25th Mar 2009 09:00
|
Immediate Release |
25 March 2009 |
Central Rand Gold Limited
("CRG" or the "Company" or the "Group")
(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
Highlights
Central Rand Gold has recorded some significant highlights during 2008. These include:
• Receipt of the First New Order Mining Right
• Commencement of trial mining
• Commissioning of first crushing and concentrating plant
• One million injury free man hours achieved
• First gold pour
• Targeting an exit rate of 100,000oz of gold per annum by 2009 year end Chairman's Report
Please note the Annual General Meeting ("AGM") of the Company is to be held at the offices of Carey Olsen, Carey House, Les Banques, St Peter Port, Guernsey, GY1 4BZ at [11 a.m.] on 21 May 2009. 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.
For the Company Profile, Directors' 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.
|
Contact: |
|
|
Johan du Toit |
+27 (0) 11 551 4000 |
|
Wayne Epstein |
+27 (0) 11 551 4000 |
|
Enquiries: |
|
|
Evolution Securities Limited |
+44 (0) 20 7071 4300 |
|
Simon Edwards / Chris Sim / Neil Elliot |
|
|
Macquarie First South Advisers (Pty) Ltd |
+27 (0) 11 583 2000 |
|
Thato Morojele / Annerie Britz / Melanie de Nysschen |
|
|
Buchanan Communications Limited |
+44 (0) 20 7466 5000 |
|
Bobby Morse / Ben Willey |
|
|
Jenni Newman Public Relations (Pty) Ltd |
(0) 11 772 1033 |
|
Jenni Newman / Megann Outram |
Chairman's Report
It is my pleasure to report to shareholders on the significant progress made by Central Rand Gold during 2008 and to provide some insight into the continued advances the Company expects to make in 2009 and beyond.
Before I do this, it is worth reflecting on the fact that the Company started out less than three years ago as a small exploration entity with a large vision. With just 10 employees and few technical and financial resources, bringing commercial gold mining back to Johannesburg was indeed a big and bold vision, but one that is now much closer to realisation.
Tracking the plan laid out in the IPO prospectus issued at the time of the Company's IPO (the "Prospectus"), the Company achieved three major milestones during 2008:
• Receipt of our first New Order Mining Right on September 17 from South Africa's Department of Minerals and Energy ("DME");
• Commencement of our trial mining phase on October 1, utilising the plant imported from Gekko Systems; and
• Pouring our first gold at Rand Refinery Limited on December 4.
Throughout our Mining Right application process the DME gave us prompt and useful feedback, and I must thank them for the speedy and professional manner in which our Mining Right was considered and ultimately awarded. This is a positive message for investment in South Africa at a time when there is a global shortage of capital as a result of the financial meltdown which continues into 2009.
In terms of receiving our first Mining Right, I would like to acknowledge the support of the following groups that gave us solid backing through this exacting process: Umkhonto we Sizwe Military Veterans' Association; Youth in Minerals and Energy; the Congress of South African Students; and the Affected Community Elected Representatives.
Community Focus
Without doubt, the substantial forward momentum achieved during 2008 is testimony to the quality of our management team and the efforts of every member of the expanding CRG family. Importantly, the strides we have taken so far have also been made possible by the communities within which we operate. Their support, their cooperation and their enthusiasm - demonstrated by more than 20,000 people attending our various community meetings and workshops - has been critical to our success to date.
In my previous Chairman's Report, I placed a strong emphasis on the vital nature of our relationship with our communities and this has certainly proved to be the case. Our focus on communities sets us apart from many of our peers in the global mining industry and lays the foundation for our future.
As a company operating in an urban environment, we have major obligations to our communities and are committed to embracing them in a variety of ways which will create employment, improve skills levels, uplift standards of living and create wealth. Of our 259 employees at the end of 2008, no fewer than 109 come from the communities surrounding our operations and approximately 90% come from the historically disadvantaged sectors of South African society.
During 2009, several of the initiatives laid out in our Social and Labour Plan will get underway, adding value in a sustainable, meaningful and practical manner to our communities.
On November 11, 2008, I was privileged to give the keynote address at a function to commemorate the official signing of our first New Order Mining Right. I used this occasion to stress the need for a broadening of our Black Economic Empowerment ("BEE") ownership structure to ensure that our communities become stakeholders. The board has taken action on this front and the 26% BEE stake in our South African operating company is being restructured to more directly benefit our communities. A stock exchange announcement to this effect was made on February 16, 2009 outlining the intended recall of shares in the operating subsidiary, CRGSA, from Puno Gold Investments (Proprietary) Limited to be placed in a trust, pending the outcome of the restructure geared towards new, more broadly-based, BEE participation.
