Central Rand Gold is one of the mining companies that are eyeing opportunities in other African countries, after experiencing slow growth in South Africa, Business Day reports.
Central Rand Gold has had to shelve its ambitious initiative to mine gold near central Johannesburg. According to its strategic update, the company stopped open-pit mining after noticing that grade were too variable. Alternatively, it was tolltreating third-party material through its plan in Roodeport, West of Johannesburg.
Besides effects of the global commodities slump, the self-destructive tendencies in South Africa’s mining sector have worsened investment conditions. South Africa’s mining companies regard militant trade unions and unpredictable policies as some of the obstacles to growth.
A statement from the Central Rand said: “The board is working with two parties regarding potential acquisition opportunities within sub-Saharan Africa. While discussions are at a preliminary stage, both opportunities exhibit characteristics which the board considers appealing, namely near-term cash-flow potential, and low capital start-up costs.” Under the new leadership of Lola Trollip as CEO of the South African subsidiary, Central Rand is also looking for more sources of ore around its plant in Roodepoort to process.
Meanwhile, the company is in talks with its strategic partner, Zhejiang Golden Machinery Plant, to invest in the company, and in expanded capacity at the Roodepoort plant, in exchange for shares.
Bergen Global Opportunity Fund, a US-based fund, has provided bridging finance of about $600,000, and it could increase the level of funding to $4,1m, if both parties agree.