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CRD - Central Rand Gold Limited - Interim management statement

Release Date: 19/05/2009 12:51:02      Code(s): CRD
CRD - Central Rand Gold Limited - Interim management statement                  
Central Rand Gold Limited                                                       
(`CRG` or `the Company`)                                                        
(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                                                          
Interim Management Statement                                                    
May 19, 2009 - London and Johannesburg listed Central Rand Gold ("CRG") is      
pleased to provide an operational update on the development of CRG`s assets in  
southern Johannesburg.  Highlights include:                                     
*    Resource to Reserve                                                        
*    Decline development                                                        
*    Delivery and commissioning of metallurgical plants                         
*    Exploration                                                                
*    Water table and CBEC                                                       
*    Black Economic Empowerment                                                 
*    Corporate Social Investment projects                                       
*    The Company is now targeting to produce at annualised rate of 100,000oz of 
    gold in early 2010 dependant upon the rate of underground development and   
the commissioning of the new 50tph Gekko plants                             
Johan du Toit, CRG`s Chief Executive Officer stated:                            
Johan du Toit, CRG`s Chief Executive Officer stated, "CRG is continuing to make 
considerable progress in building a substantial low cost gold mine.  We have    
commenced trial slot mining and should begin underground mining during August.  
In parallel, processing of bulk samples via our Gekko 20tph trial crushing and  
concentrating plant has demonstrated the capabilities of this plant. The months 
ahead will see CRG build up trial production from underground stopes accessed   
from the Slot 8 decline, whilst continuing to build surface infrastructure with 
a view to achieving commercial gold production late in the second half of this  
For photos of the operations, please refer to the document published on Central 
Rand Gold`s website: www.centralrandgold.com                                    
Conference Call & Webcast for the AGM - CRG will host a conference call on      
Thursday 21 May 2009 at 11:00 a.m. (London, GMT) and 12:00pm (Johannesburg) to  
provide an update for investors and analysts on its operational progress.       
Participants may join the call by dialling one of the two following numbers,    
approximately 10 minutes before the start of the call.                          
From the UK: (toll free) 0800 496 0440                                          
From outside the UK: +1 647 723 3976                                            
Participant pass code: 2205709#                                                 
Other international dialling codes are available on:                            
A live audio webcast of the call and a replay (available from 4:00pm London UK  
time) will be available on:                                                     
Johan du Toit                        + 27 (0) 11 551 4000                       
Wayne Epstein                        + 27 (0) 11 551 4000                       
Evolution Securities Limited         + 44 (0) 20 7071                           
Simon Edwards/Chris Sim/Neil Elliot  4300                                       
Macquarie First South Advisers       + 27 (0) 11 583 2000                       
(Pty) Ltd                                                                       
Thato Morojele/Annerie                                                          
Britz/Melanie de Nysschen                                                       
Buchanan Communications Limited      + 44 (0) 20 7466                           
Bobby Morse/Ben Willey               5000                                       
Jenni Newman Public Relations (Pty)                                             
Ltd                                  +27 (0) 11 772 1033                        
Jenni Newman/Megann Outram/Lerato                                               
Operational Update                                                              
Operationally there are four areas of focus:                                    
*    conversion of Resources into Reserves;                                     
*    surface infrastructure;                                                    
*    decline development; and                                                   
*    the implementation and operation of metallurgical processing plants.       
Resource to Reserve Update                                                      
As announced on April 3, 2009, a Reserve statement is currently being           
compiled by Snowden Mining Consultants ("Snowden"). This process involved       
the audit of elements referred to as "modifying factors" (factors affecting     
extraction, including mining, metallurgical, economic, marketing, legal,        
environmental, social and governmental factors). Snowden has undertaken         
rigorous internal reviews of the information presented to them. After having    
performed the reviews, it was established that further clarification and        
alterations of certain modifying factors were necessary before a Reserve        
statement can be released. Specifically, the modifying factors requiring        
additional information relate to mining methods and capital and operating       
cost estimates.  Snowden has indicated that this statement should be released   
around mid 2009. This initial Reserve statement is focussing on the Main Reef   
of the Consolidated Main Reef ("CMR") tenement to a depth of 300m below surface.
