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CRND - Central Rand Gold Limited - Annual Report Release

Release Date: 30/04/2008 17:39:03      Code(s): CRD
CRND - Central Rand Gold Limited - Annual Report Release                        
Central Rand Gold Limited                                                       
("CRG" or "the Company")                                                        
(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: GG00B24HM601                                                              
Share code on LSE: CRND                                                         
Share code on JSE: CRD                                                          
Annual Report Release                                                           
Please note the AGM of the Company is to be held at the offices of Carey        
Olsen, 7 New Street, St Peter Port, Guernsey, GY1 4BZ 11 a.m. (UK time) on June 
19, 2008. Shareholders wishing to participate in the AGM, in Guernsey via video 
link from London may do so at the offices of Hunton & Williams, 30 St Mary Axe, 
London EC3A 8EP and Shareholders wishing to participate in the AGM via video    
link from Johannesburg may do so at the offices of Taback and Associates        
(Proprietary) Limited, 13 Eton Road, Parktown, Johannesburg.                    
Highlights                                                                      
Central Rand Gold has recorded some significant highlights during 2007/8. These 
include:                                                                        
Primary listing on the London Stock Exchange and secondary listing on the       
 Johannesburg Stock Exchange on November 8, 2007                                
Highly successful public participation program and public meetings with         
 residents of the local communities                                             
Lodging of the Environmental Impact Assessment study on February 4, 2008        
Upgrade of an additional 1.8 million ounces of indicated and inferred           
resources to 35.6 million ounces                                                
Identification of the first three slots for initial surface mining              
Chairman`s report                                                               
In this the company`s maiden annual report to shareholders, it is a privilege   
for me to reflect on the initial steps of Central Rand Gold`s journey towards   
bringing gold mining back to the heart of Johannesburg, a city that was founded 
on gold in the 1880`s and is still headquarters to several of the world`s major 
gold mining companies.                                                          
From the outset, Central Rand Gold has been based on a multifaceted vision: to  
return gold mining to "Egoli" (the City of Gold), but in a way that minimises   
the impact on the environment, maximises the benefit to local communities,      
utilises the most modern and efficient mining methods, and aspires to the       
highest                                                                         
levels of corporate governance and operational excellence.                      
Essentially, we see ourselves as a small, entrepreneurial company that          
incorporates the management practices, professionalism, information systems and 
mining standards and methods of a much larger company. Our rationale, mindset   
and conduct is not speculative, it is mainstream, strategic and farsighted,     
based on a real desire to mine substantial unmined deposits that will bring     
rewards to all of our stakeholders, Johannesburg and South Africa at large. By  
applying the highest standards of environmental, mining and social              
responsibility, we are confident we will deliver a wide range of tangible       
improvements to the landscape, the economy and the people in the areas where    
our projects are situated.                                                      
The reception the company has received so far in its journey has been           
exceptional, especially in London where approximately GBP100 million            
(equivalent to around ZAR1.5 billion) was raised up to and including the        
company`s listings on the main boards of the LSE and the JSE on November 8,     
2007. This was a strong vote of confidence in Johannesburg, South Africa and    
Central Rand Gold itself.                                                       
The company`s recent share price performance has been disappointing,            
notwithstanding a high gold price since the IPO. Nevertheless, with a market    
capitalisation of around GBP220 million towards the end of April, the company   
was ranked in the top 130 companies on the JSE in terms of market               
capitalisation. I am confident that as we move towards gold production in       
2009, we can expect a re-rating of our prospects in the investor community      
with a positive impact on the company`s share price.                            
While shareholders have provided the company with a robust balance sheet        
through which it has been able to carry out its comprehensive exploration       
activities, upgrade its mineral resources, apply for the right to mine, and     
gradually build up to operational and mining readiness, much of the credit for  
the company being where it is today must go to Morris and Richard Viljoen, the  
geological academics on whose thesis Central Rand Gold`s business case is       
based.                                                                          
As Emeritus professors at the University of the Witwatersrand, they developed   
the notion of considerable unmined reefs remaining within the previously mined  
gold mining areas of Johannesburg. It is wonderful and encouraging to have them 
as shareholders of the company as we progress along the exploration curve to    
becoming a fully fledged gold mining entity.                                    
With exploration drilling covering more than 46,500 metres to date - at a cost  
of more than GBP15 million (over ZAR200 million) - we have already demonstrated 
ourtotal commitment to resuscitating gold mining in Johannesburg. By any        
standards                                                                       
anywhere in the world, this initial drilling phase is incredibly comprehensive  
and shows how committed management, staff and shareholders are to making        
Central Rand Gold a successful gold miner.                                      
As our CEO has stated in his report, we have defined our first three surface    
mining targets based on drilling, analytical conversion and empirical           
observations refined. This represents a very tangible step forward in our goal  
of becoming a fully fledged mining company in the very near future. Ongoing     
exploration and underground sampling is also continuing apace to ensure that we 
have a strong pipeline when we enter into our operational mining phase.         
