Struggling Central Rand Gold secures another $250,000 loan payment

File: In January, the struggling Johannesburg mining company entered into a new loan agreement with Wang for funding in the amount of US $1 million in a bid to resume its underground operations. Photo: REUTERS/Leonhard Foeger/File Photo

JOHANNESBURG – Central Rand Gold on Monday received a further tranche of the loan in an amount of US $250,000 of the US $1 million loan agreement with one of its shareholders, Jia Bang Wang.

The majority of this funding will be used to pay for the Concentrator Circuit, as well as the associated shipment and customs clearance costs.

In January, the struggling Johannesburg mining company entered into a new loan agreement with Wang for funding in the amount of US $1 million in a bid to resume its underground operations. De-watering has prevented the company from restarting any underground mining operations since they were halted in 2014.

READ: Rand closes in on R12.50 to the dollar

The total amount of the loan from Wang is currently US $1.5 million. Wang already owns 9.48 percent share holding at CRG.

CRG said its cash position still remains challenging.

The company has approximately R6.9 million at bank, near term receivables of R6.1 million and near-term liabilities of approximately R9.9 million. This includes an amount payable for the Concentrator Circuit which falls due on delivery.

After securing the loan agreement, CRG in February resolved to procure a Concentrator Circuit to upgrade the gold grade of the Mine Waste Dumps materials before further metallurgical processing.

The operating entity has managed to reach a steady state in the production cycle. The metallurgical plant, although not currently operating at full capacity, has consistently milled an average of 500 tonnes per day.

CRG said the increase required is reliant on tolling feed, and this will ensure that the full capacity of the plant is reached by the end of June 2017.

The miner said the income generated from gold produced and tolling fees has been utilised to pay down outstanding creditors, so as to ensure that historical debtors are reduced.

The directors believe that the operations are stable and that the recent strike has been fully resolved, with normal working conditions reinstated.

However, the directors are still considering a number of solutions to ensure the company meets its financial obligations.

These solutions may include the sale of the Company’s operating assets or a placing, which is likely to be materially dilutive to shareholders. CRG said the Directors cannot guarantee that either of the aforementioned options will be successfully achieved.

Meanwhile, the company’s shares will remain suspended for the time being pending further developments.

African News Agency

Discussion Policy

eNCA.com would like to send you push notifications.
Notifications can be turned off any time in your browser settings.
You have been registered for browser notifications