Once the Reserve conversion approach and methodology have been established,     
this process will be replicated and applied below 300m and to other tenements.  
Surface Infrastructure                                                          
Slot 8 is located on the CMR tenement and was selected as the site for the      
first decline to access the Main Reef. Trial mining commenced in October 2008   
through trench mining and processing of bulk samples.  Surface infrastructure   
development began in early 2009. A surface plot plan, in strict accordance with 
the Company`s Environmental Management Plan, was developed optimising material  
flow from underground and through the processing plants. Further, the surface   
layout has been configured to accommodate all of the concentrator plants above  
ground until the appropriate timing to move these units underground.  The       
appropriate timing will depend on production demands, underground development   
progress, ore grades and underground infrastructure.                            
The Company is pursuing a permanent power supply from City Power and is in      
design and enquiry stage at present with construction work expected to start    
in July 2009. Electrical power is currently supplied via diesel generators,     
most of which have been procured to act as backup power should the permanent    
City Power installation experience an outage. The Company has arranged for a    
2MVA supply of power from Crown Gold Recoveries to replace some of the more     
expensive power produced by the generators. A permanent Rand Water connection   
has been installed. This will accommodate all potable water requirements at     
Slot 8.                                                                         
The balance of surface infrastructure activities related to offices, roads,     
workshops, explosive and emulsion bays are ongoing. Security is also a focal    
point in the design of surface infrastructure.                                  
(For photo, please refer to Central Rand Gold`s website:                        
Slot 8 site                                                                     
Decline Development                                                             
The work on the Slot 8 boxcut was commenced in November 2008 and, despite       
difficult ground conditions, was completed to the portal face in February 2009. 
(For photo, please refer to Central Rand Gold`s website:                        
Slot 8 Portal                                                                   
A group of contractors have been contracted to sink the decline and took        
over the portal face in March, commencing drilling and blasting. The Mining     
contractors include Grinaker-LTA Mining, an established mining contracting      
group. Initial decline development was limited to roughly one metre per blast   
due to poor ground conditions near surface. The use of Becker Arch sets has     
also been necessary owing to these poor conditions. The decline has now         
advanced approximately 75 metres (approximately 30 metres below surface) into   
largely competent hard rock quartzites. The requirement for Becker sets stopped 
at approximately 25 metres below surface and support thereafter has been        
provided by mechanical roofbolts.                                               
(For photo, please refer to Central Rand Gold`s website:                        
Decline development on the Slot 8 decline                                       
A new Double Boom Drill Rig is now operational on site with each boom           
capable of drilling a hole in excess of 3m in less than 2 minutes thereby       
enabling decline development at a rate of 4m to 6m per day depending upon       
ground conditions.                                                              
(For photo, please refer to Central Rand Gold`s website:                        
Double boom drill rig                                                           
Metallurgical Plant Update                                                      
The trial 20 tons per hour Gekko crushing and concentrating plant was           
commissioned in October 2008 and the flotation circuit was added and            
commissioned in January 2009. This unit is modularised on skids and             
specifically designed to be moved underground in the 6m x 5m decline tunnel.    
The plant was originally designed for the treatment of hardrock from            
underground. The surface oxidised material that is initially being fed through  
the plant was therefore not optimal and therefore initially, the plant was      
unable to reach the maximum throughput. Debottlenecking and upgrading of the    
system was systematically undertaken from commissioning (as described below)    
and the plant is now capable of troughput in excess of the nameplate 20 tons    
per hour. Optimisation in terms of availability to be able to reach the         
required 12,000 tonnes per month of capacity utilisation is ongoing.            