In this regard, it is important to note that the project is of great importance to the Johannesburg and Gauteng region, as it will create a whole new generation of mining and associated businesses in the area. It has always been CRG's strategy to maximise the considerable opportunities for the local communities which this project will bring. As such, we are committed to ensuring that our Broad-Based Black Economic Empowerment ("BBBEE") is precisely what it is meant to be - broad based and for the benefit of the communities and all the stakeholders involved in this exciting project.
First gold pour
On December 4, 2008, I attended Central Rand Gold's first gold pour at Rand Refinery Limited in Germiston, South Africa, which was certainly a meaningful milestone for everyone involved with the Company.
The occasion of the gold pour was certainly a time for reflection and an opportunity to put our progress into context: what had started out as a concept 3 years earlier had now directly translated into gold output; an outfit that started out with less than 10 people had now transformed into a gold exploration and mining company employing over 250 people with many more employed by our contractors.
Tributes
It was indeed fitting that Greg James, the Company's first Chief Executive Officer, chose the day after the initial gold pour to announce that he would be standing down from his leadership role. It had always been Greg's intention to get CRG to the gold production stage, and he achieved this within the timeline indicated at the time of the IPO. He took on this important job in 2006 and professionally and sensitively guided the Company through its sometimes difficult formative phase, which has seen CRG transform from an explorer to a miner.
The spirit that he infused into the Company continues, as do the strong relationships that he built internally and externally. My thanks, and those of the Board, go to him for his significant contribution to the Company.
Our thanks also go to Riccardo Vittino who played an important role in the early stages of the Company and was our Financial Director until mid-2008.
Johan du Toit, who succeeded Riccardo as Financial Director in August 2008, was appointed by the Board to succeed Greg as Chief Executive Officer with effect from December 2008. Johan, who held a senior management position with BHP-Billiton before joining CRG, has moved seamlessly into his new role. His major task during 2009 will be to guide the Company into commercial production.
I would like to thank each and every member of the Board for the huge amount of effort they have put into, and continue to contribute, assisting our management team in the ongoing development of the Company.
Looking ahead
As outlined in the IPO prospectus, the original intention of the Company was to undertake a comprehensive exploration programme that would lead to our first commercial gold production taking place during 2009. We are on track to produce our first commercial gold by mid-2009, gradually building up towards an annualised production rate of 100,000 ounces by the end of 2009.
During 2009, we will be involved in a major capital expenditure programme as part of our objective to reach an annualised rate of 100,000 ounces by the end of the year. Importantly, the cash for this capital expenditure will be funded from the cash that was raised at the time of the IPO in November 2007 and from revenue earned during the course of 2009. Significantly, we are also on track to convert a portion of our Resources to Reserves, another sign of the Company's rapid transformation from explorer to miner.
It promises to be an extremely meaningful year as all the hard work that was channelled into receiving our Mining Right and commencing trial mining will now manifest itself in the return of commercial gold mining to the Central Rand Goldfield.
After reaching a low in 2008, in line with adverse investor sentiment towards mining stocks, our share price has been somewhat re-rated, and this process should continue as we deliver on our targets and begin to realise the potential that undoubtedly exists in our operations.
With a strong and dedicated management team and an efficient and motivated workforce, I am confident that Central Rand Gold and all the Company's stakeholders can look forward to another notable year in 2009.
Alastair Walton
Chairman
Chief Executive Officer's Report
Overview
The past year has been hugely significant for Central Rand Gold and has laid the foundation for the Company to become a meaningful employer and gold producer in the southern Johannesburg area.
As our Chairman has already noted, our progress to date would not have been possible without the single-minded dedication of our management and staff, widespread support from our local communities, and the efficiency and professionalism of the South African DME.
Receiving our First New Order Mining Right was undoubtedly the highlight of the past year, enabling us to effectively put into place the operational plans we have been working on since 2006. Beginning trial mining and pouring our first gold were also highly meaningful achievements, paving the way for our full transition to commercial gold production during 2009.
Operational Progress
Trial mining began on October 1, 2008 at Slot 8 of our Consolidated Main Reef tenement, utilising a 20 tonnes per hour (12,000 tonnes per month) plant imported from Gekko Systems in Australia. From the outset, the intention was to process 100-500 tonne parcels of ore through the plant to test ore grades and recoveries.
Through this trial mining initiative, we will be able to convert Resources into Reserves by affirming our mining and metallurgical processes, physically testing our mining and backfilling techniques, and refining our metallurgical processes and equipment.
While initial ore throughputs were lower than expected due to a proliferation of clay material, this improved after December 30 2008, when a flotation unit was commissioned, enabling the recovery rate to increase dramatically. Once the Carbon In Leach ("CIL") plant has been commissioned, it is expected that total recoveries will rise to around 80%.
