Firm Placing and Placing and Open Offer

RNS Number : 1343N

Central Rand Gold Limited

04 June 2010

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN. PLEASE SEE THE IMPORTANT NOTICE BELOW

4 June 2010

Central Rand Gold Limited

("Central Rand Gold" or "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 2007/019223/10)

ISIN: GG00B24HM601

Share code on LSE: CRND

Share code on JSE: CRD

 

Firm Placing of 649,042,335 New Shares and Placing and Open Offer of 679,029,025 New Shares of 1 pence each, in each case at 2 pence (ZAR 0.224) per New Share and Notice of Extraordinary General Meeting

A Prospectus containing details of the Firm Placing and Placing and Open Offer and convening an Extraordinary General Meeting to approve certain matters necessary to implement the Firm Placing and Placing and Open Offer is expected to be posted to Shareholders shortly and will be available on the Company's website, www.centralrandgold.com.

 

Highlights

● Net $35m fund raise to achieve a positive cash generating operation by the end of 2013

● Trial mining successfully completed, de-risking the CMR West gold project

● CMR West Reserve base 482,000oz

● Strategy to ramp up additional gold production from CRG's contiguous license areas along strike remains intact

 

The presentation utilised by the Company as part of its recent institutional road show is available on the Company's website: www.centralrandgold.com.

 

Details of the Firm Placing and Placing and Open Offer ("the Capital Raising")

Under the Firm Placing and Placing and Open Offer, Central Rand Gold intends to issue 1,328,071,380 New Shares, comprising:

·; 649,042,355 Firm Placed Shares (representing gross proceeds of £12,980,847 million), pursuant to the Firm Placing; and

·; 679,029,025 Open Offer Shares (representing gross proceeds of £13,580,580 million) to be made available to Qualifying Shareholders pursuant to the Open Offer.

Under the Open Offer, Qualifying Shareholders have a basic entitlement of 5 Open Offer Shares for every 2 Existing Shares registered in their name on the Record Date and are also being offered the opportunity, provided they take up their Open Offer Entitlement in full, to apply for a maximum number of additional Open Offer Shares equal to the number of Open Offer Shares comprised in their Open Offer Entitlement through the Excess Application Facility.

 

Johan du Toit, Chief Executive, said:

"Having spent the last year establishing the optimum mine plan for developing CRG's substantial asset base through trial mining, we now have the required working capital to commence commercial production from our first mine, CMR West. I would like to thank our long term shareholders for their support and welcome our new shareholders. Although the past 18 months have seen many challenges for CRG, the successful placing means that we can start exploiting our resource base to create value for all stakeholders."

 

For further information, please contact:

 

Central Rand Gold +27 (0) 11 551 4000

Johan du Toit / Patrick Malaza

 

Evolution Securities Limited +44 (0) 20 7071 4300

Simon Edwards / Chris Sim / Neil Elliot

 

Macquarie First South Advisers (Pty) Limited +27 (0) 11 583 2000

Annerie Britz / Melanie de Nysschen / Manisha Ramlakhan

 

Buchanan Communications +44 (0) 20 7466 5000

Bobby Morse / Katharine Sutton

 

Jenni Newman Public Relations (Pty) Limited +27 (0) 11 506 7300

Jenni Newman / Megann Outram

 

Evolution Securities, which is authorised and regulated in the United Kingdom by the FSA and Macquarie First South, which is authorised and regulated by the South African Financial Services Board, are acting exclusively for the Company and no one else in connection with the Capital Raising and will not regard any other person (whether or not a recipient of this announcement) as their client in relation to the Capital Raising and will not be responsible to anyone other than the Company for providing the protections afforded to their respective clients or for providing advice in relation to the Capital Raising or any matters referred to in this announcement.

Macquarie is acting as a financial adviser to the Company and not as an underwriter, in relation to the Capital Raising.

This announcement has been issued by, and is the sole responsibility of, Central Rand Gold Limited. Apart from the responsibilities and liabilities, if any, which may be imposed by the FSMA, neither Evolution or Macquarie nor any of their affiliates, parent undertakings, subsidiary undertakings or subsidiaries of their parent undertakings or any of their respective directors, officers, employees or advisers or any other person accepts any responsibility whatsoever and makes no representation or warranty, express or implied, for or in respect of the contents of this announcement or as to the accuracy or completeness or fairness of the information or opinions contained in this announcement and, without prejudice to the generality of the foregoing, no responsibility or liability is accepted by any of them for any such information or opinions or for any errors or omissions.

 

 

Cautionary note regarding forward looking statements

This announcement contains forward-looking statements which reflect the current view of the Company or, as appropriate, of the Directors with respect to financial performance, business strategy, plans and objectives of management for future operations (including development plans relating to the Group's products and services).

These forward-looking statements relate to the Group and the sectors and industries in which the Group operates. Statements which include the words "expects", "intends", "plans", "believes", "projects", "anticipates", "will", "targets", "aims", "may", "would", "could", "continue" and similar statements of a future or forward-looking nature identify forward-looking statements for purposes of the US federal securities laws or otherwise.

All forward-looking statements included in this announcement address matters that involve known and unknown risks and uncertainties. Accordingly, there are or will be important factors that could cause the Group's actual results to differ materially from those indicated in these statements. These factors include but are not limited to those described in the section of the Prospectus on Risk Factors, which should be read in conjunction with the other cautionary statements that are included in this announcement. Although the Company and the Directors have attempted to identify all factors that may influence the accuracy of any forward-looking statement there remain factors which are impossible to foresee and which may cause results or events to differ materially from those predicted. Any forward-looking statements in this announcement reflect the Company's and Directors' current views with respect to future events and are subject to these and other risks, uncertainties and assumptions relating to the Group's operations, results of operations, growth strategy and liquidity.

Any forward-looking statements speak only as of the date of this announcement. Subject to any obligations under the Prospectus Rules, the Listing Rules, the Disclosure and Transparency Rules and the JSE Listings Requirements, the Company undertakes no obligation to update publicly or review any forward-looking statement, whether as a result of new information, future developments or otherwise. All subsequent written and oral forward-looking statements attributable to the Company, the Directors, or any member of the Group or individuals acting on behalf of the Group are expressly qualified in their entirety by this paragraph.

Prospective investors should specifically consider the factors identified in the prospectus which could cause actual results to differ before making an investment decision.

 

Important notice

THIS ANNOUNCEMENT IS AN ADVERTISEMENT. IT IS NOT A PROSPECTUS AND INVESTORS SHOULD NOT SUBSCRIBE FOR OR PURCHASE ANY SHARES REFERRED TO IN THIS ANNOUNCEMENT EXCEPT ON THE BASIS OF INFORMATION CONTAINED IN THE PROSPECTUS WHICH IS TO BE PUBLISHED IN DUE COURSE. THE PROSPECTUS, WHEN PUBLISHED, WILL BE MADE AVAILABLE ON CENTRAL RAND GOLD'S WEBSITE AND WILL BE AVAILABLE FOR INSPECTION AT THE UK LISTING AUTHORITY'S DOCUMENT VIEWING FACILITY.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this announcement.

 

General

This announcement does not constitute an offer to sell, or the solicitation of an offer to subscribe for or buy, New Shares in any jurisdiction in which such offer or solicitation is unlawful and is not for distribution in or into the Restricted Territories. In particular, the New Shares offered by this prospectus have not been and will not be registered under the applicable securities laws of the United States of America, Canada, or Japan and, may not be offered or sold directly, or indirectly, in or into the United States of America, Canada, or Japan, or to any person resident in the United States of America, Canada, or Japan.

No action has been or will be taken in any jurisdiction, other than the United Kingdom and South Africa that would permit a public offering of the New Shares, or possession or distribution of this announcement or any other offering material, in any country or jurisdiction where action for that purpose is required. Accordingly, the New Shares may not be offered or sold, directly or indirectly, and neither this announcement nor any other offering material or advertisement in connection with the New Shares may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any applicable rules and regulations of any such country or jurisdiction.

The distribution of this announcement and the offer of the New Shares in certain jurisdictions may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about and observe any restrictions, including those set out in the Prospectus. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This announcement does not constitute an offer to subscribe for or buy any of the New Shares offered hereby to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction.

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, THE REPUBLIC OF SOUTH AFRICA, AUSTRALIA, CANADA OR JAPAN. PLEASE SEE THE IMPORTANT NOTICE IN THIS ANNOUNCEMENT

 

Central Rand Gold Limited

("Central Rand Gold" or "CRG" or the "Company")

 

Firm Placing of 649,042,355 New Shares and Placing and Open Offer of  679,029,025 New Shares of 1 pence each, in each case at 2 pence (ZAR0.224) per New Share and Notice of Extraordinary General Meeting

 

1. Introduction and Overview

CRG proposes to undertake the Capital Raising to raise approximately £24 million (net of expenses) by the issue of 1,328,071,380 New Shares (representing approximately 488.96 per cent. of the existing issued share capital and 83.02 per cent. of the enlarged share capital immediately following completion of the Capital Raising) at the Issue Price of 2 pence per New Share. 649,042,355 New Shares will be issued through the Firm Placing and 679,029,025 New Shares will be issued through the Placing and Open Offer representing 238.96 per cent. and 250 per cent. respectively of the current issued share capital of the Company. The purpose of the Capital Raising is to fund Central Rand Gold's transition from the successful completion of its trial mining and processing stage to the establishment of the first sustainable, profitable and cash positive mine on its extensive mineral holdings.

