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CRD - Central Rand Gold Limited - 2010 Interim Report

Release Date: 17/08/2010 08:00:06      Code(s): CRD
CRD - Central Rand Gold Limited - 2010 Interim Report                           
Central Rand Gold Limited                                                       
("CRG" or the "Company" or the "Group")                                         
(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                                                          
2010 INTERIM REPORT                                                             
Central Rand Gold, the South African gold mining and exploration holding        
company, today announces its Interim Results for the six months ended 30 June   
2010. The full set of results is available on the Company`s website:            
www.centralrandgold.com                                                         
For further information, please contact:                                        
CRG                                                  +27 (0) 11 674 2304        
Johan du Toit / Patrick Malaza                                                  
Evolution Securities Limited                         +44 (0) 20 7071 4300       
Simon Edwards / Chris Sim / Neil Elliot                                         
Macquarie First South Advisers (Pty) Ltd             +27 (0) 11 583 2000        
Annerie Britz/Melanie de Nysschen/ Manisha Ramlakhan                            
Buchanan Communications                              +44 (0) 20 7466 5000       
Bobby Morse / James Strong / Katharine Sutton                                   
Jenni Newman Public Relations (Pty) Ltd              +27 (0) 11 506 7350        
Jenni Newman                                                                    
CHIEF EXECUTIVE OFFICER`S REVIEW                                                
Although the first half of 2010 was a challenging period for CRG, we have made  
significant strides forward, moving from trial mining to our goal of building a 
platform for a sustainable and profitable gold mine. Highlights for the Company 
during this period included:                                                    
- Trial mining phase completed;                                                 
- Successful fundraising initiative to enable the Company to advance the project
to commence sustainable gold production;                                        
- Order placed for submersible pumps and discussions progressing with government
regarding the rising water table solution;                                      
- Underground development progressing well - decline development at 158 metres  
below surface; reef development on three levels;                                
- Second Jumbo DD420 double boom drill rig delivered;                           
- Improvement in performance and recoveries from metallurgical plants;          
- Optical ore sorter ordered for expected delivery in January 2011; and         
- Progress in cost containment                                                  
During the first half of 2010, the Company produced a total of 3,368 ounces of  
gold. The Company`s cash position at 30 June 2010 was US$4.0 million, with a    
cash position, following the fundraising, of US$36.4 million as at 31 July 2010.
FUNDRAISING                                                                     
After completing a US$6.0 million "Cashbox" placing on 22 January 2010 to enable
trial mining to be completed, CRG successfully raised US$35.0 million through a 
"Firm Placing, Placing and Open Offer" on 5 July 2010 which was fully           
underwritten by Evolution Securities (together the "Fundraising"). These funds  
will provide the essential capital needed to finance the next stage of mining   
progression which will include reef development and the acquisition of further  
necessary mining equipment.                                                     
OPERATIONAL UPDATE                                                              
Trial Mining                                                                    
The objectives of trial mining were to validate the mining method and provide   
real physical and financial data for input into the mine design.                
The trial mining, and subsequently updated Competent Person Report ("CPR") by   
Snowden Mining Industry Consultants, corroborated an updated mine plan which is 
expected to produce 476,190 ounces of gold over a mine life of 12 years with an 
average operational cash (including water pumping costs) and capital costs of   
US$582/oz and US$173/oz respectively from CMR West, one of the Company`s        
tenement areas. Extensions of mineralised reef zones (partings), sweepings and  
vampings and remnant reef pillars have also been identified as other readily    
available potential sources of gold but have not been incorporated in this mine 
plan.                                                                           
Mining                                                                          
With the completion of trial mining, the focus now shifts to developing the     
underground infrastructure to ensure that sustainable production can commence.  
The first half of the year has been focussed on decline development to provide  
the operations with sufficient access for reef development whilst opening early 
cash flow opportunities on identified surface materials. Total development      
advance to date is sitting at 1,256.1 metres with 38,497 tons of underground ore
and 45,664 tons of surface material.                                            
Key mining statistics           Metres         Tonnes    Fully diluted          
development              grams per tonne         
                                                        ("g/t")                 
Decline and waste development   1,014.3        N/A       N/A                    
Reef development                241.8          32,424    1.6                    
Trial mining stoping            -              6,073     2.6                    
Surface                         -              45,664    2.9                    
Total mining production         1,256.1        84,161    -                      
The decline development has reached 158 metres below surface. Reef development  
has commenced on three levels, with the first level at 121mbs. Ground conditions
experienced to date, have been variable for the reef development, which has     
required additional hanging wall support being introduced. The management team  
is considering various optimisation opportunities, with the potential for       
greater efficiencies and effectiveness that will complement the current mining  
methodology.                                                                    
A second Jumbo DD420 double boom drill rig was delivered to site at the end of  
July 2010. This is expected to further increase monthly development rates.      
Geology                                                                         
During March 2010, the Probable Ore Reserve was upgraded to 3.73 million tonnes 
with an average grade of 4.0 grams per tonne, yielding 482,000 ounces of gold.  
Further Confirmation of Resource Model                                          
Channel sampling of underground development ore undertaken to date has fully    
supported the Australian Joint Ore Reserves Committee ("JORC")/South African    
Code for Reporting of Exploration Results, Mineral Resources and Mineral        
Reserves ("SAMREC") Indicated Resource, as previously defined and reported. The 
in-situ grade, grade above cut-off and overall block payability (i.e. the       
percentage of the block above cut-off) appears to be very predictable and       
robust. However, the specific high grade locations within the block are more    
variable. A comparison of average block characteristics is presented in the     
table below.                                                                    
                Theoretical                     Actual                          
Develop    Block In-     C-O   Pay  Ave   Ave    In-    C-O   Pay   Ave   Ave   
ment             situ    (g/t) %    Width (g/t)  situ   (g/t) %     Width (g/t) 
(g/t)              (cm)         (g/t)              (cm)         
1596       CMR   3.04    3     46%  151   4.67   3.81   3     35%   100   9.18  
          46                                                                    
1581       CMR   3.55    3     50%  112   5.29   8.80   3     80%   100   10.58 
33                                                                    
1580       CMR   3.55    3     50%  112   5.29   0.83   3     0%    100   0.83  
          33                                                                    
1575       CMR   3.55    3     50%  112   5.29   4.53   3     62%   100   6.21  
33                                                                    
1563       CMR   3.55    3     50%  112   5.29   4.39   3     72%   111   5.36  
          33                                                                    
1551       CMR   3.55    3     50%  112   5.29   5.77   3     100%  101   5.77  
33                                                                    
                                                                                
