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CRD - Central Rand Gold Limited - Interim Management Statement

Release Date: 24/04/2012 09:00:02      Code(s): CRD
CRD - Central Rand Gold Limited - Interim Management Statement                  
Central Rand Gold Limited                                                       
(Incorporated as a company with limited liability under the laws of Guernsey,   
Company Number 45108)                                                           
(Incorporated as an external company with limited liability under the laws of   
South Africa,                                                                   
Registration number 2007/0192231/10)                                            
ISIN: GG00B24HM601                                                              
LSE share code: CRND JSE share code: CRD                                        
("Central Rand Gold" or the "Company")                                          
INTERIM MANAGEMENT STATEMENT                                                    
1    Summary                                                                    
*    Quarterly production up 70% to 4,777 ounces ("oz").                        
*    Surface mining extended from June 2012 to 31 December 2012.                
*    New surface exploration targets being investigated.                        
*    Underground production of 19,216 tonnes at a mined grade of 4.9 grams per  
    tonne ("g/t").                                                              
*    On target to increase mill capacity by 70% to 20,000 tonnes per month.     
    Company cash flow positive, by US$1 million, for the first quarter of 2012. 
*    Reduced rate of rise of the water level in the Central Basin.              
2    Operational update                                                         
    2.1  Geology                                                                
    Updated Main Reef Resources                                                 
The first quarter of 2012 ("first quarter") showed marked improvements in   
    the resource base of the Company, with an updated resource statement        
    resulting from work undertaken in February 2012. Sampling information       
    collected during the past three years of surface and underground mining was 
incorporated into the already substantial sampling database and used to re- 
    evaluate the Main Reef Resources underlying the Consolidated Main Reef      
    ("CMR") area.                                                               
    Main Reef    Measured Resources           Indicated Resources               
Depth        Tonnes       Grade  Content  Tonnes       Grade   Content      
    (metres      (million)    (g/t)   (       (million)    (g/t)   (million     
    below                            million                       oz)          
    surface)                         oz)                                        
30 - 100     0.34         3.19   0.03     1.12         3.14    0.11         
    100 - 450    1.13         3.69   0.13     4.61         4.18    0.62         
    450 - 900                                 3.25         5.21    0.54         
    900 - 1                                   2.92         6.29    0.59         
500                                                                         
    1 500 - 3                                 2.68         7.57    0.65         
    000                                                                         
    Total        1.47         3.57   0.16     14.58        5.38    2.51         
Main Reef         Inferred Resources                                        
    Depth (metres     Tonnes         Grade     Content                          
    below surface)    (million)      (g/t)      (million                        
                                               oz)                              
30 - 100                                                                    
    100 - 450                                                                   
    450 - 900                                                                   
    900 - 1 500       0.27           6.21      0.06                             
1 500 - 3 000     0.25           7.97      0.07                             
    Total             0.52           7.07      0.13                             
    Decimal rounding may result in minor discrepancies in totals.               
    Surface Exploration                                                         
Exploration through systematic mechanical trenching, geological mapping and 
    sampling continued through the first quarter, resulting in the              
    identification and delineation of further open pit "Exploration Target"     
    areas within the New Order Mining Right.                                    
Central Rand Gold Exploration Target Summary as at 31 March 2012            
    Mining Area           Reef         Exploration Target Material              
    SLOTS 8 and 9 (Areas within 4 km of Plant)                                  
    Central               MR&MRL       2.2 - 2.8 g/t    6,000 - 18,000 t        
New Unified           MR&MRL       2.7 - 3.8 g/t    9,000 - 19,000 t        
    Spenser               MR&MRL       3.0 - 3.1 g/t    9,000 - 19,000 t        
    Avon Target           MR&MRL       2.2 - 4.8 g/t    107,000 - 156,000 t     
    ROM Pad Cleanup       Various      1.6 - 3.2 g/t    20,000 - 50,000 t       

