28 May 2014 07:00
Central Rand Gold Limited(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: GG00B92NXM24 LSE share code: CRND JSE share code: CRD ("Central Rand Gold" or the "Company")
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| Status of Plant Upgrade |
Highlights
· New mill ("Mill 3") installed on time, within budget and with a perfect safety record;
· Commission of Mill 3 complete and operating in line with expectations;
· Plant upgrade is set to increase total milling capacity by over 55%;
· Availability rates of existing milling circuit have improved significantly over the past quarter.
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Further to the announcement of our unaudited preliminary results on 16 May 2014, the Company is pleased to announce the successful installation and commencement of operations of Mill 3.
1. Mill 3 procurement and installation
As previously announced, during the fourth quarter of 2013 the Company embarked on a comprehensive review and upgrade program with respect to its milling circuit (the "Program"). The Program comprised two discrete work streams:
1. Installation of a new mill; and
2. Optimisation / Enhancement of existing mills.
The common goal of these workstreams was to increase the Company's milling capacity and improve general efficiency and reliability of the expanded milling circuit.
Following an internally conducted analysis of a broad range of new and second-hand equipment, the Company determined to utilise 'fit for purpose' available second-hand equipment as opposed to new equipment. The following were key drivers of the Company's decision making process:
1. Minimising capital expenditure;
2. Reducing long lead delivery associated with the supply of heavy engineering items of equipment; and
3. Accessing spares that would normally have long lead items.
All the equipment purchased was thoroughly evaluated to ensure that no latent defects were present. This included full non-destructive testing of the mill shell and ends. Where necessary, a comprehensive refurbishment exercise was completed on equipment purchased.
Mill 3 is a 9x10 feet Ball Mill, fitted with rubber liners. Predictive mill modelling indicates a throughput capability of 17 tonnes per hour ("tph") which, when combined with the Company's two existing ball mills is targeted to increase capacity by at least 55% to 25,000 tonnes per month ('tpm'), which is in line with current mining production. The table below summarises the throughput characteristics of the Company's three individual mills which will be experienced from May 2014 onward.
Mill | Dimension (feet) | Nameplate Feed Rate (tph) | Designed Uptime (%) | Monthly Capacity (tpm) |
Mill 1 (Bateman Mill) | 7 x 10 | 7.0 | 85 | 4,200 |
Mill 2 (CIL Mill) | 9 x 12 | 22.5 | 85 | 13,700 |
Mill 3 (New Mill) | 9 x 10 | 17.0 | 85 | 10,400 |
28,300 |
The installation of Mill 3, including feeding and discharge arrangement has been completed safely, within budget and within the four month planned schedule. The commissioning of Mill 3 was successfully completed during mid May 2014 and is now fully operational. The increased feed capacity generated by Mill 3 will significantly reduce the current pressure on the existing milling circuit. This will enable a more proactive and effective maintenance program to be conducted, which will in turn improve productivity and plant availability. It is anticipated that the increased milling capacity and availability will reduce the Company's reliance on external tolling which will improve both revenue generation and operating margins. In addition, the discrete configuration of the milling units will allow for preferential milling campaigns of ore feeds of different characteristics.
As previously announced the Company is in the process of upgrading its downstream leaching capacity. Until these upgrades come on stream, monthly production will be carefully managed, at approximately 20,000 tpm, to ensure that metallurgical recoveries do not deteriorate.
2. Optimisation of existing mills
In mid January 2014, the Company initiated a pro-active refurbishment and maintenance program on the existing mills ("Maintenance Program") with the objective of improving productivity and increasing mill availability. The Maintenance Program has enabled the Company to migrate from a re-active maintenance strategy where items were replaced post breakage to a pro-active maintenance strategy where components are closely monitored (through data analysis) and repaired or replaced before breakages or failures occur.
Although the Maintenance Program is a long-term initiative, results recorded over the last two months have been positive, with a significant increase in milling unit availabilities being recorded since inception. The table below indicates the step change in availability since the Maintenance Program was launched in mid January 2014.
Period | Availability % |
January 2014 | 67.9 |
February 2014 | 90.0 |
March 2014 | 89.6 |
April 2014 | 87.9 |
The focus for 2014 will be to ensure that the plant availability will be above 90%.
Commenting on the upgrade, Johan Du Toit, Chief Executive Officer of Central Rand Gold, said "I am delighted with the advancements we have made on the milling units. In particular, I am extremely proud of the Mill 3 installation. To deliver such an important project on time, within budget and with limited input from external advisers is fantastic. The team has shown a lot of skill, discipline and ingenuity in delivering this project. This performance is something we will look to replicate and build on as we continue to improve the rest of the operation."
Nathan Taylor, newly elected Interim Chairman of the Company, said "I would firstly like to congratulate the board and executive team for achieving another key milestone, towards the improvement of the metallurgical plant. Secondly, I would also like to take the opportunity to thank our shareholders for their continued support. Approximately eight months ago, the Company embarked on an exciting journey to improve the performance at its metallurgical plant. Over that period, a significant amount of work was completed, with yet more work to be done over the coming months. With a significant number of initiatives underway, the board is looking forward to engaging with shareholders more regularly as such key strategies and initiatives mature and are completed. The coming months will be a very important phase for the Company."
Images of the upgrades can be viewed on the Company's website: www.centralrandgold.com
For further information, please contact:
Central Rand Gold +27 (0) 11 674 2304
Johan du Toit / Patrick Malaza
Charles Stanley Securities Limited +44 (0) 20 7149 6478
Marc Milmo / Mark Taylor
Merchantec Capital +27 (0) 11 325 6363
Monique Martinez / Marcel Goncalves
Buchanan +44 (0) 20 7466 5000
Bobby Morse / Louise Mason
Jenni Newman Public Relations +27 (0) 11 506 7351
Proprietary Limited
Jenni Newman
Johannesburg
28 May 2014
Sponsor
Merchantec Capital