Averages         3.43    3     49%  122   5.14   4.26   3     51%   102   6.26  
CMG/T            416     -     -    -     624    436    -     -     -     642   
G/t over 122 cm  3.43    -     -    -     5.14   3.59   -     -     -     5.28  
In particular, the gold accumulation (cmg/t) and equivalent gold grade over a   
standardised width of 122cm for the sampled development, closely approximates   
that described by the Theoretical Model.                                        
Surface Exploration Target*                                                     
Exploration trenching has continued to the east and west of the process plant.  
Two additional potential new open pit mining areas have been delineated which   
offer the opportunity to generate further gold production from surface areas:   
Note 1:                                                                         
* The potential quantity and grade described by the term "Exploration Target" is
conceptual in nature and there has been insufficient exploration to define a    
Mineral Resource. It is uncertain if further exploration will result in the     
definition of a Resource. Further exploration work is ongoing, and includes     
trial mining and processing of this shallow target to establish grade and       
orebody continuity, mineability, dilution and throughput characteristics.       
The information in this statement relating to Mineral Resources and geology has 
been reviewed and approved by Mr Keith Matier, BSc (Hons), GDE,Pr Sci Nat, who  
is a competent person in terms of the SAMREC and JORC codes. Mr Matier is       
Geology Manager of Central Rand Gold South Africa (Pty) Limited and has over 17 
years experience in exploration, mineral resource management and mineral        
evaluation                                                                      
DS Open Pit Block                                                               
To the east of the plant, trenching has exposed approximately 80m of in-situ    
Main Reef Leader, Main Reef and Mineralised Middling. Material exposed can be   
extracted through free digging and is open at depth. Combined assay results for 
material exposed thus far are as follows:                                       
Main Reef Leader: 6.4 g/t over 58cm;                                            
Middling: 2.2g/t over 47cm;                                                     
Main Reef: 3.6g/t over 70cm; and                                                
Total Package: 4.2g/t over 175cm.                                               
An estimated exploration target of between 22,000 tonnes and 28,000 tonnes has  
been discovered in these areas with composite grades of between 3.3g/t and      
3.8g/t.                                                                         
KF Open Pit Block                                                               
To the west of the process plant, exploration trenching has exposed             
approximately 160m of Main Reef package. The material exposed is amenable to    
free digging, although between 3m and 5m of overburden and backfill is present. 
The Main Reef averages approximately 7.1g/t over a diluted 102cm width with     
occasional Main Reef Leader remnant pillars present, grading up to 290g/t.      
An estimated exploration target of between 27,000 tonnes and 55,000 tonnes has  
been discovered in this area with composite grades of between 7.1g/t and 7.5g/t.
Metallurgy                                                                      
The Bateman concentrator has processed 37,851 tonnes with 21.4% mass pull factor
producing 8 108 tonnes of concentrate at 3.5 g/t for the six months to 30 June  
2010. A higher-than-expected flotation recovery of 75% on low grade at 1.4 g/t, 
predominantly oxide material was achieved despite lower than planned            
availability at 59%.                                                            
Direct feed to the carbon-in-pulp ("CIP") for the period was 33,120 tonnes at   
3.2g/t. A total of 41,228 tonnes, including the Bateman concentrate, have been  
processed through the CIP for the six months ended 30 June 2010, with year to   
date availability at 87%, 2% above forecast with an acceptable recovery of      
approximately 89% on oxide material.                                            
In total 70,971 ROM tonnes were fed to both Bateman and CIP plant during the    
period to end June 2010.                                                        
Following the improvements that have been made to the metallurgical plants      
earlier in the year, the emphasis has shifted to maximising throughput and      
recoveries, and establishing accurate metal accounting to enable refinement of  
all metallurgical processes.                                                    
Water Table                                                                     
Good progress has been made regarding the rising water-table that affects the   
Company`s mining operations. If this water, also known as acid mine drainage    
("AMD"), is allowed to decant onto the surface, it will have serious            
environmental and ultimately economic implications for the Gauteng area. Due to 
the seriousness of this problem, discussions have been escalated to the highest 
level of government. In broad terms, there is an understanding between all      
stakeholders, on an interim solution, which will include the construction of a  
submersible pump station, at 400mbs, the refurbishment of the existing high     
density sludge plant and the construction of a pipeline connecting the Western  
and Central basins. The Minister of the South African Department of Water       
Affairs, Minister Buyelwa Sonjica, speaking at the Agri SA water conference in  
Johannesburg on 11 August 2010, confirmed that the South African government     
recognised that as 70% of the mining area in the Witwatersrand district is      
currently ownerless and the liability to resolve the AMD problem would reside   
with the State, requiring a contribution of approximately US$19.8 million       
(ZAR145.0 million). The remaining 30% liability would be funded by existing     
active mining operations in the area.                                           
To limit the extent that the water table will rise above the 400mbs level, the  
Company has placed an order for the submersible pumps, which are the project`s  
longest lead item. The initial payment of US$1.3 million (ZAR10 million) will   
form part of CRG`s total committed contribution of US$5.0 million (ZAR36.0      
million).                                                                       
Corporate Overhead                                                              
Cost containment continues to be a key focus for the Company. As part of this   
process, a total of 46 support staff accepted redundancy packages, reducing the 
support payroll costs by 28%. With effect from the beginning of July 2010, the  
head office building in Killarney was vacated, with all functions moving to the 
existing operational offices at Rand Leases, Roodepoort, which will result in   
significant savings going forward.                                              
Management and Directorate                                                      
Don Harper resigned as CRG`s Head of Mining at the end of June 2010, due to     
family reasons, but will still be available to the Company in a consultancy     
capacity until the end of September 2010. The Group`s thanks goes to him for his
valuable contribution towards reconfiguring and refocusing CRG`s mining         
operations. A recruitment process is at an advanced stage to find a replacement.
In the interim, John Ramabaleha is acting as the Head of Mining, with the       
continuing support of the mining contractors, Australian Contract Mining        
("ACM").                                                                        
In February 2010, Patrick Malaza and Jerome Brauns were appointed to the Board  
of Directors (the "Board") as Finance Director and Non-Executive Director,      
respectively.                                                                   
In April 2010 the following changes were made to the Board:                     
- Michael McMahon succeeded Alastair Walton as the CRG Chairman; and            
- Robert Kirby resigned as a Non-Executive Director.                            
