Wrap Text
Proposed Funding, Listing Update and Notice of General Meeting
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 2007/0192231/10)
ISIN: GG00B92NXM24
LSE share code: CRND JSE share code: CRD
(“Central Rand Gold” or the “Company”)
Proposed Funding, Listing Update and Notice of General Meeting
Central Rand Gold today provides details of a proposed Loan Note investment to raise gross proceeds of
US$7.25 million, the proposed delisting from the Official List and Admission to AIM and subsequent transfer from
the Main Board of the JSE to AltX, the proposed approval for Waiver of Mandatory Offer provisions of The
Takeover Code and notice of General Meeting.
Highlights:
- The Company has, subject to Shareholder’s approval, entered into a conditional agreement to raise
US$7.25 million (gross) through the issue of Loan Notes to Redstone Capital. The capital is proposed to
fund the Company’s required upgrade to production facilities, further develop underground mining and
for general working capital purposes.
- Central Rand Gold proposes that AIM, rather than the Main Market, would be more appropriate for the
trading of Ordinary Shares in Central Rand Gold and in conjunction would propose to transfer the listing
of the Ordinary Shares from the Main Board of the JSE to the AltX.
- All Resolutions are inter-conditional and subject to Shareholder approval and will be proposed at a
General Meeting.
Johan du Toit, Chief Executive Officer, comments:
“This agreement with Redstone Capital will fund the much needed upgrade to the Company’s production facility
and will enable the continued strategy of seeking opportunities to fully maximise our current mining right area,
creating value for our Shareholders. The Board believes that a move to both AIM and AltX will provide a market
and environment more suited to Central Rand Gold’s current size and strategic intent to enhance Shareholder
value.”
The General Meeting is to be held at on 19 August 2013 at the offices of Carey Olsen, Carey House, Les
Banques, St Peter Port, Guernsey, GY1 4BZ (not at the registered office) at 1.00 p.m. (UK time). Shareholders
wishing to participate in the General Meeting in Guernsey via video link from London may do so at the offices of
K&L Gates LLP, One New Change, London, EC4M 9AF. Shareholders in South Africa wishing to participate in
the General Meeting via video link from Johannesburg may do so at the offices of Statucor Proprietary Limited,
BDO House, 22 Wellington Road, Parktown.
For further information, please contact:
Central Rand Gold +27 (0) 87 310 4400
Johan du Toit / Patrick Malaza
Charles Stanley Securities Limited +44 (0) 20 7149 6000
Marc Milmo / Mark Taylor
Merchantec Capital +27 (0) 11 325 6363
Marcel Goncalves / Monique Martinez
Buchanan +44 (0) 20 7466 5000
Bobby Morse/Louise Mason
www.buchanan.uk.com
Jenni Newman Public Relations Proprietary Limited +27 (0) 11 506 735
Jenni Newman
Proposed Delisting from the Official List and Admission to AIM and subsequent transfer from
Main Board of the JSE to AltX
Proposed Loan Note Investment to raise US$7.25 million
Proposed approval for Waiver of Mandatory Offer provisions of The Takeover Code
Notice of General Meeting
1. Introduction
The Company is pleased to announce that subject to, inter alia, Shareholders’ approval, it has
entered into a conditional agreement to raise US$7.25 million (gross) through the issue of Loan Notes
to Redstone Capital. The net proceeds of US$6.89 million (after deducting the fees paid to Redstone
Capital pursuant to the Fee Letter) will be used to fund the further capital expenditure required to
upgrade the Company’s production facilities, further develop its underground mining and for general
working capital purposes.
The Loan Note Instrument and the Warrant Agreement, if approved by Shareholders, may result in
Redstone Capital (assuming full conversion of the Loan Notes and Warrants at a price of 8.78 pence
per Ordinary Share) being interested in 81,273,654 Ordinary Shares representing 71.8 per cent. of
the Enlarged Issued Share Capital. As a result of holding more than 30 per cent. of the Enlarged
Issued Share Capital, Redstone Capital would be required under Rule 9 of the Takeover Code to
make a mandatory offer for the whole of the issued share capital of Central Rand Gold not already
held by it, unless a waiver of that obligation is granted by the Panel and approved by Independent
Shareholders passing the Whitewash Resolution, on a poll, at the General Meeting. The Board is
therefore seeking Shareholder approval of the Whitewash Resolution at the General Meeting.
Additionally, in light of the Company’s current strategy and size, the change in Shareholder base and
the costs and effort of maintaining a listing on the Main Market, the Board believes that AIM, rather
than the Main Market, would be more appropriate for the trading of Ordinary Shares in Central Rand
Gold. The Board is, therefore, proposing to cancel the listing of the Ordinary Shares on the Official
List and trading on the Main Market of the London Stock Exchange and to seek admission to trading
of the Ordinary Shares on AIM. In conjunction with the move to AIM, the Board is intending to seek
approval from the JSE, the Company’s secondary listing regulator, subject to obtaining Shareholder
approval at the General Meeting of Resolution 2 for the Delisting and Admission, as required by the
Company’s primary listing regulator, to transfer the listing of the Ordinary Shares from the Main Board
of the JSE to the AltX.
The Listing Rules require that if a company wishes to cancel its listing on the Official List then it must
seek the approval of shareholders in a general meeting voting in person or by proxy and holding not
less than 75 per cent. of the votes cast in respect of that resolution. Accordingly, an extraordinary
resolution (Resolution 2) is being proposed at the General Meeting to authorise the Board to cancel
the listing of the Ordinary Shares on the Official List and to remove such Ordinary Shares from trading
on the Main Market of the London Stock Exchange and to apply for admission of the Ordinary Shares
to trading on AIM.
The Resolutions are inter-conditional, therefore, if any of the Resolutions are not passed the Delisting,
Admission and investment by Redstone Capital will not proceed. If the Investment by Redstone
Capital does not occur, the Company will need to delay the upgrade of its metallurgical plant and the
commencement of underground development until such time as alternative financing can be obtained.
Financing options remain limited for the Company and it has to date been unsuccessful in obtaining
debt or project financing from traditional financial institutions. Should the Investment not be approved,
the Company may need to seek support from its current Shareholders to appropriately recapitalise the
Company.
A General Meeting has been convened for 1.00 p.m. (UK time) on 19 August 2013, at which meeting
Shareholders will be asked to consider and, if thought fit, approve the Resolutions in connection with
the investment in the Company by Redstone Capital being, inter alia, the Rule 9 Waiver and the
Delisting and Admission to AIM. The Board recommends that Shareholders vote in favour of the
Resolutions, which must be passed in order for the Proposals to proceed, at the General Meeting as
they intend to do in respect of their own holdings.
