Central Rand Gold Regulatory News (CRND)

Central Rand Gold Limited

("CRG" or the "Company" or the "Group")

(Incorporated as a company with limited liability under the laws of Guernsey,

Company Number 45108)

(Incorporated as an external company with limited liability under the laws of

South Africa, registration number 2007/0192231/10)

ISIN: GG00B24HM601

Share code on LSE: CRND

Share code on JSE: CRD

03 February 2011

Central Rand Gold ("CRG" or the "Company" or the "Group"), the gold mining company with assets in Southern Johannesburg, announces the following update:

Water Table

The Company has repeatedly received strong indications of support from the South African Government ("the Government") with regards to providing funding for the rising Acid Mine Drainage ("AMD") problem. The Government consistently provided assurances of their commitment to a joint solution throughout the year, ultimately undertaking to communicate their decision by early January 2011. No formal undertaking has been received from the Government.

Recent heavy rains and flooding in the Gauteng province has exacerbated the AMD issue and accelerated the rise of the water table.

CRG, together with other affected mining companies, supports the first phase of the interim solution being considered by Government, which involves the construction of a submersible pump station that will have the ability to lift 72 megalitres of AMD per day. The plan further envisages that the water will thereafter be partially treated through the existing High Density Sludge plant at East Rand Proprietary Mines.

The full cost of the above project is estimated at US$26million and CRG's proportionate funding thereof is expected to be approximately US$4million.

To protect the existing resource base above 250 metres below surface ("mbs"), the project needs to commence construction by the end of the first quarter of 2011. As there is no alternate proposal within the timeframe available to resolve this problem, CRG unilaterally ordered the longest lead item, i.e. the submersible pumps, in August of last year at a cost of US$4million, but the Company cannot shoulder the burden of the legacy from 120 years of mining along the central area of the Witwatersrand and complete or operate this project on its own.

Absent clear commitment to this joint project by the end of the first quarter of 2011 CRG faces the very real prospect of inaccessibility to its reserves below 250 mbs by the end of the year.

The uncertainty surrounding Government participation affects the viability of the Company, and until clarity emerges, the Board believes it is essential it adopts a prudent position with respect to its capital resources and operations. This includes the need to:

·; Protect cash resources and limit cash outflow as much as possible;

·; Delay capital expenditure of $2.6million, including the planned metallurgical upgrade;

·; Pursue short term arrangements to process excess mining production, whilst the metallurgical plants upgrade has been delayed. The Company is engaged in advanced discussions on this matter.

·; Continue to engage with the Government as a matter of urgency with a view to resolving the AMD/ water table issue.

Further updates will be made as this situation unfolds. Shareholders should be in no doubt that if a clear and positive way forward is not identified by the end of March 2011 the prospects of the Company will need to re-evaluated.

Financial

Cash held by the Company as at end December 2010 totalled US$14.6million. The lower than expected cash position can be attributed to:

·; production of 9,321 ounces against a target of 19,308 ounces in the year ended 31 December 2010, due to delayed underground stoping caused by longer equipment lead times and initial adverse ground conditions;

·; higher mine development costs due to poor ground conditions necessitating the implementation of an alternative mining method requiring increased materials and services for safe mining;

·; higher plant processing expenditure for repairs and upgrades to improve capacity, availability and recovery rates;

·; mining equipment has been self funded whilst the Company investigates alternate debt financing alternatives. The prospectus assumed a level of debt financing; and

·; Delay in receiving Value Added Tax refunds of $2.5million.

As indicated above, the short term focus for the Group is cash preservation; this will be achieved by delaying capital expenditure, placing a moratorium on all recruitment coupled by delaying all non essential operational spend. The sale of the Company's 50tph Gekko concentrator plant is at an advanced stage and the Company hopes to be able to provide an update on this shortly.

Mining

Underground Mining

CRG commenced underground stoping at the beginning of January 2011 with the arrival of the Long Hole Rig ("LHR") at the end of December 2010. Early progress has been encouraging and while underground operations are in ramp up stage, the Company believes it should still be on track to achieve its expected 2011 production target, had this not been for the issues with AMD.

Immediate target areas for stoping were identified with the first target area being used to commission the LHR as well as to test the hanging wall competency.

The first Footwall access stoping took place from the 1571/1557 draw point 13 stope and realised approximately 3096 tons of Main Reef ore grading at a diluted blasted grade of 2.5 g/t.

The following results were achieved from the first Footwall access stope:

·; The blasting of the stope from the draw point has proved that the vast majority of the blasted material runs down to the bottom draw point following the blast;

·; The remainder of the material can easily be washed down using water jetting guns;

·; Hanging wall remained largely intact during stope blasting;

·; Ore can be easily accessed from the bottom draw point; and

·; Good ore fragmentation occurred (-150mm) which is good for metallurgical crushing requirements.

·; Dilution control in this first stope was good with only 10cm of footwall being included in the stope ore. The lower grade middling encountered during the blast will be partially removed by the optical sorter, in line with CRG's current plans.

