. The Open Offer Entitlements and Excess CREST Open Offer Entitlements will
also be enabled for settlement in CREST at 8.00 a.m. on 10 June 2010.
Applications through the CREST system may only be made by the Qualifying
Shareholder originally entitled or by a person entitled by virtue of a bona fide
market claim.
Qualifying CREST Shareholders should note that, although the Open Offer
Entitlements will be admitted to CREST and be enabled for settlement,
applications in respect of entitlements under the Open Offer may only be made by
the Qualifying Shareholder originally entitled or by a person entitled by virtue
of a bona fide market claim raised by Euroclear`s Claims Processing Unit.
Qualifying Non-CREST Shareholders should note that their Application Form is not
a negotiable document and cannot be traded.
Application will be made to the UKLA for the New Shares to be admitted to the
Official List and to the London Stock Exchange for the Open Offer Shares to be
admitted to trading on the London Stock Exchange`s main market for listed
securities. It is expected that Admission will become effective on 6 July 2010
and that dealings for normal settlement in the Open Offer Shares and the Firm
Placed Shares will commence at 8.00 a.m. on the same day.
Further information on the Open Offer and terms and conditions on which it is
made, including the procedure for application and payment, are set out in the
prospectus and, where relevant, on the Application Form. If Admission does not
take place on or before 6 July 2010 (or such later time and/or date as the
Company and the Evolution may determine, not being later than 31 July 2010), the
Open Offer will lapse, any Open Offer Entitlements admitted to CREST will
thereafter be disabled and application monies under the Open Offer will be
refunded to the applicants, by cheque (at the applicant`s risk) in the case of
Qualifying Non-CREST Shareholders and by way of a CREST payment in the case of
Qualifying CREST Shareholders, without interest as soon as practicable
thereafter. In these circumstances, the Placing to the Placees will not proceed.
Conditionality
The Firm Placing and the Placing and Open Offer are inter-conditional and
conditional on, inter alia, Shareholder approval, which will be sought at an
Extraordinary General Meeting convened for 11.00 on 5 July 2010. If any of the
conditions are not fulfilled the Capital Raising will not proceed.
The Firm Placing and the Placing and Open Offer is conditional, inter alia,
upon:
- the passing, without amendment, of the Resolutions at the Extraordinary
General Meeting (and not, except with the prior written agreement of Evolution,
at any adjournment of such meeting);
- Admission taking place by no later than 8.00 a.m. on 6 July 010 (or such
later time and date as the Company and Evolution may agree, not being later than
31 July 2010); and
- the Placing and Open Offer Agreement otherwise having become unconditional in
all respects (save for the condition relating to Admission) and not having been
terminated in accordance with its terms prior to Admission.
Any Qualifying Shareholder who has sold or transferred all or part of his or her
registered holding(s) of Shares prior to the close of business on 4 June (11
June 2010 for Qualifying South African Shareholders) 2010 is advised to consult
his or her broker, bank or other agent through or to whom the sale or transfer
was effected as soon as possible since the invitation to apply for Open Offer
Shares under the Open Offer may be a benefit which may be claimed from him/her
by the purchasers under the rules of the London Stock Exchange.
The Open Offer Shares and the Firm Placed Shares, when issued and fully paid,
will be identical to and rank in full for all dividends or other distributions
declared, made or paid after Admission and in all respects will rank pari passu
with the Existing Shares. No temporary documents of title will be issued.
Shareholders should note that the Open Offer is not a rights issue. Qualifying
Shareholders should be aware that in the Open Offer, unlike in a rights issue,
any Open Offer Shares not applied for will not be sold in the market on behalf
of, or placed for, the benefit of Qualifying Shareholders who do not apply under
the Open Offer but will be issued to the Placees ultimately for the benefit of
the Company.