2. Background to and Reasons for the Proposals
Background to and reasons for the investment by Redstone Capital
Central Rand Gold is the holding company for a group of companies engaged in gold mining and
exploration projects within the Central Rand Goldfield, bordering the southern outskirts of
Johannesburg in South Africa. Central Rand Gold has New Order Mining Rights from the South
African Department of Minerals Resources over the Consolidated Main Reef, Langlaagte, Crown
Mines and City Deep with Prospecting Rights granted over an additional five areas.
During 2012 and 2013 to date, Central Rand Gold has stabilised its mining operations, based on its
new underground mining methodology and additional surface mining target areas, with current ore
production of over 20,000 tonnes per month. During 2012, Central Rand Gold also reported an
updated reserve base following Venmyn Deloitte, independent mining consultants, producing two
economic studies on Consolidated Mining Reef West (“CMR West”) and Consolidated Mining Reef
East (“CMR East”). The Probable Reserves, following the publication of the reports for CMR West and
CMR East increased to 719,700 ounces with a total measured, indicated and inferred resources of
4.51 million ounces across all of Central Rand Gold’s mining and prospecting rights to 450 metres
below surface.
In 2011, the Trans Caledon Tunnel Authority (“TCTA”) was appointed by the South African Minister of
Water Affairs to resolve the growing acid mine drainage issue in the Central, Eastern and Western
Basin areas. The Company entered into an agreement with TCTA whereby Central Rand Gold has
provided two submersible pumps to TCTA for the construction of the new high density sludge
treatment plant ("the Treatment Plant") for the Central Basin. TCTA has appointed construction
specialist, Group Five Limited, to establish the infrastructure and construct the Treatment Plant and it
is expected that this project, which commenced in mid-January 2013, will be completed by the fourth
quarter of 2013, enabling dewatering to commence in 2014. The submersible pumps, together with
the Treatment Plant, will provide the means to contain the rising water table below the environmental
critical level of 186 metres below surface, as measured at the south west vertical shaft. In addition,
the submersible pumps and the Treatment Plant will further enable Central Rand Gold to gradually
dewater the Central Basin, at an incremental operating cost, to the maximum operating depth of the
submersible pumps of 400 metres below surface.
As previously announced, Central Rand Gold experienced a number of challenges with its processing
plant during 2012, which continued into 2013. Major modifications to the VSI crushing circuit were
undertaken in January 2013 with the aim of replacing the existing open crushing configuration which
required external mobile jaw crushers with a self contained closed circuit crushing train. The
Company’s Bateman Mill has also suffered from reduced availability since the fourth quarter of 2012
despite a number of modifications to the mill’s drive-train and several gearbox changes.
In order to maximise the improved ore production and further mining opportunities that exist within the
Company’s mining licences, Central Rand Gold requires additional capital to upgrade and improve its
processing plant to enable increased availability and processing capacity. Therefore, since the
beginning of the year, the Board has been considering a number of financing alternatives. The Board
considers that the Investment by Redstone Capital provides the Company with the requisite capital to
fund the further capital expenditure required to upgrade the Company’s production facilities, further
develop its underground mining and for general working capital purposes in the medium term.
If Shareholders approve the Investment by Redstone Capital at the General Meeting, after deducting
the fees paid to Redstone Capital pursuant to the Fee Letter, US$3.325 million of the US$7.25 million
available under the Loan Note Investment will be drawn down immediately to improve and replace the
existing crushing circuit and Bateman Mill and also to increase both the plant availability and plant
capacity to between 20,000 – 25,000 tonnes per month. The costs for the upgrade are anticipated to
be approximately US$2 million. The remaining US$1.325 million will be utilised for the Company’s
working capital requirements. The balance of US$3.75 million gross (US$3.563 million net after
deducting the fees paid to Redstone Capital pursuant to the Fee Letter) available under the Loan
Note Investment will be drawn down by 31 October 2013 to enable Central Rand Gold to acquire
additional underground equipment to develop and expand its underground mining operations at CMR
West and CMR East.
The Board anticipates that it will make an Open Offer to Shareholders as soon as practical following
the move to AIM at the Issue Price, in order to raise additional funding of up to €5 million, and to allow
Shareholders to participate in the future growth and development of Central Rand Gold’s operations.
The Company has also entered into the Option Agreement with Redstone Capital, pursuant to which,
in the event that the Company undertakes the Open Offer, Redstone Capital will be entitled to
subscribe for such number of additional Ordinary Shares so as to ensure its percentage holding of the
issued share capital of the Company would remain unchanged following the Open Offer (assuming
Redstone Capital had converted in full the Loan Notes but excluding the exercise of the Warrants).
Should Redstone Capital only convert in full its Loan Notes (at an exercise price of 8.78 pence per
Ordinary Share), Redstone Capital will hold 54,182,436 Ordinary Shares representing approximately
62.9 per cent. of the voting rights of the issued share capital of the Company as enlarged only by full
conversion of the Loan Notes.
If the Loan Notes have been converted in full but none of the Warrants have been exercised at the
time of the Open Offer, and on the assumption that the Open Offer is taken up in full by Shareholders
(including by Redstone Capital whose pro rata entitlement under the Open Offer will be 62.9 per cent.
of the Ordinary Shares to be issued under the Open Offer), Redstone Capital will not have any right to
subscribe for further Ordinary Shares under the Option Agreement (since the 62.9 per cent.
shareholding in the Company which it will have following the conversion in full of the Loan Notes will
remain unchanged following the Open Offer).
Should Redstone Capital not have converted any of its Loan Notes or exercised any of its Warrants at
the time of the Open Offer, Redstone Capital will have the right to subscribe for a maximum,
83,865,205 new Ordinary Shares at a price of 8.78 pence per Ordinary Share pursuant to the Option
Agreement, which would represent approximately 50.74 per cent. of the issued share capital as
enlarged by the Open Offer and the Ordinary Shares issued under the Option Agreement.
Details relating to the maximum potential shareholding that could be held by Redstone Capital
pursuant to the agreements being entered into with the Company are set out below.
In the event that the Shareholders do not approve the Investment, the Company will need to delay the
upgrade of its metallurgical plant and the commencement of underground development until such
time as alternative financing can be obtained. Gold production will remain low and existing cash
resources will continue to be strained due to the existing challenges with the metallurgical plant. The
current mining plan requires the Company to commence underground development by early 2014; to
ensure that it does not run out of available underground ore. Any delay, could impact on the
Company’s future production output. The Company will therefore remain very vulnerable, whilst it
seeks alternative financing.
Financing options remain limited for the Company. The Company has to date been unsuccessful in
obtaining debt or project financing from traditional financial institutions. This position is unlikely to
change in the medium term. Should the Investment not be approved, the Company may need to seek
support from its current Shareholders to appropriately recapitalise the Company.
