Central Rand Gold Ltd is in talks to sell its main subsidiary for $150m.
The share price has more than trebled from 8p to 25.5p on the back of a memorandum of understanding with potential Hong Kong-based buyer Hiria. Central Rand Gold is valued at £13m. Due diligence will begin. Any deal will require regulatory approvals and a definitive sale agreement.
Hiria is a subsidiary of Canada-based leasing business Marsa, which also has invested in iron and nickel mining in Indonesia, Philippines and Tanzania and it wants to expand in Africa and Asia.
At the end of June 2014, Central Rand Gold had debt of $19.3m and cash in the bank of $4.39m. The company has net liabilities. At the end of 2013, Central Gold had raised £1.69m at 8.78p a share via an open offer and up to £2.86m via a subscription.
Gold production has been reduced because of high water levels. Operational costs have been reduced.
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