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CRD - Central Rand Gold Limited - 2010 Annual Report Release

Release Date: 29/04/2011 07:05:07      Code(s): CRD
CRD - Central Rand Gold Limited - 2010 Annual Report Release                    
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 ANNUAL REPORT RELEASE                                                      
For full copies of the Company`s Annual Report and Accounts, including the      
Company Profile, Directors` Report, Corporate Governance and Sustainable        
Development Report, Directors` Responsibility Statement, Company Secretarial    
Confirmation, Auditor`s Report and full Financial Statements, please refer to   
the Company`s website: www.centralrandgold.com.                                 
In addition, the notice of the 2011 annual general meeting to be held on 24     
June 2011 ("AGM") has now been released using electronic means. Shareholders    
should, therefore, download copies of the circular, notice and forms of proxy   
at www.centralrandgold.com.                                                     
Shareholders are advised that the AGM of the Company is to be held at the       
offices of Carey Olsen, Carey House, Les Banques, St Peter Port, Guernsey, GY1  
4BZ at 11.00 a.m. UK time on 24 June 2010. Shareholders wishing to participate  
in the AGM, in Guernsey via video link from London may do so at the offices of  
K&L Gates, One New Change, London EC4M 9AF and Shareholders wishing to          
participate in the AGM via video link from Johannesburg may do so at the        
offices of Rudolph, Bernstein & Associates, Block B, 7 Eton Road, Sandhurst,    
Johannesburg                                                                    
HIGHLIGHTS                                                                      
2010:                                                                           
- US$5.7 million (GBP3.7 million) raised in a cashbox placing on 22 January.    
- US$36.8 million (GBP24.2 million) raised in a "Firm Placing and Placing and   
Open Offer" on 5 July.                                                          
- Completed a Competent Person`s Report ("CPR") on 12 April, indicating an      
increased Joint Ore Reserves Committees ("JORC") probable reserve base of       
482,000 ounces of gold.                                                         
- 9,321 ounces of gold produced in 2010.                                        
- No fatalities                                                                 
- Discussions progressed with South African Government regarding Acid Mine      
Drainage ("AMD") and the rising water table in the Central Rand Basin.          
- Order placed for submersible pumps (delivery expected in August 2011).        
Post year-end:                                                                  
- On 7 February 2011, announced an urgent need for South African Government     
commitment to the AMD project.                                                  
- On 24 February 2011, South African Government issued its report on AMD.       
- On 29 March 2011, announced suspension of underground mining.                 
CHAIRMAN`S REPORT                                                               
In late 2007, CRG raised GBP75 million in support of the concept of reopening   
the gold mines of the Central Rand Basin and accessing gold reefs left behind   
by the "old-timers". The key factors supporting the implementation of this      
concept were:                                                                   
- the threefold rise in the real gold price since closure of the original       
mines;                                                                          
- painstaking and visionary evaluation of the resource by the Viljoen           
brothers;                                                                       
- the liberalisation of mineral rights legislation with new "use it or lose     
it" conditions;                                                                 
- the Australian-led entrepreneurial initiative of CRG`s originators, RQS; and  
- receptive capital market at that time.                                        
Since then, the share price history of your Company has made for sorry reading  
and now, as I write, it has been further impacted by the decision announced on  
29 March 2011 to suspend underground mining operations.                         
Central Rand Gold vs FTSE 350 Mining index                                      
(For the release with pictures and schematics, please refer to the Company`s    
website: www.centralrandgold.com)                                               
I am very aware of the pain that our shareholders have endured. The Company     
and its officers have come in for some criticism in terms of the gap between    
historical expectations and performance, so in reflecting on the current        
position, I will consider the extent to which we have overpromised or under     
delivered.                                                                      
Much of this is history, but the issues of the moment which threaten our very   
existence are:                                                                  
- Acid Mine Drainage ("AMD") in the Central Rand Basin and the rising water     
table;                                                                          
- the higher than expected occurrence of "double-voids", i.e. stopes where not  
only has the original Main Reef Leader been extracted but also the Main Reef,   
contrary to the historical mining plans; and                                    
- disappointingly high dilution in the reef currently being mined on the upper  
levels.                                                                         
Acid mine drainage                                                              
The rising tide of contaminated underground water from 120 years of mining      
activity in the three geological compartments of the Witwatersrand, and the     
spillage to surface that is already occurring on the far East and far West      
Rand, is a well document phenomenon.                                            
The Central Rand Basin (in which CRG is located) has, until recently, been      
dewatered almost on a "last-man-standing" basis, by the South West Vertical     
shaft of East Rand Proprietary Mines ("ERPM"). CRG`s founding premise was that  
this would continue under the sponsorship of a coalition of interested and      
affected parties, sharing capital and operating expenses into the future.       
The parties were:                                                               
- Current and new mining companies - interested in the maintaining of the       
water at a certain level below surface;                                         
- A commercial operator of a water processing plant; and                        
- The South African Government - interested in the prevention of pollution.     
In view of the lack of clarity and commitment to future funding - essentially   
by the South African Government - ERPM declined to soldier on alone, closed     
and allowed its South West Vertical operations to flood in 2009.                
The urgency of the moment is that, despite strong words of encouragement by     
the South African Government over time, by the end of 2010 there was no formal  
commitment to participate in the re engineered solution proposed by the         
industrial parties.                                                             
The crisis for CRG is that while other parties are mainly interested in         
maintaining water levels below environmentally prudent levels, there is still   
some time before these are reached. CRG`s current and future workings are       
below that level and are already threatened.                                    
There is much to be done to close the gap between the general commitments of    
the South African Government and the Company`s specific needs. Whilst there is  
no doubt that this will all be resolved, everything depends on the timing,      
which is disappointingly uncertain. In the face of these uncertainties          
concerning depth, the normal response of a mining Company would be to maximise  
development and mining in the upper levels.                                     
Mine development                                                                
In developing ahead of future stopes on the upper levels, some 30% of those     
accessed have revealed unexpected "double-voids", ie not only has the original  
Main Reef Leader been extracted but also the Main Reef, contrary to the         
historical mining plans. Mine planning, based on the trial-mining programme of  
early 2009, included only for the loss, for value and "void" reasons, of some   
10% of the ore.                                                                 
The frequency with which the double voids have been encountered have the        
effect of slowing down the rate of access to mineable stopes, increasing the    
cost of development per tonne of accessible ore, and most significantly,        
dramatically reducing immediate revenues. This has unsustainable consequences   
for the Company`s cash reserves.                                                
Development on lower levels suggest that the double-void phenomenon decreases   
with depth, leading to the interpretation that these voids are a result of      
unmapped remnant mining on retreat by the previous mining operations.           
In the face of these double voids at shallow levels, standard mining practice   
would be to go deeper. However, as a result of the rising water table this is   
not an option available to the Company in the interim.                          
Gold production                                                                 
The first two footwall-accessed stopes were mined in March 2011. Comparison     
between expected head-grades and a "built- up" head- grade, back calculated     
from in-plant and tails sampling, indicated a Mine Call Factor of               
approximately 65%, compared to budgeted values of around 75%. Since the Main    
Reef is breaking cleanly on the footwall, the only conclusion is that a         
considerable proportion of vintage hanging wall (over and above the planned-    
for "middling") is diluting the mined ore.                                      
A programme to refine the blasting and ore- handling techniques, including      
trial testing of "split-firing" of middlings plus old hanging from reef is the  
next stage.                                                                     
The "empty tonnes" associated with this dilution severely impact the cost per   
ounce of gold produced and the short-term cash flows while this gap between     
planned and actual mine call factor is being closed.                            
The dilemma                                                                     
Current development is sub-economic because of the double voids, deeper and     
more promising development is not possible because of lack of definition on     
AMD, and current stoping costs are prohibitive at present levels of dilution.   
On 29 March, the Company announced the following:                               
- The suspension of underground capital development effective 30 April 2011,    
i.e. after opening up the next stoping level which appears to have fewer        
"double-voids".                                                                 
- The mining out of all available stopes over the next three months. The prime  
purpose of this programme is to develop and refine blasting and waste           
separation techniques to establish the profitable basis for future mining.      
- A study into the feasibility of selectively mining appropriate areas by       
conventional hand-held in-stope drilling in order to reduce dilution and        
improve grade selectivity as an additional methodology is currently underway.   
- To the extent affordable, a programme of surface and underground drilling to  
verify the presence of Main Reef (ie to define the "double-void" issue) in      
near-term mining reserves will be undertaken.                                   
- Except for underground exploration work, underground operations will be       
placed on a "care and maintenance" basis following extraction of the            
immediately available stopes.                                                   
- surface mining of currently defined South African Mineral Resources           
Committee("SAMREC") and JORC Exploration Target Material (between 63,000        
tonnes and 76,000 tonnes at an expected head-grade of approximately 3.2 g/t)    
will continue until exhausted. This is expected to occur around September       
2011.                                                                           
- The commercial viability of treating all existing ore through a third-party   
toll treating agreement will be reviewed.                                       
- A financial feasibility study of processing high-grade tailings will be       
completed; and                                                                  
- In the interim CRG`s metallurgical operations will continue to process all    
surface and underground ore. If a decision is made to toll treat, or if all     
stockpiles have been depleted, the metallurgical plant will be cleaned out to   
recover all in-process stock.                                                   
The Company has commenced the process of reducing its staff complement to       
ensure alignment with the above business plan.                                  
As at 30 March 2011, the Company had cash and near cash resources of US$10      
million, which should meet all outstanding commitments until mid-2012.          
Overpromised or underdelivered?                                                 
Perhaps, with hindsight, the Company`s plans at the time of its Initial Public  
Offering ("IPO") could be seen as overly ambitious in:                          
- an apparently reasonable (as supported by Independent Competent Persons),     
but ultimately simplistic approach to the mine plan and design;                 
- a presumption that Australian leadership would import Australian mining       
technology and methodologies and achieve Australian efficiencies in the South   
African environment with South African contractors and labour; and              
- a seductively simplistic approach to the merits of underground metallurgical  
processing, with hugely inefficient performance on surface by plants seriously  
compromised by their geometric constraints.                                     
Between mid-2008 and the end of 2009, as these many nettles were grasped, the   
Company:                                                                        
- replaced the Chief Financial Officer ("CFO"), the Company Secretary, the      
heads of Geology and Metallurgy and the Chief Executive Officer ("CEO") by      
promoting the new CFO to Chief Executive and recruited another CFO;             
- replaced the entire Senior Mining and Mine Planning Team;                     
- reduced the number of Board members by two;                                   
- reassessed production methodologies, targets and costs based upon             
underground realities and actual metallurgical performance; and                 
- most significantly, concluded that it could not fund itself through to a      
cash-positive position.                                                         
This last realisation defined the 2010 year as follows:                         