15. Related Party Transaction
Mark Creasy has indicated his ongoing support for the Group through his
shareholding. Mr Creasy is a related party of CRG (as defined by the Listing
Rules) because his shareholding is in excess of 10 per cent. of the Company`s
existing issued share capital. Mr Creasy has irrevocably committed to
participate in the Firm Placing and take up his Open Offer Entitlements in
aggregate of US$1.0 million and to vote in favour of the Resolutions at the
Extraordinary General Meeting with the exception of Resolution 1 for the reason
set out below. Subject to the Capital Raising proceeding and Mr Creasy complying
with his irrevocable undertakings, Mr Creasy will be paid a commission equal to
1.75 per cent. of the aggregate value at the issue Price of the number of Open
Offer Shares acquired by Mr Creasy. The participation by Mr Creasy in the Firm
Placing is a related party transaction which, when aggregated with Mr Creasy`
participation in the Cash Box Placing, requires the approval of Independent
Shareholders. Accordingly, Mr Creasy will not vote on Resolution 1 and has
undertaken to take all reasonable steps to ensure that his associates (as
defined in the Listing Rules) will not vote on this resolution. As the Capital
Raising is conditional on the passing of all Resolutions, if Resolution 1 is not
approved by Independent Shareholders, the Capital Raising will not proceed. The
Creasy Firm Placing is described in further detail in the prospectus. The Board
of the Company has received independent financial advice from Evolution
Securities in relation to the proposed Creasy Firm Placing.
16. Proposals to be voted on at the Extraordinary General Meeting
For the purposes of effecting the Capital Raising, the Resolutions will be
proposed at an Extraordinary General Meeting. A notice convening an
Extraordinary General Meeting of the Company, which is to be held at 11.00 a.m.
on 5 July 2010 shall be found in the prospectus. The full text of the
Resolutions is set out in that notice.
Subject to the passing of all the other Resolutions:
i. Resolution 1 seeks approval of the issue of 16,771,120 Firm Placed Shares to
Mark Creasy which have been conditionally placed with him. Mark Creasy is not
eligible to vote on this Resolution. Resolution 1 is conditional on the passing
of Resolutions 2, 3 and 4;
ii. Resolution 2 seeks approval for the issue of the New Shares on the terms set
out in this announcement at a price of 2 pence per New Share (which represents a
discount of 57 per cent. to 4.6 pence, being the Closing Price on 3 June 2010,
the last dealing day before the announcement of the Capital Raising). This
resolution approves the Capital Raising generally and gives the Directors the
power to implement it, including for the purposes of the Listing Rules, because
the Issue Price represents a discount of greater than 10 per cent. to the
Closing Price on 3 June 2010. Resolution 2 is conditional on the passing of
Resolutions 1, 3 and 4;
iii. Resolution 3 seeks to increase the authorised share capital of the Company
to 4,000,000,000 ordinary shares of GBP0.01 par value each to facilitate the
issue of shares under the Capital Raising.
iv. Resolution 4(a) seeks a new authority to enable the Directors to allot
equity securities for the purpose of the Capital Raising; and
v. Resolutions 4(b) and (c) seek a new authority to disapply statutory pre-
emption rights in relation to the allotment of equity securities. If approved,
this resolution will authorise the Directors to allot shares for cash up to a
maximum nominal amount of GBP799,841.49. The Directors currently have no
specific plans to allot relevant securities other than in connection with the
Capital Raising. The latter will leave headroom of approximately 5 per cent. of
the Enlarged Issued Share Capital. These resolutions are normal annual
resolutions for a company on the Official List and in line with ABI guidelines.
Resolution 4 is conditional to the Placing and Open Offer Agreement having
become unconditional in all respects save for any condition relating to
Admission having occurred and the passing of Resolutions 1, 2 and 3.
All of the Resolutions must be passed by the shareholders of the Extraordinary
General Meeting in order for the Capital Raising to proceed.
Further details of CRG`s share capital, at present and as it will be following
the completion of the Capital Raising, are set out in the prospectus.
17. Overseas Shareholders
The attention of Overseas Shareholders who have registered addresses outside the
United Kingdom or South Africa, or who are citizens of, or residents or located
in countries other than the United Kingdom or South Africa, or who are holding
Shares for the benefit of such persons (including without limitation, nominees,
custodians and trustees) or have a contractual or legal obligation to forward
the Prospectus, the Form of Proxy or the Application Form to such persons, is
drawn to the information which appears in the prospectus.
In particular, Qualifying Shareholders who have registered addresses outside the
United Kingdom or South Africa, or who are citizens of or resident or located in
countries other than the United Kingdom or South Africa (including, without
limitation, the United States or any other Restricted Territory) should consult
their professional advisers as to whether they require any governmental or other
consent or need to observe any other formalities to enable them to take up their
entitlements in the Open Offer.
18. Taxation
Certain information about UK, Guernsey and South African taxation in relation to
the Capital Raising is set out in the prospectus. If you are in any doubt as to
your tax position, or you may be subject to tax in a jurisdiction other than the
United Kingdom or South Africa, you are strongly recommended to consult your own
professional advisers without delay.