3. Illustrative potential shareholding for Redstone Capital
The illustrative percentage shareholdings of Redstone Capital following the Loan Note Conversion,
and the Warrant Exercise and the maximum number of Ordinary Shares issued at 8.78 pence per
Ordinary Share that could be issued under the Option Agreement (assuming full subscription under
the Open Offer) are set out below:
(a) The percentage shareholding of Redstone Capital assuming full conversion of the Loan Notes
and full exercise of the Warrants at 8.78 pence per Ordinary Share (but excluding any impact
of the potential Open Offer) is set out below:
Illustrative
Maximum no. of Percentage of Enlarged
Ordinary Shares Issued Share Capital
(%)
Redstone Capital 81,273,654 71.8%
(b) The percentage shareholding of Redstone Capital on the basis that the Open Offer of up to a
maximum of €5 million at a price of 8.78 pence per Ordinary Share, which is not underwritten,
is fully subscribed by Shareholders and on the basis that Redstone Capital has not converted
any Loan Notes at the time of the Open Offer and:
(i) subscribes for a maximum of 83,865,205 new Ordinary Shares under the Option
Agreement at a price of 8.78 pence per Ordinary Share (assuming it has also not at
that time exercised any Warrants); and
(ii) subscribes for a maximum of 83,865,205 new Ordinary Shares under the Option
Agreement and subsequently converts in full the Loan Notes and exercises in full
the Warrants at a price of 8.78 pence per Ordinary Share,
are set out below:
(i) (ii)
Maximum no. Maximum Maximum no. of Illustrative
of Ordinary Percentage of the Ordinary Shares Percentage of the
Shares enlarged issued under the Option enlarged issued
under the share capital Agreement, Loan share capital
Option following the Note Conversion following the
Agreement Open Offer and Warrant Proposals
(%) Exercise (%)
Redstone Capital 83,865,205 50.74% 165,138,858 67.0%
The numbers set out above are for illustrative purposes only. There are certain limited circumstances
in which the number of Ordinary Shares issued pursuant to the conversion of the Loan Notes and
exercise of Warrants may be higher, details of which are set out in paragraph 8 below.
4. Background to and reasons for the move to AIM and AltX
The Board believes that a move to AIM and AltX will provide a market and environment more suited to
the Company’s current size and strategic intent to enhance Shareholder value through the further
development of its production capabilities, development of its underground mining operations and
future utilisation of its mining rights. Additionally, it believes the Company and its Shareholders would
benefit significantly from the lower transactional costs and simpler administration and regulatory
requirements of AIM and AltX. Given the Company’s strategy, the Board believes that the move is
likely to be of significant benefit to the Company going forward.
As the Company’s Ordinary Shares are currently listed on the premium segment of the Official List,
the Company is subject to a number of regulatory requirements which would not apply were the
Delisting and Admission to occur. These regulatory requirements include obligations in respect of
significant transactions under Chapter 10 of the Listing Rules, obligations regarding the form and
content of circulars to be sent to Shareholders under Chapter 13 of the Listing Rules and the
obligation to produce a prospectus where shares are being admitted to a regulated market for which
an exemption is not available. In order to maintain the Company’s primary listing in London on AIM
following the Delisting, the Board also proposes to transfer its South African listing from the Main
Board of the JSE to AltX.
It is intended that AIM and AltX will provide Shareholders with markets on which to trade their
Ordinary Shares whilst providing the Company with continued access to equity capital, including the
ability to improve future liquidity for the benefit of all Shareholders. Admission will not affect the
manner in which Shareholders trade Ordinary Shares and, following the Delisting and subsequent
Admission, Ordinary Shares that are held in uncertificated form will continue to be held and dealt
through CREST and Strate.
It is emphasised that the Delisting and Admission will have no impact on the assets and liabilities of
the Company and neither will the Delisting and Admission have any impact on the Company’s
strategy, development plans and funding following completion of the Investment by Redstone Capital.
In order to effect the move to AIM, the Company will require the approval of Shareholders at the
General Meeting. Resolution 2 in the Notice of General Meeting will authorise the Board to cancel the
listing of Ordinary Shares on the Official List, remove such Ordinary Shares from trading on the
Official List and facilitate the admission of the Ordinary Shares to trading on AIM. Such a cancellation
must not occur until the expiration of a period of not less than 20 Business Days from the date of
Shareholder approval. It is the Company’s understanding that the FCA will not seek to suspend or
cancel the listing of the Company’s Ordinary Shares on the Official List during such period of 20
Business Days, unless there exists a disorderly market in the Ordinary Shares.
It is anticipated that the last day of dealings in the Ordinary Shares on the Main Market will be 17
September 2013. Cancellation of the listing of Ordinary Shares on the Official List will take effect at
8.00 a.m. on 18 September 2013, being not less than 20 Business Days from the passing of
Resolution 2. Admission is expected to take place, and dealings in Ordinary Shares are expected to
commence on AIM at 8.00 a.m. on 18 September 2013. It is anticipated that the date of transfer of
listing of Ordinary Shares from the Main Board of the JSE to AltX will be at 9.00 a.m. (South African
time) on 18 September 2013.
As the Ordinary Shares are currently listed on the premium segment of the Official List, the AIM Rules
do not require an admission document to be published by the Company in connection with the
Company’s admission to trading on AIM. However, subject to the passing of Resolution 2 at the
General Meeting, the Company will publish an announcement that complies with the requirements of
Schedule One to the AIM Rules comprising information required to be disclosed by companies
transferring their securities from the Official List, as an AIM Designated Market, to AIM.
5. Current Trading
Mining Operations
For the five months to May 2013, mining operations have progressed well with total mining production
of 105,162 tonnes. The underground mined grade was at 3.17g/t being lower than the 3.92g/t
achieved in 2012. The drop in grade is not seen as permanent and the grade will continue to fluctuate
depending on the mining area and the Company remains confident that the overall Resource grade of
3.57g/t is achievable over the life of the mine. Further development during the first quarter of the year
has opened up additional mining fronts, providing the Company with greater mining opportunities and
flexibility.
Mine Call Factor
The Mine Call Factor (“MCF”) continued to show steady improvement throughout the first five months
of 2013 with operations in the month of May retaining a solid 72 per cent. of gold from working face to
gold pour. This improved MCF has been brought about by continuous improvements in the stockpile
management and ore handling philosophy as well as in adjustments to the blasting and sorting
routines required when handling the thin channel high grade ore which has become a feature of
production since late February 2013.
Processing results
As previously reported, gold production remains strained due to low overall metallurgical plant
availability. The Bateman and Carbon in Leach (“CIL”) Mills average availability for the year has only
been 60 per cent. and 78 per cent., respectively. The CIL Mill has reported improved performance,
with availability in May 2013 of 87 per cent.. Due to these problems, the Company has been required
to toll treat some of its production ore, which is not sustainable in the long-term. The Company is
currently investigating the procurement of a second 9 x 12’ ball mill, which will have the benefits of
being more suitable for the current mining conditions as it can replace the struggling Bateman Mill and
will increase the Company’s overall milling capacity from 16,500 tonnes per month to 24,000 tonnes
per month.