- In January 2010, there was a cashbox placing fund-raise of US$5.7 million     
(GBP3.7 million) to provide interim funding until trial mining was completed    
and mine plans of sufficient integrity to support a formal fund-raising         
exercise, were completed;                                                       
- A coherent mine plan was completed and approved by independent third-party    
appraisers (Snowden) in April 2010;                                             
- The Board was restructured and further reduced in size and a new Chairman     
was appointed;                                                                  
- Head office staffing was dramatically reduced in order to cut costs;          
- The Killarney head office was closed and all its functions and personnel      
were moved to the Rand Leases (Roodepoort) technical offices, close to the      
Company`s mine site;                                                            
- A prospectus was issued and US$36.8 million (GBP24.2 million) was raised in   
July 2010;                                                                      
- The requisite additional mining equipment, as laid out in the prospectus,     
was ordered;                                                                    
- Metallurgical problems were finally understood and addressed - cutting        
losses on historical mistakes and embarking on substantial re- engineering and  
the disposal of suboptimal equipment;                                           
- An alternative Acid Mine Drainage System was engineered and costed (as        
discussed above);                                                               
- The pumping equipment to handle these pumping arrangements was ordered; and   
- A "gap analysis" on governance compliance with both the UK Combined Code and  
South Africa`s new King III Code was conducted, and levels of governance        
awareness and financial controls all round were raised.                         
Following the maxim that no battle plan survives first contact there were two   
major changes in the second half of 2010 to the expectations of the             
prospectus, namely:                                                             
- Finalisation of the CPR for the prospectus delayed the capital-raising        
process by approximately six weeks. This squeezed the Company`s cash            
resources, stopped underground production and delayed the placement of orders   
for new mining equipment. The cumulative effect, particularly of the late       
placement of equipment orders in an ever-tightening resources market, was       
essentially a six - month delay to the recommencement of underground stoping.   
A conscious decision to then apply all the Company`s resources towards          
increased underground development and open-cast mining, while awaiting stoping  
equipment, has meant the Company incurred 120% of the planned expenditure, but  
received only 57% of the planned revenue; Primarily as a result of these two    
variances, cash balances at year-end were a significant US$10.4 million lower   
than tabled in the prospectus                                                   
- The Trial Mining project completed in March 2010 concluded that the           
"vintage" hanging wall above the mined-out Main Reef Leader was competent and,  
with due care, could be successfully undermined. Subsequent on-reef             
development to open ground for future stoping has, in some areas, struggled to  
cope with "self-mining" of the old hanging wall. The dangers, costs and         
inefficiencies of trying to support this incompetent hanging wall, triggered a  
search for alternatives.                                                        
An alternative plan to access reef from footwall drives and crosscuts, and      
then to long-hole stope from the crosscut-reef intersection points, has been    
developed and looks set to overcome the problems, albeit at slightly higher     
unit costs. The practicality of this concept has been proven, but its           
economics, particularly in terms of grade and dilution control, still have      
some way to go.                                                                 
In terms of whether we have overpromised or underdelivered, I conclude that     
until the start of 2009 it was largely the former. Since then, for all kinds    
of good reasons, we have failed to deliver on a set of concrete, testing but    
not unreasonable plans.                                                         
CRG cannot deliver on the promises of its IPO wherein it aspired to be the      
largest single gold mine in the world, but it does have the potential to be a   
most impressive "string of pearls", with many similar operations (some bigger,  
some richer) to the one we are now developing.                                  
The Company`s very substantial gold resource base remains intact and its short  
- term reserves have recently been reconfirm. Work to demonstrate economically  
viable extraction has progressively eliminated certain approaches and has       
highlighted the keys to success - which future planning intends to deliver. A   
combination of this focus, plus much clearer direction from South African       
Government on dealing with AMD pumping and treatment, together with the         
consequent ability to physically access the relatively "double-void" free       
deeper levels, should allow the Company to show its real value.                 
Given resolution and progress on the above-listed uncertainties, the Company    
expects to be able to reassess its prospects by the end of October 2011. Part   
of this reassessment will be the question of further funding and possible       
other corporate actions.                                                        
In the interim, given the continued difficulties and uncertainties faced by     
the Company the Board continues to look at all strategic options for the        
Company, one of which could lead to an offer for the entire issued share        
capital of the Company. However, this option is at an early stage and there     
can be no certainty that an offer for the Company will be forthcoming.          
The Directors have resolved to reduce the Board to the minimum size stipulated  
in the Articles, and the remaining two Non-Executive Directors have             
volunteered a 20% reduction in their fees.                                      
I will not dwell in this report on the ongoing and unfortunate dispute with     
CRGSA`s broad-based black economic empowerment partner - Puno. This dispute is  
a distraction and a cost, but it is not Company- threatening. It was            
comprehensively covered in the 2010 prospectus and the current status is dealt  
with in the body of this report.                                                
I extend my thanks to my fellow directors and the Executive Team, who have      
laboured mightily this year.                                                    
Michael McMahon                                                                 
Chairman                                                                        
CHIEF EXECUTIVE OFFICER`S REPORT                                                
Introduction                                                                    
The past year has been significant for Central Rand Gold. CRG`s initial focus   
in 2010 was to complete trial mining and metallurgical testing with the         
following specific objectives:                                                  
- To process ore parcels from underground and surface activities as bulk        
samples to test gold grades and recoveries.                                     
- To allow the conversion of Mineral Resources into Ore Reserves after          
confirming mining and metallurgical processes.                                  
- To physically test mining and backfilling techniques.                         
These objectives were all achieved in March 2010. On the completion of the      
Competent Person`s Report, the Company engaged in a fund-raising exercise and   
received US$36.8 million in July 2010. The Company continued underground        
development with the aim of commencing underground production during the        
latter part of 2010, which was delayed until 2011 due to lack of equipment      
availability.                                                                   
However, as is evident from the Chairman`s Report above 2010 and 2011 have had  
their challenges. While by no means glossing over or ignoring these, in order   
to avoid repetition, I have mainly concentrated in my report on activities in   
2010. My reporting of progress and achievements in early to mid 2010 clearly    
need to be seen in the context of the issues around AMD, the double-voids       
discovered, our announcement made on 29 March 2011 and our funding position     
(Explained in detail in note 1.1 to the financial statements). Together with    
my fellow directors, I am working hard to find resolution to the serious we     
face.                                                                           
Exploration and geological update                                               
Resources and reserves                                                          
The completion of the trial mining exercise in March by Snowden Mining          
Industry Consultants allowed for the upgrade of the existing JORC/SAMREC        
Reserve statement to 0.48 million ounces.                                       
Probable Reserves         Indicated          Inferred Resources                 
                         Resources                                              
      Tonna  Grade   Metal  Tonna   Grade  Metal   Tonna  Grade   Metal         
      ge     (g/t)   (Moz)  ge      (g/t)  (Moz)   ge     (g/t)   (Moz)         
(Mt)                  (Mt)                   (Mt)                         
CMR    3.70   4.00    0.48   10.70   5.42   1.86    1.70   9.13    0.51         
MR                                                                              
and                                                                             
MRL                                                                             
<900                                                                            
m                                                                               
Crown                        5.80    5.95   1.11    3.10   8.05    0.81         
MR                                                                              
and                                                                             
MRL                                                                             
<900                                                                            
m                                                                               
V&R                          1.80    6.70   0.39    0.20   15.55   0.10         
MR                                                                              
and                                                                             
MRL                                                                             
<900                                                                            
m                                                                               
City                         2.90    6.81   0.63    2.50   6.76    0.54         
MR                                                                              
and                                                                             
MRL                                                                             
<900                                                                            
m                                                                               
Simme                        1.50    8.80   0.43    0.20   8.20    0.04         
r and                                                                           
Jack                                                                            
MRL                                                                             
<900                                                                            
m                                                                               
Kimbe                        3.70    3.75   0.44    4.3    3.70    0.51         
rley                                                                            
Reef                                                                            
(CMR)                                                                           
<900                                                                            
m                                                                               
White                        2.60    3.69   0.31    0.60   3.71    0.07         
Reef                                                                            
(CMR)                                                                           
<900                                                                            
m                                                                               
MR                           58.50   9.68   18.22   45.60  7.36    10.81        
and                                                                             
MRL                                                                             
>900                                                                            
m and                                                                           
other                                                                           
sourc                                                                           
es                                                                              
Total  3.70   4.00    0.48   87.50   8.31   23.39   58.20  7.15    13.39        
Note: Resources are quoted inclusive of reserves.                               
During the latter part of 2010 it became apparent that areas of undocumented    
reef extraction exist in the immediate mining area. It is believed that these   
uncharted voids are limited to shallow areas of the mine close to the vicinity  
of historical shafts and mining progresses deeper beyond 250 metres below       
surface their frequency will diminish.                                          
The close monitoring of unexpected underground voids continues with the         
establishment of footwall access drawpoints. As this area of uncharted mining   
voids represents a very small portion of the total project area, it is not      
considered necessary at the point to adjust the Resource statement.             
Surface                                                                         
Surface exploration target                                                      
Exploration through systematic mechanical trenching and geological mapping and  
sampling continued throughout 2010, resulting in the identification and         
delineation of several significant open pit "Exploration Target" areas within   
the New Order Mining Right. The table below details the Exploration Target      
Inventory as of December 2010.                                                  
Mining area       Reef               Exploration material target                
Central Pit       Main Reef        3.1 g/t - 3.9 g/t  6,000 t - 15,000 t        
New Unified Pit   Main Reef        1.8 g/t - 5.2 g/t  11,000 t - 19,000 t       
New Unified West  Main Reef        4.6 g/t - 6.1 g/t  10,000 t - 47,000 t       
Pit                                                                             
Slot 5 Block A    White Reef       2.9 g/t - 3.1 g/t  27,000 t - 48,000 t       
