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CENTRAL RAND GOLD LIMITED - 2012 Interim Report

Release Date: 17/08/2012 12:12:00      Code(s): CRD       PDF(s):  
2012 Interim Report

                                  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”)



                                     2012 Interim Report



Central Rand Gold, the South African gold mining and exploration holding company, today
announces its unaudited Interim Results for the six months ended 30 June 2012 (“period
under review”). The full set of results is available on the Company’s website:
www.centralrandgold.com

For further information, please contact:

Central Rand Gold                                                       +27(0) 87 310 4400

Johan du Toit / Patrick Malaza

Charles Stanley Securities                                            +44 (0) 20 7149 6000

Mark Taylor / Marc Milmo / Darren Vickers

Merchantec Capital                                                      +27 (0) 11 325 6363

Marcel Goncalves/ Monique Martinez

Buchanan Communications Limited                                       +44 (0) 20 7466 5000

Bobby Morse / Louise Mason

Jenni Newman Public Relations                                         +27 (0) 11 506 7351

Jenni Newman

17 August 2012

Johannesburg
Forward-looking statements

This document contains certain forward-looking statements with respect to the financial
condition, results of operations and business of the Central Rand Gold Group. The words
“intend”, “aim”, “project”, “anticipate”, “estimate”, “plan”, “believe”, “expect”, “may”,
“should”, “will”, or similar expressions, commonly identify such forward-looking statements.
Examples of forward-looking statements in this annual report and financial statements
include those regarding estimated Ore Reserves, anticipated production or construction
dates, costs, outputs and productive lives of assets or similar factors. Forward-looking
statements involve known and unknown risks, uncertainties, assumptions and other factors
set forth in this document that are beyond the Group’s control. For example, future Ore
Reserves will be based in part on market prices that may vary significantly from current
levels. These may materially affect the timing and feasibility of particular developments.
Other factors include the ability to produce and transport products profitably, demand for
our products, the effect of foreign currency exchange rates on market prices and operating
costs, and activities by governmental authorities, such as changes in taxation or regulation,
and political uncertainty.

In light of these risks, uncertainties and assumptions, actual results could be materially
different from any future results expressed or implied by these forward-looking statements,
which speak only as at the date of this report. Except as required by applicable regulations
or by law, the Group does not undertake any obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, or future events. The
Group cannot guarantee that its forward-looking statements will not differ materially from
actual results.

Company profile

Our business

Central Rand Gold is engaged in a gold mining and exploration project that aims to bring
profitable and sustainable gold mining back to the City of Johannesburg, bringing many
benefits to the City, the communities surrounding its mining operations, its staff, its
shareholders and other stakeholders. The Company plans to extract all profitable gold from
its Resource base using appropriate mining, processing and environmentally friendly
technologies. Once the mineralised areas are worked out, stabilised and rehabilitated, the
land will become available for urban development.

History

Central Rand Gold listed on the Official List of the UK Listing Authority and the Main Boards
of both the London Stock Exchange and the JSE Limited in November 2007, after
consolidating contiguous exploration permits covering approximately 138 square kilometres
in the most prolific gold-producing area of the world – the Central Rand Goldfields on the
southern outskirts of Johannesburg.

Mining Rights and Prospecting Rights

Central Rand Gold acquired seven contiguous New Order Prospecting Rights which extend
from west to east, Western Areas A, B and E, the three Cs (one Prospecting Right for
Consolidated Main Reef, Crown Mines and City Deep), Anglodeeps area, Village Main and
Robinson Deep (one Prospecting Right) and the mining area of the defunct Simmer and Jack
Gold Mine. The Prospecting Rights extend over an area from west to east of approximately
40 kilometres and north to south of about seven kilometres (the “Central Rand Project”). In
addition, the Southern Deeps New Order Prospecting Right Application (“Prospecting
Application”), if granted, would extend the Central Rand Project by a further 13 kilometres
to the south. On 27 February 2012, it was announced that the Prospecting Rights in respect
of Western Areas A, B and E had been transferred from Rand Quest Syndicate Limited
(“RQS”) to Central Rand Gold South Africa (Proprietary) Limited (“CRGSA”) via section 11
applications lodged with the South African Department of Mineral Resources (“DMR”). The
Southern Deeps Prospecting Application is still in the process of being transferred.