What is particularly gratifying is the enthusiasm with which our public         
participation initiatives have been embraced and received by leaders and        
members of local communities who are keen to become involved in our projects,   
work on our mines, supply goods and services to our mines and generally raise   
their standards of living as a result of us doing what we are doing. In a       
country such as South Africa, which still has huge income inequalities and a    
major unemployment problem, our significant investments and our ongoing mining  
presence will bring enormous direct and indirect financial relief to thousands  
of people.                                                                      
Over the longer term, our shareholders will benefit, but it is vital to ensure  
that throughout the lifetime of our exploration and mining in the area, the     
environment and the local inhabitants are better off and not worse off as a     
result of our activities.                                                       
Though there is still much to be done before we are in gold mining mode and     
ramping up towards our optimal ore treatment rate, it is fitting to reflect on  
the achievements and progress to date and the foundation that has been laid for 
the future.                                                                     
The recent 1.8 million ounce upgrade of our mineral resources to 35.6 million   
ounces of gold is a significant achievement, especially as around 30% of the    
increased resource is between the surface and 200 metres below the surface, in  
line with our objective of gaining access to early cash flows once we have      
received our mining right.                                                      
With a strong shareholder funded balance sheet and good internal resources to   
be able to continue doing what we have done so successfully to date, an         
excellent foundation has certainly been laid for future development and growth. 
On Tuesday April 29, the directors formally welcomed Michael McMahon to         
the board as a non-executive director. A previous chairman of Impala Platinum,  
he is currently a non-executive director on the boards of Impala Platinum,      
Gold Fields and Murray & Roberts. His wealth of technical experience in the     
gold and platinum mining industries strengthens the CRG board and will prove    
extremely valuable as we move into the mining phase of our operations.          
Rams Ramokgopa, an original board member of the Central Rand Gold group,        
announced                                                                       
his retirement at the end of April. He was instrumental in introducing Puno     
Gold Investments as our BEE partner and has played a valuable role in our       
operating company`s affairs. I would like to thank him for his efforts and wish 
him well in his retirement and future activities.                               
When it comes to thanks, there are three specific groups of people to whom I    
would like to extend my sincere gratitude:                                      
my fellow non executive directors - Nick Farr-Jones, Robert Kirkby and Miklos   
 Salamon-who were instrumental in Central Rand Gold achieving its listings in   
London                                                                          
and Johannesburg. They worked tirelessly to reach this goal;                   
management and staff, under the leadership of our CEO, Greg James, who have     
 worked diligently to get our projects to such an advanced stage; and           
our BEE partners, Puno Gold Investments, who have played an important role in   
our progress to date.                                                          
It has been a pleasure working with all of our people who have put in an        
enormous amount of work towards realising the vision that we all share.         
There is certainly much to look forward to as we work together towards ensuring 
that our company takes its place among South Africa`s gold producers and        
brings gold mining back to the vibrant city of Johannesburg.                    
Alastair Walton                                                                 
Chairman                                                                        
Chief Executive Officer`s Report                                                
Overview                                                                        
It is indeed a great pleasure to be able to report back to shareholders on the  
first year of Central Rand Gold`s operations and to provide some further        
insight into where the company is heading in these exciting times for the gold  
industry in South Africa and around the world.                                  
Through the unstinting efforts of a small team of dedicated professionals, a    
tremendous amount has been achieved to date, establishing the foundations for a 
bright future for all stakeholders in Central Rand Gold.                        
From the outset, our intention has been to be a mining company with a           
difference - and we are confident that we are well on the way towards achieving 
this objective.                                                                 
Central to this is our strong involvement with the communities in which our     
mining projects are situated. Constant consultation and regular meetings with   
community members and leaders have ensured a high level of "buy-in" from        
people living in our mining-focused areas.                                      
Community leaders and members are particularly enthused by the fact that t he   
company will be bringing many important benefits to areas in which mining has   
been dormant for many years - such as skills development, training and          
employment that will favourably impact living standards.                        
This community focus formed an important part of our Environmental Impact       
Assessment report which was submitted to the Department of Minerals and Energy  
on February 4, 2008.                                                            
A database of potential employees has been created and is constantly being      
updated to ensure that at peak production, when staff will number around 4,000, 
as many people as possible will be drawn from the local community living in     
close proximity to our mining operations.                                       
Corporate Progress                                                              
While most of our emphasis to date has been on exploration, excitement is       
building up as we move closer to becoming a mining company. If all goes         
according to plan, our first mining activity should take place in early 2009.   
Importantly, Central Rand Gold remains on track to meet its forecast of         
producing its first 100,000 ounces of gold in 2009, achieving a production rate 
of 250,000 ounces of gold a year by 2010 and a production rate of one million   
ounces a year by 2012.                                                          
A huge amount of effort has gone into getting the company to its current        
position - from exploration to assay work, to community involvement, to Black   
Economic Empowerment, to our comprehensive Environmental Impact Assessment, to  
health and safety, to our Social and Labour Plan, to studying and fine-tuning   
world-class mining practices that will be implemented on our sites.             
Significantly, our staff and management complement is strongly representative   
of South Africa`s vibrant multi-racial society.                                 
In line with South Africa`s Mining Charter and Black Economic Empowerment       
legislation, 26% of Central Rand Gold SA (Proprietary) Limited is owned by Puno 
Gold Investments (Proprietary) Limited ("Puno"), chaired by Monk Goocin.        