Slot 5 Blocks B,  White Reef       1.5 g/t - 1.9 g/t  17,000 t - 33,000 t       
C, D                                                                            
Slot 7            White Reef       2.1 g/t - 3.2 g/t  87,000 t - 200,000 t      
Note: 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.   
Further exploration during 2011 will focus on improving confidence in           
exploration target material and identifying additional surface mining           
potential to supplement underground production.                                 
Underground grade verification and grade control                                
The correlation between underground Reef Drive sampling and the JORC/SAMREC     
resource model continues to be very strong.                                     
The table below portrays the expected grades in the reef drives excavated so    
far (Theoretical Resource) and compares them to the actual grades measured      
through drive sampling. It can be seen that while there is some degree of       
variation between the expected grades and the actual sampled grades, this       
variation is generally on the upside and overall a small positive increase in   
grade from 5.13 g/t to 5.27 g/t is observed.                                    
Underground                                                                     
Theoretical resource                                          
On-reef     Resource  In      CO        Payable   Average   Average             
developmen  block     situ    g/t       %         width     g/t                 
t                     g/t                                                       
1596        CMR 46    3.04    3.00      46        151       4.67                
1583        CMR 46    3.04    3.00      46        151       4.67                
1581        CMR 33    3.55    3.00      50        112       5.29                
1580        CMR 33    3.55    3.00      50        112       5.29                
1575        CMR 33    3.55    3.00      50        112       5.29                
1563        CMR 33    3.55    3.00      50        112       5.29                
1551        CMR 33    3.55    3.00      50        112       5.29                
1534        CMR 32    3.45    3.00      47        110       5.32                
Average               3.42    3.00      49        120       5.13                
Contained             410                                   616                 
Au                                                                              
Equivalent            3.42                                  5.13                
g/t                                                                             
                    Reef drive sampling                                         
On-reef     Resourc  In situ   CO        Payable   Average    Average           
developmen  e block  g/t       g/t       %         width      g/t               
t                                                                               
1596        CMR 46   3.81      3.00      35        100        9.18              
1583        CMR 46   2.96      3.00      50        100        3.85              
1581        CMR 33   8.80      3.00      80        100        10.58             
1580        CMR 33   0.83      3.00      -         100        0.83              
1575        CMR 33   3.14      3.00      35        103        6.07              
1563        CMR 33   4.37      3.00      72        111        5.36              
1551        CMR 33   4.04      3.00      56        104        5.83              
1534        CMR 32   5.80      3.00      100       123        5.80              
Average              3.88      3.00      45        103        6.12              
Contained            401                                      633               
Au                                                                              
Equivalent           3.34                                     5.27              
g/t                                                                             
In areas of poor ground conditions where the adoption of an alternative reef    
access method (footwall drive) is indicated, it is noted that the ability to    
selectively mine to a cut-off may be somewhat compromised. With this in mind,   
test work to evaluate the use of underground diamond drilling as a potential    
replacement for reef drive sampling was undertaken during the second half of    
2010.                                                                           
To this end, a 20-metre-long stretch of previously sampled reef development     
was drill targeted from the footwall tunnels immediately below the sampled      
reef at a depth of approximately 110m below surface. Previous face sampling of  
the 1581 reef development returned an average grade of 16 g/t over 55cm over    
the length of the reef development. The drill evaluation returned a very        
similar grade of 13.74 g/t over 48cm. Details are tabulated below:              
BH number         Corr width (cm)    Grade (g/t)       Content (cmg/t)          
PH01              38                 16.38             622                      
PH02B             48                 10.02             481                      
PH03              54                 16.38             885                      
PH04B             48                 10.65             511                      
PH05              59                 13.80             814                      
PH06              50                 9.94              497                      
PH07              54                 10.58             571                      
PH08              66                 11.50             759                      
PH11              38                 13.58             516                      
PH12              32                 23.24             744                      
PH13              44                 20.30             893                      
Average           48                 13.74                                      
Additional studies and financial models have further been undertaken to gauge   
the impact of mining using limited grade control with face sampling occurring   
at draw points only.                                                            
Expansion projects                                                              
There was considerable focus during the latter half of 2010 on the development  
and optimisation of the significant JORC/SAMREC resource base available to the  
Company.                                                                        
Independent scoping studies into the feasibility of developing CMR East have    
been completed and suggest that CMR East is economically viable at a scoping    
level. Further work is now anticipated to increase this confidence to a         
prefeasibility / feasibility level, which will allow for a full capitalisation  
decision to be made.                                                            
CRG has also commenced initial planning and scheduling studies to investigate   
the economics of the City Deep and Village mining propositions.                 
A comprehensive tender process for the planned resource drilling at the new     
Crown Mines site has been completed and a detailed programme of diamond         
drilling has been designed to upgrade a substantial block of Main Reef in the   
Crown Mines West target area from Inferred Resources to Indicated Resources.    
(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 the Geology Manager of Central Rand Gold South Africa (Pty) Limited   
and has over 17 years` experience in exploration, mineral resource management   
and mineral evaluation.)                                                        
Completion of trial mining                                                      
Trial mining, which began in September 2009 and was completed in April 2010,    
effectively and meaningfully demonstrated at that time , that the Main Reef     
can be safely and efficiently mined, although the issues faced since then have  
surpassed this view                                                             
The successful trial mining process has also provided confidence that the       
reserve modifying factors are reasonable.                                       
Operational update                                                              
Underground mining                                                              
Following the success of trial mining, underground mining operations commenced  
in May 2010.                                                                    
With effect from August 2010, underground mining efforts were focused on        
footwall development due to reef access development being changed from reef     
development to footwall development, as a result of poor ground conditions      
experienced when developing on-reef.                                            
Mine development                                                                
Monthly development progressed at an improved rate with 434.5 metres being      
achieved in December, compared to 407.5 metres in November and 371.6 metres in  
October.                                                                        
In developing ahead of the next planned stopes, between 120 metres below        
surface to 180 metres below surface, some 30% of the stopes accessed in the     
current mining area have been found to have unexpected "double-voids". As the   
Chairman has explained in his report, this is an unexpected problem for which   
a workable and sustainable solution needs to be found as soon as possible.      
In the face of these "voids" at shallow levels standard mining practice would   
be to go deeper, however, as a result of the rising water table, this is not    
an option available to the Company in the interim.                              
The long-hole drilling rig (required for stoping) was delivered in December     
2010 and immediately commissioned, enabling stoping operations to commence in   
January 2011.                                                                   
The December delivery of the long-hole drilling rig had short-term production   
implications in that the production forecast contained in the prospectus,       
published by the Company on 2 June 2010, anticipated significantly higher       
grade ore to be available by the end of 2010. However, the delay in the supply  
of underground ore has been partially mitigated by the extension of surface     
exploration and surface mining to supplement gold production.                   
The following table shows key underground mining statistics for 2010,           
comparing actual statistics and those included in the June Prospectus (some     
surface mining statistics are also included in the table):                      
2010           Actual                       Prospectus                          
              Tonnes        Grade (g/t)    Tonnes         Grade (g/t)           
(t)/metres                   (t)/metres                           
              (m)                          (m)                                  
Decline        858                          1,358                               
sinking (m)                                                                     
Waste          1,266                        678                                 
development                                                                     
(m)                                                                             
Footwall       859                          -                                   
development                                                                     
(m)                                                                             
Reef           355                          3,815                               
development                                                                     
(m)                                                                             
Total (m)      3,338                        5,851                               
Trial stoping  6,073         2.60           23,752         3.80                 
(t)                                                                             
Reef           33,875        1.63           77,202         1.70                 
development                                                                     
(t)                                                                             
Surface        155,452       3.19           38,000         4.30                 
mining (t)                                                                      
Total (t)      195,400       2.67           138,954        2.77                 
Surface mining                                                                  
All safety and production targets for surface mining in 2010 were achieved      
with no injuries to personnel occurring during the year.                        
During 2010, 155,452 tonnes of surface ore was mined from the following pits:   
- Central Pit - 51,147 reef tonnes at a (trammed) grade of 3.25 grams/tonne.    
- New Unified Pit - 69,690 reef tonnes at a grade of 2.67 grams/tonne.          
- New Unified Extension Pit - 18,366 reef tonnes at a grade of 4.88             
grams/tonne.                                                                    
- Main Pit - 16,249 reef tonnes at a grade of 5.80 grams/tonne.                 
(The grades presented are diluted, trammed to stockpile grades.)                
Metallurgical update                                                            
After listing in 2007, CRG commenced with the concept of metallurgical          
concentrators being placed underground in the mining vicinity to produce a      
concentrate that could be transported to surface for gold extraction, thereby   
eliminating significant haulage and surface operations. These concentrators     
and a small Carbon-in-Leach ("CIL") plant required to treat low-volume high-    
grade concentrate, were procured in 2008 and 2009. Trial mining highlighted     
the that this concept was sub-economic at shallow depths and the plant was      
commissioned on surface at the Consolidated Main Reef ("CMR") portal. This      
shift from a low-volume high-grade operation to a high-volume medium/low-grade  
operation during the trial mining and resource to reserve conversion process,   
necessitated improved metallurgical recovery to be economically viable.         
Following the principle of utilising the existing plant already capitalised,    
optimisation initiatives were commenced to increase direct whole ore leach      
capacity and also to improve overall recovery. During early 2010, the           
metallurgical plant was reconfigured to ensure a steady feed into the plant,    
increase gravity gold recovery and convert the CIL into a Carbon-in-Pulp        
("CIP") plant with increased direct leaching capacity. These changes were       
successfully completed in March, after which production capacity increased to   
23 kilotonnes per month with associated gold production of around 1,200 ounces  
per month.                                                                      
To date, crushing capacity and availability have been limiting factors to       
plant throughput. An independent design review has assessed that this would be  
addressed by the incorporation of two appropriately sized cone crushers to      
replace the original Horizontal Shaft Impactor ("HSI") and Vertical Shaft       
Impactor ("VSI") units and increase the crushing circuit capacity to the        
required 45 kilotonnes per month. Increased milling capacity will also be       