BLACK ECONOMIC EMPOWERMENT                                                      
Funding Call and Call Option: Arbitration                                       
Puno Gold Investments (Proprietary) Limited ("Puno"), the 26% shareholder in    
Central Rand Gold SA, has failed to institute the arbitration proceedings       
envisaged by an Order of the South Gauteng High Court in May 2009, in order to  
resolve the dispute surrounding the minority shareholder`s funding obligations  
and the validity of the Company`s call option in respect of their shares as a   
consequence. Attempts to resolve the dispute amicably have been explored to no  
avail. In the circumstances, the Company is now taking steps to ensure that the 
arbitration proceedings be heard as soon as possible and has itself taken steps 
in order to have an arbitrator appointed.                                       
Damages Claim                                                                   
Puno has issued a summons on the Company, claiming damages to the value of US$17
million. This action, instituted by Puno against the Company out of the South   
Gauteng High Court, Johannesburg, traverses issues similar to those covered by  
Puno`s previous application. In particular, Puno`s damages claim is premised on 
a similar interpretation of the Shareholders` Agreement as it contended for in  
the previous application.                                                       
The previous application was dismissed by Acting Judge, Alan Horwitz SC, on     
Thursday, 5 November 2009, with costs, including the costs of two counsel on the
grounds that Puno had failed to make out a case for the relief sought on each   
ground which formed the subject of the application hearing. Puno`s application  
for leave to appeal against the judgment was also dismissed with a similar order
as to costs. In relation to Puno`s interpretation of the Shareholders`          
Agreement, the Acting Judge expressly rejected the interpretation on which the  
present action seeks to rely.                                                   
It is the Company`s considered view that the present action is equally ill-     
founded, and possibly vexatious, and while Puno has in any event failed to take 
proper and appropriate steps in the institution of these proceedings on which   
basis alone the present action must be stayed, Puno`s contentions for the relief
sought are considered to be flawed and devoid of merit.                         
In consequence, the Directors are of the opinion that in as much as the action  
has no prospects of success, this will not have any material consequences in    
respect of the consolidated accounts of the Group.                              
FINANCIAL REVIEW                                                                
Operating loss for the period decreased by 22% to US$17.4 million (30 June 2009:
US$22.4 million). This is mainly attributed to:                                 
- Revenue from the sale of 3,085 ounces of gold processed from initial          
underground development ore, trial stoping and shallow surface materials;       
- Processing plant shutdown and consequent repair and reconfiguration costs;    
- Provision for voluntary retrenchment of 46 head office and support staff;     
- Full half year depreciation and amortisation of mine assets; and              
- Impairment of redundant processing plant.                                     
Net loss for the period increased 19% to US$17.3 million (30 June 2009: US$14.6 
million) mainly attributed to lower interest received and lower foreign exchange
gains on the back of lower cash balances.                                       
The net cash position is reported at approximately US$4.0 million (30 June 2009:
US$46.4 million). The Company`s cash position, following the Fundraising, is    
$36.4 million as at 31 July 2010. Major cash flows during the period are set out
in the abridged cash flow statement below:                                      
                                                    US$`million                 
Cash and cash equivalents at 1 January 2010          15.9                       
Cash used in operations                              (13.7)                     
Interest received                                    0.3                        
Mine property, plant and equipment                   (7.8)                      
Security deposits - Redemption                       0.5                        
Proceeds from share issue                            6.0                        
Effects of exchange rate movement on cash balances   2.8                        
Cash and cash equivalents at 30 June 2010            4.0                        
OUTLOOK                                                                         
With trial mining now completed, the Group is committed to achieving the        
implementation of sustainable and profitable gold mining operations.            
The second half of 2010 will focus mainly on establishing CRG`s underground     
mining operations, having made good progress in the first half, with 1,256      
metres of development completed. The Company will continue to seek to optimise  
its mining methodology thereby improving the speed that it can access mineable  
reef when poor ground conditions are encountered.                               
As outlined at the time of the Fundraising in June 2010, the Company will also  
focus on securing its mining fleet. The global increase in the demand for mining
equipment has resulted in delivery lead times increasing substantially over the 
last six months. The successful Fundraising has enabled the Company to have     
meaningful discussions with various equipment suppliers in an attempt to secure 
essential underground mining equipment. Until the Fundraising was completed it  
was not possible to contract for the additional equipment, the most significant 
being a Long Hole Rig, which is required to commence underground stoping. Any   
delay in delivery could have short term production implications as the 2010     
production forecast predominantly relies on the processing of higher grade      
underground ore. In order to mitigate these effects, extended surface           
exploration and surface mining have been undertaken to ensure the optimal       
utilisation of metallurgical plants. The Company will continue with its         
underground mine development programme, establishing stoping blocks, while it   
awaits confirmation of delivery of the Long Hole Rig.                           
From a metallurgy point of view, the emphasis will be on successfully           
implementing the optical ore sorter, which is expected to be delivered in       
January 2011. We have retained the option to rent an ore sorter in the interim, 
should underground production ramp up prior to delivery of the new unit. The ore
sorter will provide an effective mechanism to remove waste from underground ore 
linked to the mining method being utilised. It will also deal with dilution and 
provide an efficient way of "high grading" material so that recoveries can be   
maximised.                                                                      
Another important emphasis will be the completion of the feasibility study by   
early 2011 relating to CMR East, which is the Company`s next development target.
During the first half of 2010, the Company produced a total of 3,368 refined    
ounces of gold, in line with management expectations. The second half of 2010   
promises to be an exciting period for CRG, as it will build on the trial mining 
experience and create a platform for strong development and production progress 
to be made in the years that lie ahead.                                         
Johan du Toit                                                                   
CONDENSED GROUP INCOME STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 201           
0                                                                               
                          Notes 30 June 2010  31 December     30 June 2009      
US$ `000      2009            US$ `000          
                                (Unaudited)   US$ `000        (Unaudited)       
                                              (Audited)                         
                                                                                