Although generally matters have been progressing as expected with our BEE       
partner Puno, there has recently arisen a dispute relating to                   
technical breaches of the CRGSA shareholders agreement. The                     
dispute surrounds the allocation of intercompany loans which fund the budget    
and work programme and the incurring of, and level of, certain costs. We have   
tried to settle any disagreements amicably, but so far without success. The     
next step, if so required, is for the parties to refer the matter to            
arbitration pursuant to the dispute resolution mechanism under the shareholders 
agreement. We believe that ultimately our position will prevail. The Directors  
believe that this will not have any material consequences in respect of the     
consolidated accounts of the Group. Notwithstanding this position, we have      
pending the outcome of any dispute allocated 100% of the                        
intercompany funding since execution of the shareholders` agreement  from the   
Company to CRGSA. This                                                          
additional 26% of intercompany debt excluding interest amounts to ZAR29.5       
million (US$4.3 million)                                                        
between June  2007 and December 31, 2007 and ZAR12.2million (US$1.6             
million) between January 1, 2008 and March 31, 2008.                            
Our attitude has been and will continue to be that there are no short-cuts:     
everything we undertake has a methodology, a purpose and an end result.         
To this end, we have been extremely thorough in everything we have undertaken - 
from our public participation process, to our environmental and health and      
safety initiatives, to our exhaustive exploration exercises and procedures.     
There can be few mining companies that have engaged as closely as we have with  
communities while still in the exploration phase - every meeting has been       
worthwhile, ensuring that we can proceed with our projects in a spirit of       
participation and inclusiveness rather than separation and alienation.          
Exploration Activity/Resource Upgrade                                           
From an exploration point of view, the company`s geological team has been very  
active in the field since October 2006, assembling an impressive array of drill 
results from more than 45,600 metres of drilling - 10,000 metres of which were  
drilled between October 2007 and February 2008.                                 
Up until April 20 this year, no fewer than 167 diamond drill holes had been     
completed (including geotechnical holes), most of them with depths of 60-100    
metres. No fewer than 2,102 reverse circulation holes (including soil sampling) 
had been completed, most of them with depths of up to 60 metres.                
Over the same timeframe, a total of 89,575 assays had been sent for analysis    
and results for 69,893 had been received.                                       
Importantly, this showed a welcome rise in the numbers of assay results         
received to 78% of the total submitted compared to the level of 50% stated in   
our prospectus. This has resulted in the purchasing of our own analytical assay 
laboratory being unnecessary at the moment.                                     
The company`s primary focus was to access the underground workings in order to  
ratify the paper resource generated from the desktop studies, ascertain the     
existing ground conditions in the old workings and embark on a major            
underground sampling programme in targeted areas to convert existing resources  
into mineable resources.                                                        
The company has located four shafts in good condition, and is in the process of 
equipping and accessing the old level developments. An underground sampling     
programme is currently underway, and early results are proving to be            
encouraging.                                                                    
From a mineral resources point of view, a major milestone for the company was   
reached at the end of February 2008 when we were able to announce a significant 
upgrade of our indicated and inferred resources.                                
In our initial statement, we declared an indicated resource of 21.4 million     
ounces of gold and an inferred resource of 12.4 million ounces of gold, making  
a total of 33.8 million ounces.                                                 
On February 29, we upgraded the indicated resource by 932,000 ounces to 22.4    
million ounces and the inferred resource by 828,000 ounces to 13.2 million      
ounces. Our total mineral resource rose by 1.8 million ounces to 35.6 million   
ounces. Importantly, of this increase, 530 000 ounces have been identified      
between surface and 200 metres below surface.                                   
This upgrade underpins the confidence we have in the viability and              
sustainability of our exploration projects and supports the optimism we have in 
our ability to become a world-class, low-cost gold producer in the near         
future.                                                                         
More significantly, we also confirmed our first three mining targets from which 
our first gold will come once we receive our mining right. We refer to these as 
slots 4, 8 and 9. In our prospectus we had identified nine slots, so this is    
further evidence that we have refined our exploration understanding in order to 
maximise our early cash flows and test our mining concepts.                     
Our drilling programme is continuing, coupled with underground sampling, across 
all nine slots with the aim of further enhancing the current resource base in   
the Central Rand Goldfield.                                                     
It is important to note that while our initial mineral resource statement was   
based primarily on the Main Reef and Main Reef Leader sequences, our updated    
mineral resource (validated by independent competent persons Snowden Mining     
Industry Consultants and Dr Carina Lemmer in accordance with the JORC and       
SAMREC codes) is based on a wider area including the Bird Reef and Kimberley    
Reef packages.                                                                  
Summary                                                                         
While much has been achieved in a short space of time, much still needs to be   
done before we become a fully-fledged mining company, producing gold on a       
sustainable, long-term basis.                                                   
With a strong balance sheet and a strong project pipeline, we can look to the   
future with confidence. As at December 31, our cash balance was US$151.3        
million, compared to the US$135.6 million projected in our prospectus, most of  
the increase coming from our decision not to purchase our own assay laboratory. 
As a budding gold producer, it is also worth noting the current state of the    
gold and currency markets which have moved quite dramatically in recent months. 
At the time our company was conceptualising its projects and activities, the    
gold price was at around US$650/ounce and the exchange rate was ZAR7=US$1. In   
mid                                                                             
- March, 2008, the gold price nudged above US$1,000 for the first time and the  
exchange rate had gone back above ZAR8=US$1.                                    
