Central Rand Gold has signed a non-binding Memorandum of Understanding (MoU) with Hiria that may result in the sale of its Netherlands subsidiary for $150m.
Central Rand Gold owns mines and prospecting areas around Johannesburg and its Central Rand Gold Netherlands Antilles segment holds 74% of the subsidiary Central Rand Gold South Africa.
The MoU, which is subject to mutual completion of due diligence by both companies, provides the framework to enable Hiria to undertake detailed due diligence on Central Rand's subsidiary and its assets.
Central Rand Gold must secure all required regulatory and exchange approvals for the potential sale of the subsidiary.
Hiria must also secure relevant regulatory approvals and the MoU is subject to entering into a formal share sale agreement. Both companies have agreed to a target completion date of 31 March 2015 for the finalisation of due diligence and the execution of a share sale agreement.
Central Rand Gold has also provided operational update on its acid mine drainage and mining activities.
The high density sludge plant (HDSP) has been operational for five months and the company said it continues to monitor the water level at its mining operations as well as the daily flow rate.
The company had reduced the production rate from the underground mine because of the elevated water levels which is presently at 152m below surface.
Central Rand Gold has a range of assets at several stages of development located in the Central Rand Goldfield on the southern outskirts of Johannesburg, South Africa.
Image: Central Rand Gold has a range of assets at several stages of development in South Africa. Photo: courtesy of Central Rand Gold.