During January 2009 the total tonnage treated was approximately 3,800           
tonnes. The major upgrade to the plant in January was the introduction of the   
flotation circuit which allowed for better recoveries to approximately 68%,     
although continuing to process sub-optimal surface oxidised material. With      
plant upgrading being conducted, 2,500 tonnes were processed in February with   
a recovery of approximately 68%.  March 2009 saw the end of the upgrading of    
the plant to accommodate the oxidised material and focus was placed on          
planned shutdowns and a reduction of backlog maintenance. Total tonnage         
treated - 5,267 tonnes with approximately 69% recovery. April Production        
reached a total of 10,013 tonnes with a 69% recovery, decreasing downtime       
and increasing production availability up to 90% with full optimal usage.       
Planned shutdowns took place accordingly reducing backlog and planned           
maintenance. Additional spares were accommodated which increased production.    
It is anticipated that the Gekko crushing and concentrating plant`s stated      
throughput of 12,000 tonnes per month will be reached within the next two       
The concentrate is largely being stockpiled to be treated by the                
Carbon-In-Leach ("CIL") concentrate treatment plant. The CIL plant, capable     
of treating 10,000 tons per month of concentrate, commenced civil work on site  
in February, 2009. This fast track erection has been undertaken by Time Mining  
with a predominantly pre-built plant containerised originally for export.       
Commissioning is planned to commence by the end of May 2009. This plant will    
provide relief for the stockpiled concentrate generated by the trial mining     
activities to date. Included in this plant is a smelt house facility which will 
enable CRG to produce Bullion bars (88%-90% Gold) which will be transported to  
Rand Refinery Limited for final refinement and sale. The anticipated first      
smelt on site is scheduled for June 2009.                                       
(For photo, please refer to Central Rand Gold`s website:                        
Carbon-In-Leach concentrate treatment plant                                     
A Bateman 30 ton per hour concentrator ordered in 2008 was delivered in         
April 2009 and is being erected during May 2009. Civil work to accommodate      
this plant commenced in April 2009.                                             
(For photo, please refer to Central Rand Gold`s website:                        
Bateman 30tph crushing and concentrating plant                                  
Two further Gekko plants, each with 50 tons per hour capacities, ("Python       
500`s") were ordered in the period. This followed extensive interrogation and   
refinement of design work based on experience on the existing 20 tons per hour  
Gekko crushing and concentrating unit. The Python 500s are expected to be       
delivered to site in Q3 and Q4 2009.                                            
Exploration Update                                                              
Exploration activities to date have focussed on the use of diamond drilling     
and reverse circulation drilling to obtain confidence in geological structure,  
identify ore that can be targeted and extracted from surface and obtain         
geotechnical information to be used in mine design.                             
225 diamond drill holes have been undertaken from the start of the exploration  
program to date, covering targeted pre-mining areas over the entire 40km strike 
length. These holes have resolved areas of structural complexity and have       
allowed for the creation of three dimensional models upon which to conduct mine 
planning and design.                                                            
Of these 225 holes, 46 were drilled specifically to determine ground conditions 
ahead of the Slot 8 decline. The balance of the drilling focussed on identifying
Resources on the Kimberley and Bird Reefs in addition to the current Main Reef  
and Main Reef Leader Resources already quantified.                              
A total of 552 reverse circulation holes have been completed. These short       
percussion type holes were principally employed to evaluate areas where         
potential surface mining could occur and have allowed for the seamless          
transition from bulk sampling to slot mining at Slot 8 in December 2008. They   
have also provided the basis of the in-house evaluation of new additional       
surface deposits with the potential to provide plant feed during the            
metallurgical commissioning phase. The reverse circulation drilling programme   
was completed in the last quarter of 2008.                                      
This philosophy of improving geological understanding across the entire strike  
length over all of the known reef horizons has continued through the first      
quarter of 2009, where diamond drilling has focussed in four separate areas,    
namely Slot 8 Main Reef on the CMR tenement, Slot 5 Bird Reef on the Crown Mine 
tenement, Slot 4 Kimberley Reef on the CMR tenement and Slot 11 Pyritic         
Quartzite on the City Deeps tenement. In total, nine diamond drill holes were   
undertaken during the first quarter of 2009.                                    