On the back of plant availability, slightly lower mine in-situ grades and MCF, total gold produced for
the five months to May 2013 was 5,034 ounces. Cash and cash equivalents balance at the end of
May 2013 is reported at US$1.5 million, down from US$4.5 million at 31 December 2012.
6. Details on Redstone Capital
Redstone Capital is a newly formed special purpose investment company registered in Hong Kong.
Redstone Capital’s strategy is to make strategic investments in Sub-Saharan African gold
opportunities. Redstone Capital is capitalised with approximately US$7.5 million cash (and intends to
raise a further US$1.5 million) of which US$7.25 million is being applied to the investment in Central
Rand Gold and the remaining cash to be applied to general working capital expenses associated with
the day to day management of Redstone Capital.
The sole director of Redstone Capital is Mr Jason Hou. Mr Hou has a professional background in the
finance and accounting sectors. He is a co-founder of Blight Resources Limited, a resources company
focused on manganese exploration in Australia that was listed on the ASX in 2011. Mr Hou is also a
co-founder of Austinvestments Global Consulting Proprietary Limited (AGConsulting), an investment
consultancy sourcing equity investment and mining projects for Australian resources companies. Mr
Hou played a leading role in the A$110 million listing of Stonewall Resources Limited on the ASX.
In addition to Mr Hou, the key management of Redstone Capital is detailed below:
Nathan Taylor
Mr Nathan Taylor has experience in establishing and managing mining companies. He serves as a
Non-Executive Director of Stonewall Resources Limited (ASX:SWJ), Kogi Iron Limited (ASX:KFE) and
Mandalong Resources Limited (ASX:MDD). Mr Taylor has significant M&A and capital markets
experience having worked on numerous domestic and cross border transactions throughout his
career. Mr Taylor started his career as a corporate lawyer for Blake Dawson before working for UBS
AG and Macquarie Bank Limited in their equity capital markets division. Most recently, Mr Taylor was
Head of Mergers and Acquisitions at BBY Limited prior to which he was a Founder and Head of
Capital Markets at StoneBridge Group (which was sold to BBY Limited). Mr Taylor brings substantial
experience in capital raising, banking and finance matters as well as M&A activities across numerous
jurisdictions including Africa, Asia and South America.
Sunil Dhupelia
Mr Sunil Dhupelia has almost a decade of corporate transactions and advisory experience. He began
his career in law before joining Merrill Lynch’s investment banking division based in Sydney. After
several years working in Australia he moved to Hong Kong to broaden his experience across regional
markets. During his time working at Merrill Lynch, he was involved in equity capital market
transactions for many of Australia’s and Asia’s largest companies.
Andrew Defina
Mr Andrew Defina has over 20 years’ experience in corporate finance, private equity and capital
markets, including 17 years at UBS Investment Bank. Most recently, Mr Defina was Managing
Director, Head of Equity Organisation at UBS in Australia. Mr Defina has extensive experience in all
aspects of capital markets, having structured and managed equity and equity-linked capital raisings
for corporates, financial sponsors and governments across a range of sectors.
Redstone Capital’s registered address is Unit 1005 10/F, Prosperous Building, 48-52 Des Voeux
Road Central, Hong Kong and its registration number is 1934952.
Redstone Capital Shareholders
In addition to Nathan Taylor, Redstone Capital has four other shareholders as detailed below:
Redstone Capital Percentage
Shareholders Holding
%
Nathan Taylor 14%
Yizhou Gu 26%
Hong Tang 25%
Fang Tang 20%
Bao Zhu Yuan 15%
Yizhou Gu
Mr Yizhou Gu was previously director of Lytin Property Management Company, responsible for global
Property development and sales businesses. On Mr Gu’s return to China in 2009, he advised a
number of Chinese companies on capital raising, for both domestic and international listed and non
listed companies. Recent transactions include the IPO for Stonewall Resources Limited and
Mandalong Resources both of which are listed on the ASX.
Hong Tang
Mr Hong Tang was previously the business development director of Hevol Real Estate Group
Company Limited, which was established in 2001 and is a professional real estate developer and
service provider with business operations and projects throughout China in cities such as Beijing,
Tianjin, Chongqing, Chengdu, Guiyang, Shenyang, Tangshan, Xi’an, Changsha and Sanya.
Fang Tang
Mrs Fang Tang is currently vice chairman of China International Agriculture of Commerce. Mrs Tang
has experience in the insurance and retail markets in China and currently works for Goujing Venture
Capital.
Bao Zhu Yuan
Mr Bao Zhu Yuan graduated from Qinghua University of China in 1987. In 1989, he was the vice
president of Beijing Changcheng Mechanical Corporation. From 1999 to 2006, he was the General
Technical Manager for Qinghua Pufang Holding Company. Currently Mr Yuan is a director of Ouneng
Technology Development Company.
For the purposes of the Takeover Code. all of the directors and shareholders of Redstone Capital are
deemed to be acting in concert with Redstone Capital.
7. Agreements with Redstone Capital
Below are summary details of the various agreements that the Company has entered into, or will
enter into, with Redstone Capital in relation to its Investment in the Company.
(a) Subscription Agreement
The Company and Redstone Capital have entered into the Subscription Agreement, which is
conditional on the approval by Shareholders of the Resolutions at the General Meeting by no later
than 5:00 p.m. (U.K. time) on 30 November 2013 (the "Condition").
Under the Subscription Agreement, Redstone Capital has agreed to subscribe:
(i) on the date upon which the Condition is satisfied (the "Closing Date"), for US$3,500,000 of
Loan Notes and a Warrant Agreement in respect of 13,078,519 Warrants; and
(ii) on the later of the Closing Date and 31 October 2013, for US$3,750,000 of Loan Notes and a
Warrant Agreement in respect of 14,012,699 Warrants.
The Company has agreed that, prior to the date upon which it has issued all of the US$7,250,000 of
Loan Notes available under the Loan Note Instrument, it shall not, without the prior written approval of
Redstone Capital, raise capital by the issue of any equity securities, instruments linked to equity
securities or debt instruments, other than pursuant to the Open Offer.
Redstone Capital has agreed that it will not dispose of any Ordinary Shares (other than intra-group)
before the six-month anniversary of the Closing Date.
(b) Loan Note Instrument
The aggregate principal amount of the Loan Notes constituted by the Loan Note Instrument is
US$7,250,000, of which US$3,500,000 shall be issued immediately after the passing of the
Resolutions and US$3,750,000 shall be issued by 31 October 2013. The obligations of the Company
under the Loan Notes will be secured by the Charge. Interest is payable in cash on the Loan Notes at
a rate of 8.0 per cent. per annum, although the Company may elect to satisfy any obligation to pay
interest by the issue of Ordinary Shares. The Loan Notes are repayable on the third anniversary of
the date upon which they are issued, provided that the Company may, at its option, elect to repay the
Loan Notes early. The Loan Notes also contain various events of default, as a result of which a Loan
Noteholder may declare that the Loan Notes are immediately repayable.