needed to achieve the 45 kilotonnes capacity on the harder underground          
sulphide ore and would most likely incorporate a further shift towards whole    
ore leach processing, with added recovery benefits. Optimal design and costing  
options for additional milling capacity are being evaluated as this             
expenditure is only budgeted in 2012. The implementation of the comminution     
upgrade will be evaluated following clarity on the rising water issue. The      
intention would be to increase crushing capacity to 45 kilotonnes per month     
and further streamline our process, eliminating intermediary stockpiles with    
associated material handling costs and gold losses. The CIP will also require   
changes, particularly to the elution circuit, to accommodate the increased      
gold production.                                                                
The supplementation of surface oxide ore into the plant to mitigate the         
delayed underground production also needed to be accommodated in terms of       
material handling, and particularly processing, due to varying chemical         
compositions affecting acidity and organic material which "robbed" the gold     
prior to leaching. Surface oxide ore remains a significant portion of the       
intended plant feed in 2011. Recovery (R+R - recovered and residue) averaged    
75% for 2010 on predominantly oxide material.                                   
2010 was extremely beneficial in terms of establishing rhythm in the plant      
with associated metal accounting, feedback and reporting, so that future        
increased capacity can be fully utilised.                                       
Our current focus on site is to commission the Optical Ore Sorter, which is     
key to addressing dilution and economically remove waste prior to processing,   
with the added benefit of being able to sell the waste as washed and screened   
aggregate.                                                                      
Gold production of 9,321 ounces was achieved in 2010. This is within the range  
projected in September 2010 following the fund-raising.                         
Despite the positive trend in recovery rates and plant availability, the mined  
surface oxide grades reporting to the plant from the newly opened surface       
slots were within the lower end of the expected range.                          
The proportion of underground sulphides being processed versus surface oxides,  
was around 15/85 in 2010. Confirmation of grade, dilution and possible old      
workings contaminants, will also be evaluated in assessing gold output.         
Safety                                                                          
Throughout 2010, CRG continued to place major emphasis on safety in the         
workplace, resulting in the Company yet again being able to ensure that no      
fatalities took place at our operations.                                        
Under the leadership of Australian Contract Mining, the underground workforce   
maintained its focus on meeting and achieving world-class safety standards and  
outcomes. There is no room for complacency and safety will continue to receive  
priority attention from management and staff.                                   
The following table shows overall safety statistics for 2010 (a more            
comprehensive safety overview is contained in the Sustainable development       
section of this report):                                                        
Type of injury          2010                     2009                           
Dressing cases          20                       9                              
Lost-time injuries      5                        5                              
Incidents               97                       41                             
Water                                                                           
Background                                                                      
Since 2008, when the East Rand Proprietary Mines (part of the DRD Gold Limited  
Group) ceased pumping water from its SWV shaft due to a double fatality, the    
water table in the Central Basin area continued to rise at an average rate of   
0.54 metres per day and as at the end of December 2010, the water table was     
just over 500 metres below surface at the SWV shaft.                            
CRG, along with other affected industry stakeholders, has since early 2009      
been engaged in discussions with the South African Government in an attempt to  
resolve this problem.                                                           
On 24 February 2011, the Department of Water Affairs of the South African       
Government published its report on AMD to the Inter-Ministerial Committee. Our  
team has attended two meetings with the South African Government in pursuit of  
further clarity. The Company has now evaluated its prospects in terms of the    
AMD risks as they now stand and its short-term production situation and         
concludes as follows:                                                           
Whilst the publication by the South African Government of the AMD report has    
been very welcome in that it crosses the first hurdle of a commitment towards   
resolution of this major environmental issue, there remains insufficient        
clarity on key issues such as targeted minimum water levels, project            
engineering and technology, the role and responsibilities of the interested     
parties, cost allocation between interested and affected parties and timing to  
meet the degree of definition needed by the Company to continue development     
and mining at the present rate.                                                 
The submersible pumps, ordered and paid for by the Company at a cost of         
Euro3.5 million, and due for delivery in August 2011, have a capacity to pump   
72 million litres of water per day compared to the average daily ingress of 55  
million litres. Should it be decided to utilise these pumps and the             
engineering already completed for the ERPM South West Vertical shaft            
dewatering station, these pumps have the capability to dewater the Central      
Rand Basin and restore CRG`s reserves. In the event that these pumps are not    
utilised for this purpose, the Company will sell them.                          
The need to have this (or some alternative equivalent) capacity installed by    
December 2011 in order to protect the 250 metres below surface level and        
enable gradual dewatering thereafter, and the timelines inherent in the         
Western Utility Corporation`s technical proposals informed the previously       
published need for definition by the end of March 2011.                         
Based on studies completed by Western Utilities Corporation, an engineering     
plan was developed to stop and partially treat AMD in the Central Basin by the  
establishment of a submersible pump station that would be constructed at the    
South West Vertical ("SWV") shaft. Based on the above engineering study, the    
capital cost was estimated to be R178 million at 400 metres below surface,      
which included R91 million for the pump station and R87 million for the         
refurbishment of the High Density Sludge ("HDS") plant. This proposal was       
presented to the South African Government in 2009 and 2010 for consideration.   
Due to receiving strong indications of support from the South African           
Government with regard to providing support and funding for the rising AMD      
problem, CRG unilaterally ordered the longest lead item, ie the submersible     
pumps, in August of last year at a cost of US$4 million. This was done to       
ensure that once agreement was reached with the South African Government, the   
solution could be implemented without any delays, ultimately protecting as      
much of the resource base as possible.                                          
Current situation                                                               
In late 2010, the South African Government established an Inter-Ministerial     
Commission tasked with the responsibility of identifying how the AMD problem    
could be resolved in the Witwatersrand area. The task team issued its report    
in February 2011 and focused on three key strategies in dealing with AMD,       
namely:                                                                         
- Decant prevention and management.                                             
- Reduction in ingress of water into the various basins (Central, Eastern,      
Western).                                                                       
- Water quality management in each of the basins, treated separately through    
their own water treatment plants.                                               
An amount of R225 million was set aside in the 2011/12 South African            
Government budget to solve this problem.                                        
It is encouraging to note that the above proposal was at concept level aligned  
with the proposal presented by the mining industry. The report was, however,    
silent on the location and final design for the pump station. CRG therefore     
remains concerned about the time it will take to implement the above project    
and has held two meetings with the Department of Water Affairs ("DWA") to       
stress the importance of speedy action. The matters that still require          
clarification from the DWA include:                                             
- targeted minimum water levels;                                                
- project engineering and technology;                                           
- the role and responsibilities of the interested parties;                      
- cost allocation between interested and affected parties; and                  
- timing to meet the degree of definition needed by the Company to continue     
development and mining at the current rate.                                     
Broad-based black economic empowerment ("BBBEE")                                
Significant activity took place during 2010 regarding the Company`s black       
economic empowerment ("BEE") shareholding. Events that took place over this     
last year can be summarised in the table below:                                 
Date                            Event                                           
1 April 2010                    The Court rejected Puno`s application           
                               for leave to appeal the decision handed          
down by the South African High Court on          
                               5 November 2009.                                 
August 2010                     Subsequent to Puno, as claimant, failing        
                               to commence arbitration proceedings,             
CRG, as respondent, attempted to                 
                               commence arbitration proceedings and             
                               requested that AFSA appoints an                  
                               arbitrator in the absence of agreement           
between the parties on an arbitrator.            
September 2010                  AFSA advised CRG that it would indeed           
                               appoint an arbitrator, and Judge Lewis           
                               Goldblatt was subsequently appointed.            
October 2010                    Judge Goldblatt found that the matter           
                               could not proceed to arbitration as the          
                               matter was not brought before him by the         
                               claimant ("Puno").                               
Current                         - Puno has indicated its intention to           
                               challenge the constitutionality of the           
                               CRGSA Shareholders` Agreement despite            
                               having based various court applications          
thereon.                                         
                               - Various alternatives are being                 
                               investigated, amongst them being:                
                               (i) methods in which CRG itself can              
commence arbitration proceedings; and            
                               (ii) various other non-arbitration-based         
                               methods to conclude the dispute between          
                               the CRGSA shareholders.                          
Financial update                                                                
Capital raising                                                                 
On 22 January 2010, the Company successfully placed a total of 24,691,964 new   
ordinary shares of GBP0.01 each in the capital of the Company (the "Placing     
Shares") at a price of GBP0.15 per share to raise net proceeds of US$5.7        
million (GBP3.7 million) (the "Placing"). The Placing was supported by the      
Directors, senior management and certain existing substantial shareholders.     
23,781,964 Placing Shares were placed using a cashbox structure with investors  
and 910,000 Placing Shares were placed with Directors and senior management of  
the Company.                                                                    
After completing this US$5.7 million cashbox placing on 22 January 2010 to      
enable trial mining to be completed, 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, to successfully raise net proceeds of US$36.8    
million (GBP24.2 million) on 5 July 2010, which was fully underwritten by       
Evolution Securities.                                                           
Cash position                                                                   
Cash held by the Company as at end December 2010 totalled US$14.6 million.      
This compares with the estimated closing cash in the prospectus of US$25.1      
million to support the Placing and Open Offer. The lower than expected cash     
position is attributed to:                                                      
- production of 9,321 ounces against a target of 19,308 ounces in the year      
ended 31 December 2010, due to delayed underground stoping caused by longer     
equipment lead times and adverse ground conditions;                             
- higher mine development costs due to poor ground conditions and unexpected    
"double voids" necessitating the implementation of an alternative mining        
method requiring increased materials and services for safe mining;              
- higher plant processing expenditure for repairs and upgrades to improve       
capacity, availability and recovery rates;                                      
- the funding of mining equipment whilst the Company investigates alternate     
debt financing options. The prospectus assumed a level of debt financing; and   
- delay in receiving value-added tax refunds of US$2.5 million.                 
Set out below is an abridged cash flow statement:                               
                                                   2010         Prospectus      
                                                   US$`000      2010 US$`000    
Cash and cash equivalents at the beginning of the   15,899       15,899         
year                                                                            
Cash used in operations                             (20,423)     (17,011)       
                                                                                
