Central Rand Gold Ltd Share Chat (CRND)

Gold prices tend to drop when markets recover, Gold is seen as a safe haven when stock markets and money markets are in turmoil

Why has the price of gold dropped like it has?

Yes...it's not going to be very good for us given that we have/had around $1550/oz costs and our cash flow got hammered recently with all the fixes that had to be done.

Still, at least the three proposed expansion models in Venmyn's report are all based on a gold price of $1600/oz, so we have a wee buffer yet.

This is the link to the report that I mentioned yesterday re. the "model 2" etc: http://demo.crg-sa.com/wp-content/uploads/Central%20Rand%20Gold%20-%20Evaluation%20of%20Differing%20Valuation%20Scenarios%20-%20Draft%20Version%209.pdf

Re. Crown West, Johan thought it could be the "jewel in the crown", so I am keen to see the report on it.

I also asked if he thought we could be completely self-funding, i.e. use proceeds of mining alone to fund expansion and bootstrap ourselves into expansion. Can't remember whether he said "No" outright but he didn't seem keen on the idea, even though it is one of the three models proposed. We can't fund with the cash flow we have now and it is too low even now to be much of a buffer should we have a series of outages/hardware issues.

on a nasty slide the last few weeks - no floor in sight, now down to $1627 oz.

All the majors Randgold etc suffering.

Excellent report - Johan is very pleasant and easy to discuss things with.

Will try and look through your points in a bit more depth tomorrow, especially the funding ideas.

Thanks for all the info today! I'm just holding quietly on the sidelines as I don't have much to talk about. Read everyday & funny seeing the rush of people on here a couple of weeks ago for 48 hours then all quiet again. Thanks again & GLA.

Very nice work.
Cheers for the effort :)

Fyi, Johan gave me a call to go over the three points I had raised with him. As he called I don't have an email to copy/paste. The below is a memory dump, so take this with a pinch of salt. I'm sure all errors are mine.

Point 1 - status of Social Labour Plan and Mine Work Program: They have formally (officially) submitted these to the DMR so the ball is in DMR's court now.

Point 2 - The BDLive article where it was said that CRND wanted to raise "about $7m", where does the $7m come from?: Johan said this amount was inferred by the journalist from Venmyn's CPR report " Evaluation of Differing Valuation Scenarios". I had a look myself and if you look at "Table 5: Case 2 DCF Model" you can see that for the first year the model projects as final cash flow: (1) USDm, second year (3), third year (3). So in total that makes (7) USDm. In other words, to keep cash flow positive in model "Case 2" they'd need $7m (this is purely my assumption going on what Johan told me and on what I think I can make out of the CPR valuation scenarios report). That table is referring to Case 2, quote: "which is essentially a combination of self-funding and two-phased external funding". Johan said he thought that model would be best for the company and he would ideally take on debt for this. But this is what they'll work on now and what will be presented in their June 2013 growth strategy update. Depending on the strategy the funding would be raised later this year or 2014.

Point 3 - Dissatisfaction from certain community representatives, are they taking steps to avoid it becoming an obstacle in raising funds?: I believe Pablo already gave similar feedback some time ago, Johan said they are engaged with the relevant official representatives of each warden. (Acercommunity not being one of them)

I can confirm Pablo's update re. Crown West. Johan said they should have a report ready for this next two weeks. This will still be inferred estimates so they will do some drilling work this year to get actual estimates.

I also mentioned GoldPlat, I don't think this is a major focus and he said, like Pablo mentioned some time ago, it is just free prospecting for them as the actual money they'd get is not that much. He said there should be a report on this soon (March?) that lays out the GDP mining programme.

I also raised the use of the word "hopeful" in the last RNS ("the TCTA is hopeful that the plant will be completed and operational during the course of this year."). He said he was very impressed with the TCTA and Group Five, they are both impressive companies and also a month or two delay, if it should happen, would not be a big deal, as once installed the pumps would do their work very quickly. It's only if it gets delayed another year or so that it will be problematic.

Good afternoon Mates.Pablo-thank you for sharing with us your personal e-mail content from CEO.To my untrained eye it seems that once the pumps are in situ and the mine dewatered at least below 400mbs,we should be getting far greater ore gold content in Q4 of this year then from current surface mining and tailings processing.However it also looks that we just must wait for the scoping report,which should be with us shortly.This should give us projected costs for some of planned developments.However,most importantly,lets hope that crnd will not encounter more disruptions in 2013!.ATVB to ALL.sTACH.

Hi xxxx

Just for clarity the Ritz submersible pumps we acquired and donated to TCTA, have the capacity to lift 72mlpd from around 400mbs which equates to around 450mbs from our mining area. If the Company chooses to go deeper - it will require CRG to buy additional submersible pumps. The costing of these pumps have not yet been calculated. The benefit will be that no capital will be required for the surface infrastructure.

At this stage we are not planning to update the Venmyn report - and our focus is rather on the Crown area. The scoping study will be published shortly.

Johan du Toit
Chief Executive Officer

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So there we have the definite depths, pumps, etc. We don't know what any future costs would be to go lower than 450mbs but they would involve more pumps(not cheap) but the infrastructure would be in place(cheap).
Interesting comment about Crown Reef, didn't know we were doing much there.
On Feb 16th 2012 the RNS started :
Central Rand Gold is pleased to announce that, through its wholly owned subsidiary Ferreira Estates and Investment Company Ltd, it has signed a contract mining and beneficiation agreement with Goldplat plc (AIM: GDP), a London quoted gold producer, with a view of recommencing gold mining at the Crown East Main Reef (strike 1.2km) and CMR Bird Reef mines (strike 2km) in the West Rand area near Johannesburg in South Africa. The above mining areas fall outside of CRG's near term target areas of CMR Main reef (East and West) and Crown West.
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Presumably we're concentrating more on Crown West as we still haven't had any definite decision from Goldplat on their mining Crown East. Also, presumably, the scoping study expected soon is for Crown West.

Otherwise, jdsmars69 - naughty but nice!