Loan Noteholders may, at any time, require the Company to convert their Loan Notes into fully paid
up Ordinary Shares, at a conversion price equal to the lower of 8.78 pence per Ordinary Share and
the lowest price at which the Company issues Ordinary Shares or instruments linked to Ordinary
Shares for cash prior to the 18-month anniversary of the Closing Date. At a conversion price of 8.78
pence per Ordinary Share, should Redstone Capital decide to convert the Loan Notes in full, this will
convert into 54,182,436 Ordinary Shares. The Company may also elect to convert up to 50 per cent.
of the issued Loan Notes into Ordinary Shares, provided that it may only do so after the 18-month
anniversary of the Closing Date and provided that the Company's metallurgical plant has achieved an
average availability of at least 85 per cent. with an average monthly production output of at least
1,250 ounces of saleable gold for a consecutive three-month period.
The Company has undertaken, under the Loan Note Instrument, that it shall not issue Ordinary
Shares or instruments linked to Ordinary Shares for cash prior to the 18-month anniversary of the
Closing Date at a price less than 8.78 pence per Ordinary Share unless with the approval of
Independent Shareholders at a general meeting. Therefore, any change to the conversion price
described in the paragraph above will be subject to Independent Shareholders voting in favour of the
issue of Ordinary Shares or instruments linked to Ordinary Shares which would result in such change.
Any change in the conversion price will also only apply to the outstanding Loan Notes that have not
already been converted into Ordinary Shares.
The Loan Noteholders shall have the same rights as all Shareholders to participate in future capital
raisings of the Company (other than the Open Offer) as long as any of the Loan Notes or Warrants
remain outstanding.
Provided that either any of the Loan Notes remain outstanding (not having been repaid or converted
into Ordinary Shares) or Redstone Capital remains as a holder of at least 20 per cent. of the issued
Ordinary Shares, from time to time, Redstone Capital shall have the right to appoint (a) one person
immediately; and (b) after US$3,750,000 of Loan Notes have been issued, two people, as Directors
and one person as a director of Central Rand Gold SA.
(c) Warrant Agreement
The Company will enter into a Warrant Agreement with Redstone Capital at the same time as it
subscribes for each tranche of Loan Notes, as follows:
(i) on the Closing Date, a Warrant Agreement in respect of 13,078,519 Warrants; and
(ii) on the later of the Closing Date and 31 October 2013, a Warrant Agreement in respect of
14,012,699 Warrants.
Each Warrant shall entitle the Warrantholder to subscribe for one Ordinary Share, provided that, if the
Company issues Ordinary Shares or instruments linked to Ordinary Shares for cash prior to the 18-
month anniversary of the Closing Date at a price lower than 8.78 pence per Ordinary Share, and as a
result the number of Loan Note Shares is increased, then the number of Warrants will also be
increased so that the number of Warrants is equal to 50 per cent. of the increased number of Loan
Note Shares.
The subscription price under the Warrants shall be equal to the lower of:
(i) 8.78 pence per Ordinary Share; and
(ii) the lowest price at which the Company issues Ordinary Shares or instruments linked to
Ordinary Shares for cash prior to the 18-month anniversary of the Closing Date.
The Company and Redstone Capital have agreed, under the Warrant Agreement, that the Company
shall not issue Ordinary Shares or instruments linked to Ordinary Shares for cash prior to the 18-
month anniversary of the Closing Date at a price less than 8.78 pence per share unless it is approved
by Independent Shareholders at a general meeting. Therefore, any change to the subscription price
set out in (ii) above will be subject to Independent Shareholders voting in favour of the issue of
Ordinary Shares or instruments linked to Ordinary Shares which would result in such change. Any
change in the subscription price will also only apply to the Warrants issued pursuant to the Warrant
Agreement that have not already been exercised.
The Warrant Agreements shall lapse on the third anniversary of the Closing Date. Redstone Capital
has agreed that it will not dispose of any Warrants other than intra-group.
The Warrants will be not be admitted to the Official List of the UK Listing Authority and to the Main
Market of the London Stock Exchange and no application has been made or will be made for the
Warrants to be admitted to any other recognised investment exchange including AIM.
(d) Option Agreement
The Company and Redstone Capital have entered into the Option Agreement, pursuant to which the
Company has agreed with Redstone Capital that, if the Company undertakes the Open Offer,
Redstone Capital will have an option to subscribe for such number of additional Ordinary Shares as
will ensure that its percentage holding of the issued share capital of the Company will remain
unchanged (assuming the full conversion of the Loan Notes but excluding the Warrant Exercise). On
the assumption that the Open Offer is taken up in full by Shareholders, Redstone Capital will have the
right to subscribe for a maximum of 83,865,205 new Ordinary Shares under the Option Agreement.
(e) Relationship Agreement
The Company has entered into the Relationship Agreement with Redstone Capital which regulates (in
part) the degree of control that Redstone Capital may exercise over the management of Central Rand
Gold. The principal purpose of the Relationship Agreement is to ensure that the Company is capable
of carrying on its business independently of Redstone Capital and that should the Company have any
ongoing business or commercial transactions or relationships with Redstone Capital these are
undertaken on an arm’s length basis.
(f) Fee Letter
The Company has agreed, pursuant to the Fee Letter, to pay an arrangement fee to Redstone Capital
equal to five per cent. of the total subscription monies paid by Redstone Capital to the Company
pursuant to Redstone Capital's subscription for Loan Notes and for Ordinary Shares under the Option
Agreement. Such fee shall be deducted from the relevant subscription monies at such time as the
subscription monies on a pro rata basis are drawn down by the Company.
8. Rule 9 of the Takeover Code
The Takeover Code is issued and administered by the Panel. The Panel has been designated as the
supervisory authority to carry out certain regulatory functions in relation to takeovers and its statutory
functions are set out in and under Part XVIIIA of the Companies (Guernsey) Law 2008 (as amended).
Under Rule 9 of the Takeover Code, any person who acquires an “interest” (as defined in the
Takeover Code) in shares which, taken together with shares in which he is already interested and in
which persons acting in concert with him are interested, carry 30 per cent. or more of the voting rights
of a company which is subject to the Takeover Code, is normally required to make a general offer to
all of the remaining shareholders to acquire their shares.
In addition, when any person, together with any persons acting in concert with him, is interested in
shares which in the aggregate carry not less than 30 per cent. of the voting rights of such a company
but does not hold shares carrying more than 50 per cent. of such voting rights, a general offer will
normally be required if any further interests in shares are acquired by any such person.
An offer under Rule 9 of the Takeover Code must be made in cash (or accompanied by a cash
alternative) and at the highest price paid by the person required to make the offer, or any person
acting in concert with him, for any interest in shares in the company during the 12 months prior to the
announcement of the offer.