19. Further Information and Risk Factors
Your attention is drawn to the further information set out in the prospectus. In
particular, your attention is drawn to the section entitled "Risk Factors". You
are advised to read the whole of the Prospectus and the documents incorporated
by reference and not to rely solely on the information contained in this
announcement.
20. Action to be Taken
Open Offer
The latest time for acceptance by Qualifying Shareholders under the Open Offer
is 11.00 a.m. on 2 July 2010. The procedure for acceptance and payment is set
out in the prospectus. For Qualifying Non-Crest Shareholders, further details
also appear in the Application Form that is being sent to all Qualifying Non-
CREST Shareholders (other than Qualifying Non-CREST Shareholders with a
registered address in the United States, or, subject to certain exceptions, the
Restricted Territories).
Qualifying CREST Shareholders who are CREST-sponsored members should refer to
their CREST sponsors regarding the action to be taken in connection with this
announcement and the Capital Raising.
Extraordinary General Meeting
You will find set out at the end of the prospectus a notice convening an
Extraordinary General Meeting to be held at 11.00 a.m. on 5 July 2010 at the
offices of Carey Olsen, Carey House, Les Banques, St. Peter Port, Guernsey GY1
4BZ. In this, you will find a Form of Proxy for use at the Extraordinary General
Meeting or at any adjournments thereof. Whether or not you intend to be present
in person at the Extraordinary General Meeting, you are requested to complete
and sign the Form of Proxy in accordance with the instructions printed on it and
return it as soon as possible, but in any event so as to be received no later
than 11.00 a.m. on 1 July 2010 by the Company`s Registrar, Computershare
Investor Services (Jersey) Limited at Queensway House, Hilgrove Street, St.
Helier, Jersey JE1 1ES. The lodging of the Form of Proxy (or the electronic
appointment of a proxy) will not preclude you from attending and voting at the
Extraordinary General Meeting in person if you so wish.
If you have any doubt what action you should take, you should seek your own
financial advice from your broker, solicitor or other independent financial
adviser duly authorised under the FSMA who specialises in advice on the
acquisition of shares and other securities immediately.
21. Directors` Recommendations
The Capital Raising
The Board, which has received financial advice from Evolution Securities,
considers that the Capital Raising and Resolutions to be proposed at the
Extraordinary General Meeting are in the best interests of the Company and its
Shareholders as a whole. In providing advice to the Board in respect of the
Capital Raising (other than in respect of the Creasy Firm Placing), Evolution
Securities has relied upon the Board`s commercial assessments of the Group`s
funding requirements.
The Creasy Firm Placing
The Board, which has been so advised by Evolution Securities, an independent
adviser acceptable to the Financial Services Authority, considers that the
Creasy Firm Placing is fair and reasonable as far as the Shareholders of CRG are
concerned. In providing its advice to the Board, Evolution Securities has taken
account of the Board`s assessments of the commercial merits of the Creasy Firm
Placing.
Accordingly, the Board recommends that Shareholders vote in favour of the
Resolutions to be put to the Extraordinary General Meeting as each of the
Directors have irrevocably undertaken to do so, or procure to be done, in
respect of their own beneficial holdings, amounting in aggregate to 0.63 per
cent. of the Company`s existing issued share capital.
Importance of Vote
All of the Resolutions must be passed by Shareholders at the Extraordinary
General Meeting in order for the Capital Raising to proceed. Without all of the
Resolutions being passed, the Board would have to consider the future financial
viability of the Company in its current form and this would lead to an immediate
cessation of mining and exploration activities, reduction of staff and
management to a minimum level and either a piecemeal asset disposal programme
(subject to the availability of willing buyers of the Company`s assets) or, in
the event that this is unsuccessful, outright closure of the Company as the
Company would be unable to fund its ongoing activities which would result in
minimal funds, if any, being available for Shareholders.