My sincere thanks must go to everyone who has played a part in Central Rand     
Gold`s exciting journey thus far.                                               
With the continued commitment of all of our stakeholders - directors,           
management, staff, shareholders, BEE partners, suppliers and community members  
- I am confident that the company is well on the way to realising its undoubted 
potential.                                                                      
Greg James                                                                      
Chief Executive Officer                                                         
For the Company Profile, Director s` Report, Corporate Governance and           
Sustainable Development Report. Directors` Responsibility Statement, Company    
Secretarial Confirmation, Auditor`s Report and full Financial Statements,       
please refer to the company`s website: www.centralrandgold.com                  
CENTRAL RAND GOLD LIMITED GROUP                                                 
Balance Sheet as at 31 December 2007 and 31 December 2006                       
                                                          Group                 
                                                   2007               2006      
Note              USD                USD      
NON CURRENT ASSETS                                                              
Property, plant and equipment                  3 045 316          2 128 321     
Investment in subsidiaries                             -                  -     
Loans receivable                      2        6 279 167                  -     
                                              9 324 483          2 128 321      
CURRENT ASSETS                                                                  
Prepayments and other receivables              1 139 639            893 963     
Cash and bank balances                       149 194 757          7 529 622     
Security deposits and guarantees               2 072 757            277 908     
                                            152 407 153          8 701 493      
TOTAL ASSETS                                 161 731 636         10 829 814     
EQUITY AND LIABILITIES                                                          
Share Capital                                  5 017 375                  -     
Share Premium                                191 405 973                  -     
Share-based Compensation Reserve              18 152 511                  -     
Treasury Shares                                 (31 120)                  -     
Foreign Currency Translation                                                    
Reserve                                      (9 311 702)            704 673     
Merger Reserve                                         -         20 533 209     
Accumulated Losses                          (52 711 338)       (10 667 195)     
                                            152 521 699         10 570 687      
Minority Interest in equity                            -                  -     
TOTAL EQUITY                                 152 521 699         10 570 687     
NON CURRENT LIABILITIES                                                         
Borrowings                                       105 271                  -     
Operating lease liability                         38 226                  -     
                                                143 497                  -      
CURRENT LIABILITIES                                                             
Trade and other payables                       2 534 315            259 127     
Loan payable                                   6 279 167                  -     
Provisions                                       125 212                  -     
Taxation payable                                  92 066                  -     
Borrowings                                        35 680                  -     
                                              9 066 440            259 127      
TOTAL LIABILITES                               9 209 937            259 127     
TOTAL EQUITY AND LIABILITIES                 161 731 636         10 829 814     
Income Statement for the years ended 31 December 2007 and 31                    
December 2006                                                                   
                                                             Group              
2007            2006      
                                     Note              USD             USD      
Other income and gains                              414 588               -     
Employee benefits expense                       (4 048 968)     (1 209 846)     
Directors` emoluments                          (10 083 856)     (2 643 058)     
Other share-based payments                     (10 957 934)               -     
Depreciation                                      (525 007)       (135 973)     
Operating lease payments                         (621 9 52)       (160 521)     
Exploration expenditure                        (14 627 369)     (2 840 584)     
Other expenses                                  (5 880 416)     (1 720 574)     
Operating loss                                 (46 330 913)     (8 710 556)     
Interest received                                 2 333 192         323 298     
Finance costs                                     (494 776)               -     
Loss before income tax                         (44 492 497)     (8 387 258)     
Income tax expense                                 (92 066)               -     
Loss for the year                              (44 584 563)     (8 387 258)     
Loss is attributable to:                                                        
Minority interest                                      (38)               -     
Equity holders of the parent                   (44 584 525)     (8 387 258)     
                                              (44 584 563)     (8 387 258)      
Loss per share for loss attributable                                            
to the equity holders during the year                                           
(expressed in US cents per                                                      
share)                                                                          
Basic loss per share                     3          (24.64)          (6.26)     
Diluted loss per share                   3          (24.48)          (6.25)     
Basic headline loss per share            3          (24.43)          (6.26)     
Diluted headline loss per share          3          (24.27)          (6.25)     
Statement of Changes in Equity for the years ended 31 December 2007 and 31      
December 2006                                                                   
                             Attributable to equity holders of the Company      
                               Ordinary     Share Premium           Merger      
Share Capital                            Reserve      
Group                                                                           
                                    USD               USD              USD      
Balance at 31 December 2005            -                 -        2 925 820     
Shares issued by subsidiary                                                     
during the year                        -                 -       14 879 489     
Foreign currency                                                                
adjustments                            -                 -                -     
Share based payments by                                                         
subsidiary - consulting fees           -                 -        2 727 900     
Loss for the year                      -                 -                -     
Balance at 31 December 2006            -                 -       20 533 209     
Shares issued by                                                                
subsidiaries during the year           -                 -        9 869 165     
Foreign currency                                                                
adjustments                            -                 -                -     
Share based payments by                                                         
subsidiary - consulting fees           -                 -        2 606 250     