Overall the Company is extremely pleased with the results of the first footwall stope as it is in line with its expectations. Underground production continues with an initial underground production target of 16,000 tones per month.

At the end of January 2011 approximately 56 kilotons of underground Main Reef ore was exposed. The Company did identify unplanned double voids (where both the Main Reef and Main Reef Leader are mined out) in certain parts of its targeted mining area, but this seems largely an isolated occurrence.

Grades obtained from chip sampling at available draw points appear to be consistent with those estimated in the current Resource evaluation. Sampling results from the first three accessible draw points are tabulated below.

Monthly development progressed at a good rate with 434 metres being achieved in December 2010 compared to 408 metres achieved in November 2010 and 372 metres in October 2010, respectively. It is anticipated that the arrival of the new charge-up vehicle at the end of January 2011 will shorten the charging-up cycles thereby having a commensurate effect on the achievement of the set production targets.

Metallurgy

Gold production of 9,321 Oz was achieved for the year ending December 2010, which was within the range projected in the Company's Interim Management Statement announced in November 2010.

Consistent production of approximately 23 kilotonnes per month was maintained in the second half of 2010 on the predominantly surface Oxide ore feed.

The optical ore sorter was installed mid January 2011 with commissioning commencing at month end coinciding with the underground mining ramp up. The ore sorter will be utilised to remove waste from the feed thereby increasing the ore grade into the process plants with the added benefit of the waste being on sold as aggregate.

Further plant upgrade relating to the crushing and milling circuit will be postponed until clarity can be obtained with regards to the AMD solution

The proportion of underground sulphides being processed vs surface oxides will increase to around 50/50 in 2011 from around 15/85 in 2010 requiring a processing shift to address the harder and chemically different ore feed. Confirmation of grade, dilution and possible old workings contaminants will also be evaluated in assessing gold output.

Geology

Surface Exploration

Mineral Exploration through systematic mechanical trenching, geological mapping and channel sampling continued throughout the fourth quarter of 2010 resulting in the identification and delineation of several significant open pit "Exploration Target" areas within the New Order Mining Right.

Table 1 below details the Exploration Target Inventory as of December 2010.

Note: The potential quantity and grade described by the term "Exploration Target" is conceptual in nature and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the definition of a Resource. Further exploration work is ongoing, and includes trial mining and processing of this shallow target to establish grade and orebody continuity, mineability, dilution and throughput characteristics.

Further exploration for 2011 will focus on improving confidence in Exploration Target material and identifying additional surface mining potential to supplement underground production.

Expansion Projects

There has been considerable focus during the fourth quarter of 2010 on the development and optimization of the significant JORC/SAMREC resource base available to the company.

Independent Scoping studies into the feasibility of developing CMR East have been completed and suggest that CMR East is economically viable at a 30% confidence level. Further work is now required to increase this confidence to pre-Feasibility/Feasibility level which will allow for a full capitalization decision to be made.

As the resolution of the AMD/ water table issue remains unclear, additional economic studies across the lease area, focussing in particular on CMR East are scheduled to gauge the economic impact of the water level stabilising at various depth levels.

A comprehensive tender process for the planned Resource Drilling at the new Crown Mines site has been completed and the detailed programme of diamond drilling is designed to upgrade a substantial block of Main Reef in the Crown Mines West target area from Inferred Resources to Indicated Resources. It is expected that this drilling programme will commence during the second half of 2011. This is a change of schedule from the previously planned commencement date of the first quarter of 2011. This deviation was deemed prudent to allow for cash preservation, until greater clarity can be obtained with regards to the AMD solution.

Studies are also underway to investigate the economic potential of subsidiary mineral assets such as the auriferous Kimberley and White Reef packages. These largely unexploited and underexplored reefs are known to be continuously developed over strike distances in excess of 25 kilometres and remain a very substantial part of the CRG portfolio.

NOTE

The information in this statement relating to Mineral Resources and geology has been reviewed and approved by Mr. Keith Matier, BSc (Hons), GDE, Pr Sci Nat, who is a competent person in terms of the SAMREC and JORC codes. Mr. Matier is the Geology Manager of Central Rand Gold South Africa (Pty) Ltd and has over 17 years experience in precious metal exploration, mineral resource management and evaluation

For further information, please contact:

Johan du Toit +27 (0) 11 674 2304

Patrick Malaza +27 (0) 11 674 2304

Enquiries:

Evolution Securities Limited +44 (0) 20 7071 4300

Rob Collins / Chris Sim / Neil Elliot

Macquarie First South Advisers (Pty) Ltd +27 (0) 11 583 2000

Annerie Britz / Melanie de Nysschen/ Yvette Labuschagne

Buchanan Communications Limited +44 (0) 20 7466 5000

Bobby Morse / Katharine Sutton / James Strong

Jenni Newman Public Relations (Pty) Ltd +27 (0) 11 772 1033

Jenni Newman