The CIL plant, which has the capacity to treat 10,000 tonnes of concentrate per month, has been purchased, and design work has been undertaken to enable commissioning of the plant to take place in April 2009. Similarly, an additional 30 tonnes per hour crushing and concentrating (18,000 tonnes per month) plant has been ordered and is expected to be commissioned during May 2009.
Sampling of trial mining is underway, including analysis of the various size fractions and flotation test work on the tailings. Following several months of surface trial mining, it is anticipated that underground trial mining will commence in the second quarter of 2009, at a rate of around 12,000 tonnes of ore per month.
The principal reasons for this exercise are to confirm that the drift and fill method is practical for the orebody, to confirm that dilution can be controlled, to confirm that backfilling methodology is cost effective and appropriate, and to confirm that our underground support design is effective.
Exploration
From an exploration point of view, 2008 was particularly satisfying and meaningful, providing the foundation for some exciting work going forward as CRG continues to gain momentum as a mining company.
Seven shafts were re-accessed and reconnaissance sampling and mapping was completed over the Consolidated Main Reef, Crown Mines and Langlaagte tenements. Preliminary mapping was also carried out on the City Deep tenement area.
Significantly, there was confirmation of un-mined mineralised reefs and pillars through a comprehensive underground surveying and sampling programme. Reconnaissance drilling also took place on pyritic quartzites at the Village Main and City Deep tenements.
On February 29, 2008, we upgraded our Indicated Resources by 932,000 ounces to 22.4 million ounces, and our Inferred Resources by 828,000 ounces to 13.2 million ounces. Our total Resource was upgraded by 1.8 million ounces to 35.6 million ounces. An important feature of this resource upgrade was that an additional 530,000 ounces of the total was identified between the surface and 200 metres below the surface.
Through our concentrated exploration programme, several initial production slots and surface targets were identified during the year - including slots 2, 3, 4, 5, 7, 8, 9 and 14. Slot 8 at the Consolidated Main Reef tenement was chosen as the site for our first trial mining exercise.
As a result of ongoing reconnaissance mapping and trenching, un-mined sections of the North Reef and Main Reef were identified and un-mined duplicated sections of the Bird and Kimberley Reefs - due to faulting - were also identified. Large sections of un-worked Elsburg Reef were located towards the southern boundary of the CMR, Crown Mines and City Deep ("3C's") tenement areas.
Importantly, this all adds up to good potential for additional tonnages through the discovery of mineralised halos in the hanging wall and footwall of conglomerate bands found in the Main Reef package. There is also leaching potential.
In addition, exploration activity has established that there are viable grades in the soils, that there is uncomplicated mineralogy in the ore bodies, and that gold bearing ore exists outside of the reef horizons in disseminated pyrite, mineralised halos and grit bands, boosting the potential for an increase in mineable resources.
Exploration during 2009 will focus on a variety of activities, including surface drilling (grade control and resource drilling), pyritic quartzites, underground drilling, bulk sampling, regional mapping and ground geophysics, all of which play a vital role in assisting us to build up a strong and sustainable resource base for the future.
Significantly, we are in the process of converting Resources into Reserves and we expect to release our first reserve statement by the beginning of April 2009.
Water
As a member of the Central Basin Environmental Corporation - which also comprises DRDGold Limited and West Wits Mining Limited with the Government of South Africa being an interested party - CRG will be contributing towards the building of a pumping station, which is expected to be located around 600 metres below surface. This is largely the result of DRDGold's decision to stop pumping water (due to two fatalities at its East Rand Proprietary Mines' South West Vertical Shaft 1), as from early October last year.
Work on the new pumping station will begin in early 2009 and is expected to be completed in late 2010. As a result of the pumping station, water levels in CRG's affected tenements, will be maintained at levels of 400-500 metres below the surface, enabling our operations to be conducted normally and safely for the next few years.
We have also begun investigating installing a pump station in other areas that will assist in dropping the water levels further.
Safety
Since the Company's inception in 2006, we at CRG have placed a major emphasis on safety in everything that we do throughout our operations. There is never room for complacency, and we are always striving to maintain an accident and injury free environment in an industry which is more dangerous than most.
It was thus with great pride that we achieved an important safety milestone in December 2008 - one million man hours without any lost time injuries. Significantly, this notable safety achievement occurred during a period when we were heavily involved in re-accessing and re-equipping shafts - potentially dangerous and hazardous work - and comprehensive drilling and exploration operations.
We are extremely gratified to have achieved this milestone as the safety of our employees and contractors is the Group's paramount objective. Maintaining safety at our operations will continue to be at the heart of all of our activities, as we move into our commercial mining phase.
Granting of New Order Prospecting Rights
On February 25, 2009, CRGSA received notification from the DME that applications for transfers of New Order Mining and Prospecting Rights in terms of Section 11 of South Africa's Minerals and Petroleum Resources Development Act, 2002, had been approved for seven of the Group's exploration tenements.
