Central Rand Gold Regulatory News (CRND)

12 Nov 2008 07:00



Central Rand Gold

Interim Management Statement

November 12 2008 - London and Johannesburg listed Central Rand Gold ("CRG") is pleased to provide an operational update on progress being made with the development of CRG's assets in southern Johannesburg. Highlights include:

Award of New Order Mining Right on September 17, 2008, with the formal execution of the right on November 11, 2008.

Commencement of trial mining - Gekko Plant was commissioned on October 1, 2008

Bulk sampling and drilling results

Appointments - geologist and project manager 

CRG remains on track to produce at an annualised rate of 100,000 oz Au by Dec 2009

Publication of feasibility study expected in Q1 2009

Update on water pumping at South West Vertical 1 (SWV1) shaft

Cash at hand as at 30 September 2008 - US$ 105.8 million

First gold pour expected before year end 2008

"After receiving our first New Order Mining Right on September 17, we moved swiftly to commence trial mining on October 1, with our focus now firmly on generating early cash flows, publishing our feasibility study and meeting our initial gold production target," said Greg James, CEO of Central Rand Gold.

"Ongoing exploration and underground bulk sampling continue to be a major priority as we concentrate on building our resource base and upgrading resources to proven reserves."

A copy of the press release with all of the associated maps is available on the web site of Central rand Gold on www.centralrandgold.com.

Operational Update

New Order Mining Right

Central Rand Gold received its first New Order Mining Right ("the mining right") from the South African Department of Minerals and Energy (DME) on September 17, just 14 months after initial application was made.

The mining right enables the company to now rapidly transform from an explorer to an active miner at its Consolidated Main Reef, Langlaagte and Crown Mines tenements in the Central Rand Goldfield.

The targeted resource for initial operations in the awarded New Order Mining Right has been depicted in the table below:

This is the first mining right in a series of New Order mining rights that will be applied for by CRG. The next two applications will be made in 2009. 

Commencement of Trial Mining

Trial mining commenced as scheduled on October 1, utilising a crushing and concentrating plant acquired from Gekko Systems in Australia. The plant has a capacity of 20 tons/hour or around 12,000 tonnes per month and is expected to produce gold at a rate of 750-1,500 ounces per month.

A major objective of the trial mining process is to convert resources into reserves by affirming mining and metallurgical processes, physically testing mining and backfilling techniques and refining metallurgical processes and equipment.

Ore parcels of between 100 tons and 500 tonnes are being processed through the Gekko plant to test ore grades and recoveries. 

Order placed for concentrate processing plant; board approves purchase of second crusher and concentrator plant

The company has ordered a pilot Carbon In Leach (CIL) concentrate processing plant and has received Board approval to acquire an additional 30 tonnes/hour (18,000 tonnes/month) crusher and concentrator plant to increase its initial gold production rate and enhance its bulk mining opportunities.

The CIL plant is expected to be operational in the first quarter of 2009 while the second processing plant is scheduled to be operational before the end of March or early April 2009.

By processing its own concentrate instead of toll-treating, the company will gain higher gold recoveries and benefit from cost savings. It is estimated the CIL plant will operate initially at a cost of some R90/tonne, reducing to some R60/tonne in October 2009 as capacity is increasingly utilised. This compares with considerably higher toll treatment costs. 

The additional crushing and concentrating plant will enable the company to process up to 30,000 tonnes of material per month in total at two different locations and accelerate gold production.

The first crushing and concentrating plant (costing approximately US$ 1.7 million) as well as the CIL plant (costing approximately US$ 2.5 million) have already been paid for and the second crusher and concentrating plant will cost approximately US$ 5.5 million.

Appointments

Two further senior members to the senior management team have been appointed:

Riccardo Francesco Tonini: Riccardo started his project management career at Bateman  Engineered Technologies 13 years ago, where he has held various positions from Senior Project Manager to his present position as General Manager: Project Execution (a board level position within the company). In this role, he had overall responsibility for management of projects, construction, commercial, safety, health & environment and IT systems development and implementation. 

Keith Matier: Keith started his career as a geologist at a contract geological service provider in 1993, where he was responsible for all geological activities for clients. He specialises in large scale platinum and gold exploration projects. Keith has gained his experience through working at MSA Geoservices.

Water Pumping at SWV1 Shaft

On October 6, 2008, the company received notification of East Rand Proprietary Mines Limited's (ERPM) withdrawal of pumping at the SVW1 shaft. This was in response to the death of two employees owing to asphyxiation while conducting routine water measurements. These pumps are utilised to maintain the water levels in the Central Rand at approximately 900 metres below surface. 

Central Rand Gold has calculated that ERPM's decision to stop pumping at its south-west vertical shaft will have no short or medium term effects on its own mining operations.

Pre-empting that pumping may at some stage cease, CRG five months ago conducted an investigation which showed that it would take at least four years for this underground water to affect or interfere with its own shallow mining operations in the area. ERPM had been pumping water at a rate of 60 megalitres per day.

CRG is confident that it has ample time to address this situation and is examining its various options. 

Cash Position

At at September 31, 2008 the company had US$ 105.8 million in cash. The majority of cash is currently held in British Pounds. Despite the weakening of the Pound against the US$ over the last few weeks, the South African Rand is the currency in which the company has most of its operational cash exposure. The Rand has reported weakening against both the US$ and the Pound over this period. 

The Board is meeting in December where a full review of the 2009 mining plan and budget will be considered in light of the current cash resources available to the company. Further updates to the market will follow in due course.

Following this review the Company will revise, update and upgrade its current draft feasibility study to the level and accuracy appropriate to the reviewed mining plan. This exercise is expected to take four months to complete and will be a significant part of the confirmation and upgrading of mineral resources to reserves.

The current cash spend is in line with budget estimations. 

Overview

CRG has one of the largest gold resources in the world. Its management ream has a strong track record of building large scale mining projects. Through the application of tried and tested mining methods, around four million ounces of gold is expected to be extracted from the CMR, Langlaagte and CMR tenements alone over the next seven years. The company has the necessary political and community backing following a highly inclusive Environmental Impact Study process.

Ends

Issued on behalf of: Central Rand Gold Limited

Date: November 12, 2008

About CRG

Central Rand Gold is engaged in gold mining and exploration in southern Johannesburg, South Africa. With JORC and SAMREC-compliant resources of over 35.6m oz of gold, CRG has a primary listing on the London Stock Exchange and a secondary listing on the JSE Limited. CRG's operating subsidiary Central Rand Gold South Africa is currently involved in prospecting an area south of the Johannesburg Central Business District, known as the 3C's (Consolidated Main Reef, Crown Mines and City Deep) as well as Langlaagte, the farm where gold was first discovered in the Witwatersrand in 1886 by Australian prospector George Harrison.