Interest received                                   513          2,817          
                                                                                
Finance costs                                       (16)         -              
Mine property, plant and equipment                  (20,124)     (17,391)       
Security deposits                                   (4,251)      -              
Repayment of borrowings                             (33)         -              
Proceeds from issue of share capital                42,552       40,751         
                                                                                
Effects of exchange rate movement on cash balances  507          -              
Cash and cash equivalents at the end of the year    14,624       25,065         
Note 1 - Includes water pump security deposit of US$3.5million as analysed in   
note 9 of the financial statements.                                             
Impairment                                                                      
The uncertainty on the rising water table solution implementation plan and the  
initial unexpected "double voids" encountered underground which existed at the  
year-end which ultimately triggered the suspension of further underground       
development had an adverse impact on projected cash flows. In the light of      
this, management performed a review of asset values and where relevant          
obtained advise of an independent expert valuer, Reinertsen Valuation           
Services, a division of Marsh (Pty) Ltd. On the basis of this review it was     
considered appropriate and prudent to recognise an impairment loss of           
US$44.45million as set out below (Refer to Note 21 of financial statements):    
Asset     US$`000                    US$`000                                    
1.   Mine under construction, PPE    37,214                                     
and mining rights                                                               
This represents costs capitalised                                               
since 1 September 2009.                                                         
2.   Non-current assets held for     5,559                                      
sale                                                                            
-    Fair value adjustment on Gekko                                             
50 tonne per hour concentrating                                                 
plant                                                                           
-    Fair value adjustment on Gekko  997                                        
20 tonne per hour concentrating                                                 
plant reclassified to property plant                                            
and equipment                                                                   
3.   Other assets                    137                                        
This represents leasehold                                                       
improvements , vehicles ,furniture                                              
and computer equipment written down                                             
to estimated fair value.                                                        
4.   Deposits                        548                                        
This represents provision for                                                   
cancellation penalties on deposits                                              
paid.                                                                           
Total                                44,455                                     
Further details on the impairment of property, plant and equipment can be       
found in note 3 of the annual financial statements.                             
Results                                                                         
Loss for the year is reported at US$72.1 million (4.51 US$ cents per share)     
against prior year of US$46.3 million (18.77 US$ cents per share). This         
increased loss is mainly attributed to:                                         
- Higher mining costs due to poor ground conditions and unexpected "double      
voids" resulting in increased material and services consumption per metre       
advanced;                                                                       
- Higher process plant costs due to repairs and reconfiguration to improve      
capacity, efficiency, availability and recoveries;                              
- Impairment of capitalised mine development costs and asset write down to      
fair value; and                                                                 
- Mitigated by higher gold production sourced mainly from nearby open pits,     
which also compensated for loss of underground production due to longer than    
expected lead time for the long hole drill rig.                                 
Going Concern                                                                   
The Directors have prepared the financial statements on the going concern       
basis having considered the current operations, the current funding position    
and the projected funding requirements of the business for at least 12 months   
from the date of approval of the financial statements.                          
The continued uncertainty around the resolution of the rising water table and   
the continued difficulty in finding a viable mining method, together with the   
need for additional fund raising if the water table and viable mining method    
issues are satisfactorily resolved, are material uncertainties that may cast    
significant doubt on the Group`s and Company`s ability to continue as a going   
concern and they may therefore be unable to realise their assets and discharge  
their liabilities in the normal course of business.                             
Nevertheless, after taking account of the Group`s funding position and its      
cash flow projections which show that available cash will not run out until     
July 2012, and having considered the following:                                 
- the risks and uncertainties associated with these projections;                
- the current trading position which has not provided the Directors with any    
evidence that their assumptions are not achievable; and ,                       
- the strategic options available to the  Directors,                            
The Directors have a realistic expectation that the Group and Company have      
adequate resources to continue in operational existence for at least 12 months  
from the date of approval of these financial statements. For these reasons,     
they continue to prepare the financial statements on a going concern basis.     
These financial statements do not include any adjustments that would result     
from the going concern basis of preparation being inappropriate. Further        
consideration of the basis of preparation is set out in note 2.                 
Prospects                                                                       
The Company`s future prospects will be impacted by how it resolves the          
following three major challenges:                                               
1. Stopping the rising water table within the Central Basin remains a top       
priority. The Company remains confident that the water table will be stopped,   
but it remains unclear at what level it will be stopped and managed on an       
ongoing basis. A programme of lowering the water level of the Central Basin     
will commence once the pump station is operational. However, short-term         
production could be impacted whilst the resource base is being "dewatered".     
2.The Company needs to have a better understanding of and an improved ability   
to predict the occurrence of double-voids within its direct mining area. To     
the extent that it is affordable, a programme of surface and underground        
drilling to verify the presence of Main Reef (ie to define the "double-void"    
issue) in near-term mining reserves will be undertaken.                         
3.The major focus of mining during the first half of 2011 will be the further   
investigation of viable methods to reduce dilution in the currently available   
stopes.                                                                         
Given resolution and progress on the above-listed uncertainties, the Company    
expects to be able to reassess its prospects by the end of October 2011. Part   
of this reassessment will be the question of further funding and the            
possibility of other corporate actions taking place.                            
Thanks                                                                          
On behalf of Central Rand Gold`s Executive Team, I would like to thank all      
management and staff for their tireless efforts over the past year and during   
the first quarter of 2011. Whatever we do is a team effort, but this also       
requires exceptional effort and commitment from individuals. My thanks to all   
of our shareholders, suppliers, other stakeholders and the members of the       
communities in which we operate.                                                
Johan du Toit                                                                   
Chief Executive Officer                                                         
Statements of Financial Performance for the year ended 31 December 2010         
                                                  Group             Company     
2010      2009     2010       2009     
                                No    US$`000   US$`000  US$`000    US$`000     
                                te                                              
                                s                                               

                                                                                
Other income and gains                 11,681     1,666        -          -     
Employee benefits expense            (10,875)   (9,688)      (8)       (61)     
Directors` emoluments           12    (1,237)   (1,676)    (631)      (874)     
Depreciation and amortisation         (2,524)   (2,479)        -          -     
Inventory write-down                    (263)   (1,947)        -          -     
Impairment of assets                 (44,455)   (4,476)  (300,46          -     
7)                
Operating lease expense               (1,045)     (833)        -       (47)     
Surface mining costs                 (17,099)         -        -          -     
Operational expenses                    (718)         -    (405)          -     
Exploration expenditure                     -  (30,884)        -      (393)     
Other expenses                        (6,578)   (5,956)    (836)    (1,582)     
Operating loss                       (73,113)  (56,273)  (302,34    (2,957)     
                                                              7)                
Interest receivable                     1,512     3,996   29,078     23,029     
Finance costs                         (1,015)   (1,108)        -          -     
Foreign exchange transaction            1,384     7,596   37,373     32,177     
gains                                                                           
(Loss)/Profit before income          (71,232)  (45,789)  (235,89     52,249     
tax                                                           6)                
Income tax expense                      (840)     (546)        -          -     
(Loss)/Profit for the year           (72,072)  (46,335)  (235,89     52,249     
6)                
                                                                                
Loss is attributable to:                                                        
Non-controlling interest                    -         -                         
Equity holders of the parent         (72,072)                                   
                                               (46,335)                         
                                     (72,072)                                   
                                               (46,335)                         

Loss per share for loss                                                         
attributable to the equity                                                      
holders during the year                                                         
(expressed in US cents per                                                      
share)                                                                          
Basic loss per share                   (4.51)   (18.77)                         
Diluted loss per share              (4.51)      (18.77)                         
Statements of Comprehensive Income for the year ended 31 December 2010          
                                                 Group              Company     
                                        2010      2009       2010      2009     
                                     US$`000   US$`000    US$`000   US$`000     

(Loss)/ Profit for the year         (72,072)  (46,335)  (235,896)               
                                                                     52,249     
                                                                                
Profit/(Loss) for the year          (72,072)  (46,335)  (235,896)               
                                                                     52,249     
Profit/(Loss) for the year          (72,072)  (46,335)  (235,896)               
                                                                     52,249     
Income tax relating to components          -         -          -         -     
of other comprehensive income                                                   
Other comprehensive income/ (Loss)     1,445    14,500    (6,623)               
for the period, net of tax          (34,447)                         16,799     
Total comprehensive (Loss)/ income  (70,627)  (31,835)  (242,159)               
for the period                                                       69,048     
                                                                                
Total comprehensive (Loss)/ income                                              
is attributable to:                                                             
Non-controlling interest                   -         -          -         -     
Equity holders of the parent        (70,627)  (31,835)  (242,159)               
                                              (31,835)               69,048     
(70,627)  (31,835)  (242,159)               
                                              (31,835)               69,048     
Statements of Financial Position as at 31 December 2010                         
                                                  Group              Company    
2010         2009        2010     2009    
                          Note     US$`000      US$`000     US$`000  US$`000    
                          s                                                     
                                                                                
NON-CURRENT ASSETS                                                              
Property, plant and       6         10,022       34,298           -        -    
equipment                                                                       
Intangible assets         8              -        1,316           -        -    
Investment in                            -            -       9,809    9,776    
subsidiaries                                                                    
Security deposits and                6,498        5,806         226      203    
guarantees                                                                      
Loans receivable          9          9,830        7,818       9,830             
                                                                     209,936    
                                    26,350       49,238      19,865             
                                                                     219,915    

CURRENT ASSETS                                                                  
Security deposits and                4,069          510          62      382    
guarantees                                                                      
Prepayments and other                6,626        5,272         220      164    
receivables                                                                     
Inventories               10           207        1,574           -        -    
Cash and cash                       14,624       15,899       9,906    8,847    
equivalents                                                                     
Non-current assets held   7          4,074        2,750           -        -    
for sale                                                                        
                                    29,600       26,005      10,188    9,393    

TOTAL ASSETS                        55,950       75,243      30,053             
                                                                     229,308    
                                                                                
EQUITY                                                                          
Attributable to equity                                                          
holders of the parent                                                           
Share capital             11        25,604        5,023      25,604    5,023    
Share premium             11       213,377      191,406     213,377             
                                                                     191,406    
Share-based compensation            27,925       27,482      27,925             
reserve                                                               27,482    
Treasury shares                        (6)          (2)           -        -    
Foreign currency                  (26,955)     (28,400)    (55,667)             
translation reserve                                                  (49,404    
                                                                           )    
Accumulated                      (210,897)    (138,825)   (181,256)             
(losses)/profit                                                       54,640    
                                    29,048       56,684      29,983             
                                                                     229,147    
Non-controlling interest                 -            -           -        -    
TOTAL EQUITY                        29,048       56,684      29,983             
                                                                     229,147    
                                                                                
NON-CURRENT LIABILITIES                                                         
Environmental                        6,474        1,434           -        -    
rehabilitation and other                                                        
provisions                                                                      
Loan payable                         9,830        7,818           -        -    
Operating lease                          4           26           -        -    
liability                                                                       
Borrowings                               -           12           -        -    
16,308        9,290           -        -    
                                                                                
CURRENT LIABILITIES                                                             
Trade and other payables             8,884        7,620          70      161    
Environmental                            -          701           -        -    
rehabilitation and other                                                        
provisions                                                                      
Taxation payable                     1,704          895           -        -    
Operating lease                          -           26           -        -    
liability                                                                       
Borrowings                               6           27           -        -    
                                    10,594        9,269          70      161    

TOTAL LIABILITIES                   26,902       18,559          70      161    
                                                                                
TOTAL EQUITY AND                    55,950       75,243      30,053             
LIABILITIES                                                          229,308    
Attributable to equity holders of the Parent Company                            
Group                                   Ordinary         Share    Share-Based   
                                          Share       Premium   Compensation    
Capital                      Reserve    
                                        US$`000       US$`000        US$`000    
                                                                                
Balance at 31 December 2008                5,023       191,406         26,429   
Total comprehensive income for                                                  
the year                                                                        
Loss for the year                              -             -              -   
Other comprehensive income                                                      
Foreign currency adjustments                   -             -              -   
Transactions with owners,                                                       
recorded directly in equity                                                     
Employee Share Option Scheme:                                                   
Share-based payments: Employees                -             -          1,053   
and Directors shares and options                                                
Balance at 31 December 2009                5,023       191,406         27,482   
Total comprehensive income for                                                  
the year                                                                        
Loss for the year                              -             -              -   
Other comprehensive income                                                      
Foreign currency adjustments                   -             -              -   
Transactions with owners,                                                       
recorded directly in equity                                                     
Issue of shares:                                                                
Capital raising                           20,581        21,971              -   
Employee Share Option Scheme:                                                   
Share-based payments: Employees                -             -            443   
and Directors shares and options                                                
Balance at 31 December 2010               25,604       213,377         27,925   
Attributable to equity holders of the Parent Company                            
Group                                Treasury       Foreign     Accumulated     
                                       Shares      Currency          Losses     
                                                Translation                     
Reserve                     
                                      US$`000       US$`000         US$`000     
                                                                                