This is a significant step forward for us as the contiguous nature of the Rights granted will enable us to optimise the development and production schedules over the entire area.
Summary
Just as 2008 was a momentous year for the Company, 2009 should be equally important, as it will test our mining techniques and herald our arrival as a viable and sustainable commercial producer of gold.
As stated in the Prospectus, our aim is to be producing gold at an annualised rate of 100,000 ounces by the end of 2009. This aim will be aided by the acquisition of additional crushing and concentrating plants, which will take our ore processing and crushing capacity to around 150 tonnes per hour, by the end of the year.
In line with the economic slowdown and credit crunch that has impacted world financial markets, we have realigned the business to ensure that our current financial resources will be able to support a sustainable cash positive situation at a production rate of 100,000 ounces per year without us having to seek further capital.
CRG has come a long way in a short space of time in gold mining terms and during 2009 we expect to make considerable progress towards laying the foundation for growing in the years that lie ahead.
It is worth noting that at the time the Company was conceptualising its projects and activities, the gold price was approximately US$650 an ounce and the exchange rate was ZAR7=US$1. In the middle of February 2009, the gold price was around US$970 an ounce while the exchange rate was above ZAR10=US$1.
Thanks
I would in particular like to pay tribute to my predecessor, Greg James, for the huge role he played in getting CRG to the vital production stage. He has left a very strong legacy and created a strong foundation from which the Company can build its future. A special mention must also be made of Riccardo Vittino, who was our Financial Director until the middle of 2008, and who also contributed significantly to CRG's progress. My sincere thanks must go to everyone - staff, shareholders, contractors, community members and other stakeholders - who has played a role in getting the Company and the rest of the Group to where they are today.
Johan du Toit
Chief Executive Officer
Group and Company Balance Sheets as at 31 December 2008
|
Group |
Company |
|||||||
|
2008 |
2007 |
2008 |
2007 |
|||||
|
Notes |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
||||
|
NON CURRENT ASSETS |
||||||||
|
Property, plant and equipment |
2 |
10,458 |
3,045 |
- |
- |
|||
|
Investment in subsidiaries |
- |
- |
8,174 |
5,348 |
||||
|
Loans receivable |
3 |
5,205 |
6,279 |
84,350 |
41,834 |
|||
|
15,663 |
9,324 |
92,524 |
47,182 |
|||||
|
CURRENT ASSETS |
||||||||
|
Security deposits and guarantees |
4 |
6,095 |
2,073 |
576 |
860 |
|||
|
Prepayments and other receivables |
5,332 |
1,140 |
152 |
905 |
||||
|
Inventories |
732 |
- |
- |
- |
||||
|
Cash and cash equivalents |
69,601 |
149,195 |
66,089 |
147,881 |
||||
|
81,760 |
152,408 |
66,817 |
149,646 |
|||||
|
TOTAL ASSETS |
97,423 |
161,732 |
159,341 |
196,828 |
||||
|
EQUITY |
||||||||
|
Equity attributable to holders of the parent |
||||||||
|
Share capital |
5 |
5,023 |
5,017 |
5,023 |
5,017 |
|||
|
Share premium |
191,406 |
191,406 |
191,406 |
191,406 |
||||
|
Share-based compensation reserve |
26,429 |
18,153 |
26,429 |
18,153 |
||||
|
Treasury shares |
6 |
(4) |
(31) |
- |
- |
|||
|
Foreign currency translation reserve |
(42,900) |
(9,312) |
(66,203) |
(8,014) |
||||
|
Accumulated losses |
(92,490) |
(52,711) |
2,391 |
(10,574) |
||||
|
87,464 |
152,522 |
159,046 |
195,988 |
|||||
|
Minority interest in equity |
- |
- |
- |
- |
||||
|
TOTAL EQUITY |
87,464 |
152,522 |
159,046 |
195,988 |
||||
|
NON CURRENT LIABILITIES |
||||||||
|
Environmental rehabilitation and other provisions |
244 |
- |
- |
- |
||||
|
Operating lease liability |
41 |
28 |
- |
- |
||||
|
Borrowings |
46 |
105 |
- |
- |
||||
|
331 |
133 |
- |
- |
|||||
|
CURRENT LIABILITIES |
||||||||
|
Trade and other payables |
3,758 |
2,660 |
295 |
840 |
||||
|
Loan payable |
5,205 |
6,279 |
- |
- |
||||
|
Environmental rehabilitation and other provisions |
324 |
- |
- |
- |
||||
|
Taxation payable |
310 |
92 |
- |
- |
||||
|
Operating lease liability |
2 |
11 |
- |
- |
||||
|
