LONDON (Alliance News) - Central Rand Gold Ltd, which Wednesday started trading on AIM after moving from the London Stock Exchange's main market, said it has received the first tranche of its USD7.25 million finance boost, allowing it to progress upgrades to its crushing and milling facilities.
The gold miner has been struggling with its metallurgical processing plant for the Consolidated Main Reef West mining area since late last year as the outdated equipment wore down. It announced a fund raising to try and update the plant so that had a capacity of about 25,000 tonnes a month.
Wednesday it said it has received the first USD3.5 million of its loan notes issue to Redstone Capital Ltd., which has been set aside to help pay for the plant upgrade. The second tranche of USD3.75 million will be drawn down no later than October 31.
It said it had already procured a primary jaw crusher that, once installed, will have a crushing capacity in excess of 30,000 tonnes a month, and is evaluating options for secondary crusher with the same capacity. It has also procured an additional 8 x 16 foot Ball Mill that will effectively increase milling capacity by 15,000 tonnes per month to in excess of 25,000 tonnes a month.
"The increased overall production will however, require a capacity upgrade for the thickener and leach circuit to accommodate the additional ore tonnage and also an upgrade in the elution circuit to allow for the increase in gold production," the company said in a statement. "These additional upgrades are in an advanced planning and execution phase, and are expected to be completed in early 2014."
It said its mine had produced 47,221 tonnes of ore over July and August.
The company also has interests in other assets on the same goldfield located on the outskirts of Johannesburg, in various stages of exploration and production.
Central Rand Gold said initial results from tests at the Crown East Main Reef joint venture with Goldplat Recovery Proprietary Ltd., are very encouraging. Under the terms of the deal, Goldplat will have the right to assume mining, at its own cost and risk, at Crown East in return for a 5% net smelter royalty to Central Rand Gold.
Initial sampling results indicated grades in excess of 10 grammes a tonne, Central Rand Gold said.
"Whilst the tonnage mined by Goldplat has been modest, the sampling results to date seem to confirm that the high grade pay-shoot modelled in the Crown area exist and suggest that there may be further economic upside to the recent Crown West Scoping Study undertaken by the company," it said.
It will continue to assess the exploration potential of the area.
Shares in Central Rand Gold were up 28.81% to 9.50 pence Wednesday morning.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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