Shares issued during the year    245 135        18 110 090                -     
Corporate reorganisation       3 392 223        29 452 262     (33 008 624)     
Shares issued on listing       1 262 340       143 843 621                -     
Treasury shares issued to                                                       
Employee Share Trust             117 677                 -                -     
Treasury shares issued to                                                       
directors and employees                -                 -                -     
Shares and Options issued                                                       
to employees and directors                                                      
of subsidiary                          -                 -                -     
Loss for the year                      -                 -                -     
Balance at 31 December 2007    5 017 375       191 405 973                -     
                                                  Foreign      Share based      
                                                 Currency     compensation      
Translation          Reserve      
                                                  Reserve                       
Group                                                                           
                                                      USD              USD      
Balance at 31 December 2005                       (54 174)                -     
Shares issued by subsidiary                                                     
during the year                                          -                -     
Foreign currency adjustments                       758 847                -     
Share based payments by                                                         
subsidiary - consulting fees                             -                -     
Loss for the year                                        -                -     
Balance at 31 December 2006                        704 673                -     
Shares issued by                                                                
subsidiaries during the year                             -                -     
Foreign currency                                                                
adjustments                                   (10 016 375)                -     
Share based payments by                                                         
subsidiary - consulting fees                             -                -     
Shares issued during the year                            -                -     
Corporate reorganisation                                 -                -     
Shares issued on listing                                 -                -     
Treasury shares issued to                                                       
Employee Share Trust                                     -                -     
Treasury shares issued to                                                       
directors and employees                                  -                -     
Shares and Options issued                                                       
to employees and directors                                                      
of subsidiary                                            -       18 152 511     
Loss for the year                                        -                -     
Balance at 31 December 2007                    (9 311 702)       18 152 511     
Statement of Changes in Equity for the years ended 31 December 2007 and 31      
December 2006 continued                                                         
Attributable to equity holders of the Company       
                                Treasury      Accumulated            Total      
                                  Shares           Losses                       
Group                                                                           
USD              USD              USD      
Balance at 31 December 2005             -      (2 279 937)          591 709     
Shares issued by                                                                
subsidiary during the year              -                -       14 879 489     
Foreign currency                                                                
adjustments                             -                -          758 847     
Share based payments by                                                         
subsidiary - consulting fees            -                -        2 727 900     
Loss for the year                       -      (8 387 258)      (8 387 258)     
Balance at 31 December 2006             -     (10 667 195)       10 570 687     
Shares issued by                                                                
subsidiaries during the year            -                -        9 869 165     
Foreign currency adjustments            -                -     (10 016 375)     
Share based payments by                                                         
subsidiary - consulting fees            -                -        2 606 250     
Shares issued during the year           -                -       18 355 225     
Corporate reorganisation         (12 067)        2 540 382        2 364 176     
Shares issued on listing                -                -      145 105 961     
Treasury shares issued to                                                       
Employee Share Trust            (117 677)                -                -     
Treasury shares issued to                                                       
directors and employees             98 624                -           98 624    
Shares and Options                                                              
issued to employees and                                                         
directors of subsidiary                 -                -       18 152 511     
Loss for the year                       -     (44 584 525)     (44 584 525)     
Balance at 31 December 2007      (31 120)     (52 711 338)      152 521 699     
                                                 Minority            Total      
interest                       
Group                                                                           
                                                      USD              USD      
Balance at 31 December 2005                              -          591 709     
Shares issued by                                                                
subsidiary during the year                               -       14 879 489     
Foreign currency                                                                
adjustments                                              -          758 847     
Share based payments by                                                         
subsidiary - consulting fees                             -        2 727 900     
Loss for the year                                        -      (8 387 258)     
Balance at 31 December 2006                              -       10 570 687     
Shares issued by                                                                
subsidiaries during the year                             -        9 869 165     
Foreign currency adjustments                             -     (10 016 375)     
Share based payments by                                                         
subsidiary - consulting fees                             -        2 606 250     
Shares issued during the year                            -       18 355 225     
Corporate reorganisation                                38       2 364 1 38     
Shares issued on listing                                 -      145 105 961     
Treasury shares issued to                                                       
Employee Share Trust                                     -                -     
Treasury shares issued to                                                       
directors and employees                                   -           98 624    
Shares and Options                                                              
issued to employees and                                                         
directors of subsidiary                                  -       18 152 511     
Loss for the year                                     (38)     (44 584 563)     