The Issue Price of 2 pence (ZAR0.224) per New Share represents a discount of approximately 57 per cent. to the Closing Price of 4.6 pence per Share on 3 June 2010 (being the last dealing day prior to the announcement of the Capital Raising). This discount has been set based on the Directors' assessment of market conditions following discussions with a number of institutional investors and has been determined in order to obtain the level of funds required by the Company under the Capital Raising.

Mark Creasy, who holds approximately 10.40 per cent. of the Company's Shares and is deemed to be a Related Party under the Listing Rules due to him being a Substantial Shareholder, has undertaken to take up 16,771,120 New Shares in the Firm Placing and 17,545,970 New Shares pursuant to his entitlements under the Open Offer. Mr Creasy has also undertaken to vote in favour of the Resolutions at the Extraordinary General Meeting with the exception of Resolution 1. Resolution 1 relates to the approval of the Creasy Firm Placing, which when aggregated with Mr Creasy's participation in the Cash Box Placing is a related party transaction requiring the approval of the Independent Shareholders under the Listing Rules. Mr Creasy has also undertaken to take all reasonable steps to ensure that his associates (as defined in the Listing Rules) will not vote on this resolution. As the Capital Raising is conditional on the passing of all Resolutions, if Resolution 1 is not approved by the Independent Shareholders, the Capital Raising will not proceed.

Resolution 2 relates to the approval of the Issue Price of 2 pence (ZAR0.224) per New Share and is required to enable the Directors to implement the Capital Raising, including for the purposes of the Listing Rules, because the Issue Price represents a discount of greater than 10 per cent. to the Closing Price on 3 June 2010.

Resolution 3 seeks to increase the authorised share capital of the Company to 4,000,000,000 ordinary shares of £0.01 par value each to facilitate the issue of shares under the Capital Raising.

Resolution 4(a) seeks a new authority to enable the Directors to allot equity securities for the purpose of the Capital Raising. Resolution 4(b) seeks a new authority to disapply the pre-emption rights contained in the Articles in connection with the Capital Raising. Resolution 4(c) seek to disapply the pre-emption rights to enable the Directors to allot shares for cash up to a nominal amount of £799,841.49, leaving headroom of 5 per cent. of the Enlarged Issued Share Capital, as is normal for a company on the Official List and in line with ABI guidelines. The Company does not currently have any plans to issue any Shares other than pursuant to the Capital Raising. Resolution 4 is conditional on the Placing and Open Offer Agreement having become unconditional in all respects save for any condition relating to Admission having occurred and on the passing of Resolutions 1, 2 and 3.

Pursuant to the Articles, the unalloted and unissued shares in the Company are at the disposal of the Board save that, where the Board is proposing to issue new Equity Securities, the Board must first offer such Equity Securities to Shareholders in accordance with the terms of the Articles unless such rights are first disapplied by extraordinary resolution of the Company. Accordingly an extraordinary resolution of the Company is to be proposed at the Extraordinary General Meeting disapplying the said rights of Shareholders in connection with the proposed Capital Raising.

With the exception of Michael McMahon who continues to support the Company by owning 0.08 per cent. of the current issued share capital of the Company, each of the Directors intends to take up his full entitlement to acquire New Shares in the Open Offer. In addition, Miklos Salamon has irrevocably undertaken to apply for the maximum number of New Shares to which he is entitled under the Excess Application Facility. All of the Directors have irrevocably undertaken to vote in favour of the Resolutions at the Extraordinary General Meeting. The Capital Raising is being fully underwritten by Evolution.

The Capital Raising is conditional upon, among other things, the passing of all the Resolutions at the Extraordinary General Meeting convened for 11.00 a.m. UK time on 5 July 2010 and the Placing and Open Offer Agreement becoming unconditional in all respects. The notice convening the Extraordinary General Meeting is set out at the end of the Prospectus.

 

Importance of Vote

All of the Resolutions must be passed by Shareholders at the Extraordinary General Meeting in order for the Capital Raising to proceed. Without all of the Resolutions being passed, the Board would have to consider the future financial viability of the Company in its current form and this would lead to an immediate cessation of mining and exploration activities, reduction of staff and management to a minimum level and either a piecemeal asset disposal programme (subject to the availability of willing buyers of the Company's assets) or, in the event that this is unsuccessful, outright closure of the Company as the Company would be unable to fund its ongoing activities resulting in minimal funds, if any, being available for Shareholders.

 

2. History and Background of the Company

CRG is the listed holding company for a group of companies engaged in a gold mining and exploration project that is seeking to bring commercial gold mining back to the city of Johannesburg.

The Central Rand Goldfield contains many separate and parallel ore-bodies (or reefs). The founding premise of the Company is that the now defunct gold mining companies that operated in the Central Basin of the Witwatersrand Goldfield in South Africa over the last 100 years mined only those particular ore-bodies that were economic at the time.

The "pegged rate" currency regime that came into place at the Bretton Woods Conference in July 1944, and the associated fixing of the price of gold at US$35 per ounce (which lasted until August 1971) worked against the basics of mining economics, where unit costs inevitably rise as higher grades are depleted and as mines go deeper. The "real" price of gold, since it was decoupled from the dollar in 1971 (by which time the last of the Central Rand mines were on the verge of closing) has since trebled, rendering reefs previously uneconomic at 4 to 6 g/t attractive and economically viable today.

 

The enabling features of the founding of this company were:

·; The vision and effort of the Viljoen brothers (pre-eminent geologists in Johannesburg in the 1970s and 1980's) in seeing and assessing the potential.

·; The entrepreneurial spirit and support of RQS (the corporate vehicle used to collate CRG's tenement areas).

·; Changing mineral rights legislation in South Africa, which enabled the release and commercialisation of mineral rights under new "use it or lose it" provisions.

This alignment of interest, opportunity and support led to the pronouncement of contiguous Prospecting Applications, over a strike length of approximately 40 kilometres, from Roodepoort on the West Rand, through the southern edge of Johannesburg to Germiston on the East Rand. More information on the geological background to the project is included in the prospectus.

Following the approval of the Prospecting Applications and the granting of Prospecting Rights the Company listed on the Official List of the UKLA and was admitted to trading on the Main Market of the LSE and the Main Board of JSE Limited on 8 November 2007. The IPO raised £75 million (US$150.8 million).

These funds were intended;

·; to upgrade and add to the Company's Mineral Resources;

·; to identify the optimal area to begin a new mine;

·; to obtain a New Order Mining Right including that area; and

·; to commence mining.

It was always expected, as set out in the IPO prospectus, that further funding would be required in late 2009 to accelerate the development of the Company, but there is no doubt that a combination of over-optimistic planning, disappointing mining progression early in 2009 and poor metallurgical recoveries from the opencast surface material caused the Company to be in a different position today to that envisaged at the time of the IPO.

 

3. Progress since the IPO

The Company received its first New Order Mining Right from the South African Department of Minerals and Energy on 17 September 2008. This licenses CRG to mine gold at its Consolidated Main Reef ("CMR"), Langlaagte and Crown Mines mining right. In February 2009 these New Order Mining Rights together with Prospecting Rights over six other areas were executed in terms of Section 11 of South Africa's Mineral and Petroleum Resources Development Act of 2002.

At the same time, the Company was also granted additional Prospecting Rights by the renamed Department of Mineral Resources ("DMR") - namely Western Areas A, B and E covering 58 square kilometres in the western extension of the Central Rand Basin, south of Roodepoort. This brought the number of prospecting rights accessible to the Company to six, covering a total of 178 square kilometres.

The Company has further invested in its long-term future by applying for a Prospecting Permit over a large area almost as wide as the full strike length of the Company's existing licences, and down dip of the current areas of interest, known as South Deeps.

The Company has established:

·; A JORC and SAMREC compliant Inferred and Indicated Resource of 36.7 million ounces of gold.

·; A JORC and SAMREC compliant Probable Reserve of 482,000 ounces of gold (3.73 million tonnes at 4.0g/t) within the Main Reef on the CMR tenement. This site was chosen from the overall portfolio as it represented the most immediately accessible and viable site within which to test CRG's planned mining methodology. This initial Ore Reserve Statement did not attribute any reserve figures to additional material such as sweepings and vampings, which the Directors anticipate to be significant.

To provide immediate cash flow and to provide material for commissioning and testing its metallurgical plants the Company embarked on a programme of surface opencast "slot" mining. While the mining went much to plan the difficulties of handling this clay-like material and of achieving reasonable recoveries from the oxidised and contaminated material were much underestimated. Nevertheless these difficulties and the research to overcome them had much to do with the recent optimisation of the plants, their "normal" performance at present, and a recent decision to re-commence this opencast mining while underground production builds up.

Sub-surface trial mining operations at CMR began in March 2009 with the sinking of a trackless decline shaft. Following the successful completion in March 2010 of the initial trial stoping and as run-of-mine development progresses, CRG will be able to extend this initial Ore Reserve and will also be able to establish and grow other ore reserves within areas subsequently licensed as New Order Mining Rights.

Regrettably, the Company has found itself at odds with its Broad Based Black Economic Empowerment Partner, Puno, who has 26 per cent. of CRGSA. Dispute has arisen over the funding of CRGSA, which the Directors believe is quite clearly determined in the Shareholders' Agreement of that company to be a pro rata affair. While the details of this dispute, and other issues that surround it, are described in the prospectus, Information on the Group, shareholders should note that the Company's Prospecting Rights, Mineral Rights and compliance with the relevant Mining and Empowerment legislation are not under question or threat.