The Company received its first New Order Mining Right from the DMR on 17 September
2008. This Mining Right, which was awarded 14 months after the initial application, enables
Central Rand Gold to mine gold at its Consolidated Main Reef, Langlaagte and Crown Mines
tenements.

Chief Executive Officer’s report

SALIENT FEATURES OF THIS REPORT

*    Gold production up by 14.7% to 8,246 ounces (1H 2011:7,189 ounces);
*    Cash and cash equivalents of US$6.4 million at 30 June 2012 (30 June 2011: US$4.8
     million);
*    Underground mining production of 44,966 tonnes at an insitu grade of 4.6 grams per
     tonne;
*    Metallurgical plant performed well with a 95% average recovery rate;
*    New Competent Person’s Report (“CPR”) completed by Venmyn Rand (Proprietary)
     Limited (“Venmyn”):
     *     Conventional hand-held mining methodology proven to be effective and
           economical; and
     *     Total Mineral asset base of the Company valued between US$148 million to
           US$256 million;
*    Rate of rise of Acid Mine Drainage (“AMD”) level in the Central Basin slower than
     anticipated;
*    Revised Mine Works Plan and Social and Labour Plan submitted to the DMR;
*    Memorandum of Understanding entered into with the City of Johannesburg regarding
     the Social and Labour Plan and Local Economic Development programmes; and
*     Application proceedings have been launched in an attempt to expedite the conclusion
      of the dispute with the Company’s broad-based black economic empowerment
      partner, Puno Gold Investments (Proprietary) Limited (“Puno”).


OVERVIEW

The first half of 2012 proved to be a highly productive and encouraging period for Central
Rand Gold. The Company has continued to make good progress with its underground and
surface mining operations. Underground production reported a good performance for the
half year at 44,966 tonnes. This validates the decision made in 2011 to change from
mechanised long-hole stoping to a conventional hand-held mining methodology.

The Metallurgical operations were successful in increasing mill capacity from 12,000 tonnes
per month (“tpm”) towards the targeted 20,000 tpm level. Further improvements have
been made to the primary crushing circuit to enable crushing of the harder underground
sulphide ore. These improvements have been implemented to assist the smooth transition
from the current surface oxide processing operation, to a primarily underground sulphide
processing operation. Gold production rose by 14.7% to 8,246 ounces in the period under
review and the Company is on track for full year output to exceed last year’s annual total.

While water levels in the Central Basin remain a significant obstacle to long-term growth, it
is pleasing to note that the rate of rise of the water level was below the expected rate of rise
of 0.5 metres per day (“mpd”). Based on this, the Environmental Critical Level (“ECL”) is now
likely to be reached during the second quarter of 2013. Further details are provided under
the paragraph entitled ‘Water’ in this Interim Report.

The Company received a completed CPR (published 12 June 2012 and available on the
central Rand Gold website) from mineral industry experts, Venmyn, during the period under
review. This report focused on three key areas:

1. to re-establish and confirm the South African Code for the Reporting of Exploration
   Results, Mineral Resources and Mineral Reserves (“SAMREC Code”) and compliant
   Probable Reserves based on conventional South African mining techniques;
2. to independently adjust the Company’s Resource base in line with the rising water table
   in the Central Basin; and
3. to ascribe an independent market-related value to the Company based on all of its
   mineral assets.
Detailed findings of the CPR are contained in the paragraph entitled ‘Independent Valuation’
in this Interim Report.

The first half of 2012 has undoubtedly been a watershed period for the Company, providing
a good foundation for further progress to be made in the second half of 2012 and into the
future.
WATER

An agreement has been reached between Central Rand Gold and Trans Caledon Tunnel
Authority (“TCTA”), which will see Central Rand Gold contributing the Ritz pumps, acquired
in 2010, in the form of a donation, towards the AMD project. This contribution will allow
Central Rand Gold to de-water the Central Basin below ECL, at the incremental operational
cost. The agreement has been approved by the Central Rand Gold South Africa Board and is
currently before the TCTA Board.

It is encouraging to note that the rate of rise of the AMD water level has remained constant
at around 0.3 mpd. This is below the expected rate rise of 0.5 mpd. The water level at the
end of July 2012 was 365 meters below surface (“mbs”) as measured at 14 shaft, which is in
the Crown mining area. Based on the latest estimate, ECL will only be breached during the
second quarter of 2013. It is hoped that the construction of the new High Density Sludge
Plant will commence by the end of August 2012.