Balance at 31 December 2007                              -      152 521 699     
Cash Flow Statement for the years ended 31 December 2007 and 31 December 2006   
                                                             Group              
                                                      2007            2006      
USD             USD      
CASH FLOWS FROM OPERATING ACTIVITIES                                            
Loss before tax                                (44 492 497)     (8 387 258)     
Adjusted for :                                                                  
Depreciation                                        525 007         135 973     
Employment benefit expenditure (Share based                                     
payments)                                        20 708 141       2 727 900     
Loss on disposal of fixed assets                    375 259               -     
Net (gain)/loss on foreign exchange               (315 618)         299 942     
Other income                                        (4 027)               -     
Interest received                               (2 333 192)       (323 298)     
Interest paid                                       494 776               -     
Changes in working capital                                                      
Increase in receivables                           (245 676)       (821 652)     
Increase in provisions                              125 212                     
Increase/(Decrease) in trade and other payables   2 275 188       (193 622)     
Cash flows (used in)                                                            
operations                                     (22 887 427)     (6 562 015)     
Interest received                                 2 333 192         323 298     
Interest paid                                     (494 776)               -     
Other income received                                 4 027                     
Net cash used in operating activities          (21 044 984)     (6 238 717)     
CASH FLOWS FROM INVESTING ACTIVITIES                                            
Purchases of property, plant & equipment        (1 901 596)     (2 191 171)     
Proceeds from disposal of property, plant and                                   
equipment                                           131 594               -     
Increase in operating lease liability                38 226               -     
Increase in investment in subsidiaries                    -               -     
Increase in loans receivable                              -               -     
Net cash (used in) investing activities         (1 731 776)     (2 191 171)     
CASH FLOWS FROM FINANCING ACTIVITIES                                            
Proceeds from borrowings                            140 952               -     
Increase in security deposits                   (1 794 849)       (277 908)     
Proceeds from issuance of shares                172 431 236      14 879 489     
Net cash generated from financing activities    170 777 339      14 601 581     
Net increase/(decrease) in cash and cash                                        
equivalents                                     148 000 579       6 171 693     
Cash and cash equivalents at beginning                                          
of year                                           7 529 622         749 201     
Effects of exchange rate movement on                                            
cash balances                                  (6 335 444)         608 728      
Cash and cash equivalents at end of year        149 194 757       7 529 622     
Selected Notes to the Financial Statements                                      
1. Selected Significant Accounting Policies                                     
Basis of Preparation                                                            
Pursuant to a corporate reorganisation on June 15, 2007, the company became the 
parent company of Central Rand Gold SA (Proprietary) Limited ("CRGSA "), a      
company incorporated in the Republic of South Africa, through a newly formed    
intermediate holding company, Central Rand Gold (Netherlands Antilles) N.V.     
("CRGNV"), a company incorporated in the Netherlands Antilles.                  
On this date, CRGSA acquired the mineral rights and all other assets and        
liabilities of its former parent company, Rand Quest Syndicate Limited          
("RQS"), and certain mineral rights from Central Rand Australia (Proprietary)   
Limited, ("CRA"), a wholly-owned subsidiary of RQS subject to Section 11        
Applications, for the right to proceed with mining activities, being granted.   
Both RQS and CRA are incorporated in Australia. The consideration for the       
acquisitions was settled by inter-company loans payable by CRGSA to RQS and CRA 
which were then assigned by RQS and CRA to the company in exchange for RQS      
receiving 168,666,648 shares in the company. Under the provisions of IFRS 3:    
"Business Combinations", the abovementioned corporate reorganisation involves   
entities and businesses under common control, which are ultimately owned by the 
same parties both before and after and whose rights remained unchanged.         
Accordingly, the reorganisation is considered to be outside the scope of IFRS 3 
and the group has applied the pooling of interests method, as described in the  
basis of consolidation, to prepare the consolidated financial statements.       
Accounts have also been prepared under IFRS for the periods ended June 30,      
2005, 2006 and 2007 for the purposes of the company`s listing Prospectus. No    
other accounts have been prepared for previous periods. As the Johannesburg     
Stock Exchange regulations require the company accounts to be prepared on a     
calendar year, the financial statements have been prepared for the year ended   
31 December 2007 and audited comparatives figures have been prepared for the    
previous 12 months.                                                             
Group          
                                                             2007     2006      
                                                              USD      USD      
2. Loans receivable                                                             
Central Rand Gold (Netherlands Antilles) N.V.                    -        -     
Puno Gold Investments (Proprietary) Limited              6 279 167        -     
                                                        6 279 167        -      
On 15 June 2007, as part of the restructuring, the group advanced a loan of     
ZAR 111,196,279 (USD 16,457,049) to Central Rand Gold SA                        
(Proprietary) Limited ("CRGSA")and a further loan of ZAR 39,068,963 (USD        
5,782,207) to Puno                                                              
Gold Investments (Proprietary) Limited ("Puno"). The loan bears interest at     
South African prime lending rate plus 2% and is payable on demand as and when   
free cash flows as determined by the board of CRGSA are available.              
Although generally matters have been progressing as expected with our BEE       
partner Puno, there has recently arisen a dispute relating to procedural        
breaches of the CRGSA shareholders agreement. The dispute surrounds the         
allocation of intercompany loans which fund the budget and work programme and   
the incurring of, and level of, certain costs. We have tried to settle any      
disagreements amicably, but so far without success. The next step, if so        
required, is for the parties to refer the matter to arbitration pursuant to the 
dispute resolution mechanism under the shareholders agreement. We believe that  
ultimately our position will prevail. The Directors believe that this will not  
have any material consequences in respect of the consolidated accounts of the   
Group. Notwithstanding this position, we have pending the outcome of any        
dispute allocated 100% of the intercompany funding since execution of the       
shareholders agreement from the                                                 
Company to CRGSA. This additional 26% of intercompany debt excluding interest   
amounts to ZAR 29,541,700 (USD4,278,795) between June 2007 and 31 December 2007 
and ZAR 12,161,285 (USD 1,611,646) between 1 January 2008 and 31 March 2008.    