Employee benefits expense          (5,546)       (9,688)         (5,027)        
Directors` emoluments      12      (534)         (1,676)         (925)          
Depreciation and                 (1,445)         (2,479)         (911)          
amortisation                                                                    
Inventory write down               (420)         (1,947)         (1,076)        
Operating lease expense            (310)         (833)           (689)          
Exploration and            13      (5,249)       (33,696)        (11,061)       
evaluation expenditure                                                          
Other expenses                     (3,873)       (5,956)         (2,680)        
Operating loss                   (17,377)        (56,275)        (22,369)       
Interest receivable                772           3,996           2,458          
Finance costs                      (500)         (1,108)         (329)          
Foreign exchange                   367           7,596           6,085          
transaction gains                                                               
Other income and gains             6             2               -              
Loss before income tax           (16,732)        (45,789)        (14,155)       
Income tax expense         14      (617)         (546)           (399)          
Loss for the period              (17,349)        (46,335)        (14,554)       
                                                                                
Loss is attributable to:                                                        
Non-controlling interest           -             -               -              
Equity holders of the            (17,349)        (46,335)        (14,554)       
parent                                                                          
                                (17,349)        (46,335)        (14,554)        

Shares in issue                  271,611,610     246,919,650                    
                                                              246,919,650       
Weighted average number          268,746,797     246,919,650                    
of ordinary shares in                                          246,919,650      
issue                                                                           
Fully diluted weighted           268,746,797     246,919,650                    
average number of                                              246,919,650      
ordinary shares in issue                                                        
Basic loss per share             (6.46)          (18.77)         (5.89)         
(cents)                                                                         
Headline loss per share          (5.46)          (17.15)         (5.62)         
(cents)                                                                         
Diluted loss per share           (6.46)          (18.77)         (5.89)         
(cents)                                                                         
Diluted headline loss per        (5.46)          (17.15)         (5.62)         
share (cents                                                                    
                                                                                
                                                                                
                                                                                

Reconciliation between                                                          
loss attributable to the                                                        
equity holders of the                                                           
Group and the headline                                                          
loss attributable to the                                                        
equity holders of the                                                           
Group:                                                                          
Loss attributable to             (17,349)        (46,335)        (14,554)       
equity holders of the                                                           
Group                                                                           
Provision for                      616           -               472            
restructuring                                                                   
Loss on measurement of             2,159         3,496           -              
non-current assets held                                                         
for sale to fair value,                                                         
less costs to sell                                                              
(Profit)/loss on disposal          (98)          501             217            
of property, plant and                                                          
equipment                                                                       
Headline loss                    (14,672)        (42,338)        (13,865)       
attributable to equity                                                          
holders of the Group                                                            
CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED      
30 JUNE 2010                                                                    
                           30 June 2010    31 December 2009  30 June 2009       
                           US$ `000        US$ `000          US$ `000           
                           (Unaudited)     (Audited)         (Unaudited)        

Loss for the period         (17,349)          (46,335)          (14,554)        
Other comprehensive                                                             
income:                                                                         
Exchange differences on     (3,245)           14,500            12,610          
translating foreign                                                             
operations                                                                      
Income tax relating to        -               -                 -               
components of other                                                             
comprehensive income                                                            
Other comprehensive income  (3,245)           14,500            12,610          
for the period, net of tax                                                      
Total comprehensive income  (20,594)          (31,835)          (1,944)         
for the period                                                                  
                                                                                
Total comprehensive income                                                      
is attributable to:                                                             
Non-controlling interest      -               -                 -               
Equity holders of the       (20,594)          (31,835)          (1,944)         
parent                                                                          
(20,594)          (31,835)          (1,944)          
CONDENSED GROUP STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2010              
                       Note   30 June 2010,  31 December     30 June 2009       
                              US$ `000       2009            US$ `000           
(Unaudited)    US$ `000        (Unaudited)        
                                             (Audited)                          
ASSETS                                                                          
NON CURRENT ASSETS                                                              
Property, plant and     5        31,339         34,298          30,712          
equipment                                                                       
Intangible assets       7      1,282            1,316           1,251           
Security deposits and          5,641            5,806           -               
guarantees                                                                      
Loans receivable        8        8,065          7,818           6,626           
                              46,327           49,238          38,589           
                                                                                
CURRENT ASSETS                                                                  
Security deposits and          185              510             6,686           
guarantees                                                                      
Prepayments and other            4,446          5,272           5,176           
receivables                                                                     
Inventory               9        1,205          1,574           4,142           
Cash and cash                  3,945            15,899          46,449          
equivalents                                                                     
Non-current assets held 6        8,780          2,750           -               
for sale                                                                        
                              18,561           26,005          62,453           
                                                                                