Appendix I
Expected timetable of Principal Events
Each of the times and dates in the table below in indicative only and may be
subject to change
2010
Announcement of Capital Raising 4 June
* Commencement of restrictions on Qualifying 4 June
South African Shareholders dematerialising or
rematerialising their Existing Shares
SA Last Date to Trade for entitlement under Open 4 June
Offer
Lodgement of the Placing and Open Offer Agreement 4 June
and supporting documents with the Companies and
Intellectual Property Registration Office
Publication of Prospectus 4 June
UK Record Date for entitlement under Open Offer close of business on
4 June
Commencement of restrictions on transfers between close of business on
UK Register and SA Register 4 June
* Commencement of the period during which the SA
Registrar will not register the transfer of
Existing Shares by Qualifying South African close of business of
Shareholders where those Existing Shares are held 4 June
in certificated form (South African time)
* Existing Shares marked "ex" by the JSE before 9.00 a.m. on 7
June
(South African time)
Existing Shares marked "ex" by the London Stock before 8.00 a.m. on 7
Exchange June
Open Offer Entitlements and Excess CREST Open 8.00 a.m. on 10 June
Offer Entitlements credited to the stock accounts
of Qualifying CREST Shareholders in CREST
SA Record Date for Open Offer close of business of
11 June
(South African time)
End of restrictions on transfers between UK close of business of
Register and SA Register 11 June
(South African time)
End of restrictions on Qualifying South African close of business of
Shareholders dematerialising or rematerialising 11 June
their Existing Shares (South African time)
End of period during which the SA Registrar will close of business of
not register the transfer of Existing Shares by 11 June
Qualifying South African Shareholders where those (South African time)
Existing Shares are held in certificated form
* Open Offer Entitlements credited to the stock 9.00 a.m. on 14 June
accounts of Qualifying South African Shareholders (South African time)
to the broker or CSDP accounts
Recommended latest time and date for requesting
withdrawal of Open Offer Entitlements and Excess
CREST Open Offer Entitlements from CREST (i.e. if
Open Offer Entitlements are in CREST and the
Shareholder wishes to convert them to
certificated form) 4.30 p.m. on 28 June
Latest time and date for depositing Open Offer
Entitlements into CREST 3.00 p.m. on 29 June
Latest time and date for splitting Application
Forms (to satisfy bona fide market claims only) 3.00 p.m. on 30 June
Latest time and date for receipt of Extraordinary
General Meeting Forms of Proxy 11.00 a.m. on 1 July
Latest time and date for acceptance, payment in 11.00 a.m. on 2 July
full and submission of Application Forms and SA (12:00 p.m. South
Application Forms to the Registrar African time*)
Extraordinary General Meeting 11.00 a.m. on 5 July
Listing of New Shares on the London Stock
Exchange 8.00 a.m. on 6 July
New Shares in uncertificated form expected to be
credited to accounts in CREST 8.00 a.m. on 6 July
Listing of New Shares on the JSE 9.00 a.m. on 6 July
(South African time)
Dispatch of definitive share certificates for the
New Shares in certificated form by 13 July
Appendix II
Statistics relating to the Capital Raising
Issue Price for each Open Offer Share and 2 pence
each Firm Placed Share
Number of Shares in issue as at 3 June 271,661,610
2010 (being the latest practicable
date prior to the publication of the
Prospectus)
Number of Open Offer Shares to be issued 679,029,025
pursuant to the Open Offer
Number of Firm Placed Shares to be issued 649,042,025
pursuant to the Firm Placing
Number of Shares in issue immediately 1,599,682,990
following completion of the
Capital Raising
Open Offer Shares as a percentage of the 42.45 per cent.
Enlarged Issued Share Capital
Firm Placed Shares as a percentage of the 40.57 per cent.
Enlarged Issued Share Capital
New Shares as a percentage of the Enlarged 83.02 per cent.
