15th Sep 2015 07:33
LONDON (Alliance News) - Central Rand Gold Ltd Tuesday said its pretax loss was substantially narrower in the first half of 2015 after it reduced its costs, and said talks are progressing about the sale of its Dutch subsidiary but said there is still no guarantee a deal will be reached.
The miner operating in South Africa reported a USD1.2 million pretax loss in the first six months of 2015, significantly narrower than the USD15.3 million loss reported a year earlier despite revenue almost halving to USD4.4 million from USD8.2 million after being hit by a fall in production and the slump in gold prices.
The loss before interest, tax and depreciation came in at USD713,000 compared to a USD8.6 million loss a year ago.
Those losses narrowed as production costs dropped to USD2.8 million from USD9.8 million, its employee benefit expenses fell to USD1.3 million from USD3.2 million and other expenses decreased to USD560,000 from USD1.7 million. Central Rand also reported lower director fees, lease expenses, and operational expenses in the period.
Those costs fell as the company focused on stabilising its operations in the first half and on securing a deal to sell its Central Rand Gold (Netherlands Antilles) NV subsidiary.
Central Rand is currently in talks with two Asia companies, Hiria Group Co Ltd and Huili Resources Group Ltd, about the potential sale or partial sale of the subsidiary. The company has a range of assets, all based in South Africa, that are held by the Dutch subsidiary that's up for sale.
"The company continues to caution that there can be no certainty that the discussions with both Huili or Hiria will lead to a binding agreement being entered into by either party, nor that the potential sale of Central Rand Gold (Netherlands Antilles) NV, or any other transaction will be completed," it said in a statement.
Total gold production in the first half totalled 3,679 ounces compared to 4,149 ounces a year earlier. Internal gold production rose in the period to 3,435 ounces from 3,205 ounces but external production, whereby the company treats gold from other company's operations, fell to 244 ounces from 944.
In the next six months, the miner will attempt to finalise a deal for its subsidiary and focus on improving its operational processes to increase efficiency.
Central Rand shares were up 5.5% to 8.70 pence per share on Tuesday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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