Borrowings |
29 |
35 |
- |
- |
||||
|
9,628 |
9,077 |
295 |
840 |
|||||
|
TOTAL LIABILITIES |
9,959 |
9,210 |
295 |
840 |
||||
|
TOTAL EQUITY AND LIABILITIES |
97,423 |
161,732 |
159,341 |
196,828 |
||||
Group and Company Income Statement for the years ended 31 December 2008 and 31 December 2007
|
Group |
Company |
|||||||
|
2008 |
2007 |
2008 |
2007 |
|||||
|
Notes |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
||||
|
Other income and gains |
252 |
415 |
6,093 |
1,242 |
||||
|
Employee benefits expense |
10 |
(7,809) |
(4,049) |
- |
- |
|||
|
Directors' emoluments |
7, 10 |
(9,830) |
(10,084) |
(4,576) |
(4,849) |
|||
|
Other share-based payments |
- |
(10,958) |
- |
(8,442) |
||||
|
Depreciation |
(1,210) |
(525) |
- |
- |
||||
|
Operating lease payments |
(809) |
(622) |
(189) |
(101) |
||||
|
Exploration expenditure |
(20,310) |
(14,628) |
(200) |
(55) |
||||
|
Other expenses |
(6,043) |
(5,880) |
(3,089) |
(2,559) |
||||
|
Operating loss |
(45,759) |
(46,331) |
(1,961) |
(14,764) |
||||
|
Interest receivable |
7,051 |
2,333 |
14,926 |
4,190 |
||||
|
Finance costs |
(853) |
(495) |
- |
- |
||||
|
Loss before income tax |
(39,561) |
(44,493) |
12,965 |
(10,574) |
||||
|
Income tax expense |
(218) |
(92) |
- |
- |
||||
|
Loss for the year |
(39,779) |
(44,585) |
12,965 |
(10,574) |
||||
|
Loss is attributable to: |
||||||||
|
Minority interest |
- |
- |
||||||
|
Equity holders of the parent |
(39,779) |
(44,585) |
||||||
|
(39,779) |
(44,585) |
|||||||
|
Shares in issue |
246,919,650 |
246,599,650 |
||||||
|
Weighted average number of ordinary shares in issue |
245,387,150 |
180,935,078 |
||||||
|
Basic loss per share (cents) |
(16.21) |
(24.64) |
||||||
|
Headline loss per share (cents) |
(16.21) |
(24.43) |
||||||
|
Diluted loss per share (cents) |
(16.21) |
(24.64) |
||||||
Group and Company Statement of Changes in Equity for the years ended 31 December 2008 and 31 December 2007
|
Attributable to equity holders of the Parent Company |
|||||||||||||
|
Ordinary Share Capital |
Share Premium |
Merger Reserve |
Share-based Compensation Reserve |
Treasury shares |
|||||||||
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|||||||||
|
Balance at 31 December 2006 |
- |
- |
20,533 |
- |
- |
||||||||
|
Shares issued by subsidiaries during the year |
- |
- |
9,869 |
- |
- |
||||||||
|
Share-based payments by subsidiary - consulting fees |
- |
- |
2,606 |
- |
- |
||||||||
|
Shares and options issued to employees and directors of subsidiary |
- |
- |
- |
18,153 |
- |
||||||||
|
Corporate reorganisation |
3,392 |
29,452 |
(33,008) |
- |
(12) |
||||||||
|
Foreign currency translation |
- |
- |
- |
- |
- |
||||||||
|
Net income recognised directly in equity |
3,392 |
29,452 |
- |
18,153 |
(12) |
||||||||
|
Loss for the year |
- |
- |
- |
- |
- |
||||||||
|
Total recognised income and expense for the period |
3,392 |
29,452 |
- |
18,153 |
(12) |
||||||||
|
Shares issued during the year |
245 |
18,110 |
- |
- |
- |
||||||||
|
Shares issued on listing |
1,262 |
143,844 |
- |
- |
- |
||||||||
|
Treasury shares issued to Employee Share Trust |
118 |
- |
- |
- |
(118) |
||||||||
|
Treasury shares issued to directors and employees |
- |
- |
- |
- |
99 |
||||||||
|
Balance at 31 December 2007 |
5,017 |
191,406 |
- |
18,153 |
(31) |
||||||||
|
Shares and options issued to employees and directors of subsidiary |
- |
- |
- |
8,276 |
- |
||||||||
|
Foreign currency translation |
- |
- |
- |
- |
- |
||||||||
|
Net income recognised directly in equity |
5,017 |
191,406 |
- |
26,429 |
(31) |
||||||||
|
Loss for the year |
- |
- |
- |
- |
- |
||||||||
|
Total recognised income and expense for the period |
5,017 |
191,406 |
- |
26,429 |
(31) |
||||||||
|
Treasury shares issued to Employee Share Trust |
6 |
- |
- |
- |
(6) |
||||||||
|
Treasury shares issued to directors and employees |
- |
- |
- |
- |
33 |
||||||||
|
Balance at 31 December 2008 |
5,023 |
191,406 |
- |
26,429 |
(4) |
||||||||
|
Attributable to equity holders of the Parent Company |
|||||||||||||
|
Foreign Currency Translation Reserve |
Accumulated Losses |
Total |
Minority Interest |
Total Equity |
|||||||||
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
US$'000 |
|||||||||
|
Balance at 31 December 2006 |
704 |
(10,667) |
10,570 |