 

4. Development of the Mining Method

Since the target reefs outcrop on surface, the intention was always to access the ore body via footwall (i.e. in the ground below the reef) decline shafts.

The Main Reef is the targeted reef on the initial CMR mine. It underlies the historically excavated Main Reef Leader with a parting between the two of an average of approximately one metre.

It was always CRG's intention to avoid the labour-intensive and potentially hazardous historical practice of hand-held in-stope drilling and scraper winch cleaning. Drawing on its Australian roots, CRG proposed to employ highly mechanised mining methods common in Western Australia, although largely untested in South Africa.

Initial progress when sinking the mechanised footwall access decline in early 2009 was extremely disappointing and resulted in management changes at the top level of the Company and replacement of the local contractor with Australian Contract Mining Pty Ltd. ("ACM"), a Perth based contracting company. There is no doubt that this hiatus, which took six months to identify, analyse and correct, cost time and money and was the major factor in the Company requiring further funds before its trial-mining programme was complete.

Progress on-mine has dramatically improved since ACM commenced operations. The footwall decline development rates, in terms of metres advanced per month, have improved four-fold from less than one half of that required by the mine plan to almost double.

Following the management and contractor changes in mid 2009, the incoming Head of Operations, Don Harper, an experienced Australian hard-rock mining engineer, and his team determined that stoping of the relatively narrow reef seams that occur on the CMR property is best effected by a methodology known as "long-hole stoping". This technology specifically avoids the hazards of mining below previously worked out stopes.

This methodology, which is common in Australia, but is untested on the Witwatersrand was accepted by Snowden as economically viable and efficient within the CMR tenement and formed the basis of the CPR report, which underpinned the Company's first JORC and SAMREC compliant Ore Reserve announced in August 2009.

It was specifically concluded that "trial mining" of the selected methodology, at an appropriate (and relatively cautious) size was necessary. While this deviation from the main development plan set out at the time of the IPO was disappointing, the success of this process has been significant and the Directors believe that it positions the Company for a solid mining future.

 

5. Board and Management Changes

The demands on Directors and Executives, and the required skills sets, change as Companies move from concept through design to delivery.

The previous Chairman, Alastair Walton, and Non-Executive Director Bob Kirkby, having led the Company from before the IPO and having guided the Group through to "proof of concept" stage concluded that a Board re-alignment in favour of local skills and operational expertise was now appropriate. On release of the announcement dated 14 April 2010 covering the success of trial mining and presentation of an updated CPR by Snowden they accordingly stood down from the Board. The grateful thanks of the Board and the management team go with them.

The Board will move forward one less in number, with only one replacement in the form of Jerome Brauns, who joined formally on 14 April 2010. Jerome is a prominent South African advocate and a member of the Black Lawyer's Association. It is intended that Jerome succeed Michael McMahon as Chairman of CRGSA.

In December 2008 Alastair voluntarily reduced his Chairman's Fees by one third. Certainly until the Company is more established and self-reliant, Michael McMahon will continue to draw this reduced level of fee.

In order to ensure that the appropriate skills are present within the Company, there has been almost a complete change at Executive level in the last eighteen months.

·; Johan du Toit joined as Finance Director in August 2008 and was subsequently made CEO in December 2008.

·; Patrick Malaza joined as CFO in July 2009, and was appointed as Finance Director in February 2010.

·; Don Harper, a highly experienced Australian hard-rock miner, with exactly the expertise and experience CRG requires, took over as Head of Mining in June 2009.

·; Keith Matier, a geologist with 17 years experience in mining exploration became Head of Geology in July 2009. Keith is a "Competent Person" in terms of JORC and SAMREC Codes.

·; Peter ("PG") Hurter, a consultant metallurgist from Western Australia, but with South African roots and experience, has been on semi-permanent secondment to CRG since September 2009 and was the catalyst in the recent improvement in our metallurgical performance.

Certainly CRG have had our disappointments as the project transitioned from desktop to reality, but this current team has successfully developed the revised mining method and delivered the trial-mine. It has demonstrated a sure-footed capacity to run and grow this Company.

 

6. Trial Mining

At the time of the IPO, it was stated that CRG would raise debt and/or further equity capital in 2009 of US$156 million to enable the Company to accelerate the underground development of the mine. The financial crisis of late 2008 caused such ambitions to evaporate and forced the Company to review its position and prospects.

The two key outcomes were;

·; a scaling back of ambition and expenditure and an effort to maximise what could be achieved with the balance of the remaining capital from the IPO; and

·; a target to deliver "proof of concept" within this financial limit, meaning:

- proven ability to develop footwall declines efficiently;

- proven ability to develop on-reef drives, with their upper edges traversing the voids from old mining, safely and efficiently;

- proven ability to support and mine stopes on the Main Reef safely and efficiently;

- re-evaluate the Reserve status in terms of further exploration and underground performance;

- proven ability to process ore efficiently; and

- the sum of this performance generating an updated Competent Person's Report ("CPR") in support of further fund-raising.

Collectively this process is known as "trial mining". It is common for start-up operations, even those without financial constraints and managed by far larger companies than CRG, to go through this process before committing to full-scale production.

On 14 April 2010 the Company announced the successful achievement of all of took receipt of an updated Competent Persons' Report from Snowden, the Company's designated independent technical consultant.

In delivering this successful mining performance the mining team has delivered:

·; world-class underground mechanised development rates;

·; successful execution of a highly mechanised long-hole stoping methodology of a type common in Australia but new to the Witwatersrand; and

·; a 79 per cent. uplift in Proven and Probable Reserves.

Details of this performance and the full CPR are included in the prospectus.

 

7. The Underground Water Table

For economic and safety reasons East Rand Proprietary Mines (part of the DRD Group) ceased pumping water in October 2008 from its SWV1 shaft. This pump station had served the purpose of maintaining the water level in the whole Central Rand Basin, in which CRG sits.

The water in the basin rises at between 0.4 and 0.9 metres a day and by the end of 2008 had flooded the pump station. Unchecked, this water will eventually rise to the natural ground level generating a major environmental risk in terms of Acid Mine Water Drainage in the immediate vicinity of downtown Johannesburg.

There are a variety of interested and affected parties who would not wish this to happen:

·; Government has environmental concerns, is interested in a supply of clean water and has publicly committed itself to participation;

·; DRD has an interest in a supply of water to its ERGO mine tailings retreatment operations;

·; The Water Utility Corporation (WUC) has a commercial interest in processing and onward selling clean water to water authorities and others;

·; CRG obviously wishes to protect its underground workings; and

·; Peripheral mines who currently decant from the adjoining West and East Rand Basins into the Central Basin need this Basin to continue pumping.

Straightforward solutions have been engineered and costed to high levels of confidence.

The parties are all committed to solving this problem and are currently in the final stages of negotiation as to the appropriate sharing mechanisms in terms of capital and future operating costs. CRG has committed 20 per cent. of the capital costs of the proposed new pumping station and another mining company has verbally agreed to a similar quantum. Other mining companies, participants, interested parties and government agencies, such as the Department of Water Affairs and the Department of Mineral Resources, are currently in the process of negotiating the level of their funding commitments to ensure that the full capital cost of the pumping station is appropriately covered between all the interested parties. Currently, all commitments and negotiations are subject to contract, but all parties accept the importance of reaching an agreed position as soon as possible.

If there are significant delays in the funding or construction of the water pump station the water table will rise and will progressively threaten the mine from its lower reaches. Up to a point the mine plan can be amended to mine selectively from the upper areas, but the full life-of-mine requires this project to proceed and the water table to be lowered to 900 m below surface. Under the current estimates water will ingress into the Company's planned mining area in the first half of 2012.

Final negotiations are expected to be concluded by July 2010.

 

8. The "Cash Box" and Future Funding

In November 2009 it became clear that the Company was not going to reach the conclusion of the trial mining process within the balance of the unused IPO funds (assuming a reserve was maintained in terms of current liabilities). The primary reasons were the disappointing mining progress in early 2009 and the poor metallurgical recoveries from the surface ore material.

While corrective action means that operational performance now is exactly where the Board expected it to be, costs were incurred and revenue not realised, with a negative impact on cash resources.

It was obvious to the Board that any significant further capital raising must be underpinned by the higher levels of technical and financial certainty expected from the end of the trial mining and the generation of an updated CPR. The costs associated with achieving these higher levels of certainty would require bridging finance.

On 22 January 2010 the Company put this bridging finance in place by raising US$6 million in a "Cash Box" placing of 9.99 per cent. of its share capital. The Company is grateful to the shareholders who supported this issue.

Working from the base case in the CPR, the Company has determined that net proceeds of US$35 million are required to put the operational phase of its first mine into a cash positive, stable and sustainable position. Cash flow projections on a "project base" are included in the CPR report in the prospectus.

Cash flow projections on a "total company" base, i.e. adding the corporate overhead to the Snowden CPR base, are included in the prospectus.

 

9. Going Concern

In presenting their unqualified opinion on the Group's Financial Statements for the year 31 December 2009, the Auditors (KPMG) have noted that there are material uncertainties over the "going concern" status of the Company.

The first of these (quite obviously) is the need for success in this fundraising.

The second is a timeous and reasonable conclusion to the negotiations on the funding and cost sharing of the new Central Rand Basin water pumping facility. The Board believes that this is probable and that the working capital provisions in this regard are appropriate. The Directors have structured the fundraising accordingly.