TOTAL ASSETS                   64,888           75,243          101,042         
                                                                                
EQUITY AND LIABILITIES                                                          
Attributable to equity                                                          
holders of the parent                                                           
Share capital           10       5,424          5,023           5,023           
Share premium           10       197,017        191,406         191,406         
Share-based                      28,296         27,482          26,644          
compensation reserve                                                            
Treasury shares                  (6)            (2)             (2)             
Foreign currency               (31,645)         (28,400)        (30,290)        
translation reserve                                                             
Accumulated losses             (156,174)        (138,825)       (106,859)       
                              42,912           56,684          85,922           
Non-controlling                -                -               -               
interest                                                                        
TOTAL EQUITY                   42,912           56,684          85,922          
                                                                                
NON CURRENT LIABILITIES                                                         
Environmental           11     1,460            1,434           39              
rehabilitation and                                                              
other provisions                                                                
Loan payable                     8,065          7,818           6,626           
Operating lease                -                26              41              
liability                                                                       
Borrowings                       1              12              35              
                              9,526            9,290           6,741            
                                                                                
CURRENT LIABILITIES                                                             
Trade and other                  8,155          7,620           6,413           
payables                                                                        
Environmental           11     2,805            701             1,206           
rehabilitation and                                                              
other provisions                                                                
Taxation payable                 1,461          895             709             
Operating lease                  4              26              13              
liability                                                                       
Borrowings                       25             27              38              
                              12,450           9,269           8,379            
                                                                                
TOTAL LIABILITES               21,976           18,559          15,120          
                                                                                
TOTAL EQUITY AND               64,888           75,243          101,042         
LIABILITIES                                                                     
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE     
2010                                                                            
Attributable to equity holders of the Parent Company                            
                  Notes  Ordinary    Share        Share-based   Treasury        
share       premium      compensation  Shares          
                         capital                  reserve                       
                          US$ `000    US$ `000     US$ `000      US$ `000       
Balance at 31               5,023       191,406      26,429        (4)          
December 2008                                                                   
Total                                                                           
comprehensive                                                                   
income for the                                                                  
period ended 30                                                                 
June 2009                                                                       
Loss for the                -           -            -             -            
period                                                                          
Other                                                                           
comprehensive                                                                   
income                                                                          
Foreign currency            -           -            -             -            
adjustments                                                                     
Transactions with                                                               
owners, recorded                                                                
directly in equity                                                              
Employee Share                                                                  
Option Scheme:                                                                  
Transfer of                 -           -            (185)         -            
forfeited share                                                                 
options                                                                         
Share-based                 -           -            400           2            
payments:                                                                       
Employees` and                                                                  
Directors` shares                                                               
Balance at 30 June          5,023       191,406      26,644        (2)          
2009                                                                            
                                                                                
Balance at 31               5,023       191,406      27,482        (2)          
December 2009                                                                   
Total                                                                           
comprehensive                                                                   
income for the                                                                  
period ended 30                                                                 
June 2010                                                                       
Loss for the                -           -            -             -            
period                                                                          
Other                                                                           
comprehensive                                                                   
income                                                                          
Foreign currency            -           -            -             -            
adjustments                                                                     
Transactions with                                                               
owners, recorded                                                                
directly in equity                                                              
Issue of Shares:                                                                
Capital raising    10       401         5,611        -             -            
Employee Share                                                                  
Option Scheme:                                                                  
Share-based        17       -           -            814           (4)          
payments:                                                                       
Employees` and                                                                  
Directors` shares                                                               
Balance at 30 June          5,424       197,017      28,296        (6)          
2010                                                                            
CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2010
(CONTINUED)                                                                     
Attributable to equity holders of the Parent Company                            
             Notes  Foreign     Accumulated  Total    Non          Attributable 
                    currency    losses                controlling  to equity    
translation                       interest     holders of   
                    reserve                                        the Parent   
                                                                   Company      
                     US$ `000                          US$ `000                 
Balance at 31          (42,900)    (92,490)     87,464   -            87,464    
December 2008                                                                   
Total                                                                           
comprehensive                                                                   
income for                                                                      
the period                                                                      
ended 30 June                                                                   
2009                                                                            
Loss for the           -           (14,554)              -            (14,554)  
period                                        (14,554)                          
Other                                                                           
comprehensive                                                                   
income                                                                          
Foreign                12,610      -            12,610   -            12,610    
currency                                                                        
adjustments                                                                     
Transactions                                                                    
with owners,                                                                    
recorded                                                                        
directly in                                                                     
equity                                                                          
Employee                                                                        
Share Option                                                                    
Scheme:                                                                         
Transfer of            -           185          -        -            -         
forfeited                                                                       
share options                                                                   
Share-based            -           -            402      -            402       
payments:                                                                       
Employees`                                                                      
and                                                                             
Directors`                                                                      
shares                                                                          
Balance at 30          (30,290)    (106,859)    85,922   -            85,922    
June 2009                                                                       
                                                                                
Balance at 31          (28,400)    (138,825)    56,684   -            56,684    
December 2009                                                                   
Total                                                                           
comprehensive                                                                   
income for                                                                      
the period                                                                      
ended 30 June                                                                   
2010                                                                            
Loss for the           -         (17,349)     (17,349)   -          (17,349)    
period                                                                          
Other                                                                           
comprehensive                                                                   
income                                                                          
Foreign              (3,245)       -          (3,245)    -          (3,245)     
currency                                                                        
adjustments                                                                     
Transactions                                                                    
with owners,                                                                    
recorded                                                                        
directly in                                                                     
equity                                                                          
Issue of                                                                        
Shares:                                                                         
Capital       10       -           -            6,012                 6,012     
raising                                                                         
Employee                                                                        
Share Option                                                                    
Scheme:                                                                         
Share-based   17       -           -            810      -            810       
payments:                                                                       
Employees`                                                                      
and                                                                             
Directors`                                                                      
shares                                                                          
Balance at 30        (31,645)    (156,174)    42,912   -            42,912      
June 2010                                                                       
CONDENSED GROUP CASH FLOW STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2010       
                        Note  30 June 2010,  31 December     30 June 2009       
                              US$ `000       2009            US$ `000           
                              (Unaudited)    US$ `000        (Unaudited)        
(Audited)                          
                                                                                