Slot 8 (Main Reef Package)                                                      
Five diamond drill holes were undertaken in the immediate vicinity of the       
decline, primarily to test the rock stability and ground conditions ahead of the
decline. They also confirmed the expected wide reef conditions in the immediate 
area and returned grades of between 2.42g/t and 3.70g/t over widths of between  
143cm and 157cm respectively.                                                   
Slot 4 (Kimberley Reef Package)                                                 
Two diamond drill holes were positioned in the unmined area of the Kimberley    
Reefs between Slot 1 and Slot 4 to test the structural and lithological         
continuity between these two target areas. Whilst assay results are still       
outstanding, continuity between these two areas has been adequately demonstrated
and will be incorporated into the existing digital model.                       
Slot 5 (Bird Reefs)                                                             
During this quarter a single diamond drill hole completed the long running      
drilling programme in this area. Initial results from this slot confirm         
that gold grades in the Bird Reef zone are concentrated in the conglomerate     
of the White Reef itself. Grades are variable and tend to the low side (0.5 to  
1.5 g/t range over 3m) across the 1,500m strike length immediately available    
for surface exploitation, however an approximate 200m long portion of the       
strike in the central part of the slot shows a continuous stretch of relatively 
high grades (4 to 5g/t range over a 3m width). This will be further investigated
using surface sampling techniques.                                              
Slot 11 (Pyritic Quartzite)                                                     
The Pyritic Quartzites are part of a well documented Erosion Channel that cuts  
through the Main Reef succession starting generally below the Main Reef Leader. 
A single, deep hole was drilled in the City Deep lease area (Slot 11) to test   
the down dip extent of the City Deep Erosion Channel. The mother hole, with its 
5 deflections, was designed to provide stratigraphic information on all reefs   
within the lease area as well as provide initial information of the auriferous  
Pyritic Quartzite channel.                                                      
Both South Reef and Main Reef Leader return predictably high values over        
relatively wide corrected widths of 2.63g/t over 127cm and 5.19g/t over 173cm,  
The Pyritic Quartzite was intersected immediately beneath the Main Reef Leader  
as expected. Assay information from the deflections is outstanding but the      
mother hole returned a continuous zone of pyritic quartzite grading 1.65g/t over
7.4m. This hole will be fully assessed once the remaining deflections have been 
logged and assayed.                                                             
Underground Drilling (Main Reef Zone)                                           
Underground exploration drilling has continued at the recently reopened East    
Shaft with the drilling of 22 underground holes targeting the Main Reef, Main   
Reef Leader and South Reefs as well as investigating the gold content of the    
middlings between these known reefs. Results have confirmed the existence of low
grade zones of mineralisation outside of the Main Reef, South Reef and Main Reef
Leader horizons. Drilling has also confirmed the position of pillars and other  
unmined areas in the East Shaft area.                                           
Strategy for next quarter                                                       
The focus of drilling for the next quarter will change somewhat, with the       
increasing demands of the decline taking precedence. A single diamond drill rig 
will be employed to drill holes of a geotechnical nature planned ahead of the   
face, as the decline progresses. This rig will also be used to provide          
additional confidence in Inferred Resource blocks with the aim of converting the
remaining shallow Inferred Resource to Indicated status. To this end, between   
nine and twelve diamond drill holes are envisaged for the coming quarter.       
Underground drilling will be restricted to decline cover drilling with the      
imminent ramp up to underground production.                                     