Conversion of the Loan Note
If the Loan Note is converted in full at the exercise price of 8.78 pence per Ordinary Share (excluding
the Warrant Exercise), Redstone Capital will hold 54,182,436 Ordinary Shares representing
approximately 62.9 per cent. of the voting rights of the issued share capital as enlarged only by the
Loan Note Conversion.
Conversion of the Loan Note and Warrant Exercise
Assuming the full conversion of the Loan Note and the full exercise of Warrants (at the exercise price
of 8.78 pence per Ordinary Share), Redstone Capital will hold 81,273,654 Ordinary Shares
representing approximately 71.8 per cent. of the voting rights of the Enlarged Issued Share Capital.
Subscription under the Option Agreement
The Company has entered into the Option Agreement with Redstone Capital, pursuant to which in the
event that the Company undertakes the Open Offer to Shareholders, Redstone Capital will be entitled
to subscribe for such number of additional Ordinary Shares so as to ensure that its percentage
holding of the issued share capital of the Company would remain unchanged following the Open Offer
(assuming Redstone Capital had converted in full the Loan Notes but excluding the Warrant
Exercise). As noted above in the sub-section of this paragraph entitled “Conversion of the Loan Note”,
should Redstone Capital only convert in full its Loan Notes at a price of 8.78 pence per Ordinary
Share, Redstone Capital will hold a number of Ordinary Shares representing a maximum of 62.9 per
cent. of the voting rights of the issued share capital of the Company as enlarged only by full
conversion of the Loan Notes.
Therefore, on the assumption that the Open Offer is taken up in full by Shareholders, Redstone
Capital will have the right to subscribe for a maximum of 83,865,205 new Ordinary Shares at a price
of 8.78 pence per Ordinary Share in order to maintain a 62.9 per cent. shareholding in the Company
based on an issued share capital enlarged by the Ordinary Shares issued pursuant to the full
subscription under the Open Offer, the full conversion of the Loan Notes and the full subscription by
Redstone Capital under the Option Agreement.
Should Redstone Capital not have converted any of its Loan Notes or exercised any of its Warrants at
the time of the Open Offer and it were to subscribe in full for the maximum, 83,865,205 new Ordinary
Shares at a price of 8.78 pence per Ordinary Share pursuant to the Option Agreement, this would
represent approximately 50.74 per cent. of the then issued share capital as enlarged by the Open
Offer and the Ordinary Shares issued under the Option Agreement.
General
Shareholders should note that, should Redstone Capital undertake both the Loan Note Conversion
and Warrant Exercise in full, Redstone Capital will in aggregate hold Ordinary Shares carrying more
than 50 per cent. of the Company’s voting share capital, and Redstone Capital may be able to acquire
interests in further shares without incurring any further obligation under Rule 9 of the Takeover Code
to make a general offer (but in each case subject to Note 4 on Rule 9.1 of the Takeover Code).
Shareholders should also note that following completion of the Loan Note Conversion and the
Warrant Exercise, Redstone Capital’s interest in the issued share capital of the Company will also
mean that Redstone Capital will be able, if it so wishes, to exert significant influence over resolutions
proposed at future general meetings of the Company. Due to the potential size of its shareholding in
Central Rand Gold, Redstone Capital has entered into the Relationship Agreement with the
Company. The principal purpose of the Relationship Agreement is to ensure that the Company is
capable of carrying on its business independently of Redstone Capital and that all of the Company’s
transactions and relationships with Redstone Capital are at arm’s length.
Panel Waiver
The illustrative percentage shareholdings of Redstone Capital following the Loan Note Conversion,
the Warrant Exercise and the maximum number of Ordinary Shares that could be issued under the
Option Agreement (assuming full subscription under the Open Offer) at a price of 8.78 pence per
Ordinary Share are set out in paragraph 3 above.
The maximum possible shareholding of Redstone Capital pursuant to the agreements which would
occur in the event that Redstone Capital were to convert the Loan Notes and exercise its Warrants in
full at a price of 8.78 pence per Ordinary Share and that the Company does not raise any additional
capital under the proposed Open Offer (in such circumstance Redstone Capital would not be entitled
to subscribe for any additional shares under the Option Agreement). In this scenario, Redstone
Capital would hold 81,273,654 Ordinary Shares representing 71.8 per cent. of the Company’s issued
share capital as enlarged by the conversion of the Loan Notes and the Warrant Exercise.
The Panel has agreed to waive the obligation to make a general offer that would otherwise be
required as a result of the Loan Note Conversion, the Warrant Exercise and the Option Agreement by
Redstone Capital subject to the approval of Independent Shareholders. Accordingly, Resolution 1 is
being proposed at the General Meeting and will be taken on a poll.
Maximum potential controlling interest for the purposes of the Takeover Code
Under the terms of the Loan Note Instrument and the Warrant Agreement, if the Company issues
Ordinary Shares or instruments linked to Ordinary Shares for cash prior to the 18-month anniversary
of the Closing Date at a price less than 8.78 pence per Ordinary Share, the Loan Notes and Warrants
will, subject to Independent Shareholder approval, be re-priced to the price of any such issue. This
could impact the number of Ordinary Shares potentially issued to Redstone Capital pursuant to
conversion of the Loan Notes and exercise of the Warrants. Therefore, the Company will not be able
to undertake an equity fundraising at a price of less than 8.78 pence per Ordinary Share without the
approval of Independent Shareholders at a general meeting of the Company. As such any re-pricing
of the Loan Notes and Warrants under the terms of the Loan Note Instrument and Warrant Agreement
will therefore be subject to approval by Independent Shareholders.
Pursuant to the Takeover Code, the Company is required to disclose the maximum potential
controlling position which Redstone Capital may obtain as a result of the Rule 9 waiver proposals.
Therefore, set out below is a theoretical example of a potential scenario. Shareholders should be
aware that, under Guernsey law, there is no minimum price at which a company can issue ordinary
shares. As a result, if Central Rand Gold were to issue an Ordinary Share for cash at a price of
0.0001 pence in the 18 month period following the Closing Date, and were Independent Shareholders
to vote in favour of such an issue, under the terms of the Loan Note Instrument and the Warrant
Agreement, all outstanding Ordinary Shares to be issued to Redstone Capital pursuant to the
conversion of the Loan Notes and exercise of the Warrants would be issued at such a price. In this
scenario, if Redstone Capital were to convert all of its Loan Notes and exercise all of its Warrants at a
price of 0.0001 pence per Ordinary Share as a result of the re-pricing mechanism, then Redstone
Capital would be interested in 99.99 per cent. of the issued share capital of the Company.
For the avoidance of doubt, this re-pricing mechanism only applies to the proportion of Loan Notes
and Warrants that had not already been converted into Ordinary Shares at the date of such an issue.