 

10. Use of Proceeds and Future Plan

The Directors intend to use the net proceeds of US$35 million as follows (in order of priority):

·; US$13.3 million will be utilised for further decline and reef development;

·; US$7.4 million will be utilised for the acquisition of further mining equipment needed to implement the Company's mine plan;

·; US$2.5 million will be utilised to further develop and optimise the Company's metallurgical processing plants in order that gold recoveries are maximised;

·; US$4.6 million is needed to fund CRG's share of the construction costs of the pumping station required to maintain the water table at 400 metres below surface;

·; US$2.0 million will fund further exploration activities on the Company's Crown Mines tenement in order that further mining targets can be identified; and

·; US$5.2 million will be utilised to fund the Company's overheads until such time as the Company becomes cash generative.

With the completion of trial mining, immediate underground activities are now concentrated on decline and reef development in line with the mine plan in the updated CPR, in expectation of this capital raising being successful.

With the completion of the recent plant reconfiguration, the plant will utilise capacity, over and above that needed to process underground ore, to process surface stockpiles, highgrade tailings deposited on the DRD tailings dam during a period of sub-optimal plant performance, and further surface ore from open cast operations.

Continuation on the plan outlined in the CPR, after receipts of the proceeds will move the Company from trial mining to full scale commercial production at an annualized rate of 45,000 oz by the end of 2013.

Medium and long-term strategic development for the Company will focus on the systematic establishment of mining operations across the entire 40km strike length of the Company's mining and prospecting rights.

The current and ongoing development of the CMR west and central areas will be used as a template for operating and capital costs, as well as providing a proving ground for mechanised mining techniques that will be used in the development of new operations along strike.

The next development target is the adjacent Crown Mine West block. Substantial work has already been undertaken here by CRG and mineable JORC and SAMREC compliant resources have been identified. A 8,000m programme of confirmatory drilling has been designed with the aim of increasing the confidence in the shallow (sub 300m) resource areas to allow for the conversion to Ore Reserves. This programme is to be carried out during 2010 and in to 2011. Prior to mining development in these adjacent mining blocks, feasibility level studies will be undertaken to ensure the criteria for a production decision are met. The current work planned to take place during 2010 and 2011 on Crown Mine West is expected to cost $2 million.

Thereafter Resource development and Reserve conversion will proceed systematically east through the Village Main and Robinson Deep Prospecting rights, the City Deep Prospecting Rights and the Simmer & Jack Prospecting Rights.

The Directors believe that a number of operations similar to that currently established at CMR west are feasible and can commence development over the next five to ten years.

 

11. Comparative Costs

Reference is made in the prospectus to the recently published GFMS "Gold Survey 2010", widely regarded as the benchmark analysis of the world's gold mining industry. This survey contains an analysis of worldwide production costs in the industry.

By aligning information contained in the Competent Person's Report and the Illustrative Projections with GFMS definitions, CRG can be positioned on the GFMS cost curves as shown in the table below.

The "Base Case", as defined in the CPR, is the foundation of this Capital Raising. It excludes (because the components cannot be statistically defined) the potential upside identified for this first mine in the Snowden CPR. This is a secure platform from which to consider the upside potential and the benefits of further growth at CRG:

·; The Illustrative Projections, on which the auditors have reported in accordance with Paragraph 133(b)(ii) of the CESR recommendations, postulate that realisation of just the Middlings, vampings and sweepings (Mining Upside) listed in the upside potential identified in the CPR, on just the first mine, could reduce working costs by $94 per ounce.

·; CRG's All-in Cost is prejudiced by the relatively high corporate overhead of $126 per ounce based upon the production schedule set out in the CPR. This figure is capable of supporting (with little or no increase) at least one further parallel mine. One more mine of a similar size to the mine currently being developed is expected to reduce the All-in Cost position, in both "Base Case" and "Mining Upside", by about 15 percentile points.

 

 

 

 

CRG unit costs	2010 cost/oz	Restated to 2009	Percentile on cost curve
		Base Case (calculated)	Base Case (postulated)	+ Mining Upside
Total Cash Cost	$545	$529	68th	38th
Total Production Cost	$685	$665	62nd	30th
All-in Cost	$811	$787	72nd	44th

 

·; The relevant operating and on-going capital figures for CRG are the "steady-state" figures in table 16.2 of the CPR; i.e. from 2013 and onwards, once the mine has reached full production.

·; The relevant overhead and corporate figure for CRG is the "Corporate and mining support expenditure" figure for 2013 in the Illustrative Projections.

·; GFMS Total Cash Cost is the same as the "Operating Cost" in table 16.2 of the CPR. From and including 2013 this is $545 per ounce.

·; GFMS Total Production Cost (Cash Cost plus amortisation and depreciation) is approximated by adding the CRG average from 2013 for on-going capex of $140 per ounce and the item listed as "Other" in table 3.1 of the Illustrative Projections, which is Head Office Capital, essentially for I.T. expenditure and which averages approximately $4 per ounce.

·; A GFMS All-in Cost is harder to arrive at in the somewhat artificial construct of a single mine excluding upside. In that scenario the Corporate Costs, from the first "steady-state" year of 2013 ($8.3m per table 2.1 in Illustrative Projections) fall, over the life of the Mine to less than half that. This is primarily due to the front-loaded royalty arrangements with i-Prop and the tailing off of on-mine geological expenditure. The resultant cost per ounce for Corporate Costs to be added to "Total Production Costs" are $180 per ounce in 2013, but average $126 per ounce over the steady-state period of the Mine.

·; CRG costs, which are based upon 2010 prices, must be deflated to bring them into line with the 2009 levels published by GFMS. The above table uses the GFMS quoted 2008-2009 escalation (presumed typical) of 3 per cent. for Cash Costs.

 

12. Outlook

Clearly the immediate objectives of a cash positive sustainable operation at an annual rate of 45,000 oz.p.a. deliver a low volume and relatively high cost operation. This is some way short of the aspirations in the original IPO.

Part of this is due inevitably, to any "trial mine" being at the wrong end of economies of scale, particularly in terms of fixed costs and overheads.

The Board believes that the Company's mining and metallurgical methodologies can be implemented across its entire tenement area, requiring, at worst, minimal adjustment to and re-testing of its mining methods to suit local conditions, and in particular reef widths, before full-scale mine development can commence. The "vision" in this sense is intact, and there is no doubt that overall unit costs will decline as fixed costs are carried over a larger base and as the mining crews increase efficiencies with experience.

While the CPR confirms this prospect of future mines on the Main Reef as a continuation of the current theme (with variations), the as yet unproven, but exciting prospects of further mines on the Bird and Kimberley Reefs form part of our development strategy. The possibility of mining these Reefs as a single package have been considerably enhanced by the advent of the optical ore-sorter, which has the potential to remove much of the middling between the individual components of each reef.

This is some way in the future, but the prospect of immediate upside to the CPR "Base Case" upon which all formal projections are based is real. The prospectus lists expectations that are not yet included in the base case and can reasonably be expected from:

·; extraction of the Main Reef and the parting between it and the Main Reef Leader void above it, together with sweepings and vampings from the old workings lying on top of the parting, as a single package;

·; the mining, with the Main Reef and its parting, of Main Reef Leader pillars and remnants;

·; optical ore-sorting of development reef to upgrade it as a feedstock to the metallurgical plant;

·; optical ore-sorting of stoping ore to separate plant feed into higher and lower grade streams with optimised processing; and

·; further upgrading of the process flow sheet, and in particular of the carbon-in-pulp plant.

The potential mining benefits have been acknowledged by Snowden in the CPR as real and reasonable, but they could not be included in the base case analysis, as there is no statistical basis for analysing or forecasting their value, i.e. for including the potential in Reserves.

This upside list has the potential to dramatically lower the Company's position on the cost curve.

If this can be combined with the economies of scale as the Company expands significant value will be created for Shareholders.

The achievements in securing the Mining Rights and in successful trial mining and processing should not be under-estimated. It has taken longer than was thought, has delivered a smaller first mine than initially proposed and has cost more than expected to do that, but:

·; the concept has been proven;

·; an Ore Reserve has been declared;

·; they can be efficiently and safely mined and processed;

·; without any of the potential upside built-in, and with a relatively small scale first operation, there will be a profitable and cash generating mine;

·; the upside potential is significant; and

·; the vision of developing and building a major gold operation is intact.

 

The Board believes that the opportunity (and historical investment) that would be wasted were the Company to falter at this stage is huge.

 

13. Dividends and Dividend Policy

The Group continues to make significant investments in its mining business and continues to be loss making. For this reason and to preserve financial flexibility, the Company has never paid a dividend. It is the Board's intention that the Company will review this policy when the Group is generating sustainable cash flows and the trading performance and financial resources of the Group permit.

 

14. Details of the Capital Raising

Structure

The Directors have given consideration to how to structure the proposed equity fundraising, having paid regard to the current market conditions, the composition of the Company's Shareholder register, the level of the Company's share price and the importance of preemption rights to Shareholders. After considering these factors, the Directors have concluded that the structure of the Capital Raising by way of the Firm Placing and the Placing and Open Offer is the most suitable option available to the Company and its Shareholders as a whole. The Open Offer provides an opportunity for all Qualifying Shareholders to participate in the fundraising by acquiring Open Offer Shares pro rata to their current holding of Shares.