Black Economic Empowerment Update                                               
On February 16, 2009, Central Rand Gold Netherlands Antilles ("CRGNV"), Central 
Rand Gold`s wholly owned subsidiary company which directly holds 74% of the     
shares in Central Rand Gold SA (Pty) Ltd ("CRGSA"), exercised the call option   
granted to it in terms of the CRGSA Shareholders Agreement and gave the         
requisite 90 days` notice to Puno Gold Investments (Pty) Ltd ("Puno"), CRG`s    
Black Economic Empowerment partner to acquire its entire interest in CRGSA. This
was owing to Puno`s inability to provide funding as required in CRGSA`s         
Shareholder Agreement.                                                          
On April 7, 2009, Puno instituted an urgent application with the South Gauteng  
High Court, Johannesburg, to interdict CRGSA and CRGNV from proceeding with the 
exercise of the call option pending the final determination by arbitration or a 
court order of the validity and enforceability of:                              
*    the funding call by CRGSA;                                                 
*    the call option furnished by Puno in favour of CRGNV in respect of Puno`s  
    shares in CRGSA.                                                            
On May 13, 2009, CRGNV and Puno consensually agreed to refer the disputation    
over the call to an arbitration process. CRGNV is the claimant in these         
proceedings. CRG and Puno have agreed a timetable for the arbitration and the   
final outcome will be made an order of the court and will be binding. By        
agreeing to go through the arbitration process, there will be no further        
opportunity to approach the South African courts on the substantive issues      
between the parties and a final resolution will be obtained more quickly than   
via the ordinary court process.                                                 
CRG is still fully compliant with the current legislation relating to Black     
Economic Empowerment and has continuously kept South Africa`s Department of     
Minerals and Energy abreast with all developments in this regard. CRG is firmly 
committed to the principles of Broad Based Black Economic Empowerment.          
Water table and the Central Basin Environmental Corporation ("CBEC")            
As published in the Company`s 2008 annual report, CRG will be contributing to   
the building of a pump station to maintain the underground water levels in the  
Central Basin as part of the CBEC initiative. CBEC is comprised of CRG, DRDGold 
Limited and West Wits Mining Limited.                                           
Murray and Roberts was commissioned to provide cost estimates and time horizons 
of this installation. Based on these studies, a final elevation underground and 
shaft location has been determined as 600 metres below surface in DRDGold`s     
South West Vertical One Shaft. While final timing, costing and respective       
contribution for the water pumping station is expected in mid June 2009, the    
costing is expected to total in the region of US$ 22.5 million.                 
Finance Update                                                                  
As at April 30, 2009, the Company had approximately US$51 million in cash on    
hand. Cash spend during 2009 has been primarily focussed on trial mining, the   
development of the decline and on payments required for completion and delivery 
of the metallurgical plants. The Company is currently undergoing a cost         
management and reduction exercise as part of its continual drive to ensure that 
cash resources are being spent effectively in maximising the Company`s          
commercial activities at Slot 8.                                                
Further development and financing                                               
The Company is continuously making progress regarding the mine design and       
stoping methods. Capex to date has been funded by shareholders` funds. CRG is   
evaluating financing options relating to further expansion of the project       
including the utilisation of corporate debt or asset financing.                 
Corporate Social Investment                                                     
As part of CRG`s Corporate Social Investment plans, CRG identified several      
projects which could enrich the lives of the community members surrounding      
CRG`s tenements.                                                                
Bursary Program                                                                 
The Company entered into a partnership with South Africa`s Department of        
Education ("DOE") who provided the Company with a list of the top students from 
the poorest backgrounds who live in close proximity to the Company`s mining     
tenements. CRG issued 13 full bursaries to these students including one bursary 
to a child of a CRG employee. The bursaries include tuition, books,             
accommodation close to Wits University and a stipend.                           
Weekend and Vacation School Project                                             
As with the bursary project above, CRG partnered with the DOE and embarked on a 
Weekend and Vacation School Project. This project aims to target the weakest    
performing Grade 12 learners in the poorest performing schools to try and       
achieve a 20% increase in pass rates in 2009.                                   
Date: 19/05/2009 12:51:01 Supplied by www.sharenet.co.za                     
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information disseminated through SENS.                                          

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