    SLOTS 5 and 7 (Areas more than 4 km from Plant)                             
    Slot 5 A              White        2.9 - 3.1 g/t    27,000 - 48,000 t       
    Slot 5 B,C,D          White        1.5 - 1.9 g/t    17,000 - 33,000 t       
Slot 7                White        2.1 - 3.2 g/t    87,000 - 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.                                                 
An additional open pittable target area, Avon Target, has been identified   
    approximately 4km to the west of the current operations, representing a     
    potential open pittable strike length of more than 1.5km. Current           
    investigations comprising close spaced mechanical trenching (30m to 50m     
spacing) in the western 400m strike of this area, have yielded potentially  
    economic grades and mining widths.                                          
    Trench results for the initial 560m of strike in the Avon Target.           
                                                                                

    Trench            Results                    Comment                        
    LLMRR1A           1.98 g/t over 66 cm                                       
    LLMRR1B           0.43 g/t over 72 cm                                       
LLMRR1C           0.76 g/t over 51 cm                                       
    LLMRR1            0.45 g/t over 55 cm                                       
    LLMRR2            1.07 g/t over 100 cm                                      
    LLMRR3            3.11 g/t over 125 cm                                      
LLMRR4            2.51 g/t over 106 cm                                      
    LLMRR5            2.33 g/t over 117 cm                                      
    LLMRR6            Not Sampled                Unsafe, Intersected            
                                                 Underground Workings           
LLMRR7            0.83 g/t over 78 cm        Not Fully Exposed              
    LLMRR8            2.00 g/t over 143 cm                                      
    LLMRR9            Cavity/Backfill            Intersected Underground        
                                                 Workings                       
LLMRR10           2.15 g/t over 100 cm       Thin pebble band               
                                                 running 10.3 g/t over          
                                                 21 cm                          
    LLMRR11           3.40 g/t over 66 cm                                       
LLMRR12           Cavity/Backfill            Intersected Underground        
                                                 Workings                       
    LLMRR13           16.81 g/t over 120 cm                                     
    LLMRR14           Cavity/Backfill            Intersected Underground        
Workings                       
    LLMRR15           Cavity/Backfill            Intersected Underground        
                                                 Workings                       
    LLMRR16           19.2 g/t over 50 cm                                       
2.2  Mining                                                                 
    Underground Mining                                                          
    Just under 20,000 tonnes of underground ore was mined in the first quarter, 
    which was largely in line with Central Rand Gold`s production targets. The  
Company remains confident in achieving its production target of 12,000      
    tonnes per month during the second half of 2012.                            
    Monthly underground production results                                      
    MONTH (2012)            ACTUAL TONNES            MINED GRADE                
January                 4,681                    5.02                       
    February                7,506                    4.99                       
    March                   7,029                    4.73                       
    Total Tonnes            19,216                   4.90                       
Surface Mining                                                              
    Open pit production has held up well in the first quarter. However, the     
    current pits at Slot 8, being New Unified Pit and Spencer Pit, are nearing  
    the end of production. Production in these pits is envisaged to cease by    
mid June 2012. The Central Pit is being extended, and this has the          
    potential to extend the surface mining for an additional three month        
    period.                                                                     
    Monthly surface mining production results                                   

                                                                                
                                                                                
    MONTH (2012)             ACTUAL TONNES         MINED GRADE                  
January                  10,521                3.88                         
    February                 12,363                3.71                         
    March                    13,337                3.47                         
    Total Tonnes             36,211                3.67                         
The rehabilitation of the Main Pit has been completed, whilst               
    rehabilitation of the Central Pit will continue once mining of the extended 
    area has commenced.                                                         
    2.3  Metallurgy                                                             
Gold production in the first quarter was 70% higher than last year at 4,777 
    oz, with 3,051 oz having been produced by the Company`s own operating       
    plant. The ore processing plant continued to perform above expectations     
    during the first quarter showing an overall reduction in operating costs    
and a substantial increase in ore throughput and gold output. This was due  
    to ongoing cost saving initiatives in the case of the former, and by        
    engineering projects in the case of the latter.                             
               September to   January 2012  February      March 2012            
December 2011                2012                                
               (Monthly                                                         
               average)                                                         
                                                                                