CRG is proposing to raise approximately £24 million (net of expenses) by way of the Capital Raising. The Issue Price of 2 pence per New Share represents a discount of 2.6 pence (approximately 57 per cent.) to the Closing Price of 4.6 pence per Share on 3 June 2010 (being the last dealing day prior to announcement of the Capital Raising). This discount has been set based on the Directors' assessment of market conditions following discussions with a number of institutional investors and has been determined in order to obtain the level of funds required by the Company under the Capital Raising. Given that the Issue Price represents a discount of greater than 10 per cent. to the Closing Price of the Shares on 3 June 2010, the Company is required, under the Listing Rules, to seek the approval of its Shareholders for the issue of the New Shares at the Issue Price. Accordingly, the Extraordinary General Meeting will consider, amongst other things, the approval of the amount of discount.

The Firm Placing and Placing and Open Offer is being underwritten by Evolution pursuant to the Placing and Open Offer Agreement, the principal terms and conditions of which are summarised in the prospectus.

Principal terms of the Firm Placing

CRG is proposing to issue 649,042,355 New Shares pursuant to the Firm Placing, subject to the same conditions and termination rights that apply to the Placing and Open Offer. The Firm Placed Shares are not subject to clawback from Shareholders and do not form part of the Open Offer.

The Firm Placing includes the placing of 16,771,120 Firm Placed Shares to Mark Creasy. Under the Listing Rules, Mr Creasy is a related party of the Company and the Creasy Firm Placing, when aggregated with Mr Creasy's participation in the Cash Box Placing, is a related party transaction which will need the approval of a simple majority of the Independent Shareholders. This approval is being sought pursuant to Resolution 1 to be proposed at the Extraordinary General Meeting.

Principal terms of the Placing and Open Offer

Qualifying Shareholders, on and subject to the terms and conditions of the Open Offer, are being given the opportunity to apply for the Open Offer Shares at the Issue Price, pro rata to their holdings of Existing Shares on the Record Date, on the basis of:

5 Open Offer Shares for every 2 Existing Shares

Qualifying Shareholders are also being given the opportunity, provided they take up their Open Offer Entitlement in full, to apply for a maximum number of additional Open Offer Shares equal to the number of Open Offer Shares comprised in their Open Offer Entitlement through the Excess Application Facility.

Fractions of Open Offer Shares will not be allotted to Qualifying Shareholders in the Open Offer and fractional entitlements under the Open Offer will be rounded down to the nearest whole number of Open Offer Shares.

Qualifying Shareholders may apply for any whole number of Open Offer Shares up to their maximum entitlement which, in the case of Qualifying Non-CREST Shareholders, is equal to the number of Open Offer Entitlements as shown in Box B on their Application Form, or, in the case of Qualifying CREST Shareholders, is equal to the number of Open Offer Entitlements standing to the credit of their stock account in CREST. Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements at 8.00 a.m. on on 10 June 2010. Qualifying Shareholders with holdings of Existing Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating their entitlements under the Open Offer, as will Qualifying Shareholders with holdings under different designations or in different accounts. CRG is proposing to issue 679,029,025 Shares to Placees pursuant to the terms of the Placing and Open Offer with the aggregate number of New Shares issued to such Placees being reduced by the receipt of valid applications for Open Offer Shares from Qualifying Shareholders.

 

Excess Application Facility

The Excess Application Facility will enable Qualifying Shareholders, provided they take up their Open Offer Entitlement in full, to apply for a maximum number of additional Open Offer Shares equal to the number of Open Offer Shares comprised in their Open Offer Entitlement. Qualifying Non-CREST Shareholders who wish to apply to acquire more than their Open Offer Entitlement should complete the relevant sections on the Application Form. Qualifying CREST Shareholders will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to the prospectus for information on how to apply for Excess Shares pursuant to the Excess Application Facility. If applications under the Excess Application Facility are received for more than the total number of Open Offer Shares available following take up of Open Offer Entitlements, such applications will be scaled back pro rata to the number of Excess Shares applied for by Qualifying Shareholders under the Excess Application Facility.

The aggregate number of Open Offer Shares available for acquisition pursuant to the Open Offer will not exceed 679,029,025 New Shares.

Effect of the Capital Raising

Upon completion of the Capital Raising, the New Shares will represent approximately 488.96 per cent. of the Company's existing issued ordinary share capital and approximately 83.02 per cent. of the Company's Enlarged Issued Share Capital. New Shares issued through the Placing and Open Offer and New Shares issued through the Firm Placing will account for approximately 51.13 per cent. and 48.87 per cent. respectively of the total New Shares to be issued. The Resolutions set out in the notice attached to this Prospectus must be passed at the Extraordinary General Meeting in order for the Capital Raising to proceed.

Following the issue of the New Shares to be allotted pursuant to the Capital Raising, Qualifying Shareholders who take up their full entitlements, excluding any New Shares acquired through the Excess Application Facility, in respect of the Open Offer will suffer a dilution of up to 41 per cent. to their interests in the Company because of the Firm Placing. Qualifying Shareholders who do not take up any of their entitlements in respect of the Open Offer will suffer a more substantial dilution of approximately 83 per cent. to their interests in the Company because of the Firm Placing and Open Offer.

Application for Admission

Application will be made for the Open Offer Entitlements (in respect of Qualifying Crest Shareholders) and Excess CREST Open Offer Entitlements to be admitted to CREST. It is expected that such Open Offer Entitlements and Excess CREST Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on 10 June 2010. The Open Offer Entitlements and Excess CREST Open Offer Entitlements will also be enabled for settlement in CREST at 8.00 a.m. on 10 June 2010. Applications through the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

Qualifying CREST Shareholders should note that, although the Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim raised by Euroclear's Claims Processing Unit. Qualifying Non-CREST Shareholders should note that their Application Form is not a negotiable document and cannot be traded.

Application will be made to the UKLA for the New Shares to be admitted to the Official List and to the London Stock Exchange for the Open Offer Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. It is expected that Admission will become effective on 6 July 2010 and that dealings for normal settlement in the Open Offer Shares and the Firm Placed Shares will commence at 8.00 a.m. on the same day.

Further information on the Open Offer and terms and conditions on which it is made, including the procedure for application and payment, are set out in the prospectus and, where relevant, on the Application Form.

If Admission does not take place on or before 6 July 2010 (or such later time and/or date as the Company and the Evolution may determine, not being later than 31 July 2010), the Open Offer will lapse, any Open Offer Entitlements admitted to CREST will thereafter be disabled and application monies under the Open Offer will be refunded to the applicants, by cheque (at the applicant's risk) in the case of Qualifying Non-CREST Shareholders and by way of a CREST payment in the case of Qualifying CREST Shareholders, without interest as soon as practicable thereafter. In these circumstances, the Placing to the Placees will not proceed.

 

Conditionality

The Firm Placing and the Placing and Open Offer are inter-conditional and conditional on, inter alia, Shareholder approval, which will be sought at an Extraordinary General Meeting convened for 11.00 on 5 July 2010. If any of the conditions are not fulfilled the Capital Raising will not proceed.

The Firm Placing and the Placing and Open Offer is conditional, inter alia, upon:

·; the passing, without amendment, of the Resolutions at the Extraordinary General Meeting (and not, except with the prior written agreement of Evolution, at any adjournment of such meeting);

·; Admission taking place by no later than 8.00 a.m. on 6 July 2010 (or such later time and date as the Company and Evolution may agree, not being later than 31 July 2010); and

·; the Placing and Open Offer Agreement otherwise having become unconditional in all respects (save for the condition relating to Admission) and not having been terminated in accordance with its terms prior to Admission.

 

Any Qualifying Shareholder who has sold or transferred all or part of his or her registered holding(s) of Shares prior to the close of business on 4 June (11 June 2010 for Qualifying South African Shareholders) 2010 is advised to consult his or her broker, bank or other agent through or to whom the sale or transfer was effected as soon as possible since the invitation to apply for Open Offer Shares under the Open Offer may be a benefit which may be claimed from him/her by the purchasers under the rules of the London Stock Exchange.

The Open Offer Shares and the Firm Placed Shares, when issued and fully paid, will be identical to and rank in full for all dividends or other distributions declared, made or paid after Admission and in all respects will rank pari passu with the Existing Shares. No temporary documents of title will be issued.

Shareholders should note that the Open Offer is not a rights issue. Qualifying Shareholders should be aware that in the Open Offer, unlike in a rights issue, any Open Offer Shares not applied for will not be sold in the market on behalf of, or placed for, the benefit of Qualifying Shareholders who do not apply under the Open Offer but will be issued to the Placees ultimately for the benefit of the Company.

 

15. Related Party Transaction

Mark Creasy has indicated his ongoing support for the Group through his shareholding. Mr Creasy is a related party of CRG (as defined by the Listing Rules) because his shareholding is in excess of 10 per cent. of the Company's existing issued share capital. Mr Creasy has irrevocably committed to participate in the Firm Placing and take up his Open Offer Entitlements in aggregate of US$1.0 million and to vote in favour of the Resolutions at the Extraordinary General Meeting with the exception of Resolution 1 for the reason set out below. Subject to the Capital Raising proceeding and Mr Creasy complying with his irrevocable undertakings, Mr Creasy will be paid a commission equal to 1.75 per cent. of the aggregate value at the issue Price of the number of Open Offer Shares acquired by Mr Creasy. The participation by Mr Creasy in the Firm Placing is a related party transaction which, when aggregated with Mr Creasy' participation in the Cash Box Placing, requires the approval of Independent Shareholders. Accordingly, Mr Creasy will not vote on Resolution 1 and has undertaken to take all reasonable steps to ensure that his associates (as defined in the Listing Rules) will not vote on this resolution. As the Capital Raising is conditional on the passing of all Resolutions, if Resolution 1 is not approved by Independent Shareholders, the Capital Raising will not proceed. The Creasy Firm Placing is described in further detail in the prospectus.