                                                                                
                                                                                

                                                                                
CASH FLOWS FROM                (16,732)         (45,789)        (14,155)        
OPERATING ACTIVITIES                                                            
Loss before tax                                                                 
Adjusted for :                 1,445            2,479           911             
Depreciation and                 265            1,053           638             
amortisation                                                                    
Employment benefit               (98)           501             217             
expenditure (share-                                                             
based payments)                                                                 
Loss/(profit) on                 420            1,947           -               
disposal and scrapping                                                          
of assets                                                                       
Inventory write down             2,202          4,476           -               
Impairment of assets             (367)          (7,596)         (6,085)         
Net gain on foreign              (48)           9               3               
exchange                                                                        
Increase/(decrease) in           (6)            (2)             -               
operating lease                                                                 
liability                                                                       
Sundry income                    (772)          (3,996)         (2,458)         
Interest received                500            1,108           329             
Finance costs                                                                   
Changes in working               (826)          60              2,266           
capital                                                                         
(Increase)/decrease in           (2,185)        (842)           (2,813)         
prepayments and other                                                           
receivables                                                                     
Increase in inventory            535            3,862           1,303           
Increase/(decrease) in         1,963            13              485             
trade and other                                                                 
payables                                                                        
Increase in provisions         (13,704)         (42,717)      (19,359)          
Cash flows used in               283            2,899           2,458           
operations                                                                      
Interest received                (12)           (83)            (329)           
Finance costs                    6              2               -               
Sundry income                  (13,427)         (39,899)        (17,230)        
Net cash used in                                                                
operating activities                                                            
                                                                                
CASH FLOWS FROM          5     (8,263)          (26,915)      (18,193)          
INVESTING ACTIVITIES                                                            
Purchases of property,         445              104             -               
plant and equipment                                                             
Proceeds from disposal   7       -              (1,185)         -               
of property, plant and                                                          
equipment                                                                       
Purchases of intangible          -              -               (917)           
assets                                                                          
Purchases of                   (7,818)          (27,996)      (19,110)          
subsidiaries                                                                    
Net cash used in                                                                
investing activities                                                            
                                                                                
CASH FLOWS FROM                  (13)           (36)            (15)            
FINANCING ACTIVITIES                                                            
Repayments of                  490              (221)           516             
borrowings                                                                      
(Increase)/decrease in   10    5,985            -               -               
security deposits and                                                           
guarantees                                                                      
Proceeds from issuance         6,462            (257)           501             
of shares                                                                       
Net cash (used in)/from                                                         
financing activities                                                            
                              (14,783)         (68,152)      (35,839)           
Net decrease in cash             15,899         69,601          69,601          
and cash equivalents                                                            
Cash and cash                  2,829            14,450          12,687          
equivalents at                                                                  
beginning of period                                                             
Effects of exchange            3,945            15,899          46,449          
rate movement on cash                                                           
balances                                                                        
NOTES TO THE CONDENSED INTERIM GROUP FINANCIAL STATEMENTS                       
1. Basis of preparation                                                         
These condensed consolidated interim financial statements for the six months    
ended 30 June 2010 have been prepared in accordance with the accounting policies
set out in the 2009 Annual Report (except as stated below) which comply with    
International Financial Reporting Standards ("IFRS"), as adopted by the European
Union ("EU") in accordance with EU laws (IA`s regulation EC 1606/2002), and also
in accordance with IAS 34, `Interim Financial Reporting` as adopted by the EU.  
The interim results for the six months ended 30 June 2010 are unaudited. They do
not include all of the information required for full annual financial statements
and should be read in conjunction with the consolidated financial statements of 
the Group as at and for the year ended 31 December 2009, which have been        
prepared in accordance with IFRS as adopted by the EU. The financial information
set out in this document in respect of the year ended 31 December 2009 does not 
constitute the Group`s statutory accounts for the year ended 31 December 2009.  
2. Accounting policies                                                          
Except as described below, the accounting policies applied by the Group in these
condensed consolidated interim financial statements are the same as those       
applied by the Group in its consolidated financial statements as at and for the 
year ended 31 December 2009, as described in those consolidated financial       
statements.                                                                     
Taxes on income in the interim periods are accrued using the tax rate that would
be applicable to expected total annual earnings                                 
The following new standards and amendments to standards are mandatory for the   
first time for the financial year beginning 1 January 2010:                     
- IFRS 5, `Non-current Assets Held for Sale and Discontinued Operations`. The   
amendment clarifies that the disclosure requirements in Standards other than    
IFRS 5 do not generally apply to non-current assets classified as held for sale 
and discontinued operations.                                                    
- IFRS 8, `Operating Segments`. The improvement to IFRS 8 clarifies that segment
information with respect to total assets is required only if such information is
regularly reported to the chief operating decision maker                        
- IAS 7, `Statement of Cash Flows`. The amendment clarifies that only           
expenditures that result in the recognition of an asset can be classified as a  
cash flow from investing activities.                                            
- IAS 32, `Financial Instruments: Presentation`. The amendment deals with the   
classification of rights issues. For rights issues offered for a fixed amount of
foreign currency current practice appears to require such issues to be accounted
for as derivative liabilities. The amendment states that if such rights are     
issued pro rata to an entity`s all existing shareholders in the same class for a
fixed amount of currency, they should be classified as equity regardless of the 
currency in which the exercise price is denominated.                            
The following new standards and amendments to standards and interpretations have
been issued, but are not effective for the financial year beginning 1 January   
2010 and have not been early adopted:                                           
- IFRS 7, `Financial Instruments: Disclosures`                                  
- IFRS 9, `Financial Instruments`                                               
- IAS 1, `Presentation of Financial Statements`                                 
- IAS 24, `Related Party Disclosures`                                           
- IAS 27, `Consolidated and Separate Financial Statements`                      
- IAS 34, `Interim Financial Reporting`                                         
3. Estimates                                                                    
The preparation of interim financial statements requires management to make     
judgements, estimates and assumptions that affect the application of accounting 
policies and the reported amounts of assets and liabilities, income and expense.
Actual results may differ from these estimates.                                 
During the six months ended 30 June 2010 management reassessed its estimates in 
respect of:                                                                     
- the carrying value of property, plant and equipment                           
- the units of production depreciation                                          
- the impairment of assets                                                      
- net realisable value of non-current assets held for sale                      
- the recoverable amount of inventory (see note 9)                              
- provisions (see note 11)                                                      
4. Financial risk management                                                    
The Group`s financial risk management objectives and policies are consistent    
with those disclosed in the consolidated annual financial statements as at and  
for the year ended 31 December 2009                                             
Foreign currency rates                                                          
The US Dollar rates of exchange applicable to the year are as follows:          
                      2010            2009             2009                     
                      Six months to   Year ended 31    Six months to            
30 June         December         30 June                  
                      Closing         Closing          Closing                  
                      Average         Average          Average                  
                                                                                