Issued Share Capital
Estimated aggregate net proceeds of the GBP24.0 million
Capital Raising after estimated total
expenses
Estimated aggregate expenses of the GBP2.5 million
Capital Raising
Appendix III
Definitions
"Admission" admission of the New Shares to the
Official List and to trading on the JSE
becoming effective in accordance with,
respectively, the Listing Rules and the
JSE Listings Requirements
"Application Form" or "Non- the application form accompanying the
Crest Application Form" Prospectus for use by Qualifying Non-Crest
Shareholders in relation to the Open Offer
"Articles of Incorporation" the articles of incorporation of the
or "Articles" Company
"Banks" Evolution and Macquarie
with respect to English Law Eversheds LLP
and with respect to South African law
Webber Wentzel Bowen
"Banks Counsel" with respect to English Law
Eversheds LLP
"Board" the Board of Directors
"Capital Raising" the Firm Placing, Placing and Open Offer
"Cash Box Placing" the placing of new Shares to certain
subscribers on 27 January 2010
"Cash Box Placing The agreement entered into on 22 January
Agreement" 2010 between (1) the Company; and (2)
Evolution in relation to the Cash Box
Placing
"Central Rand Australia" Central Rand Pty Limited, a company
incorporated under the laws of Australia
"Central Rand Gold NV" or Central Rand Gold (Netherlands Antilles)
"CRGNV" N.V. a company
incorporated under the laws of the
Netherlands Antilles
"Central Rand Goldfield" the central area of the Witwatersrand
Basin, comprising the aggregate of all the
defunct and working gold mines in the area
"Central Rand Gold SA" or Central Rand Gold South Africa
"CRGSA" (Proprietary) Limited, a company
incorporated under the laws of South
Africa
"Central Rand Project" the project area over which the
Prospecting Rights extend, being an area
from west to east of about 40 kilometres
and north to south of about 7 kilometres
"certificated" or "in a share or other security which is not in
certificated form" uncertificated form
"City Deep" a defunct Old Order gold mine, which lies
in the north eastern area of the Central
Rand Project held by FEIC
"Company" or "CRG" Central Rand Gold Limited, a company
incorporated under the laws of the Island
of Guernsey
"Competent Persons` Report" the report prepared by Snowden set out in
or "CPR" the Prospectus
"Computershare" Computershare Investor Services
(Proprietary) Limited, the Company`s South
African transfer secretaries, a company
duly incorporated under the laws of South
Africa
the 679,029,025 New Shares to be allotted
"Conditional Placed Shares" and issued by the Company under the Placing
subject to clawback to satisfy valid
applications by Qualifying Shareholders
under the Open Offer, pursuant to the
Placing and Open Offer Agreement
"Consolidated Main Reef" a defunct Old Order gold mine, which lies
or "CMR" to the west of City Deep and is held by
FEIC
"Creasy Firm Placing" the placing of certain of the Firm Placed
Shares with Mark Creasy
"CREST" the relevant system (as defined in the
CREST Regulations) operated by EUROCLEAR
in accordance with which securities may be
held or transferred in uncertificated form
"CRG CB" CRG CB Limited a company incorporated
under the laws of the Island of Guernsey
"Crown Mines" a defunct Old Order gold mine, which lies
between CMR and City Deep and is held by
FEIC
"deposit" coherent geological body such as a
mineralised body
"dip" the true dip of a plane is the angle it
makes with the horizontal plane
"Directors" the Directors of the Company, including
the Executive and Non-Executive Directors
"Disclosure and Transparency the rules relating to the disclosure of
Rules" information made in accordance with
Section 73A(3) of FSMA
"DMR" the South African Department of Mineral
Resources
"EGM" or "Extraordinary the extraordinary general meeting of the
General Meeting" Company proposed to be held on 5 July 2010
"Enlarged Issued Share the 1,599,682,990 Shares which will be in
Capital" issue following completion of the Firm
Placing, Placing and Open Offer (assuming
that no further options are exercised
between 3 June (being the latest
practicable date prior to the publication
of the Prospectus) and Admission
"Equity Securities" a share in the Company (other than a share
shown in the memorandum to have been taken
by a subscriber to the memorandum or a
bonus share), or a right to subscribe for
or to convert securities into Relevant
Shares in the Company
"EU" the European Union
"EUROCLEAR" EUROCLEAR UK & Ireland Limited, a company
incorporated under the laws of England and
Wales
"Evolution" or "Evolution Evolution Securities Limited, a company
Securities" incorporated under the laws of England and
Wales
7 June 2010 (in the case of Qualifying
"Ex-Date" CREST Shareholders and Qualifying Non-
CREST) or 7 June 2010 (in the case of
Qualifying South African Shareholders)
"Executive Directors" Mr. Sarel Johan du Toit and Mr Patrick
Malaza
"Excess Application Facility" the arrangement pursuant to which
Qualifying Shareholders may apply for Open
Offer Shares in excess of their Open Offer
Entitlement (up to a maximum number of
Open Offer Shares equal to the number of
Open Offer Entitlement) provided they have
agreed to take up their Open Offer
Entitlement in full
"Excess CREST Open Offer in respect of each Qualifying CREST
Entitlement" Shareholder, the entitlement (in addition
to his Open Offer Entitlement) to apply
for Open Offer Shares up to the number of
Open Offer Shares comprised in his Open
Offer Entitlement, credited to his stock
account in CREST, pursuant to the Excess
Application Facility, which is conditional
on him taking up his Open Offer
Entitlement in full and which may be
subject to scaling back in accordance with
the provisions of the Prospectus
"Existing Shares" the Shares in issue as at the date of the
Prospectus
"exploration" method by which ore deposits are evaluated
"feasibility study" an extensive technical and financial study
to assess the commercial viability of a
project
"FEIC" Ferreira Estate Investment Company
Limited, a company incorporated under the
laws of South Africa
"Firm Placed Shares" the 649,042,335 New Shares which are
subject to the Firm Placing
"Firm Placees" those persons with whom the Firm Placed
Shares are to be placed, including Mark
Creasy
"Firm Placing" the placing of the Firm Placed Shares with
the Firm Placees
"flotation" a mineral processing used to separate
mineral particles in a slurry, by causing
them to selectively adhere to a froth and
float to the surface
"footwall" rock mass below a fault, vein, bed or
mineralisation
"FSA" the Financial Services Authority acting in
its capacity as the competent authority
for the purposes of Part IV of the FSMA
"FSMA" Financial Services and Markets Act 2000,
as amended
"grade" relative quantity or the percentage of ore
mineral or metal content in an ore body
"Group" the Company and its subsidiaries and
subsidiary undertakings from time to time.
