CRD - Central Rand Gold Limited - Interim Management Statement Release Date: 12/11/2008 10:32:11 Code(s): CRD
CRD - Central Rand Gold Limited - Interim Management Statement
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)
Share code on LSE: CRND
Share code on JSE: CRD
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,
- 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
- 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."
For further information please contact:
(011) 551 4000
Buchanan Communications Limited +44 (0) 20 7466 5000
Bobby Morse / Ben Willey
Evolution Securities Limited +44 (0) 20 7071 4300
Simon Edwards / Chris Sim / Neil Elliot
Jenni Newman Public Relations (Pty) Ltd +27 (0) 11 772 1033
Jenni Newman / Megann Outram
Macquarie First South Advisers (Pty) Ltd +27 (0) 11 583 2307
Amanda Markman / Thato Morojele / Annerie Britz
The full version of this release with the appropriate diagrams is available on
the CRG website www.centralrandgold.com.
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.
(For the diagram, please refer to the full version of this release on the CRG
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:
SITE MASS-t GRADE-g/t CONTENT-oz
8/9 12 930 000 5,76 2 400 000
5 13 000 000 5,54 2 320 000
4 3 790 000 3,61 440 000
7 3 950 000 3,71 940 000
Total 33 670 000 5,19 5 620 000
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.
(For the diagram, please refer to the full version of this release on the CRG
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
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.
Surface drilling and bulk sampling results
- Surface Drilling:
- Around 59,000 metres of diamond and RC drilling has been completed
- Resource has been upgraded by 1.8 million oz to 35.6 million oz as a
result of exploration work
- There has been confirmation of un-mined mineralised pillars and reefs
- RC drilling has been carried out on pyritic quartzites at Village Main
and City Deep
- Uncomplicated orebodies = potential for better recoveries.
- Reconnaissance mapping & trenching has identified:
- Un-mined sections of North and Main Reef
- Un-mined duplicated sections of Bird & Kimberley Reefs - faulting
- Large sections of un-worked Elsburg Reefs towards southern boundary of
- Potential additional tonnage - mineralised halos in hanging wall and
footwall of conglomerate bands of Main Reef package - leaching
- Bulk Sampling
- Discovery of gold outside reef horizons indicates a potential increase
in mineable tonnes and resources.
- Underground bulk sampling has been undertaken to quantify mineralized
zones in hanging and footwalls and between reef mineralization (it was
established that channel/chip sampling was not delivering sufficient
- Using an innovative approach CRG has developed a breakthrough in
continuous bulk sampling
- A headgear, winder and hoistroom have been successfully installed on
East Shaft to assist with haulage of bulk samples
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
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.
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
The current cash spend is in line with budget estimations.
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
Issued on behalf of: Central Rand Gold Limited
Date: November 12, 2008
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
Date: 12/11/2008 10:32:11 Supplied by www.sharenet.co.za
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