3. Loss per Share                                                               
Reconciliation of loss used in calculating losses per share                     
a) Basic                                                                        
Basic loss per share is calculated by dividing the loss attributable to equity  
holders of the group by the weighted average number of ordinary shares in issue 
during the year.                                                                
Group              
                                                      2007            2006      
                                                       USD             USD      
Loss attributable to ordinary equity                                            
holders of the group                           (44 584 525)     (8 387 258)     
Weighted average number of ordinary                                             
shares used calculating basic loss per share    180 935 078     134 069 598     
Basic loss per share (US cents per share)           (24.64)          (6.26)     
b) Diluted loss per share                                                       
Diluted loss per share is calculated by adjusting the weighted average number   
of ordinary shares outstanding to assume conversion of all dilutive potential   
ordinary shares. The group has two categories of dilutive potential ordinary    
shares: 1) Share options. For the share options, a calculation is done to       
determine the number of shares that could have been acquired at fair value      
(determined as the average annual market share price of the group`s shares)     
based on the monetary value of the subscription rights attached to outstanding  
share options. The options were however anti-dilutive as the strike price of    
the options was higher than the average share price for the year. 2) Treasury   
shares. For the treasury shares, no value is taken into account as the shares   
hold no rights. The weighted average of the shares is taken into account to     
determine the dilution.                                                         
                                                            Group               
                                                      2007            2006      
                                                       USD             USD      
Diluted loss per share                                                          
Loss attributable to ordinary equity                                            
holders of Central Rand Gold Limited                                            
used to calculate basic loss per share         (44 584 525)     (8 387 258)     
Interest savings on treasury shares                       -               -     
Loss attributable to ordinary equity                                            
holders of Central Rand Gold Limited                                            
used to calculate diluted loss per share       (44 584 525)     (8 387 258)     
Number          Number      
Weighted average number of                                                      
ordinary shares used in calculating                                             
basic loss per share                            180 935 078     134 069 598     
Adjustments for calculation of diluted                                          
loss per share:                                                                 
- Treasury shares                                 1 214 192          55 890     
Weighted average number of                                                      
ordinary shares used in calculating                                             
diluted loss per share                          182 149 270     134 168 228     
Diluted loss per share (US cents per                                            
share)                                              (24.48)          (6.25)     
c) Headline loss per share                                                      
Headline loss per share is calculated by dividing the calculated headline loss  
of the group by the weighted average number of ordinary shares outstanding to   
assume conversion of all dilutive potential ordinary shares.                    
Group           
                                                          2007           2006   
                                                           USD            USD   
Loss attributable to equity holders of the group   (44 584 525)    (8 387 258)  
Plus: Loss on disposal of property,                                             
plant and equipment                                     375 259              -  
Loss used in calculating headline loss per share    (44 209 266)    (8 387 258) 
Weighted average number of ordinary shares used                                 
calculating headline loss per share                 180 935 078    134 069 598  
Headline losss per share (US cents per share)           (24.43)         (6.26)  
d) Diluted headline loss per share                                              
Diluted headline loss per share is calculated by dividing the calculated        
headline loss of the group by the weighted average number of ordinary shares in 
issue during the year.                                                          
                                                                 Group          
                                                          2007           2006   
USD           USD   
Loss attributable to equity holders of the group     (44 584 525)  (8 387 258)  
Plus: Loss on disposal of property, plant                                       
and equipment                                             375 259            -  
Profit used in calculating headline loss per share   (44 207 259)  (8 387 258)  
Weighted average number of ordinary shares used in                              
calculating diluted headline loss per share          182 149 270  134 168 228   
Diluted headline loss per share (US cents per share)      (24.27)       (6.25)  
4. Commitments                                                                  
a) Operating lease commitments                                                  
The group usually negotiates operating leases for a period of five years. The   
group`s minimum future lease rentals payable under non-cancellable operating    
leases are as follows:                                                          
                                                               Group            
                                                          2007        2006      
                                                           USD         USD      
Payable - Minimum Lease Payments                                                
- not later than 12 months                              404 550     160 638     
- between 12 months and 5 years                         557 863     701 474     
- greater than 5 years                                        -           -     
962 413     862 112      
Three month`s notice was given in order to terminate the rental of the offices  
in London. The lease expires at the end of April 2008. The operating lease      
commitments shown above have taken this into account.                           
Group          
                                                             2007     2006      
                                                              USD      USD      
b) Purchase of shares in companies                                              
Purchase price of Ferreira Estate and                                           
Investment Company Limited ("FEIC")                      1 000 000        -     
                                                        1 000 000        -      
The Purchase of FEIC is further discussed in d) below.                          
c) Rent payable on tenements for exploration activities                         
Rent is payable on the following tenements for the year in order to continue    
exploration activities:                                                         
                                                                 Group          
2007     2006      
                                                              USD      USD      
No. 1 Shaft                                                  7 897        -     
No. 2 Shaft                                                 22 273        -     
East Shaft                                                   8 343        -     
                                                           38 513        -      
The rentals are payable to Industrial Zone Limited.                             
d) Various contractual fees payable                                             
Group          
                                                             2007     2006      
                                                              USD      USD      
Fees payable to iProp Limited for                                               
prospecting                                                500 000        -     
Option fees payable to Gravelotte                                               
Mines Limited                                              100 000        -     
                                                          600 000        -      
Fees payable to the Department of Minerals and Energy:                          
                              Payable     Payable within     Payable after      
                        within 1 year       2 to 5 years           5 years      
                                  USD                USD               USD      
3C`s                             2 453              6 746                 -     
Langlaagte                         178                400                 -     
AngloGold Ashanti                1 040              2 860                 -     
Village Main                       455              1 250                 -     
4 126             11 256                 -      
The prospecting rights over the Simmer and Jack and Western Areas A,B and E     
have been granted but not formally notarised by South Africa`s Department of    
Minerals and Energy. The company expects this notarisation to occur imminently. 
