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Operational Update
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: GG00B24HM601
LSE share code: CRND JSE share code: CRD
("Central Rand Gold" or the “Company”)
OPERATIONAL UPDATE
Central Rand Gold today provides an update detailing significant
events that occurred during the first four months of 2013,
expanding on detail provided in the Operational Update of 29 April
2013.
Mining Operations
Overall, mining operations have progressed well with total mining
production of 83,597 tonnes against a target of 83,604 tonnes. The
overall mined grade was, at 3.25g/t, slightly lower than in 2012
where 3.92g/t was achieved. The drop in grade is not seen as
permanent and the grade will continue to fluctuate depending on
the specific mining area. This is not unusual in mining operations
and the Company remains confident that the overall Resource grade
of 3.57g/t is achievable over the life of the mine.Further
development during the first quarter of the year has opened up
additional mining fronts, providing the Company with greater
mining optionality and flexibility.
Mine Call Factor
The Mine Call Factor (“MCF”) continued to show steady improvement
throughout the first four months of 2013 with operations in the
month of April retaining a solid 74% of gold from working face to
gold pour. Current indications are that May will mirror this trend
and even exceed the April figure. This improved MCF has been
brought about by continuous improvements in the stockpile
management and ore handling philosophy as well as in adjustments
to the blasting and sorting routines required when handling the
thin channel high grade ore which has became a feature of
production since late February 2013.
Production results
As previously reported the challenges experienced due to the
availability of the Bateman Mill continued through January and
February and again in April (albeit to a much lesser extent).
Gearbox modifications were again undertaken in April and in early
May in an attempt to improve reliability of this mill. The mill is
now running well on a single gearbox and currently offering
availability in excess of 80%.Whilst this is encouraging,
availability and general performance will be closely monitored and
assessed. The Company is also investigating the procurement of a
second 9 x 12’ ball mill to serve as a backup and potential
replacement for the Bateman Mill.
The Carbon in Leach (“CIL”) 9 x 12’ mill continued to perform well
during the four month period with an average availability
approaching and ultimately exceeding 90%. Low availability during
January was due to a planned swap around of a pinion gear which
overran the scheduled timeframe due to unforeseen complications.
Month Mill Availability Dry Tonnes
January Bateman 7 x 10' 47% 2896
January CIL 9 x 12' 42% 5386
February Bateman 7 x 10' 45% 2378
February CIL 9 x 12' 84% 10178
March Bateman 7 x 10' 80% 4457
March CIL 9 x 12' 85% 11188
April Bateman 7 x 10' 58% 3092
April CIL 9 x 12' 92% 10875
Gold production increased to 1,205 ounces in April as a result of
a relatively stronger performance by the process plant and a
significant step up in tolling tempo.
January February March April
Tonnes Processed (t) 8282 12556 15645 13967
Oxide (%) 50 57 62 68
Belt Grade (g/t) 2.88 1.91 1.94 2.10
Residue Grade (g/t) 0.22 0.22 0.20 0.21
Gold Produced (Oz) 526 605 747 703
Tonnes Tolled (t) 2048 7052 3646 9128
Grade Tolled (g/t) 1.91 1.92 2.25 1.71
Gold Produced (Oz) 126 435 264 502
Grades showed a steady increase as the improved waste sorting
techniques were adopted to cope with thin but high grade reef
production. This trend has continued through May with indications
of belt grades in the mid 2g/t range.
Potential Restructuring
The strategic review with respect to potential retrenchments in
terms of Section 189 of the Labour Relations Act 66 of 1995 has
been suspended.
This has been brought about following a reassessment of the
capital cost required to meaningfully increase both the
availability and capacity of the gold process plant beyond the
current capacity.
The introduction of a high capacity crushing circuit is to be
effected in July, coupled with the option of adding an additional
9 x 12’ mill to complement the current milling arrangement. This
will significantly reduce the unit operating cost of the mine to
well below commercial tolling rates, whilst offering far superior
plant availability.
Update on Legal Proceedings with Puno Gold Investments Proprietary
Limited (“Puno”)
On 27 November 2012, the Deputy Judge President issued a directive
letter to the both Puno and Central Rand Gold setting out certain
requirements for the further prosecution of the matter, including
but not limited to the date upon which Puno was required to serve
and file its heads of argument, namely on 15 April 2013.
On or about 10 April 2013, four days before the 15 April 2013
deadline set by the Deputy Judge President,Puno chose to
terminate the mandate of its then attorneys of record. This was
followed on 12 April 2013 by a request to the office of the Deputy
Judge President seeking an indulgence for the late filing of
Puno’s heads of argument, on Friday, 19 April 2013.
On 19 April 2013 and again on 25 April 2013, Puno filed further
affidavits introducing new defences, factual content and
additional new information. Despite wanting to avoid a delay and
initially expressing their endeavour to reply before the hearing,
the Company did not have sufficient time to deal with the series
of new issues contained in the new affidavits.The amount of new
information introduced by Puno’s own admission, very late in the
day, required such additional detailed research and investigation
on the part of Central Rand Gold that the Company was left with no
option but to apply for the postponement of the scheduled 9 May
2013 hearing.
This is seen by the Company as a blatant excuse to introduce all
manner of new material into proceedings substantially after the
close of pleadings.
As at Friday, 31 May 2013, the Company has received confirmation
that the Judge President is attending on the special allocation of
a further hearing date of the application in order to expedite the
matter.
Execution of the Simmer and Jack Prospecting Right
The Simmer and Jack Prospecting Right (“Right”) was executed on
5 June 2013 following a lengthy administrative delay. This Right
covers a SAMREC compliant shallow Main Reef Leader Resource of
0.19 million ounces of Indicated Resource and 0.04 million ounces
of Inferred Resource as well as a SAMREC compliant Main Reef
Leader Exploration Target of 3.16 million ounces.
In addition to this detailed and established Resource base, there
exists considerable untested and un-mined potential in the
Kimberley and White Reef horizons in this area which offer
excellent targets for further development.
The execution of this Right marks the start of a fresh five year
exclusive prospecting term, and grants the Company sole right to
apply for a mining licence during this term on the back of
positive prospecting results.
Acid Mine Drainage
Construction on the High Density Sludge Treatment Plant is
reportedly on track with commissioning timed for the beginning of
November 2013 and is expected to be fully operational in early
2014.
Financial Update
Cash and cash equivalents balance at the end of April 2013 was
US$2.1 million, down from US$4.5 million in December 2012. This
drop in cash is largely attributable to loss of production through
poor plant performance in January, February and April. The recent
drop in gold price has also put additional strain on cash
reserves, but this is somewhat offset by the weakening Rand/Dollar
exchange rate and improving MCF.
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
7 June 2013
Sponsor
Merchantec Capital
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