The Board of the Company has received independent financial advice from Evolution Securities in relation to the proposed Creasy Firm Placing.

 

 

16. Proposals to be voted on at the Extraordinary General Meeting

For the purposes of effecting the Capital Raising, the Resolutions will be proposed at an Extraordinary General Meeting. A notice convening an Extraordinary General Meeting of the Company, which is to be held at 11.00 a.m. on 5 July 2010 shall be found in the prospectus. The full text of the Resolutions is set out in that notice.

Subject to the passing of all the other Resolutions:

i. Resolution 1 seeks approval of the issue of 16,771,120 Firm Placed Shares to Mark Creasy which have been conditionally placed with him. Mark Creasy is not eligible to vote on this Resolution. Resolution 1 is conditional on the passing of Resolutions 2, 3 and 4;

ii. Resolution 2 seeks approval for the issue of the New Shares on the terms set out in this announcement at a price of 2 pence per New Share (which represents a discount of 57 per cent. to 4.6 pence, being the Closing Price on 3 June 2010, the last dealing day before the announcement of the Capital Raising). This resolution approves the Capital Raising generally and gives the Directors the power to implement it, including for the purposes of the Listing Rules, because the Issue Price represents a discount of greater than 10 per cent. to the Closing Price on 3 June 2010. Resolution 2 is conditional on the passing of Resolutions 1, 3 and 4;

iii. Resolution 3 seeks to increase the authorised share capital of the Company to 4,000,000,000 ordinary shares of £0.01 par value each to facilitate the issue of shares under the Capital Raising.

iv. Resolution 4(a) seeks a new authority to enable the Directors to allot equity securities for the purpose of the Capital Raising; and

v. Resolutions 4(b) and (c) seek a new authority to disapply statutory pre-emption rights in relation to the allotment of equity securities. If approved, this resolution will authorise the Directors to allot shares for cash up to a maximum nominal amount of £799,841.49. The Directors currently have no specific plans to allot relevant securities other than in connection with the Capital Raising. The latter will leave headroom of approximately 5 per cent. of the Enlarged Issued Share Capital. These resolutions are normal annual resolutions for a company on the Official List and in line with ABI guidelines. Resolution 4 is conditional to the Placing and Open Offer Agreement having become unconditional in all respects save for any condition relating to Admission having occurred and the passing of Resolutions 1, 2 and 3.

All of the Resolutions must be passed by the shareholders of the Extraordinary General Meeting in order for the Capital Raising to proceed.

Further details of CRG's share capital, at present and as it will be following the completion of the Capital Raising, are set out in the prospectus.

 

17. Overseas Shareholders

The attention of Overseas Shareholders who have registered addresses outside the United Kingdom or South Africa, or who are citizens of, or residents or located in countries other than the United Kingdom or South Africa, or who are holding Shares for the benefit of such persons (including without limitation, nominees, custodians and trustees) or have a contractual or legal obligation to forward the Prospectus, the Form of Proxy or the Application Form to such persons, is drawn to the information which appears in the prospectus.

In particular, Qualifying Shareholders who have registered addresses outside the United Kingdom or South Africa, or who are citizens of or resident or located in countries other than the United Kingdom or South Africa (including, without limitation, the United States or any other Restricted Territory) should consult their professional advisers as to whether they require any governmental or other consent or need to observe any other formalities to enable them to take up their entitlements in the Open Offer.

 

 

18. Taxation

Certain information about UK, Guernsey and South African taxation in relation to the Capital Raising is set out in the prospectus. If you are in any doubt as to your tax position, or you may be subject to tax in a jurisdiction other than the United Kingdom or South Africa, you are strongly recommended to consult your own professional advisers without delay.

 

19. Further Information and Risk Factors

Your attention is drawn to the further information set out in the prospectus. In particular, your attention is drawn to the section entitled "Risk Factors". You are advised to read the whole of the Prospectus and the documents incorporated by reference and not to rely solely on the information contained in this announcement.

 

20. Action to be Taken

Open Offer

The latest time for acceptance by Qualifying Shareholders under the Open Offer is 11.00 a.m. on 2 July 2010. The procedure for acceptance and payment is set out in the prospectus.

For Qualifying Non-Crest Shareholders, further details also appear in the Application Form that is being sent to all Qualifying Non-CREST Shareholders (other than Qualifying Non-CREST Shareholders with a registered address in the United States, or, subject to certain exceptions, the Restricted Territories).

Qualifying CREST Shareholders who are CREST-sponsored members should refer to their CREST sponsors regarding the action to be taken in connection with this announcement and the Capital Raising.

Extraordinary General Meeting

You will find set out at the end of the prospectus a notice convening an Extraordinary General Meeting to be held at 11.00 a.m. on 5 July 2010 at the offices of Carey Olsen, Carey House, Les Banques, St. Peter Port, Guernsey GY1 4BZ. In this, you will find a Form of Proxy for use at the Extraordinary General Meeting or at any adjournments thereof. Whether or not you intend to be present in person at the Extraordinary General Meeting, you are requested to complete and sign the Form of Proxy in accordance with the instructions printed on it and return it as soon as possible, but in any event so as to be received no later than 11.00 a.m. on 1 July 2010 by the Company's Registrar, Computershare Investor Services (Jersey) Limited at Queensway House, Hilgrove Street, St. Helier, Jersey JE1 1ES. The lodging of the Form of Proxy (or the electronic appointment of a proxy) will not preclude you from attending and voting at the Extraordinary General Meeting in person if you so wish.

If you have any doubt what action you should take, you should seek your own financial advice from your broker, solicitor or other independent financial adviser duly authorised under the FSMA who specialises in advice on the acquisition of shares and other securities immediately.

 

21. Directors' Recommendations

The Capital Raising

The Board, which has received financial advice from Evolution Securities, considers that the Capital Raising and Resolutions to be proposed at the Extraordinary General Meeting are in the best interests of the Company and its Shareholders as a whole. In providing advice to the Board in respect of the Capital Raising (other than in respect of the Creasy Firm Placing), Evolution Securities has relied upon the Board's commercial assessments of the Group's funding requirements.

The Creasy Firm Placing

The Board, which has been so advised by Evolution Securities, an independent adviser acceptable to the Financial Services Authority, considers that the Creasy Firm Placing is fair and reasonable as far as the Shareholders of CRG are concerned. In providing its advice to the Board, Evolution Securities has taken account of the Board's assessments of the commercial merits of the Creasy Firm Placing.

Accordingly, the Board recommends that Shareholders vote in favour of the Resolutions to be put to the Extraordinary General Meeting as each of the Directors have irrevocably undertaken to do so, or procure to be done, in respect of their own beneficial holdings, amounting in aggregate to 0.63 per cent. of the Company's existing issued share capital.

Importance of Vote

All of the Resolutions must be passed by Shareholders at the Extraordinary General Meeting in order for the Capital Raising to proceed. Without all of the Resolutions being passed, the Board would have to consider the future financial viability of the Company in its current form and this would lead to an immediate cessation of mining and exploration activities, reduction of staff and management to a minimum level and either a piecemeal asset disposal programme (subject to the availability of willing buyers of the Company's assets) or, in the event that this is unsuccessful, outright closure of the Company as the Company would be unable to fund its ongoing activities which would result in minimal funds, if any, being available for Shareholders.

 

Appendix I

Expected timetable of Principal Events

 

Each of the times and dates in the table below in indicative only and may be subject to change

	2010
Announcement of Capital Raising	4 June
* Commencement of restrictions on Qualifying South African Shareholders dematerialising or rematerialising their Existing Shares	4 June
SA Last Date to Trade for entitlement under Open Offer	4 June
Lodgement of the Placing and Open Offer Agreement and supporting documents with the Companies and Intellectual Property Registration Office	4 June
Publication of Prospectus	4 June
UK Record Date for entitlement under Open Offer	close of business on 4 June
Commencement of restrictions on transfers between UK Register and SA Register	close of business on 4 June
* Commencement of the period during which the SA Registrar will not register the transfer of Existing Shares by Qualifying South African Shareholders where those Existing Shares are held in certificated form	close of business of 4 June (South African time)
* Existing Shares marked "ex" by the JSE	before 9.00 a.m. on 7 June (South African time)
Existing Shares marked "ex" by the London Stock Exchange	before 8.00 a.m. on 7 June
Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to the stock accounts of Qualifying CREST Shareholders in CREST	8.00 a.m. on 10 June
SA Record Date for Open Offer	close of business of 11 June (South African time)
End of restrictions on transfers between UK Register and SA Register	close of business of 11 June (South African time)
End of restrictions on Qualifying South African Shareholders dematerialising or rematerialising their Existing Shares	close of business of 11 June (South African time)
End of period during which the SA Registrar will not register the transfer of Existing Shares by Qualifying South African Shareholders where those Existing Shares are held in certificated form	close of business of 11 June (South African time)
* Open Offer Entitlements credited to the stock accounts of Qualifying South African Shareholders to the broker or CSDP accounts	9.00 a.m. on 14 June (South African time)
Recommended latest time and date for requesting withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST (i.e. if Open Offer Entitlements are in CREST and the Shareholder wishes to convert them to certificated form)	4.30 p.m. on 28 June
Latest time and date for depositing Open Offer Entitlements into CREST	3.00 p.m. on 29 June
Latest time and date for splitting Application Forms (to satisfy bona fide market claims only)	3.00 p.m. on 30 June
Latest time and date for receipt of Extraordinary General Meeting Forms of Proxy	11.00 a.m. on 1 July
Latest time and date for acceptance, payment in full and submission of Application Forms and SA Application Forms to the Registrar	11.00 a.m. on 2 July (12:00 p.m. South African time*)
Extraordinary General Meeting	11.00 a.m. on 5 July
Listing of New Shares on the London Stock Exchange	8.00 a.m. on 6 July
New Shares in uncertificated form expected to be credited to accounts in CREST	8.00 a.m. on 6 July
Listing of New Shares on the JSE	9.00 a.m. on 6 July (South African time)
Dispatch of definitive share certificates for the New Shares in certificated form	by 13 July