For the purposes of the historical
financial information included in the
Prospectus, which has been prepared using
the `pooling of interests` method of
accounting, the "Group" includes the RQS
Group prior to the Reorganisation
"holder" the person or persons registered in the
register of members of the Company as a
holder of Shares
"Independent Shareholder" a Shareholder other than Mark Creasy or
his associates (as defined in the Listing
Rules)
"Indicated Mineral as defined in the JORC and SAMREC Codes,
Resource" is that part of a Mineral Resource which
has been sampled by drill holes,
underground openings or other sampling
procedures at locations that are too
widely spaced to ensure continuity but
close enough to give a reasonable
indication of continuity and where
geoscientific data are known with a
reasonable degree of reliability. An
Indicated Mineral Resource will be based
on more data and therefore will be more
reliable than an Inferred Mineral Resource
estimate
"Inferred Mineral Resource" as defined in the JORC and SAMREC Codes,
is that part of a Mineral Resource for
which the tonnage and grade and mineral
content can be estimated with a low level
of confidence. It is inferred from the
geological evidence and has assumed but
not verified geological and/or grade
continuity. It is based on information
gathered through the appropriate
techniques from locations such as
outcrops, trenches, pits, workings and
drill holes which may be limited or of
uncertain quality and reliability
"IPO" the initial public offering undertaking by
the Company in November 2007 via a placing
pursuant to which the Equity Securities
were admitted to trading on the Official
List and the JSE
"Issue Price" 2 pence per New Share
"JORC Code" the Australasia Code for Reporting of
Mineral Resources and Ore Reserves 2004
which sets out the minimum standards,
recommendations and guidelines for the
Public Reporting of exploration results,
Mineral Resources and Ore Reserves III
Australasia
"JSE" JSE Limited, a company duly registered and
incorporated with limited liability under
the company laws of the Republic of South
Africa, licensed as an exchange under the
South African Securities Services Act 36
of 2004
"JSE Listings Requirements" the Listing Requirements of the JSE
Limited
"Kimberly Reef" a geological outcrop forming part of the
Upper Witwatersrand supergroup formation
which is a relatively lithologically
homogenous mappable unit
"Langlaagte" the site of discovery of gold in the
Johannesburg area, and a defunct Old Order
mines held by Gravelotte Mines Limited
"Guernsey Companies Law" The Companies (Guernsey) Law, 2008, as
amended, including every Order in Council,
Act or Ordinance for the time being in
force concerning companies registered in
Guernsey or securities or other laws of
other jurisdictions applicable to the
Company
"Listing Rules" the rules and regulations made by the FSA
under Part VI of the FSMA
"London Stock Exchange" London Stock Exchange plc
or "LSE"
"Main Reef" a geological outcrop forming part of the
upper Witwatersrand supergroup formation
which is a relatively lithologically
homogeneous mappable unit
"Main Reef Leader" a geological outcrop forming part of the
upper Witwatersrand supergroup formation
which is a relatively lithologically
homogeneous mappable unit
"Macquarie" or Macquarie First South Advisers
"Macquarie First South" (Proprietary) Limited, a company
incorporated under the laws of South
Africa
"Mark Creasy" Mark Creasy and his associates (as defined
in the Listing Rules)
"metallurgical" describing the science concerned with the
production, purification and properties of
metals and their applications
"Mineral Resource" a concentration or occurrence of material
of intrinsic economic interest in or on
the Earth`s crust in such a form that
there are reasonable prospects for the
eventual economic extraction. The
location, quantity, grade geological
characteristics and continuity of a
mineral resource are known, estimated or
interpreted from specific geological
evidence and knowledge. Mineral Resources
are subdivided into Inferred Mineral
Resources, Indicated Mineral Resources and
Measured Mineral Resources
"mineralisation" process of formation and concentration of
elements and their chemical compounds
within a mass or body of rock
"MPRDA" the South African Mineral and Petroleum
Resources Development Act 28 of 2002
"New Order prospecting any prospecting right, mining right,
right" granted in terms of the substantive
provisions of the MPRDA or upon the
conversion of an Old Order right granted
in terms of items 6 of Schedule II to the
MPRDA
"New Shares" the new Shares which the Company will
allot and issue pursuant to the Firm
Placing, Placing and Open Offer
"Non-Executive Directors" Mr. John Michael McMahon, Mr. Miklos
Salamon, Mr. Nicholas Farr-Jones and Mr.