South African Rand     0.13    0.13    0.13    0.12     0.13    0.11            
British Pound          1.51    1.53    1.59    1.57     1.65    1.49            
5. Property, plant and equipment                                                
During the six months ended 30 June 2010 the Group spent US$215,820 (six months 
ended 30 June 2009: US$0) to upgrade processing plants and US$7,151,601 (six    
months ended 30 June 2009: US$0) was spent on mine development. US$895,255 was  
spent on other items of property, plant and equipment.                          
A Gekko 50 ton per hour processing plant was transferred to non-current assets  
classified as held for sale at 30 June 2010. Refer to note 6 for further        
details.                                                                        
6. Non-current assets held for sale                                             
At 31 December 2009, the Group classified land situated at holding 59,          
Tedderfield Agricultural Holdings (net realisable value: US$442,125) and the    
Gekko 20 ton per hour gold processing plant and head gears (net realisable      
value: US$2,245,450) as non-current assets held for sale. During  the period,   
the Group disposed of the land for US$445,137, resulting in a loss of US$9,881. 
An item of plant and machinery, a Gekko 50 ton per hour processing plant, has   
been classified as held for sale during the six months ended 30 June 2010. The  
value of the asset is now expected to be realised from the sale of the asset    
rather than the continuing use. The value of assets transferred to non-current  
assets held for sale is US$8,868,702 at 30 June 2010. Based on management`s     
estimate of the fair value to be obtained from the sale, the asset held for sale
has been impaired by US$2,203,702 to its fair value less costs to sell.         
7. Intangible assets                                                            
During the prior year, the Group purchased the issued share capital of Ferreira 
Estate and Investment Company ("FEIC"), the registered holder of the Prospecting
and Mining rights over the Consolidated Main Reef, Crown Mines, City Deep and   
Langlaagte mining areas. The amount of US$1,282,417 included the purchase of    
these Prospecting and Mining rights. No further additions were made in the      
current year                                                                    
8. Loans receivable                                                             
Puno Gold Investments (Proprietary) Limited ("Puno")                            
Since the last report for the year ended 31 December 2009 there has been no     
resolution to the dispute relating to alleged procedural breaches of the        
Shareholders` Agreement between CRGSA and its current Black Economic Empowerment
("BEE") shareholder, Puno. The dispute surrounds the allocation of intercompany 
loans which fund the budget and work programme and the incurring of, and level  
of, certain costs. In order to suspend protracted litigation, the parties have  
agreed to refer the matter to arbitration pursuant to the dispute resolution    
mechanism under the Shareholders` Agreement. The Group still believes that      
ultimately their position will prevail. The Directors are still of the opinion  
that this will not have any material consequences in respect of the consolidated
accounts of the Group. Notwithstanding this position, the Group have, pending   
the outcome of any dispute, allocated 100% of the intercompany balances directly
from the Company to CRGSA. This additional 26% of intercompany debt, excluding  
interest, amounts to US$2,982,708 (ZAR22,375,901)  between 1 January and 30 June
2010 (US$18,315,012 (ZAR151,903,560)  between 1 January and 31 December 2009.   
The loan payable to Puno contains the same allocations referred to above.       
9. Inventory                                                                    
                                              Group                             
                                              June        December              
                                              2010        2009                  
US$ `000    US$ `000             
                                                                                