 

Appendix II

Statistics relating to the Capital Raising

Issue Price for each Open Offer Share and each Firm Placed Share	2 pence
Number of Shares in issue as at 3 June 2010 (being the latest practicable date prior to the publication of the Prospectus)	271,661,610
Number of Open Offer Shares to be issued pursuant to the Open Offer	679,029,025
Number of Firm Placed Shares to be issued pursuant to the Firm Placing	649,042,025
Number of Shares in issue immediately following completion of the Capital Raising	1,599,682,990
Open Offer Shares as a percentage of the Enlarged Issued Share Capital	42.45 per cent.
Firm Placed Shares as a percentage of the Enlarged Issued Share Capital	40.57 per cent.
New Shares as a percentage of the Enlarged Issued Share Capital	83.02 per cent.
Estimated aggregate net proceeds of the Capital Raising after estimated total expenses	£24.0 million
Estimated aggregate expenses of the Capital Raising	£2.5 million

 

Appendix III

Definitions

"Admission"	admission of the New Shares to the Official List and to trading on the JSE becoming effective in accordance with, respectively, the Listing Rules and the JSE Listing Requirements
"Application Form" or "Non- Crest Application Form"	the application form accompanying the Prospectus for use by Qualifying Non-Crest Shareholders in relation to the Open Offer
"Articles of Incorporation" or "Articles"	the articles of incorporation of the Company
"Banks"	Evolution and Macquarie
"Banks Counsel"	with respect to English Law Eversheds LLP
"Board"	the Board of Directors
"Capital Raising"	the Firm Placing, Placing and Open Offer
"Cash Box Placing"	the placing of new Shares to certain subscribers on 27 January 2010
"Cash Box Placing Agreement"	The agreement entered into on 22 January 2010 between (1) the Company; and (2) Evolution in relation to the Cash Box Placing
"Central Rand Australia"	Central Rand Pty Limited, a company incorporated under the laws of Australia
"Central Rand Gold NV" or "CRGNV"	Central Rand Gold (Netherlands Antilles) N.V. a company incorporated under the laws of the Netherlands Antilles
"Central Rand Goldfield"	the central area of the Witwatersrand Basin, comprising the aggregate of all the defunct and working gold mines in the area
"Central Rand Gold SA" or "CRGSA"	Central Rand Gold South Africa (Proprietary) Limited, a company incorporated under the laws of South Africa
"Central Rand Project"	the project area over which the Prospecting Rights extend, being an area from west to east of about 40 kilometres and north to south of about 7 kilometres
"certificated" or "in certificated form"	a share or other security which is not in uncertificated form
"City Deep"	a defunct Old Order gold mine, which lies in the north eastern area of the Central Rand Project held by FEIC
"Company" or "CRG"	Central Rand Gold Limited, a company incorporated under the laws of the Island of Guernsey
"Competent Persons' Report" or "CPR"	the report prepared by Snowden set out in the Prospectus
"Computershare"	Computershare Investor Services (Proprietary) Limited, the Company's South African transfer secretaries, a company duly incorporated under the laws of South Africa
"Conditional Placed Shares"	the 679,029,025 New Shares to be allotted and issued by the Company under the Placing subject to clawback to satisfy valid applications by Qualifying Shareholders under the Open Offer, pursuant to the Placing and Open Offer Agreement
"Consolidated Main Reef" or "CMR"	a defunct Old Order gold mine, which lies to the west of City Deep and is held by FEIC
"Creasy Firm Placing"	the placing of certain of the Firm Placed Shares with Mark Creasy
"CREST"	the relevant system (as defined in the CREST Regulations) operated by EUROCLEAR in accordance with which securities may be held or transferred in uncertificated form
"CRG CB"	CRG CB Limited a company incorporated under the laws of the Island of Guernsey
"Crown Mines"	a defunct Old Order gold mine, which lies between CMR and City Deep and is held by FEIC
"deposit"	coherent geological body such as a mineralised body
"dip"	the true dip of a plane is the angle it makes with the horizontal plane
"Directors"	the Directors of the Company, including the Executive and Non-Executive Directors
"Disclosure and Transparency Rules"	the rules relating to the disclosure of information made in accordance with Section 73A(3) of FSMA
"DMR"	the South African Department of Mineral Resources
"EGM" or "Extraordinary General Meeting"	the extraordinary general meeting of the Company proposed to be held on 5 July 2010
"Enlarged Issued Share Capital"	the 1,599,682,990 Shares which will be in issue following completion of the Firm Placing, Placing and Open Offer (assuming that no further options are exercised between 3 June (being the latest practicable date prior to the publication of the Prospectus) and Admission
"Equity Securities"	a share in the Company (other than a share shown in the memorandum to have been taken by a subscriber to the memorandum or a bonus share), or a right to subscribe for or to convert securities into Relevant Shares in the Company
"EU"	the European Union
"EUROCLEAR"	EUROCLEAR UK & Ireland Limited, a company incorporated under the laws of England and Wales
"Evolution" or "Evolution Securities"	Evolution Securities Limited, a company incorporated under the laws of England and Wales
"Ex-Date"	7 June 2010 (in the case of Qualifying CREST Shareholders and Qualifying Non-CREST) or 7 June 2010 (in the case of Qualifying South African Shareholders)
"Executive Directors"	Mr. Sarel Johan du Toit and Mr Patrick Malaza
"Excess Application Facility"	the arrangement pursuant to which Qualifying Shareholders may apply for Open Offer Shares in excess of their Open Offer Entitlement (up to a maximum number of Open Offer Shares equal to the number of Open Offer Entitlement) provided they have agreed to take up their Open Offer Entitlement in full
"Excess CREST Open Offer Entitlement"	in respect of each Qualifying CREST Shareholder, the entitlement (in addition to his Open Offer Entitlement) to apply for Open Offer Shares up to the number of Open Offer Shares comprised in his Open Offer Entitlement, credited to his stock account in CREST, pursuant to the Excess Application Facility, which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of the Prospectus
"Existing Shares"	the Shares in issue as at the date of the Prospectus
"exploration"	method by which ore deposits are evaluated
"feasibility study"	an extensive technical and financial study to assess the commercial viability of a project
"FEIC"	Ferreira Estate Investment Company Limited, a company incorporated under the laws of South Africa
"Firm Placed Shares"	the 649,042,335 New Shares which are subject to the Firm Placing
"Firm Placees"	those persons with whom the Firm Placed Shares are to be placed, including Mark Creasy
"Firm Placing"	the placing of the Firm Placed Shares with the Firm Placees
"flotation"	a mineral processing used to separate mineral particles in a slurry, by causing them to selectively adhere to a froth and float to the surface
"footwall"	rock mass below a fault, vein, bed or mineralisation
"FSA"	the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part IV of the FSMA
"FSMA"	Financial Services and Markets Act 2000, as amended
"grade"	relative quantity or the percentage of ore mineral or metal content in an ore body
"Group"	the Company and its subsidiaries and subsidiary undertakings from time to time. For the purposes of the historical financial information included in the Prospectus, which has been prepared using the 'pooling of interests' method of accounting, the "Group" includes the RQS Group prior to the Reorganisation
"holder"	the person or persons registered in the register of members of the Company as a holder of Shares
"Independent Shareholder"	a Shareholder other than Mark Creasy or his associates (as defined in the Listing Rules)
"Indicated Mineral Resource"	as defined in the JORC and SAMREC Codes, is that part of a Mineral Resource which has been sampled by drill holes, underground openings or other sampling procedures at locations that are too widely spaced to ensure continuity but close enough to give a reasonable indication of continuity and where geoscientific data are known with a reasonable degree of reliability. An Indicated Mineral Resource will be based on more data and therefore will be more reliable than an Inferred Mineral Resource estimate
"Inferred Mineral Resource"	as defined in the JORC and SAMREC Codes, is that part of a Mineral Resource for which the tonnage and grade and mineral content can be estimated with a low level of confidence. It is inferred from the geological evidence and has assumed but not verified geological and/or grade continuity. It is based on information gathered through the appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes which may be limited or of uncertain quality and reliability
"IPO"	the initial public offering undertaking by the Company in November 2007 via a placing pursuant to which the Equity Securities were admitted to trading on the Official List and the JSE
"Issue Price"	2 pence per New Share
"JORC Code"	the Australasia Code for Reporting of Mineral Resources and Ore Reserves 2004 which sets out the minimum standards, recommendations and guidelines for the Public Reporting of exploration results, Mineral Resources and Ore Reserves III Australasia
"JSE"	JSE Limited, a company duly registered and incorporated with limited liability under the company laws of the Republic of South Africa, licensed as an exchange under the South African Securities Services Act 36 of 2004
"JSE Listings Requirements"	the Listings Requirements of the JSE Limited
"Kimberly Reef"	a geological outcrop forming part of the Upper Witwatersrand supergroup formation which is a relatively lithologically homogenous mappable unit
"Langlaagte"	the site of discovery of gold in the Johannesburg area, and a defunct Old Order mines held by Gravelotte Mines Limited