Furthermore, the Directors confirm that the Company currently has no intention of issuing Ordinary
Shares for cash at a price of less than 8.78 pence. Finally, as outlined above, under the terms of the
Loan Note Instrument and the Warrant Agreement, the Company cannot undertake an equity fund
raise at a price less than 8.78 pence per Ordinary Share prior to the 18 month anniversary of the
Closing Date without the approval of Independent Shareholders at a general meeting.
9. General Meeting
A General Meeting of the Company will be held on 19 August 2013 at the offices of Carey Olsen,
Carey House, Les Banques, St Peter Port, Guernsey, GY1 4BZ (not at the registered office) at 1.00
p.m. (UK time). Shareholders wishing to participate in the General Meeting in Guernsey via video link
from London may do so at the offices of K&L Gates LLP, One New Change, London, EC4M 9AF.
Shareholders in South Africa wishing to participate in the General Meeting via video link from
Johannesburg may do so at the offices of Statucor Proprietary Limited, BDO House, 22 Wellington
Road, Parktown.
At the General Meeting, Shareholders will be asked to consider and, if thought fit, approve the
Resolutions in connection with the Panel Waiver and move to AIM as outlined below:
(a) Resolution 1, which will be proposed as an ordinary resolution and which is subject to the
passing of Resolutions 2 and 3, seeks the approval of Shareholders to waive the obligation on
Redstone Capital which would otherwise arise under Rule 9 of the Takeover Code as a result
of the issue of the Loan Note Shares and Warrant Shares and the issue of Ordinary Shares
pursuant to the Option Agreement. Resolution 1 will be taken on a poll of Independent
Shareholders;
(b) Resolution 2, which will be proposed as an extraordinary resolution seeks the approval of
Shareholders to cancel the listing of the Ordinary Shares on the Official List and to remove
such Ordinary Shares from trading on the London Stock Exchange’s Main Market for listed
securities and to apply for admission of the Ordinary Shares to trading on AIM; and
(c) Resolution 3, which will be proposed as an extraordinary resolution and which is subject to
the passing of Resolutions 2 and 3, disapplies pre-emption rights contained in the Company’s
Articles of Incorporation, provided that such authority shall be limited to (i) up to a nominal
amount of £1,651,388.59, in connection with the allotment of equity securities in connection
with the Loan Note Conversion, the Warrant Exercise and the issue of Ordinary Shares
pursuant to the Option Agreement, (ii) in connection with an offer by way of a rights issue or
open offer, and (iii) otherwise the allotment of equity securities up to an aggregate nominal
amount of £15,966.72, representing 5 per cent. of the issued share capital of the Company.
10. Recommendation
Your Board believes that the Resolutions (which include the Rule 9 Waiver Proposals) set out in the
Notice of General Meeting are in the best interests of Shareholders taken as a whole and
unanimously recommends that Shareholders vote in favour of such Resolutions as the Directors each
intend to do in respect of their own beneficial holdings of Ordinary Shares which amount in total to
137,498 Existing Ordinary Shares, representing approximately 0.43 per cent. of the issued ordinary
share capital of the Company.
The Directors, who have been so advised by Charles Stanley, consider that the Rule 9 Waiver
Proposals are fair and reasonable and in the best interests of the Company and its Shareholders as a
whole. In providing advice to the Independent Directors, Charles Stanley has taken into account the
Directors’ commercial assessments.
11. Notice of General Meeting and availability of Circular
The Company has published a circular to Shareholders dated 2 August 2013, which provides further
details of the transaction and encloses the Notice of General Meeting to be held on 19 August 2013
and the Form of Proxy (the “Circular”).
Shareholders are hereby advised that the Circular, the Notice of General Meeting and the Form of
Proxy have been supplied to Shareholders by being published on the Company’s website at
www.centralrandgold.com and will also be posted to Shareholders.
12. Expected Timetable of Principal Events
Latest time and date for receipt of Forms of Proxy at the 1.00 p.m. on 15 August 2013
Company’s Receiving Agents in Guernsey or with the
Transfer Secretaries in South Africa
Record date to determine Shareholders who are entitled to 1.00 p.m. on 18 August 2013
attend and vote at the General Meeting
General Meeting 1.00 p.m. on 19 August 2013
Results of General Meeting released on RNS and SENS 19 August 2013
Last day of dealings in Ordinary Shares on the Official List 17 September 2013
Last day of dealings in Ordinary Shares on the Main Board of 17 September 2013
the JSE
Cancellation of listing of Ordinary Shares on the Official List 8.00 a.m. on 18 September 2013
Admission and commencement of dealings in Ordinary
Shares on AIM 8.00 a.m. on 18 September 2013
Admission and commencement of dealings in Ordinary 9.00 a.m. (South African time) on
Shares on AltX 18 September 2013
Record date for Shareholders on the SA Register to be 25 September 2013
recorded in the register on the Main Board of the JSE
DEFINITIONS
The following definitions apply throughout this announcement:
“Admission” the admission of the Ordinary Shares to trading
on AIM
“AIM” AIM, a market operated by the London Stock
Exchange
“AIM Designated Market” a market whose name appears on the latest
publication by the London Stock Exchange of the
document entitled “The AIM Designated Market
Route”
“AIM Rules” the AIM Rules for Companies, the rules for
companies whose securities are admitted to
trading on AIM, as published by the London
Stock Exchange from time to time
“AltX” the Alternative Exchange of the JSE
“ASX” Australian Securities Exchange
“Business Day” any day on which the London Stock Exchange is
open for business and any reference to business
days shall be to clear business days
“Central Rand Gold” or “CRG” or “the Central Rand Gold Limited, incorporated as a
Company” company limited by shares under the laws of the
Island of Guernsey (Company Number 45108),
and incorporated as an external company with
limited liability under the laws of South Africa
(registration number 2007/019223/10)
“Central Rand Gold SA” Central Rand Gold SA Proprietary Limited
“Charge” The fixed and floating charge over all of the
assets of the Company to be granted by the
Company in favour of Redstone Capital as
security for its obligations under the Loan Notes
“Charles Stanley” Charles Stanley & Co. Limited, trading through its
division Charles Stanley Securities
“CREST” the relevant system (as defined in the CREST
Regulations) operated by Euroclear UK & Ireland
Limited (a company incorporated under the laws
of England and Wales) in accordance with which
securities may be held or transferred in
uncertificated form
“CSDP” Central Securities Depository Participant in South
Africa
“Deferred Shares” the 1,597,689,547 deferred shares of one pence
each in the capital of the Company
“Delisting” the cancellation of the listing of the Ordinary