- |
10,570 |
||||||||
|
Shares issued by subsidiaries during the year |
- |
- |
9,869 |
- |
9,869 |
||||||||
|
Share-based payments by subsidiary - consulting fees |
- |
- |
2,606 |
- |
2,606 |
||||||||
|
Shares and options issued to employees and directors of subsidiary |
- |
- |
18,153 |
- |
18,153 |
||||||||
|
Corporate reorganisation |
- |
2,541 |
2,365 |
- |
2,365 |
||||||||
|
Foreign currency translation |
(10,016) |
- |
(10,016) |
- |
(10,016) |
||||||||
|
Net income recognised directly in equity |
(9,312) |
(8,126) |
33,547 |
- |
33,547 |
||||||||
|
Loss for the year |
- |
(44,585) |
(44,585) |
- |
(44,585) |
||||||||
|
Total recognised income and expense for the period |
(9,312) |
(52,711) |
(11,038) |
- |
(11,038) |
||||||||
|
Shares issued during the year |
- |
- |
18,355 |
- |
18,355 |
||||||||
|
Shares issued on listing |
- |
- |
145,106 |
- |
145,106 |
||||||||
|
Treasury shares issued to Employee Share Trust |
- |
- |
- |
- |
- |
||||||||
|
Treasury shares issued to directors and employees |
- |
- |
99 |
- |
99 |
||||||||
|
Balance at 31 December 2007 |
(9,312) |
(52,711) |
152,522 |
- |
152,522 |
||||||||
|
Shares and options issued to employees and directors of subsidiary |
- |
- |
8,276 |
- |
8,276 |
||||||||
|
Foreign currency translation |
(33,588) |
- |
(33,588) |
- |
(33,588) |
||||||||
|
Net income recognised directly in equity |
(42,900) |
(52,711) |
127,210 |
- |
127,210 |
||||||||
|
Loss for the year |
- |
(39,779) |
(39,779) |
- |
(39,779) |
||||||||
|
Total recognised income and expense for the period |
(42,900) |
(92,490) |
87,431 |
- |
87,431 |
||||||||
|
Treasury shares issued to Employee Share Trust |
- |
- |
- |
- |
- |
||||||||
|
Treasury shares issued to directors and employees |
- |
- |
33 |
- |
33 |
||||||||
|
Balance at 31 December 2008 |
(42,900) |
(92,490) |
87,464 |
- |
87,464 |
||||||||
Group and Company Cash Flow Statement for the years ended 31 December 2008 and 31 December 2007
|
Group |
Company |
||||||
|
2008 |
2007 |
2008 |
2007 |
||||
|
US$'000 |
US$'000 |
US$'000 |
US$'000 |
||||
|
CASH FLOWS FROM OPERATING ACTIVITIES |
|||||||
|
(Loss)/Profit before tax |
(39,561) |
(44,493) |
12,965 |
(10,574) |
|||
|
Adjusted for: |
|||||||
|
Depreciation |
1,210 |
525 |
- |
- |
|||
|
Employment benefit expenditure (Share-based payments) |
8,769 |
20,708 |
3,755 |
12,718 |
|||
|
Loss on disposal of property, plant and equipment |
1 |
375 |
- |
- |
|||
|
Net gain on foreign exchange |
(165) |
(316) |
(6,040) |
(989) |
|||
|
Increase in operating lease liability |
18 |
38 |
- |
- |
|||
|
Sundry income |
- |
(4) |
- |
- |
|||
|
Interest receivable |
(6,225) |
(2,333) |
(5,847) |
(4,190) |
|||
|
Finance costs |
27 |
495 |
- |
- |
|||
|
Changes in working capital |
|||||||
|
(Increase)/decrease in prepayments and other receivables |
(5,144) |
(246) |
646 |
(906) |
|||
|
Increase in inventory |
(852) |
- |
- |
- |
|||
|
Increase/(decrease) in trade and other payables |
2,107 |
2,402 |
(402) |
(840) |
|||
|
Increase in provisions |
660 |
- |
- |
- |
|||
|
Cash flows used in operations |
(39,155) |
(22,849) |
5,077 |
(4,781) |
|||
|
Interest receivable |
6,225 |
2,333 |
5,847 |
4,190 |
|||
|
Finance costs |
(27) |
(495) |
- |
- |
|||
|
Sundry income |
- |
4 |
- |
- |
|||
|
Net cash (used in)/from operating activities |
(32,957) |
(21,007) |
10,924 |
(591) |
|||
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|||||||
|
Purchases of property, plant and equipment |
(10,856) |
(1,902) |
- |
- |
|||
|
Proceeds from disposal of property, plant and equipment |
18 |
132 |
- |
- |
|||
|
Increase in loans receivable |
- |
- |
(69,219) |
(16,306) |
|||
|
Net cash used in investing activities |
(10,838) |
(1,770) |
(69,219) |
(16,306) |
|||
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|||||||
|
Proceeds from borrowings |
- |
141 |
- |
- |
|||
|
Repayment of borrowings |
(30) |
- |
- |
- |
|||
|
(Increase)/decrease in security deposits |
(5,347) |
(1,795) |
60 |
(860) |
|||
|
Proceeds from issuance of shares |
2 |
172,431 |
6 |
172848 |
|||
|
Net cash (used in)/from financing activities |
(5,375) |
170,777 |
66 |
171,,988 |
|||
|
Net (decrease)/increase in cash and cash equivalents |
(49,170) |
148,000 |
(58,229) |
155,091 |
|||
|
Cash and cash equivalents at beginning of year |