Exploration consumables                          1,045       1,223              
Ore stockpiles                                   158         308                
Stationery on hand                               2           43                 
Total inventory                                  1,205       1,574              
The amount of the write-down of ore stockpiles to net realisable value and      
recognised as an expense is US$419,995 (2009: US$1,946,955).                    
10. Share capital and share premium                                             
On 22 January 2010, CRG placed a total of 24,691,960 new ordinary shares of     
GBP0.01 each in the capital of the Company at a price of GBP0.15 per share to   
raise US$6.0 million (GBP3.7 million). 23,781,964 Placing Shares were placed    
using the cashbox structure with existing investors and 909,996 Placing Shares  
were placed with Directors and senior management of the Company. As part of this
placing, 2,567,964 ordinary shares were placed with entities owned and          
controlled by Mark Creasy who is deemed to be a Related Party under the UKLA`s  
Listing Rules by virtue of the fact that he is a Substantial Shareholder. The   
placing of ordinary shares is classified as a smaller related party transaction 
under Listing Rule 11.1.10 and this disclosure is being made in accordance with 
that rule.                                                                      
11. Environmental rehabilitation and other provisions                           
Provisions consist of provisions for environmental rehabilitation of            
US$3,660,430 (30 June 2009: US$697,888) and a provision of US$605,090 (30 June  
2009: US$547,562) which has been recognised for restructuring. The restructuring
costs are expected to be incurred during the current financial year.            
12. Directors` emoluments                                                       
During the current year, the composition of the Board of Directors changed. Two 
Directors of the Group, Mr A. Walton and Mr R. Kirkby, resigned on 14 April     
2010. Mr P. Malaza and Mr J. Brauns were appointed to the Board on the 17       
February 2010.                                                                  
13. Exploration expenditure                                                     
Included in exploration expenditure above is the revenue incidental to the      
exploration and development operations of the Group. CRGSA sold 3,085 ounces (30
June 2009: 122.81 ounces) of gold recovered from the metallurgical processing   
plants during the six months ended 30 June 2010. The revenue attributable to    
this sale is US$3,830,252 (30 June 2009: US$115,345)                            
14. Income taxes                                                                
Income tax expense is recognised based on management`s best estimate of the     
weighted average annual income tax rate expected for the full financial year.   
The estimated average annual tax rate used for the year to 30 June 2010 is 3.69%
(2009: 1.19%). The increase is mainly due to an increase in the intercompany    
loans from the Company to Central Rand Gold (Netherlands Antilles) N.V.         
("CRGNV") and the disallowed interest on these loans.                           
15. Commitments                                                                 
Group                             
                                              June        December              
                                              2010        2009                  
                                               US$ `000    US$ `000             

Design of optical ore sorter                     26          -                  
Mining equipment                               1,176         -                  
Fees payable to iProp Limited for prospecting    -           500                
1,202         500                 
16. Segment reporting                                                           
An operating segment is a component of an entity that engages in business       
activities from which it may earn revenues and incur expenses, whose operating  
results are regularly reviewed by the entity`s chief operating decision maker to
make decisions about resources to be allocated to the segment and assess its    
performance and for which discrete financial information is available. The      
entity`s chief operating decision maker reviews information in one operating    
segment, being the acquisition of mineral rights and data gathering in the      
Central Rand Goldfield of South Africa, therefore management has determined that
there is only one reportable segment. Accordingly, no analysis of segment       
revenue, results or net assets has been presented. No corporate or other assets 
are excluded from this segment                                                  
17. Share based payments                                                        
Grant of shares in the Company                                                  
During the six months ended 30 June 2010, the Company granted the following     
shares to selected Non-Executive Directors:                                     
Vesting                     Strike price       Allocation   Number of           
                                                           shares               
                                                           granted              
100,000 on 28 June 2010     Exercise price     Mr J. Brauns 300,000             
100,000 on 17 February 2011 of GBP0.01 per                                      
100,000 on 17 February 2012 share.                                              
                                                                                

Grant of options in the Company                                                 
During the period further share options were granted to selected Executive      
Directors. The options granted are summarised below:                            
Vesting                     Strike price      Allocation    Number of           
                                                           share options        
                                                           granted              
500,000 on 10 February      Exercise price    Mr S.J. du    1,500,000           
2011, 500,000 on 10         escalates in      Toit                              
February 2012 and 500,000   accordance with                                     
on 10 February 2013.        the vesting                                         
                           tranches. One                                        
third at price                                       
                           of GBP0.20, one                                      
                           third at GBP0.40                                     
                           and one third at                                     
GBP0.60.                                             
18. Related parties                                                             
Two dormant subsidiaries in the Group, Central Rand Gold Assay Laboratory       
(Proprietary) Limited and Central Rand Gold Water (Proprietary) Limited, were   
deregistered during the six months ended 30 June 2010. The deregistration has no
material impact on the Group.                                                   
Except for the information disclosed in Note 17 Share-based payments above, no  
other disclosable related party transactions occurred in the period.            
19. Events occurring after balance sheet date                                   
On 5 July 2010 CRG placed a total of 1,328,071,380 new ordinary shares (Firm    
Placing of 649,042,355 new shares and Placing and Open Offer of 679,029,025 new 
shares) of GBP0.01 each in the capital of the Company at a price of GBP0.02 per 
share to raise gross proceeds of US$40.4 million (GBP26.6 million).The placing  
provides sufficient funds to meet the projected funding requirements of the     
business for at least the next twelve months from the date of approval of the   
interim financial statements.                                                   
20. Contingent liability                                                        
Damages claim                                                                   
Puno has issued a summons on the Company, claiming damages, to the value of     
US$17m. This action instituted by Puno against the Company out of the South     
Gauteng High Court, Johannesburg, traverses issues similar to those covered by  
Puno`s previous application. In particular, Puno`s damages claim is premised on 
a similar interpretation of the Shareholders` Agreement as it contended for in  
the previous application.                                                       
The previous application was dismissed by Acting Judge, Alan Horwitz SC, on     
Thursday, 5 November 2009, with costs, including the costs of two counsel on the
grounds that Puno had failed to make out a case for the relief sought on each   
and every ground which formed the subject of the application hearing. Puno`s    
application for leave to appeal against the judgment was also dismissed with a  
similar order as to costs. In relation to Puno`s interpretation of the          
Shareholders` Agreement, the Acting Judge expressly rejected the very           
interpretation on which the present action seeks to rely.                       
It is the Company`s considered view that the present action is thus equally ill-
founded and possibly vexatious, and while Puno has in any event failed to take  
proper and appropriate steps in the institution of these proceedings, on which  
basis alone the present action must be stayed, Puno`s contentions for the relief
sought are considered to be flawed and devoid of merit.                         
In consequence the directors are of the opinion that in as much as the action   
has no prospects of success this will not have any material consequences in     
respect of the consolidated accounts of the Group.                              
17 August 2010                                                                  
Johannesburg                                                                    
JSE Sponsor                                                                     
Macquarie First South Advisers (Pty) Limited                                    
Date: 17/08/2010 08:00:04 Supplied by www.sharenet.co.za                     
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