Balance at 31 December 2008               (4)      (42,900)        (92,490)     
Total comprehensive income for                                                  
the year                                                                        
Loss for the year                           -             -        (46,335)     
Other comprehensive income                                                      
Foreign currency adjustments                -        14,500               -     
Transactions with owners,                                                       
recorded directly in equity                                                     
Employee Share Option Scheme:                                                   
Share-based payments: Employees             2             -               -     
and Directors shares and                                                        
options                                                                         
Balance at 31 December 2009               (2)      (28,400)       (138,825)     
Total comprehensive income for                                                  
the year                                                                        
Loss for the year                           -             -        (72,072)     
Other comprehensive income                                                      
Foreign currency adjustments                -         1,445               -     
Transactions with owners,                                                       
recorded directly in equity                                                     
Issue of shares:                                                                
Capital raising                             -             -               -     
Employee Share Option Scheme:                                                   
Share-based payments: Employees           (4)             -               -     
and Directors shares and                                                        
options                                                                         
Balance at 31 December 2010               (6)      (26,955)       (210,897)     
Attributable to equity holders of the Parent Company                            
Group                                    Total           Non-  Total Equity     
Controlling                   
                                                     Interest                   
                                       US$`000        US$`000       US$`000     
                                                                                
Balance at 31 December 2008             87,464              -        87,464     
Total comprehensive income for                                                  
the year                                                                        
Loss for the year                     (46,335)              -      (46,335)     
(46,335)                                  
Other comprehensive income                                                      
Foreign currency adjustments            14,500              -        14,500     
Transactions with owners,                                                       
recorded directly in equity                                                     
Employee Share Option Scheme:                                                   
Share-based payments: Employees          1,055              -         1,055     
and Directors shares and options                                                
Balance at 31 December 2009             56,684              -        56,684     
Total comprehensive income for                                                  
the year                                                                        
Loss for the year                     (72,072)              -      (72,072)     
Other comprehensive income                                                      
Foreign currency adjustments             1,445              -         1,445     
                                      (34,447)                                  
Transactions with owners,                                                       
recorded directly in equity                                                     
Issue of shares:                                                                
Capital raising                         42,552              -        42,552     
Employee Share Option Scheme:                                                   
Share-based payments: Employees            439              -           439     
and Directors shares and options                                                
Balance at 31 December 2010             29,048              -        29,048     
Company                               Ordinary  Share Premium    Share Based    
Share Capital                  Compensation     
                                                                    Reserve     
                                      US$`000        US$`000        US$`000     
Balance at 31 December 2008              5,023        191,406         26,429    
Total comprehensive income for                                                  
the year                                                                        
Profit for the year                          -              -              -    
Other comprehensive income                                                      
Foreign currency adjustments                 -              -              -    
Transactions with owners,                                                       
recorded directly in equity                                                     
Employee Share Option Scheme:                                                   
Share-based payments: Employees              -              -          1,053    
and Directors shares and                                                        
options                                                                         
Balance at 31 December 2009              5,023        191,406         27,482    
Total comprehensive income for                                                  
the year                                                                        
Loss for the year                            -              -              -    
Other comprehensive income                                                      
Foreign currency adjustments                 -              -              -    
Transactions with owners,                                                       
recorded directly in equity                                                     
Issue of Shares:                                                                
Capital raising                         20,581         21,971              -    
Employee Share Option Scheme:                                                   
Transfer of forfeited share                                                     
options                                                                         
Share-based payments: Employees              -              -            443    
and Directors shares and                                                        
options                                                                         
Balance at 31 December 2010             25,604        213,377         27,925    
Company                                Foreign    Accumulated   Total Equity    
                                     Currency         Losses                    
                                  Translation                                   
                                      Reserve                                   
US$`000        US$`000        US$`000     
Balance at 31 December 2008           (66,203)          2,391        159,046    
Total comprehensive income for                                                  
the year                                                                        
Profit for the year                          -         52,249         52,249    
Other comprehensive income                                                      
Foreign currency adjustments            16,799              -         16,799    
Transactions with owners,                                                       
recorded directly in equity                                                     
Employee Share Option Scheme:                                                   
Share-based payments: Employees              -              -          1,053    
and Directors shares and                                                        
options                                                                         
Balance at 31 December 2009           (49,404)         54,640        229,147    
Total comprehensive income for                                                  
the year                                                                        
Loss for the year                            -      (235,896)      (235,896)    
Other comprehensive income                                                      
Foreign currency adjustments           (6,263)              -        (6,263)    
Transactions with owners,                                                       
recorded directly in equity                                                     
Issue of Shares:                                                                
Capital raising                              -              -         42,552    
Employee Share Option Scheme:                                                   
Transfer of forfeited share                                                     
options                                                                         
Share-based payments: Employees              -              -            443    
and Directors shares and                                                        
options                                                                         
Balance at 31 December 2010           (55,667)      (181,256)         29,983    
Statements of Cash Flow for the year ended 31 December 2010                     
                                                 Group                Company   
2010       2009       2010        2009   
                                    US$`000    US$`000    US$`000     US$`000   
                                                                                
CASH FLOWS FROM OPERATING                                                       
ACTIVITIES                                                                      
(Loss)/Profit before tax           (71,232)   (45,789)  (235,896)      52,249   
Adjusted for :                                                                  
Depreciation and amortisation         2,524      2,479          -           -   
Bad debts written off                    11          -          -           -   
Employment benefit expenditure          443      1,053         78         280   
(Share-based payments)                                                          
Loss on disposal and scrapping           24        501          -           -   
of property, plant and equipment                                                
Impairment of inventory                 578      1,947          -           -   
Impairment of assets                 44,455      4,476    300,467           -   
Net gain on foreign exchange        (1,384)    (7,596)   (37,373)               
(32,177)   
Increase in operating lease            (47)          9          -           -   
liability                                                                       
Sundry income                          (36)        (2)          -           -   
Interest received                   (1,512)    (3,996)   (29,078)               
                                                                     (23,029)   
Finance costs                         1,015      1,108          -           -   
Changes in working capital                                                      
(Increase)/decrease in              (1,354)         60       (56)        (12)   
prepayments and other                                                           
receivables                                                                     
Decrease/(increase) in inventory      1,367      (842)          -           -   
Increase/(decrease) in trade and      1,264      3,862       (91)       (134)   
other payables                                                                  
Increase in provisions                3,461         13          -           -   
Cash flows used in operations      (20,423)   (42,717)    (1,912)     (2,823)   
Interest received                       513      2,899         37       2,165   
Finance costs                          (16)       (83)          -           -   
Sundry income                             -          2          -           -   
Net cash used in operating         (19,926)   (39,899)    (1,912)       (658)   
activities                                                                      
                                                                                
CASH FLOWS FROM INVESTING                                                       
ACTIVITIES                                                                      
Purchases of property, plant &                                  -           -   
equipment                          (20,595)   (26,915)                          
Proceeds from disposal of               471        104          -           -   
property, plant and equipment                                                   
Purchases of intangible assets            -    (1,185)          -           -   
Increase in loans receivable              -          -   (40,062)               
                                                                    (103,205)   
Net cash used in investing         (20,124)              (40,062)               
activities                                    (27,996)              (103,205)   
                                                                                
CASH FLOWS FROM FINANCING                                                       
ACTIVITIES                                                                      
Repayment of borrowings                (33)       (36)          -           -   
(Increase)/decrease in security     (4,251)      (221)        297         (9)   
deposits                                                                        
Net proceeds from issue of share     42,552          -     42,552           -   
capital                                                                         
Net cash from/(used in)              38,268      (257)     42,849         (9)   
financing activities                                                            
                                                                                