"Guernsey Companies Law"	The Companies (Guernsey) Law, 2008, as amended, including every Order in Council, Act or Ordinance for the time being in force concerning companies registered in Guernsey or securities or other laws of other jurisdictions applicable to the Company
"Listing Rules"	the rules and regulations made by the FSA under Part VI of the FSMA
"London Stock Exchange" or "LSE"	London Stock Exchange plc
"Main Reef"	a geological outcrop forming part of the upper Witwatersrand supergroup formation which is a relatively lithologically homogeneous mappable unit
"Main Reef Leader"	a geological outcrop forming part of the upper Witwatersrand supergroup formation which is a relatively lithologically homogeneous mappable unit
"Macquarie" or "Macquarie First South"	Macquarie First South Advisers (Proprietary) Limited, a company incorporated under the laws of South Africa
"Mark Creasy"	Mark Creasy and his associates (as defined in the Listing Rules)
"metallurgical"	describing the science concerned with the production, purification and properties of metals and their applications
"Mineral Resource"	a concentration or occurrence of material of intrinsic economic interest in or on the Earth's crust in such a form that there are reasonable prospects for the eventual economic extraction. The location, quantity, grade geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge. Mineral Resources are subdivided into Inferred Mineral Resources, Indicated Mineral Resources and Measured Mineral Resources
"mineralisation"	process of formation and concentration of elements and their chemical compounds within a mass or body of rock
"MPRDA"	the South African Mineral and Petroleum Resources Development Act 28 of 2002
"New Order prospecting right"	any prospecting right, mining right, granted in terms of the substantive provisions of the MPRDA or upon the conversion of an Old Order right granted in terms of items 6 of Schedule II to the MPRDA
"New Shares"	the new Shares which the Company will allot and issue pursuant to the Firm Placing, Placing and Open Offer
"Non-Executive Directors"	Mr. John Michael McMahon, Mr. Miklos Salamon, Mr. Nicholas Farr-Jones and Mr. Jerome Brauns
"Official List"	the Official List of the UKLA
"Old Order prospecting right" or "Old Order mining right"	a mineral right, right to prospect or right to mine, valid as at 1 May 2004 and preserved for the time periods set out in Schedule II to the MPRDA as Old Order rights as defined in item 1 of Schedule II to the MPRDA
"Open Offer"	the invitation by the Company to Qualifying Shareholders to apply to subscribe for Open Offer Shares on the terms and conditions set out in the Prospectus and, in the case of Qualifying Non-CREST Shareholders, in the Non-CREST Application Form
"Open Offer Entitlement"	a pro rata entitlement to apply to subscribe for Open Offer Shares allocated to a Qualifying Shareholder and Qualifying South African Shareholders under the Open Offer
"Open Offer Shares"	the 679,029,025 New Shares to be offered to Qualifying Shareholders and Qualifying South African Shareholders under the Open Offer
"ore"	rock that can be mined and processed at a profit
"ore body"	mining term to define a solid mass of mineralised rock which can be mined profitably under current or immediately foreseeable economic conditions
"ore reserve"	the economically mineable part of a Measured or Indicated Mineral Resource. It includes diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction could be reasonably justified. Ore Reserves are sub-divided in order of increasing confidence into Probable and Proven
"ounce"	troy ounce; equal to 31.1035 grammes
"Overseas Shareholders"	Shareholders with registered addresses outside the United Kingdom or who are citizens or residents of countries outside the United Kingdom
"Placees"	any persons who have agreed to subscribe for New Shares not taken up by Qualifying Shareholders pursuant to the Open Offer
"Placing"	the placing by Evolution of the Conditional Placed Shares pursuant to the Placing and Open Offer Agreement
"Placing and Open Offer Agreement"	the conditional agreement dated 4 June between (1) the Company and (2) Evolution, details of which are set out in the Prospectus
"Prospecting Application"	the New Order prospecting right application over the Southern Deeps which if granted would extend the Central Rand Project by a further 13 kilometres to the south, further details of which are set out in the Prospectus
"Prospecting Rights"	the eight New Order prospecting rights in the Central Rand Goldfield constituting from west to east, Western Areas A, Band E, Consolidated Main Reef, Langlaagte, Crown Mines, Anglodeeps Village Main, Robinson Deep, City Deep and Simmer & Jack, further details of which are set out in the Prospectus
"Prospectus"	The Prospectus, to be dated 4 June 2010 and issued by the Company in connection with, inter alia, the Capital Raising
"Prospectus Rules"	the rules published by the FSA under section 73A of the FSMA
"Puno"	Puno Gold Investments (Proprietary) Limited, a company incorporated under the laws of South Africa
"Qualifying CREST Shareholders"	Qualifying Shareholders holding Shares in uncertificated form (other than Qualifying South African Shareholders)
"Qualifying Non-CREST Shareholders"	Qualifying Shareholders holding Shares in certificated form (other than Qualifying South African Shareholders)
"Qualifying Shareholders"	holders of Shares (including Qualifying South African Shareholders) on the register of members of the Company at the Record Date (other than the Company in respect of Shares held in treasury)
"Qualifying South African Shareholder"	Shareholders on the SA Register at the SA Record Date
"Rand Quest Syndicate" or "RQS"	Rand Quest Syndicate Limited incorporated under the laws of Australia
"Record Date"	the UK Record Date or the SA Record Date, as appropriate
"Relevant Shares"	shares in the Company other than (i) shares which as respect dividend and capital carry a right to participate only up to a specific amount in a distribution; and (ii) shares which are held by a person who acquired them in pursuance of an employees' share scheme or which are to be allotted in pursuance to such a scheme
"Reorganisation"	the transfer of the material assets of RQS and its subsidiaries to the Group
"Resolutions"	the resolutions to be proposed at the EGM in connection with the Capital Raising
"Restricted Territories" or "Restricted Territory"	the United States, Canada, Australia (other than to the extent that an offer of New Shares to a person in Australia is permitted by this announcement) or Japan
"Robinson Deep"	a defunct blaster mine in the North East of the Central Rand Project and held by RQS
"RQS Group"	RQS and its subsidiaries and subsidiary undertakings from time to time. For the avoidance of doubt as at the date of this prospectus, the RQS Group comprises RQS and Central Rand Australia but not Central Rand Gold SA
"SA Application Form"	the personalised application form on which Qualifying South African Shareholders may apply for Open Offer Shares under the Open Offer
"SA Record Date"	close of business on 11 June 2010
"SA Register"	the branch register of members of the Company in South Africa
"SA Registrar" or "South African Registrar"	Computershare Investor Services (Pty) Limited
"Section 11 Application"	an application pursuant to Section II of MPRDA for Ministerial Consent to the transfer of a controlling interest in a company or close corporation holding a prospecting or mining right (as applicable) or the transfer of the right itself
"shaft"	vertical or inclined excavation into mine workings
"Shareholders"	holders of Shares
"Shares"	shares of £0.01 each in the capital of the Company
"Simmer & Jack"	the defunct Simmer & Jack mine area held by RQS
"Snowden"	Snowden Mining Industry Consultants Pty Limited, a company incorporated under the laws of the Republic of South Africa
"South Africa" or "SA"	the Republic of South Africa
"South African Rand" or "ZAR" or "R" or "Rand"	the lawful currency of the Republic of South Africa
"Southern Deeps"	the southern most area of the Central Rand Goldfield in respect of which a prospecting right application has been lodged by RQS
"Standards"	the "Admission and Disclosure Standards" of the London Stock Exchange
"State"	the government for the time being of South Africa
"stoping"	the mining term for large-scale extraction of ore from underground
"strike length"	the longest horizontal dimension of an ore body or zone of mineralisation
"UK holders"	holders of the Shares and absolute beneficial owners of the Shares who are resident and, in the case of individuals only, ordinarily resident and domiciled in the UK for tax purposes
"UK" or "United Kingdom"	the United Kingdom of Great Britain and Northern Ireland
"UK Record Date"	close of business on 4 June 2010
"UK Register"	the register of members of the Company in the United Kingdom
"UKLA" or "UK Listing Authority"	the FSA in its capacity as the competent authority for the purposes of Part VI of the FSMA
"underground working"	mine openings for evaluation for ore extraction excavated beneath the ground surface
"United States" or "USA"	the United States of America, its territories and possessions, any state of the United States and the District of Columbia
"US dollars", "USD" or "US$"	the lawful currency of the United States
"vein"	a tabular deposit of minerals occupying a fracture, in which particles may grow away from the walls towards the middle
"Viljoen and Viljoen"	Morris Viljoen and Richard Viljoen, professors of geology at the University of the Witwatersrand
"Village Main"	a defunct Old Order mine immediately south of the Robinson Deep area
"Western Areas A, B and E"	three contiguous defunct mining areas situated to the west of the Central Rand Project
"Witwatersrand Basin"	gold bearing conglomerates within the Witwatersrand Basin
"Witwatersrand Goldfields"	a large bank of shaped depositary of sedimentary rocks including gold bearing conglomerates constituting the Witwatersrand Goldfields

 

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