149,195 |
7,530 |
147,881 |
- |
|||
|
Effects of exchange rate movements on cash balances |
(30,424) |
(6,335) |
(23,563) |
(7,210) |
|||
|
Cash and cash equivalents at end of year |
69,601 |
149,195 |
66,089 |
147,881 |
|||
Notes:
Basis of presentation and general information
1. General information
These are the non statutory financial statements, extracted from the Group and Company annual financial statements for the year ended 31 December 2008.
Central Rand Gold Limited is a Guernsey incorporated company and it is also registered in South Africa as an external company. One of its subsidiaries, Central Rand Gold (Netherland Antilles) N.V, was incorporated in the Netherlands Antilles. CRG's operating subsidiary is Central Rand Gold South Africa. CRG has a primary listing on the London Stock Exchange ('LSE') and a secondary listing on JSE Limited ('JSE').
Legally, Central Rand Gold Limited ("CRG Ltd") complies with the Company laws of its place of incorporation being Guernsey and the Company laws of the place of its external registration being South Africa. By virtue of its LSE listing, CRG Ltd experiences the impact of UK Company laws and because one of its subsidiaries, Central Rand Gold (Netherlands Antilles) N.V. ("CRGNV"), is incorporated in the Netherlands Antilles, the Group is also impacted by the company laws of the Netherlands Antilles.
The Group and Company annual financial statements for the year ended 31 December 2008 were approved for issue on 24 March 2009. The auditor has issued their unqualified auditors' opinions on the Group and Company financial statements for the year ended 31 December 2008.
Accounting policies
The Group and Company annual financial statements have been prepared in accordance with International Financial Reporting Standards ('IFRS') and Interpretations.
The accounting policies have been consistently applied to all years presented.
Foreign currency rates
The US Dollar rates of exchange applicable to the period are as follows:
|
Period ended 31 December 2008 |
Period ended 31 December 2007 |
||||||
|
Closing |
Average |
Closing |
Average |
||||
|
South African Rand (ZAR) |
0.10601 |
0.12327 |
0.14800 |
0.14435 |
|||
|
British Pound (£) |
1.44792 |
1.85518 |
1.99730 |
2.02969 |
|||
2. Property, plant and equipment
During the year, the Group spent US$10,856,280 on crushing and concentrating plant and equipment, on renovations of the Head Office and computer equipment and software to increase office capacity and on equipment to continue with the shaft re-access programme.
3. Loan receivable
Puno Gold Investments (Proprietary) Limited
Since the last report for the interim results for the six months ended June 30, 2008 there has been no resolution to the dispute relating to procedural breaches of the Central Rand Gold South Africa (Proprietary) Limited ('CRG SA') shareholders agreement between CRG SA and our BEE partner, Puno Gold Investments (Proprietary) Limited. During 2007, the dispute arose between the shareholders of CRG SA in regard to the allocation of intercompany loans which fund the budget and work programme and the incurring of, and level of, certain costs by CRG SA. As per the provisions of the shareholders agreement, the Chief Executive Officers and subsequently the Chairmen of both Puno and CRG SA met in an effort to amicably resolve the matter. These meetings have unfortunately proven to be unsuccessful. On 16 February 2009, CRG NV, the direct holding Company of CRG SA, exercised the call option granted to it in terms of the shareholders agreement and gave Puno 90 days notice, to acquire Puno's entire interest in CRG SA. The Directors believe that this will not have any material consequences in respect of the consolidated accounts of the Group as the 26% shareholding will be held in trust pending the outcome of discussions relating to new BEE arrangements. Notwithstanding this position, we have pending the outcome of any dispute allocated 100% of the intercompany balances directly through from the Company to CRG SA. This additional 26% of intercompany debt excluding interest amounts to ZAR 114,139,770 (US$12,099,957) between 1 January and 31 December 2008 (ZAR 29,541,700 (US$4,278,795) between June 2007 and 31 December 2007).