Net decrease in cash and cash       (1,782)   (68,152)      (875)               
equivalents                                                         (103,872)   
Cash and cash equivalents at 1       15,899     69,601      8,847      66,089   
January                                                                         
Effects of exchange rate                507     14,450        184      46,630   
fluctuations on cash balances                                                   
Cash and cash equivalents at 31      14,624     15,899      9,906       8,847   
December                                                                        
Basis of preparation and general information:                                   
1. General information                                                          
These are the non statutory financial statements, extracted from the Group and  
Company annual financial statements for the year ended 31 December 2010.        
Central Rand Gold Limited ("CRG") is a Guernsey incorporated company and it is  
also registered in South Africa as an external company. One of its              
subsidiaries, Central Rand Gold (Netherland Antilles) N.V. ("CRGNV"), was       
incorporated in the Netherlands Antilles. CRG`s operating subsidiary is         
Central Rand Gold South Africa ("CRGSA"). CRG has a primary listing on the      
London Stock Exchange ("LSE") and a secondary listing on JSE Limited ("JSE").   
Legally, CRG complies with the company laws of its place of incorporation       
being Guernsey and the company laws of the place of its external registration   
being South Africa. One of its subsidiaries, CRGNV, is incorporated in the      
Netherlands Antilles, therefore the Group is also impacted by the company laws  
of the Netherlands Antilles.                                                    
The Group and Company annual financial statements for the year ended 31         
December 2010 were approved for issue on 28 April 2011. The auditor has issued  
their unqualified auditors` opinions on the Group and Company financial         
statements for the year ended 31 December 2010.                                 
2. Basis of preparation                                                         
The consolidated and company annual financial statements have been prepared in  
accordance with International Financial Reporting Standards and                 
Interpretations (collectively "IFRS") issued by the International Accounting    
Standards Board ("IASB") as adopted by the European Union ("EU") in accordance  
with EU laws (IA`s regulation EC 1606/2002).                                    
The consolidated and company financial statements have been prepared according  
to the historical cost basis.                                                   
The consolidated and company financial statements are presented in United       
States Dollars ("US$" or "US Dollar") and rounded to the nearest thousand. The  
Company`s functional currency is British Pound Sterling ("GBP") and the         
functional currency of its principal subsidiary, Central Rand Gold South        
Africa (Proprietary) Limited ("CRGSA"),is South African Rand ("ZAR" or          
"Rand").                                                                        
Going Concern                                                                   
The Directors have prepared the financial statements on the going concern       
basis having considered the current operations, the current funding position    
and the projected funding requirements of the business for at least 12 months   
from the date of approval of the financial statements.                          
Current operations                                                              
The Company is facing two significant challenges: the rising water table in     
the Central Rand Basin and unexpected delays with the underground mine          
development. On 29 March 2011 the Company announced the results of its          
operational and strategic review which considered these two challenges and led  
to the announcement of the suspension of underground mining operations.         
Rising water table                                                              
The water table in the Central Rand Basin is rising. It is imperative that the  
water table is kept 250 meters below surface for the mine to retain access to   
its reserves and resources and hence be able to reach full commercial           
production. The directors believe that the South African Government will        
inevitably need to step in to resolve this to prevent Acid Mine Drainage        
("AMD") reaching the surface. The discussions held by the Company with the      
Government to date and the public commitment made by the Government to          
resolving this issue give the Directors confidence that a suitable solution     
will be found, although no deadline has been set.                               
While the South African government has now made this commitment towards         
resolving the AMD issue, there remains insufficient clarity on key issues such  
as preferred technology solution, timing and depth at which the water table is  
to be maintained to enable the Company to continue underground development and  
the costs to be borne by the company.                                           
Delays in underground mine development                                          
In addition, the Company has encountered difficulties in the underground mine   
development. A greater than anticipated level of stopes have been found to      
have "double-voids", i.e. not only has the original Main Reef Leader been       
extracted but also the Main Reef.  This was not indicated on the historical     
mining plans. The effect of these double voids has been to increase             
significantly the cost of development per ton of accessible ore and to reduce   
revenue compared with the Company`s projections. Having encountered these       
voids, standard mining practice would be to go deeper.  However, as a result    
of the rising water table referred to above, this is not an option available    
to the Company.                                                                 
The Company has also faced lower than anticipated Mine Call Factors due to a    
considerable proportion of vintage hanging wall (over and above the planned     
for "middling") diluting the mined ore. The empty tons associated with this     
dilution severely impact the cost per ounce of gold produced.                   
As a result of these challenges, underground mine development is to be          
suspended with effect from 30 April 2011. The focus for the remainder of 2011   
will be to continue to investigate viable mining methods to avoid the dilution  
problem while mining out ore from currently available stopes and processing     
all available underground ore and surface materials. The underground            
operations will then be placed on a care and maintenance basis following        
extraction of ore from the immediately available stopes. The Company has        
already commenced a process of reducing staff levels to reflect the lower       
level of activity.                                                              
Having taken account of the challenges outlined above which provide further     
evidence of impairment at 31 December 2010, the Directors have reviewed the     
carrying values of the Group`s assets at 31 December 2010 and an impairment     
charge of US$ 44 million has been booked in these consolidated financial        
statements (and a charge of US 300 million has been booked in the Company       
financial statements), further details of which are set out in note 3 and 21    
to these financial statements.                                                  
As noted above, underground development has continued in the 2011 financial     
year and in accordance with the Company`s accounting policy, the cost of this   
development has been capitalised.  However, as a result of the challenges       
outlined above and the cessation of development on 30th April, these            
capitalised costs will be impaired in the 2011 financial statements resulting   
in a charge of at least US$4.4 million.                                         
Current and projected funding requirements                                      
At 31 December 2010, the Group had cash of US$ 14.6 million.  At 31 March 2011  
the Group had cash of US$ 5.3 million; the reduced level of cash resulting      
from continued expenditure on underground mine development.                     
The Directors have prepared cash flow projections for the next 18 months (from  
the date of these financial statements) that reflect the decision of the        
Directors to place the underground operations on to a care and maintenance      
basis, to continue to process the available ore from developed stopes or on     
surface and to run the company with a significantly reduced cost base to        
reflect these lower activity levels. These projections show that the Group has  
sufficient funding for at least the next 12 months from the date of approval    
of the financial statements and hence the Directors have prepared the           
financial statements on a going concern basis.                                  
However, the available cash is projected to run out in July 2012.               
The risks inherent in any early-stage mining operation will continue to apply   
to the Group. In particular, the cash flow projections prepared by the          
Directors are critically dependent on three key assumptions: the gold grade of  
the ore; the mining production; and, the metallurgical recovery and production  
rate. If any one of these key assumption: the gold grade of the ore; the        
mining production; and, the metallurgical recovery and production rate. If any  
one of these key assumptions is not achieved, then this will result in the      
need for additional funding.                                                    
Conclusion                                                                      
The continued uncertainty around the resolution of the rising water table and   
the continued difficulty in finding a viable mining method, together with the   
need for additional fund raising if the water table and viable mining method    
issues are satisfactorily resolved, are material uncertainties that may cast    
significant doubt on the Group`s and Company`s ability to continue as a going   
concern and they may therefore be unable to realise their assets and discharge  
their liabilities in the normal course of business.                             
Nevertheless, after taking account of the Group`s funding position and its      
cash flow projections which show that cash is available until July 2012, and    
having considered the following:                                                
- the risks and uncertainties associated with these projections;                
- the current trading position which has not provided the Directors with any    
evidence that their assumptions are not achievable; and ,                       
- the strategic options available to the Directors,                             
the Directors have a realistic expectation that the Group and Company have      
adequate resources to continue in operational existence for at least 12 months  
from the date of approval of these financial statements. For these reasons,     
they continue to prepare the financial statements on a going concern basis.     
These financial statements financial statements do not include any adjustments  
that would be result from the going concern basis of preparation being          
inappropriate.                                                                  
3. Accounting policies                                                          
The accounting policies have been consistently applied to all years presented.  
(a) New and amended standards adopted by the Group                              
The Group has adopted the following new and amended IFRSs as of 1 January       
2010:                                                                           
IAS 7 (amendment): 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.         
IFRS 5 (amendment): 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 (amendment): Operating Segments                                          
The amendment 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.                                                 
(b) Standards, amendments and interpretations to existing standards that are    
not yet effective and have not been early adopted by the Group                  
A number of standards and amendments to existing standards have been published  
and are mandatory for the Group`s accounting periods beginning on or after 1    
January 2011 or later periods, but the Group has not early adopted them.        
IFRS 3 (Revised) Business Combinations:                                         
From 1 January 2010 the Group has applied IFRS 3 Business Combinations (2008)   
in accounting for business combinations. Business combinations are accounted    
for using the acquisition method as at the acquisition date, which is the date  
on which control is transferred to the Group. Control is the power to govern    
the financial and operating policies of an entity so as to obtain benefits      
from its activities. In assessing control, the Group takes into consideration   
potential voting rights that currently are exercisable. The change in           
accounting policy has been applied prospectively and has had no material        
impact on the financial statements.                                             
IAS 27 Consolidated and separate financial statements:                          
From 1 January 2010 the Group has applied IAS 27 Consolidated and Separate      
Financial Statements (2008) in accounting for acquisitions of non-controlling   
interests. The change in accounting policy has been applied prospectively and   
has had no impact on earnings per share.                                        
Under the new accounting policy, acquisitions of non-controlling interests are  
accounted for as transactions with owners in their capacity as owners and       
therefore no goodwill is recognised as a result of such transactions. The       
adjustments to non-controlling interests are based on a proportionate amount    
of the net assets of the subsidiary.                                            
Previously, goodwill was recognised on the acquisition of non-controlling       
interests in a subsidiary, which represented the excess of the cost of the      
additional investment over the carrying amount of the interest in the net       
assets acquired at the date of the transaction.                                 
IAS 24 (Revised): Related Party Disclosures                                     
IAS 24 (revised) will be adopted by CRG for the first time for its financial    
reporting period ending 31 December 2011. This standard will be applied         
retrospectively.                                                                
IAS 24 (revised) addresses the disclosure requirements in respect of related    
parties, with the main changes relating to the definition of a related party    
and disclosure requirements by South African government-related entities.       
The change in the definition of a related party has resulted in a number of     
new related party relationships being identified.                               
IFRS 7 (amendment): Disclosures: Transfers of Financial Assets                  
The amendment to IFRS 7 will be adopted by CRG for the first time for its       
financial reporting period ending 31 December 2012.                             
In terms of the amendment additional disclosure will be provided regarding      
transfers of financial assets that are:                                         
i)  Not recognised in their entirety; and                                       
ii) Derecognised in their entirety but for which CRG retains continuing         
involvement.                                                                    
IFRS 9: Financial Instruments                                                   
IFRS 9 will be adopted by CRG for the first time for its financial reporting    
period ending 31 December 2013. The standard will be applied retrospectively,   
subject to transitional provisions.                                             
IFRS 9 addresses the initial measurement and classification of financial        
assets and will replace the relevant sections of IAS 39.                        
Under IFRS 9 there are two options in respect of classification of financial    
assets, namely, financial assets measured at amortised cost or at fair value.   
Financial assets are measured at amortised cost when the business model is to   
hold assets in order to collect contractual cash flows and when they give rise  
to cash flows that are solely payments of principal and interest on the         
principal outstanding. All other financial assets are measured at fair value.   
Additions to IFRS 9                                                             
The additions to IFRS 9 are expected to be adopted by CRG for the first time    
for its financial reporting period ending 31 December 2013. The standard will   
be applied retrospectively, subject to transitional provisions. The additions   
to IFRS 9 have not yet been endorsed by the EU.                                 
Under IFRS 9 (2010), the classification and measurement requirements of         
financial liabilities are substantially the same as per IAS 39, barring the     
following two aspects:                                                          
i) Fair value changes for financial liabilities (other than financial           
guarantees and loan commitments) designated at fair value through profit or     
loss, attributable to the changes in the credit risk of the liability will be   
presented in other comprehensive income. The remaining change is recognised in  
profit and loss. However, if the requirement creates or enlarges an accounting  
mismatch in profit or loss, then the whole fair value change is presented in    
profit or loss. The determination as to whether such presentation would create  
or enlarge an accounting mismatch is made on initial recognition and is not     
subsequently reassessed.                                                        
ii) Under IFRS 9 (2010) derivative liabilities that are linked to and must be   
settled by delivery of an unquoted equity instrument whose fair value cannot    
be reliably measured, are measured at fair value.                               
IFRS 9 (2010) incorporates the guidance in IAS 39 dealing with fair value       