The Southern Deeps area is still under application with the DME, however,       
should this be granted and notarised, the fees for the first year of            
prospecting will total USD5,518 (ZAR37,284).                                    
Under the South African Mineral and Petroleum Resources Development Act 28 of   
2002, the group requires Ministerial consent in terms of Section 11             
Applications (which consent is still outstanding) to:                           
(i) the cession to Central Rand Gold SA (Proprietary) Limited ("CRGSA") of the  
prospecting rights held by Gravelotte Mines Limited (once the option is         
exercised) and AngloGold Ashanti Limited;                                       
(ii) the cession to CRGSA of the prospecting rights in respect of Village Main, 
Simmer & Jack and Western Areas;                                                
(iii) to confirm a change of control in the shareholding in Ferreira Estate and 
Investment Company Limited; and                                                 
(iv) the cession to CRGSA of the prospecting rights for Southern Areas once     
granted to RQS.                                                                 
The details of the groups currently explored tenements are:                     
Three C`s area                                                                  
This area covers the mining areas of the currently closed Consolidated Main     
Reef ("CMR"), Crown Mines and City Deep Goldmines, south of Roodepoort and      
Johannesburg.                                                                   
CRGSA has a contractual right to conduct exploration in this area. In return    
for conducting the exploration programme, CRGSA has an option to acquire the    
entire shareholding of Ferreira Estate and Investment Company Limited           
("FEIC"), the registered holder of the prospecting right from iProp Limited     
("iProp").                                                                      
CRGSA is required to spend not less than USD2,000,000 on exploration.           
Furthermore for a period of eight years following the effective date of the     
agreement, CRGSA shall pay to iProp a minimum amount of USD500,000 per annum,   
which shall reduce to USD100,000 per annum after the expiry of the eight year   
period which payments shall continue for the remainder of the agreement. The    
first payment was made on 29 March 2006.                                        
CRGSA shall be deemed to have exercised the option to acquire FEIC once an      
application for a mining right has been lodged with the DME, CRGSA has spent    
not less than USD2,000,000 on exploration and ministerial consent in terms of   
section 11 of the Mineral and Petroleum Resources Development Act has been      
obtained to the change in shareholding in FEIC, whereupon CRGSA shall pay       
USD1,000,000 as consideration for the purchase of FEIC. A guarantee to this     
effect has already been put into place.                                         
As a further consideration for the acquisition of the shares in FEIC, once the  
production threshold as detailed in the applicable phase two work programme has 
been reached, CRGSA shall pay to iProp USD8 per ounce of gold produced from the 
area on a quarterly basis.                                                      
Once all exploration expenditure and mine development and associated costs are  
repaid by FEIC to CRGSA and the FEIC mining operations become profitable, CRGSA 
shall cease paying USD8 per ounce of gold and thereafter pay a quarterly net    
profit interest of 10% for the remainder of the agreement. The various          
payments of USD500,000 and USD100,000 referred to above will be set off against 
the USD8 and net profit interests referred to being payable to iProp above.     
Langlaagte area                                                                 
This area covers the area between the CMR and Crown Mines, near to the Three    
C`s Area.                                                                       
CRGSA has a contractual right to conduct prospecting over this area. A term of  
the prospecting contract is that CRGSA has the sole and exclusive option to     
purchase the prospecting right from Gravelotte Mines Limited, the registered    
holder of the prospecting right. The purchase price for the prospecting right   
is USD250,000 and the option period runs from November 4, 2005 to November 3,   
2010. Option fees of USD100,000 per annum are payable for the duration of the   
option.                                                                         
In further consideration for the grant and exercise of the option, Central      
Rand Gold SA shall on a quarterly basis pay Gravelotte Mines Limited the sum of 
USD10 per ounce of gold mined from the prospecting area.                        
AngloGold Ashanti area                                                          
This area covers various farm subdivisions in the central Witwatersrand area    
and suburbs of Johannesburg, Germiston and Alberton.                            
Central Rand Proprietary Limited, formerly a wholly owned subsidiary of Rand    
Quest Syndicate Limited, concluded an agreement with AngloGold Ashanti Limited  
("AngloGold") under which AngloGold would apply for a prospecting right and     
Central Rand Proprietary Limited would be entitled to take cession of the       
prospecting right once granted on payment of USD 150,000 to recoup the costs of 
the application.                                                                
Under the reorganisation of the group the agreement with AngloGold was assigned 
to CRGSA.                                                                       
If a decision to mine the area is taken and AngloGold and the parties agree     
that AngloGold has no future role in the project then CRGSA shall be required   
to pay USD8 per ounce of gold recovered from the area.                          
Date: 30/04/2008 17:39:02 Supplied by www.sharenet.co.za                     
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