The loan payable to Puno Gold Investments (Proprietary) Limited contains the same allocations referred to above.
4. Security Deposits and Guarantees
During the year, an additional guarantee of US$ 4,329,521 was issued to the South African Department of Minerals as a guarantee for the rehabilitation of land disturbed by mining operations.
5. Share Capital and share premium
During the year under review 320,000 shares were issued to the Employee Share Trust at par value.
6. Treasury shares
During the year the Company issued 320,000 treasury shares at a value of £0.01 per share to the Employee Share Trust. 100,000 shares to Mr M McMahon vested on 19 June 2008 and 20,000 shares to Mr K Kunene vested on 9 May 2008. The balance of the 200,000 shares for Mr M McMahon vest as follows: 100,000 will vest on 29 April 2009 and 100,000 on 29 April 2010.
On 1 November 2008, a further 1,535,000 shares were issued to directors and senior management in accordance with the share scheme. The shares were issued at US$ 0.01.
7. Director's emoluments
Three directors of the Group, Mr S Ramokgopa, Mr REM Vittino and Mr G James, resigned during the period.
Mr S Ramokgopa received a cash termination benefit of US$ 179,851 and retained his share options granted to him on 31 October 2007. Due to his resignation the future share options were recognised on the date of his resignation. The value of the accelerated share-based payments for these share options is US$ 1,076,293.
Mr REM Vittino received a cash termination benefit of US$ 157,474 and retained the first and second tranches of his share options. The final portion of his share options granted were forfeited (821,999 shares). Due to his resignation the future share options were recognised on the date of his resignation. The value of the accelerated share-based payments for these share options is US$ 471,002.
Mr G James retained the first and second tranches of his share options. The final portion of his share options granted were forfeited (1,643,998 shares). Due to his resignation the future share options were recognised on the date of his resignation. The value of the accelerated share-based payments for these share options is US$ 503,117.
8. Commitments
|
Group |
2008 US$'000 |
2007 US$'000 |
|
a) Purchase of shares in companies |
||
|
Purchase of shares of Ferreira Estate and Investment Company Limited ('FEIC') |
1,000 |
1,000 |
|
b) Various contractual amounts payable |
||
|
Fees payable to iProp Limited for prospecting |
500 |
500 |
|
Option fees payable to Gravlotte Mines Limited |
100 |
100 |
|
Fees payable to Department of Minerals and energy within one year |
3 |
4 |
|
Plant and equipment contracted for |
6,295 |
- |
|
c) Donations payable |
||
|
Donations payable to Umkhonto we Sizwe Military Veterans Association (MKMVA) |
83 |
- |
9. Segment Reporting
The Group operates primarily in one business and geographical segment, being the acquisition of mineral rights and data gathering in the Central Rand goldfield of South Africa. Accordingly, no analysis of segment revenue, results or net assets has been presented.
10. Share-based payments
Grant of options in the Company
During the year further share options were granted to selected employees. The options granted are summarized below.
|
Vesting |
Strike Price |
Allocation |
Number of share options granted |
||||
|
555,556 on the first anniversary of admission being 8 November 2008, 555,556 on the second anniversary of admission and the balance on the third anniversary of admission |
Exercise price escalates in accordance with the vesting of tranches. One third at Placing Price of £1.25, one third at 150% of Placing Price and one third at 200% of Placing Price |
Selected staff |
1,666,667 |
||||
Grant of shares in the Company
During the year the Company granted the following shares to Directors and Senior Managers of the Group.
|
Name |
Purchase Date |
Number of shares |
Purchase Price |
Release Period |
|
Directors |
100,000 on grant date, 100,00 on 1st anniversary of the appointment date and the remainder on the 2nd anniversary of the appointment date |
|||
|
Mr M McMahon |
27 June 2008 |
300,000 |
£0.01 |
|
|
Senior Management |
||||
|
Mr K Kunene |
9 May 2008 |
20,000 |
£0.01 |
20,000 on grant date |
Issued on behalf of: Central Rand Gold Limited
Date: 25 March 2009
Related Shares:
Central Rand Gold