measurement.                                                                    
The impact on the financial statements for CRG has not yet been estimated.      
Other amendments to standards effective on or after 1 January 2011 are not      
expected to have a material impact on the Group.                                
4. Estimates                                                                    
The preparation of the financial statements requires the Group`s management to  
make judgements, estimates and assumptions that affect the application of       
accounting policies and the reported amounts of assets and liabilities and      
disclosure of contingent assets and liabilities at the date of the financial    
statements, and the reported amounts of revenues and expenses during the        
reporting period. The determination of estimates requires the exercise of       
judgement based on various assumptions and other factors such as historical     
experience and current and expected economic conditions. Actual results may     
differ from these estimates.                                                    
5. Financial risk management                                                    
The Group`s activities expose it to a variety of financial risks: credit risk,  
liquidity risk and market risk (including currency risk, interest rate risk     
and gold price risk). The Group`s overall risk management programme focuses on  
the unpredictability of financial markets and seeks to minimise potential       
adverse effects on the Group`s financial performance. The Board monitors this   
risk management process.                                                        
Foreign Currency Rates                                                          
The US Dollar rates of exchange applicable to the year are as follows:          
           Year ended 31 December 2010   Year ended 31 December 2009            
Closing        Average        Closing        Average                 
South       0.15090        0.13721        0.13482        0.12057                
African                                                                         
Rand                                                                            
Pound       1.54710        1.54633        1.59257        1.56593                
Sterling                                                                        
6. Property, plant and equipment                                                
The public announcement of 29 March 2011 declared that underground capital      
development operations will be suspended effective 30 April 2011. Therefore,    
property, plant and equipment was impaired. The value of the impairment was     
US$35,863,232.                                                                  
7. Non-current assets held for sale                                             
An item of plant and machinery, a Gekko 50 tonne per hour processing plant,     
has been classified as held for sale during the period. The value of the asset  
is now expected to be realised from the sale of the asset rather than the       
continuing use. A formal agreement was drawn up by Gekko and signed on 15       
March 2011 whereby Gekko would purchase the Gekko 50 tonne per hour plant from  
CRG for US$4,116,300, payable in instalments with the first instalment payable  
on the date of the agreement.. At year end the Group valued the asset at        
US$4,074,000. The value of assets transferred to non-current assets held for    
sale is US$10,192,422 at 31 December 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$5,559,159 to its fair value less costs to sell.                  
8. Intangible assets                                                            
As a result of the suspension of the underground mining activities, the future  
expected cash flows as a result of the mining right could not be justified.     
Therefore the mining right was fully impaired.                                  
9. Loans receivable                                                             
Puno Gold Investments (Proprietary) Limited ("Puno")                            
On 15 June 2007, as part of the restructuring, the Company advanced a loan of   
ZAR 111,196,279 (US$ 16,457,049) to CRGSA and in terms of the Puno Loan         
Agreement, a further loan of ZAR 39,068,963 (US$ 5,782,207) to Puno Gold        
Investments (Proprietary) Limited (``Puno``). The loan bears interest at South  
African prime lending rate plus 2% and is payable as and when free cash flows   
as determined by the Board of CRGSA are available.                              
During 2007, a dispute arose between the shareholders of CRGSA in regard to     
the allocation of intercompany loans which fund the budget and work programme   
and the incurring of, and level of, certain costs by CRGSA. Subsequently on 16  
February 2009, CRGNV, the direct holding company of CRGSA, exercised the call   
option granted to it in terms of the shareholders agreement and gave Puno 90    
days notice, to acquire Puno`s entire interest in CRGSA ("the call").           
During April 2009, Puno made an urgent application to the South Gauteng         
Division of the High Court of South Africa to interdict CRGNV from proceeding   
with the Call pending the final determination by arbitration of the validity    
and enforceability of: 1) the various funding calls made by CRGSA; and the      
consequent Call and; 2) the interpretation of the shareholder funding           
provisions of the Shareholders` Agreement. The parties agreed that the matter   
would proceed to arbitration as sought in the application. Puno, in its         
capacity as claimant in the matter delayed and ultimately failed to bring the   
matter before the Arbitration Foundation of South Africa ("AFSA") and           
consequently, in an effort to expedite matters CRGNV and CRGSA approached AFSA  
as respondent requesting that an arbitrator be appointed and that arbitration   
proceedings commence. In response to this request during September 2010 AFSA    
advised the Company that it would indeed appoint an arbitrator and Judge Lewis  
Goldblatt was subsequently appointed.                                           
During October 2010, however Judge Goldblatt found that the matter could not    
proceed to arbitration as the matter was not brought before him by the          
claimant in the matter ("Puno") but rather was sought to be brought by the      
respondent ("CRG"). Following from this finding Puno has indicated their        
intention to challenge the validity and constitutionality of the CRGSA          
shareholders agreement despite having based various of their court              
applications thereon - including the application brought in the South Gauteng   
High Court, Johannesburg, South Africa against CRGNV, the Company and CRGSA,    
in which it sought to interdict CRGSA from proceeding with mining operations    
pending an arbitration award or court order on the proper interpretation of     
clause 18 of the CRGSA Shareholders` Agreement which ultimately failed as the   
Court found 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.      
In an effort to bring this matter to finality various alternatives are now      
being investigated, amongst them being 1) methods in which CRG itself can       
commence arbitration proceedings; and 2) various other non-arbitration based    
methods to conclude the dispute between the CRGSA shareholders. It should be    
noted however that in the event that the matter not be successfully brought to  
arbitration or resolved by other means, CRGNV will not be able to introduce a   
new BBBEE compliant partner who the Directors believe will be more beneficial   
for the Group as a whole.                                                       
Despite the above the Directors remain confident of success and further         
believe that the return of the shares by Puno will not have any material        
consequences in respect of the consolidated accounts of the Group as the 26%    
shareholding will be held in trust pending the outcome of discussions relating  
to new BEE arrangements. Notwithstanding this position, we have, pending the    
outcome of any dispute, allocated 100% of the intercompany balances directly    
through from the Company to CRGSA. This additional 26% of intercompany debt     
excluding interest amounts to ZAR 75,913,440 (US$ 10,416,083) between 1         
January and 31 December 2010 (ZAR 151,903,560 (US$ 18,315,012) between 1        
January and 31 December 2009).                                                  
The loan payable to Puno contains the same allocations referred to above.       
                     Group                                                      
2010                  2009                                 
                     US$`000               US$`000                              
10. Inventories                                                                 
Current                                                                         
Consumables           59                    1,223                               
Ore stockpiles        125                   308                                 
Stationary and        23                    43                                  
office consumables                                                              
on hand                                                                         
Total inventories     207                   1,574                               
The amount of the write-down of ore stockpiles to net realisable value, and     
recognised as an expense is US$263,451 (2009: US$1,946,955).                    
11. 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 net proceeds of US$5.7 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.                          
In July 2010, CRG placed a further 649,042,355 new ordinary shares of GBP0.01   
each in a Firm Placing and 679,029,025 new ordinary shares of GBP0.01 each in   
a Placing and Open Offer in the capital of the Company at a price of GBP0.02    
per share to raise net proceeds of US$36.8 million (GBP24.2 million).           
12. Directors` emoluments                                                       
During the current year, the composition of the Board of Directors changed.     
Two Directors of the Group, Mr A. Walton and Mr R. Kirkby, resigned on 14       
April 2010. Mr P. Malaza and Mr J. Brauns were appointed to the Board on the    
17 February 2010.                                                               
13. Commitments                                                                 
Group                   2010                     2009                           
                       US$`000                  US$`000                         
a)Various contractual                                                           
amounts payable                                                                 
Fees payable to iProp   500                      500                            
Limited for prospecting                                                         
Fees payable to the     2                        6                              
Department of Mineral                                                           
Resources within one                                                            
year                                                                            
Plant and equipment     6,517                    -                              
contracted for                                                                  
b) Donations payable                                                            
Donations payable to    -                        109                            
Umkhonto we Sizwe                                                               
Military Veterans                                                               
Association (MKMVA)                                                             
14. 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.                                          
15. Share-based payments                                                        
Grant of options in the Company                                                 
During the year, further share options were granted to selected employees. The  
options granted are summarised below:                                           
Vesting           Strike Price       Allocation         Number of share         
options granted          
500,000 on 10     Exercise price     Mr S.J. du Toit      1,500,000             
February 2011,    escalates in                                                  
500,000 on 10     accordance with                                               
February 2012 and the vesting                                                   
500,000 on 10     tranches. One                                                 
February 2013.    third at price of                                             
                 GBP0.20, one                                                   
third at GBP0.40                                               
                 and one third at                                               
                 GBP0.60.                                                       
1,100,000 on 6    Exercise price     Mr S.J. du Toit      3,300,000             
July 2011,        escalates in                                                  
1,100,000 on 6    accordance with                                               
July 2012 and     the vesting                                                   
1,100,000 on 6    tranches. One                                                 
July 2013.        third at price of                                             
                 GBP0.04, one                                                   
                 third at GBP0.06                                               
                 and one third at                                               
GBP0.08.                                                       
400,000 on 6 July Exercise price     Mr P. Malaza         1,200,000             
2011, 400,000 on  escalates in                                                  
6 July 2012 and   accordance with                                               
400,000 on 6 July the vesting                                                   
2013.             tranches. One                                                 
                 third at price of                                              
                 GBP0.04, one                                                   
third at GBP0.06                                               
                 and one third at                                               
                 GBP0.08.                                                       
1,433,333 on 6    Exercise price     Executive            4,300,000             
July 2011,        escalates in       Management                                 
1,433,333 on 6    accordance with                                               
July 2012 and the the vesting                                                   
balance on 6 July tranches. One                                                 
2013.             third at price of                                             
                 GBP0.04, one                                                   
                 third at GBP0.06                                               
                 and one third at                                               
GBP0.08.                                                       
                                                       10,300,00                
16. 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 year. The deregistration has no material impact on the  
Group.                                                                          
Except for the information disclosed in Note 15 Share-based payments above, no  
other disclosable related party transactions occurred in the period.            
17. Events occurring after balance sheet date                                   
- As at 31 December 2010, a Gekko 50 tonne per hour plant was classified as     
non-current asset held for sale. On 15 March 2011, a formal agreement was       
signed between CRG and Gekko whereby CRG would sell the plant to Gekko for a    
sale price of US$4,116,300, payable in instalments with the first instalment    
payable on the date of the agreement.                                           
- On the 29 March 2011, the Company announced suspension of underground mine    
development with effect from 30 April 2011, as a result of uncertainty on the   
rising water table solution and the unexpected "double voids".                  
28 April 2011                                                                   
Johannesburg                                                                    
JSE Sponsor                                                                     
Macquarie First South Advisers (Pty) Limited                                    
For further information, please contact:                                        
Johan du Toit                                     +27 (0) 11 674 2304           
Patrick Malaza                                    +27 (0) 11 674 2304           
Enquiries:                                                                      
Evolution Securities Limited                      +44 (0) 20 7071 4300          
Rob Collins / Chris Sim / Neil Elliot                                           
Macquarie First South Advisers (Pty) Ltd           +27 (0) 11 583 2000          
Annerie Britz / Melanie de Nysschen/ Yvette Labuschagne                         
Buchanan Communications Limited                   +44 (0) 20 7466 5000          
Bobby Morse / Katharine Sutton / James Strong                                   
Jenni Newman Public Relations (Pty) Ltd           +27 (0) 11 772 1033           
Jenni Newman                                                                    
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 the Geology Manager of Central Rand Gold South Africa (Pty) Limited   
and has over 17 years` experience in exploration, mineral resource management   
and mineral evaluation.                                                         
Date: 29/04/2011 07:05:01 Supplied by www.sharenet.co.za                     
Produced by the JSE SENS Department                             .                  
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howsoever arising, from the use of SENS or the use of, or reliance on,          
information disseminated through SENS.                                          



                                        
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