Shareholders approve Rand Refinery’s loan facility


The facility, if drawn down, is reportedly convertible to equity after a period of two years and has been secured as a precautionary measure following challenges encountered in the implementation of its new enterprise resource planning (ERP) software system.

“Following the adoption of the ERP system in April last year, Rand Refinery experienced implementation difficulties which have led to a difference between the actual inventory and the accounting records of approximately 87,000 ounces of gold,” said the company.

“Uncertainty around the true position has prevented the company from being able to finalise its annual financial statements for the financial year ended 30 September 2013. This information has been shared with the company’s regulators, shareholders, insurers and banks. Rand Refinery’s operations are unaffected by this matter and the processing of gold continues at full capacity.”


(READ MORE: S.Africa’s Sibanye Gold lifts reserves estimate)

As a result, Rand Refinery has requested financial assistance from shareholders, which includes [DATA ANG:AngloGold Ashanti], Sibanye Gold, [DATA DRD:DRDGOLD], Harmony Gold and [DATA GFI:Gold Fields], should the resolution of these difficulties result in a financial loss for the company.

“The Rand Refinery management team, under the leadership of recently appointed Mark Lynam, has appointed external financial and technical specialists, including Accenture, to assist,” it said.

According to the company, the maximum commitment of AngloGold Ashanti will be 573.8 million rand. [DATA SGL:Sibanye Gold] will commit 448.5 million rand, [DATA HAR:Harmony Gold] will commit 140.4 million rand and Gold Fields will commit 37.3 million rand.

(READ MORE: Gold Fields to embrace mechanised mining in S.Africa)

“Actions and controls implemented to date have stabilised the situation and the focus now is on resolving the matter and finalising the accounts,” Rand Refinery said.

“Rand Refinery’s board of directors, and shareholders are confident that these will be resolved timeously and that the company will retain its reputation for integrity, reliability and quality.”

DRDGOLD has agreed that the company obtain support however, it will not be participating in the loan facility.