Jerome Brauns
"Official List" the Official List of the UKLA
"Old Order prospecting a mineral right, right to prospect or
right" or "Old Order mining right to mine, valid as at 1 May 2004 and
right" preserved for the time periods set out in
Schedule II to the MPRDA as Old Order
rights as defined in item 1 of Schedule II
to the MPRDA
"Open Offer" the invitation by the Company to
Qualifying Shareholders to apply to
subscribe for Open Offer Shares on the
terms and conditions set out in the
Prospectus and, in the case of Qualifying
Non-CREST Shareholders, in the Non-CREST
Application Form
"Open Offer Entitlement" a pro rata entitlement to apply to
subscribe for Open Offer Shares allocated
to a Qualifying Shareholder and Qualifying
South African Shareholders under the Open
Offer
"Open Offer Shares" the 679,029,025 New Shares to be offered
to Qualifying Shareholders and Qualifying
South African Shareholders under the Open
Offer
"ore" rock that can be mined and processed at a
profit
"ore body" mining term to define a solid mass of
mineralised rock which can be mined
profitably under current or immediately
foreseeable economic conditions
"ore reserve" the economically mineable part of a
Measured or Indicated Mineral Resource. It
includes diluting materials and allowances
for losses which may occur when the
material is mined. Appropriate
assessments, which may include feasibility
studies, have been carried out, and
include consideration of and modification
by realistically assumed mining,
metallurgical, economic, marketing, legal,
environmental, social and governmental
factors. These assessments demonstrate at
the time of reporting that extraction
could be reasonably justified. Ore
Reserves are sub-divided in order of
increasing confidence into Probable and
Proven
"ounce" troy ounce; equal to 31.1035 grammes
"Overseas Shareholders" Shareholders with registered addresses
outside the United Kingdom or who are
citizens or residents of countries outside
the United Kingdom
"Placees" any persons who have agreed to subscribe
for New Shares not taken up by Qualifying
Shareholders pursuant to the Open Offer
"Placing" the placing by Evolution of the
Conditional Placed Shares pursuant to the
Placing and Open Offer Agreement
"Placing and Open Offer the conditional agreement dated 4 June
Agreement" between (1) the Company and (2) Evolution,
details of which are set out in the
Prospectus
"Prospecting Application" the New Order prospecting right
application over the Southern Deeps which
if granted would extend the Central Rand
Project by a further 13 kilometres to the
south, further details of which are set
out in the Prospectus
"Prospecting Rights" the eight New Order prospecting rights in
the Central Rand Goldfield constituting
from west to east, Western Areas A, Band
E, Consolidated Main Reef, Langlaagte,
Crown Mines, Anglodeeps Village Main,
Robinson Deep, City Deep and Simmer &
Jack, further details of which are set out
in the Prospectus
"Prospectus" The Prospectus, to be dated 4 June 2010
and issued by the Company in connection
with, inter alia, the Capital Raising
"Prospectus Rules" the rules published by the FSA under
section 73A of the FSMA
"Puno" Puno Gold Investments (Proprietary)
Limited, a company
incorporated under the laws of South
Africa
"Qualifying CREST Qualifying Shareholders holding Shares in
Shareholders" uncertificated form (other than Qualifying
South African Shareholders)
"Qualifying Non-CREST Qualifying Shareholders holding Shares in
Shareholders" certificated form (other than Qualifying
South African Shareholders)
"Qualifying Shareholders" holders of Shares (including Qualifying
South African Shareholders) on the
register of members of the Company at the
Record Date (other than the Company in
respect of Shares held in treasury)
"Qualifying South African Shareholders on the SA Register at the SA
Shareholder" Record Date
"Rand Quest Syndicate" or Rand Quest Syndicate Limited incorporated
"RQS" under the laws of Australia
"Record Date" the UK Record Date or the SA Record Date,
as appropriate
"Relevant Shares" shares in the Company other than (i)
shares which as respect dividend and