Tonnage         12,200 t       11,932 t      13,490 t      16,783 t             
Grade           2.44 g/t       2.59 g/t      2.48 g/t      2.33 g/t             
Recovery        95%            96%           96%           95%                  
Availability    92%            85%           96%           96%                  
OPEX            US$27/t        US$24/t       US$22/t       US$27/t              
    Notes:                                                                      
    Due to the October 2011 production stoppage, September 2011 figures have    
    been used instead of those of October 2011.                                 
Minor capital items used in the upgrade of the Bateman Mill have been       
    expensed for March 2012.                                                    
    Plant availability remained high, ending the first quarter at 96%.          
    Recoveries remained consistently positive, averaging just under 96% for the 
first quarter. Internal processing costs for the first quarter were reduced 
    from US$27/tonne in the fourth quarter of 2011 to US$24/tonne.              
    Toll Processing                                                             
    Toll processing of surplus ore at Mintails Limited`s ("Mintails") Mogale    
facility continued throughout the first quarter with approximately 23,136   
    tonnes of mixed underground sulphide and low grade oxide being delivered to 
    the Mogale facility.                                                        
                                                                                

                      January 2012         February 2012   March 2012           
                                                                                
      Wet Tonnage     10,810 t             5,415 t         6,852 t              
Grade           2.17 g/t             2.77 g/t        2.33 g/t             
    Milling Upgrade                                                             
    In February 2012, the Company embarked on a retrofit engineering project    
    aimed at increasing the overall plant capacity by around 70% to 20,000      
tonnes per month. This reconfiguration of the Bateman milling section was   
    completed in March 2012 and is currently undergoing throughput trials. As   
    the Bateman was utilised, the upgrade has come at an insignificant cost to  
    the Company.                                                                
Central Rand Gold is pleased to announce that total plant throughput of     
    just under 17,000 tonnes was achieved for the month of March 2012.          
    In addition, the upgrade will also reduce the Company`s current reliance on 
    the toll treating of Central Rand Gold`s excess mine production.            
2.4  Financial Update                                                       
         The Company is pleased that it continues to remain cash flow positive, 
         with cash and cash equivalents for the three months ended 31 March     
         2012 being US$6.3 million. This represents an increase from US$5.3     
million as at 31 December 2011.                                        
    2.5  Acid Mine Drainage                                                     
         Encouragingly, the rate of rise of the water level has remained        
         constant at around 0.3m per day. This figure is below the expected     
rate of rise of 0.5m per day. Based on the latest estimate,            
         Environmentally Critical Level ("ECL") will therefore only be breached 
         during the second quarter of 2013. This delay provides Trans Caledon   
         Tunnel Authority ("TCTA") with more time to construct the High Density 
Sludge Plant.                                                          
    The final agreement between Central Rand Gold and TCTA is near completion   
    and will provide Central Rand Gold the right to dewater the Central Basin   
    below ECL, at the incremental dewatering cost.                              
For further information, please contact:                                        
Central Rand Gold                       +27 (0) 11 674 2304                     
Johan du Toit / Patrick Malaza                                                  
Evolution Securities Limited            +44 (0) 20 7071 4300                    
Chris Sim / Neil Elliot                                                         
Merchantec Capital                      +27 (0) 11 325 6363                     
Monique Martinez / Marcel Goncalves                                             
Buchanan                                +44 (0) 20 7466 5000                    
Bobby Morse / James Strong                                                      
Jenni Newman Public Relations           +27 (0) 11 506 7351                     
Proprietary Limited                                                             
Jenni Newman                                                                    
Note: The information in this statement relating to Mineral Resources and       
geology has been reviewed and approved by Mr 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 (Proprietary) Limited  
and has over 17 years` experience in precious metal exploration, mineral        
resource management and evaluation.                                             
24 April 2012                                                                   
Johannesburg                                                                    
JSE Sponsor                                                                     
Merchantec Capital                                                              
Date: 24/04/2012 09:00:01 Supplied by www.sharenet.co.za                     
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