Shares on the Official List and from trading on the
Main Market
“Directors” or “Board” the directors of the Company
“Enlarged Issued Share Capital” the issued Ordinary Share capital of the
Company as enlarged by the issue of the Loan
Note Shares pursuant to the Loan Note
Conversion and the issue of the Warrant Shares
pursuant to the Warrant Exercise (and excluding
the Deferred Shares)
“Existing Ordinary Shares” the 31,993,443 Ordinary Shares in issue
the Financial Conduct Authority of the UK in its
“Financial Conduct Authority” or “FCA” capacity as the competent authority for the
purposes of Part VI of FSMA and in the exercise
of its functions in respect of admission to the
premium segment of the Official List otherwise
than in accordance with Part VI of FSMA
“Fee Letter” The letter from Redstone Capital to the Company
dated 1 August 2013, further details of which are
included in paragraph 7(f)
“Form of Proxy” the form of proxy relating to the General Meeting
being sent to Shareholders with the circular to
shareholders
“FSMA” the Financial Services and Markets Act 2000, as
amended from time to time
“General Meeting” the general meeting of the Company to be held at
1.00 p.m. (UK time) the offices of Carey Olsen,
Carey House, Les Banques, St Peter Port,
Guernsey, GY1 4BZ (not at the registered office)
on 19 August 2013
“Independent Shareholders” Shareholders unconnected with Redstone Capital
“Investment” the proposed subscription by Redstone Capital
for Loan Notes and Warrants
“Issue Price” 8.78 pence per Ordinary Share
“JSE” JSE Limited, a public company duly incorporated
under the company laws of South Africa under
registration 2005/022939/06, licensed as an
exchange under the Securities Services Act,
2004 (Act 36 of 2004), as amended
“Listing Rules” the listing rules made by the FCA in exercise of
its function as competent authority pursuant to
Part VI of FSMA, as amended from time to time
“London Stock Exchange” or “LSE” London Stock Exchange plc
“Loan Note Conversion” the conversion of the Loan Note Instrument into
54,182,436 Ordinary Shares
“Loan Noteholder” a holder of Loan Notes
“Loan Note Instrument” the loan note instrument constituting up to
US$7,250,000 non-amortising secured
convertible 8 per cent. loan notes due 2016, to be
entered into by the Company upon the
Subscription Agreement becoming unconditional
“Loan Note Investment” the investment by Redstone Capital through the
Loan Note Instrument
“Loan Notes” the loan notes issued by the Company pursuant
to the Loan Note Instrument
“Loan Note Shares” the Ordinary Shares which may be issued
pursuant to the conversion of the Loan Notes
“Main Market” the London Stock Exchange’s main market for
listed securities
‘‘MPRDA’’ the South African Mineral and Petroleum
Resources Development Act, 2002 (Act 28 of
2002)
‘‘New Order Mining Right’’ any mining right granted in terms of the
substantive provisions of the MPRDA
“Notice of General Meeting” the notice of the General Meeting set out at the
end of the circular to shareholders
“Official List” the Official List of the FCA
“Open Offer” the proposed offer of Ordinary Shares to be
made by the Company at the earliest possible
time after Admission, on a pre-emptive basis to
shareholders, to raise up to €5,000,000
“Option Agreement” the option agreement between (1) the Company
and (2) Redstone Capital, dated 2 August 2013,
under which, if the Company undertakes the
Open Offer, Redstone Capital will be able to
subscribe for such number of additional Ordinary
Shares as will ensure that its percentage holding
of the issued share capital of the Company will
remain unchanged following the Open Offer
(assuming full conversion of the Loan Notes but
excluding the exercise of the Warrants
“Ordinary Shares” ordinary shares of one pence each in the capital
of the Company
“Panel” The Panel on Takeovers and Mergers
“Probable Reserves” is the economically mineable material derived
from a measured and/or indicated mineral
resource in compliance with the South African
Code for Reporting of Exploration Results,
Mineral Resources and Mineral Reserves
(“SAMREC”) and the South African Code for
Reporting of Mineral Asset Valuation (“SAMVAL”)
“Proposals” the Delisting, Admission to AIM and the
investment by Redstone Capital
“Redstone Capital” Redstone Capital Limited, a company registered
in Hong Kong
“Relationship Agreement” the relationship agreement between (1) the
Company and (2) Redstone Capital, dated 2
August 2013, which regulates (in part) the degree
of control that Redstone Capital may exercise
over the management of the Company
“Resolutions” the resolutions to be proposed at the General
Meeting, as set out in the Notice of General
Meeting
“RNS” the regulatory information service operated by the
London Stock Exchange
“Rule 9 Waiver” the proposed waiver by the Panel of the
obligations of Redstone Capital arising upon the
Loan Note Conversion, the Warrant Exercise and
the Option Agreement pursuant to Rule 9 of the
Takeover Code
“Rule 9 Waiver Proposals” the Rule 9 Waiver and the issue of the Loan
Notes, the Warrants, the Option Agreement and
the Fee Letter
“SA Register” the branch register of Shareholders in South
Africa
“SENS” the Stock Exchange News Service of the JSE
“Shareholder(s)” holder(s) of Ordinary Shares
“Strate” the settlement and clearing system used by the
JSE, managed by Strate Limited, a public
company duly incorporated under the company
laws of South Africa (registration number
1998/022242/06)
“Subscription Agreement” the subscription agreement between (1) the
Company and (2) Redstone Capital, dated 2
August 2013, pursuant to which Redstone Capital
will subscribe for Loan Notes and Warrants
“Takeover Code” The City Code on Takeovers and Mergers
“the Transfer Secretaries in South Africa” Computershare Investor Services Proprietary
Limited (registration number 2004/003647/07)
“UK” or “United Kingdom” the United Kingdom of Great Britain and Northern
Ireland
“UK Listing Authority” The Financial Conduct Authority acting in its
capacity as competent authority for the purposes
of FSMA
“Warrantholder” a holder of Warrants pursuant to the Warrant
Agreement
“Warrants” the warrants, each to subscribe for one Ordinary
Share, granted pursuant to the Warrant
Agreement
“Warrant Agreement” the warrant agreements to be entered into by (1)
the Company and (2) Redstone Capital
“Warrant Exercise” the exercise by Redstone Capital of the Warrants
“Warrant Shares” the 27,091,218 Ordinary Shares which may be
issued pursuant to the Warrant Exercise
“Whitewash Resolution” Resolution 1 to be proposed at the General
Meeting to approve the Rule 9 Waiver
For further information, please contact:
Central Rand Gold +27(0) 87 310 4400
Johan du Toit / Patrick Malaza
Charles Stanley Securities Limited +44 (0) 20 7149 6000
Marc Milmo / Mark Taylor
Merchantec Capital +27 (0) 11 325 6363
Marcel Goncalves / Monique Martinez
Buchanan +44 (0) 20 7466 5000
Bobby Morse / Louise Mason
Jenni Newman Public Relations (Proprietary) Limited +27 (0) 11 506 735
Jenni Newman
2 August 2013
Johannesburg
JSE Sponsor
Merchantec Capital
Date: 02/08/2013 04:30:00 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.
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