capital carry a right to participate only
up to a specific amount in a distribution;
and (ii) shares which are held by a person
who acquired them in pursuance of an
employees` share scheme or which are to be
allotted in pursuance to such a scheme
"Reorganisation" the transfer of the material assets of RQS
and its subsidiaries to the Group
"Resolutions" the resolutions to be proposed at the EGM
in connection with the Capital Raising
"Restricted Territories" or the United States, Canada, Australia
"Restricted Territory" (other than to the extent that an offer of
New Shares to a person in Australia is
permitted by this announcement) or Japan
"Robinson Deep" a defunct blaster mine in the North East
of the Central Rand Project and held by
RQS
"RQS Group" RQS and its subsidiaries and subsidiary
undertakings from time to time. For the
avoidance of doubt as at the date of this
prospectus, the RQS Group comprises RQS
and Central Rand Australia but not Central
Rand Gold SA
"SA Application Form" the personalised application form on which
Qualifying South African Shareholders may
apply for Open Offer Shares under the Open
Offer
"SA Record Date" close of business on 11 June 2010
"SA Register" the branch register of members of the
Company in South Africa
"SA Registrar" or "South Computershare Investor Services (Pty)
African Registrar" Limited
"Section 11 Application" an application pursuant to Section II of
MPRDA for Ministerial Consent to the
transfer of a controlling interest in a
company or close corporation holding a
prospecting or mining right (as
applicable) or the transfer of the right
itself
"shaft" vertical or inclined excavation into mine
workings
"Shareholders" holders of Shares
"Shares" shares of GBP0.01 each in the capital of
the Company
"Simmer & Jack" the defunct Simmer & Jack mine area held
by RQS
"Snowden" Snowden Mining Industry Consultants Pty
Limited, a company incorporated under the
laws of the Republic of South Africa
"South Africa" or "SA" the Republic of South Africa
"South African Rand" or the lawful currency of the Republic of
"ZAR" or "R" or "Rand" South Africa
"Southern Deeps" the southern most area of the Central Rand
Goldfield in respect of which a
prospecting right application has been
lodged by RQS
"Standards" the "Admission and Disclosure Standards"
of the London Stock Exchange
"State" the government for the time being of South
Africa
"stoping" the mining term for large-scale extraction
of ore from underground
"strike length" the longest horizontal dimension of an ore
body or zone of mineralisation
"UK holders" holders of the Shares and absolute
beneficial owners of the Shares who are
resident and, in the case of individuals
only, ordinarily resident and domiciled in
the UK for tax purposes
"UK" or "United Kingdom" the United Kingdom of Great Britain and
Northern Ireland
"UK Record Date" close of business on 4 June 2010
"UK Register" the register of members of the Company in
the United Kingdom
"UKLA" or "UK Listing the FSA in its capacity as the competent
Authority" authority for the purposes of Part VI of
the FSMA
"underground working" mine openings for evaluation for ore
extraction excavated beneath the ground
surface
"United States" or "USA" the United States of America, its
territories and possessions, any state of
the United States and the District of
Columbia
"US dollars", "USD" or "US$" the lawful currency of the United States
"vein" a tabular deposit of minerals occupying a
fracture, in which particles may grow away
from the walls towards the middle
"Viljoen and Viljoen" Morris Viljoen and Richard Viljoen,
professors of geology at the University of
the Witwatersrand
"Village Main" a defunct Old Order mine immediately south
of the Robinson Deep area
"Western Areas A, B and E" three contiguous defunct mining areas
situated to the west of the Central Rand
Project
"Witwatersrand Basin" gold bearing conglomerates within the
Witwatersrand Basin
"Witwatersrand Goldfields" a large bank of shaped depositary of
sedimentary rocks including gold bearing
conglomerates constituting the
Witwatersrand Goldfields
Date: 07/06/2010 07:05:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