GEOLOGY

Resources and Reserves

Significant developments have been seen around the Central Rand Gold’s Resources and
Reserves. A decision was taken to limit the declaration of Mineral Resources to a depth of
450 mbs level. This decision, undertaken in conjunction with Venmyn, allows for a more
realistic valuation of the Company, based on immediately accessible sources of revenue.

Resources lying below 450 mbs are currently flooded due to the rising water table and have
therefore been reclassified as “Exploration Target”, a SAMREC and JORC classification for
material that does not meet the criteria for Resources (the Company has procured pumps
that can pump to this depth and it is therefore a prudent cut-off point for immediately
accessible Resources). Management remains confident that the continuity of mineralisation,
grade and gold content of this reclassified material remains the same.

The potential remains to claw back these “Exploration Target” resources through
agreements with the South African Department of Water Affairs (“DWA”) and government-
contracted service provider, TCTA. The claw back will allow pumping below this level,
together with initial financial studies to establish the capital and operating costs to acquire
additional pumps that may be required to undertake dewatering below 450 mbs.
SAMREC Compliant Mineral Resources above 450 mbs

                                              Width      Tonnes   Grade Content
Area            Category    Reef               (cm)        (Mt)    (g/t)  (Moz)

Consolidated
Main Reefs      Measured    Main Reef              143     1.47    3.57    0.16

                Indicated                          133     5.73    3.98    0.73

                            Main Reef
                Indicated   Leader                 100     0.71    9.98    0.23

                Inferred                           100     1.11   11.18    0.40

                Indicated   White Reef             164     2.99    4.21    0.40

                Inferred                           166     2.64    3.45    0.31

                Indicated   Kimberley Reef         151     2.60    3.69    0.31

                Inferred                           146     0.59    3.71    0.07

Crown Mines     Indicated   Main Reef              110     2.57    5.63    0.47

                Inferred                           120     2.21    4.81    0.34

                            Main Reef
                Indicated   Leader                 112     0.01   18.02    0.01

                Inferred                           123     0.56   16.76    0.30

City Deep       Indicated   Main Reef              112     0.78    7.63    0.19

                Inferred                           118     0.17    6.42    0.04

                            Main Reef
                Inferred    Leader                 102     0.53    8.29    0.14

Simmer and                  Main Reef
Jack            Indicated   Leader                 101     0.73    8.45    0.19

                Inferred                           121     0.15    8.20    0.04

Village Main
Reefs and
Robinson Deep   Indicated   Main Reef              140     0.53    6.30    0.10
                                 Main Reef
                   Inferred      Leader                  116          0.17    14.35       0.08

Total                                                    134        26.25       5.34      4.51

Note: Rounding may result in computational discrepancies especially where small tonnages
are involved.

In late 2011, the Company announced that a review of the Company’s Mineral Reserves was
required due to the changeover in mining technique from mechanised long-hole stoping to
conventional hand-held stoping that was a result of excessive dilution and costs.

Prior to December 2011, Central Rand Gold’s Reserve Base was estimated at approximately
482,000 ounces of Probable Reserve. This estimate was based on the now abandoned
mechanised long-hole stoping method. Reserves were largely defined around two high
grade payshoots and tested depths of approximately 900 mbs at the deepest point.

The new Reserve figures, published in June 2012, are estimated at approximately 407,000
ounces of Probable Reserve. Aside from the complete change in mining method, this
estimate differs from the former in that it is only defined to a depth of 450 mbs - in line with
the available Resources - and that it incorporates mining of the lower grade area between
the two previously defined high grade payshoots.

Reserve comparison December 2011 and June 2012

                                           December 2011                            June 2012

Area                                            CMR West                           CMR West

Category                                 Probable Reserve                    Probable Reserve

Tonnage (MT)                                           3.73                               3.55

Grade (g/t)                                            4.00                               3.56

Content (Koz)                                           482                                407

Maximum depth (m)                                       900                                450

Note: Rounding may result in computational discrepancies especially where small tonnages
are involved.

Whilst the overall quantum of Reserves is lower than that previously established, the
declaration depth is considerably less. The June 2012 Resource upgrade, which incorporated
additional sampling information from surface trenching, demonstrates that the area
between the two payshoots is of a higher grade than previously modelled and has become
an economic proposition.
The Mineral Resource to Mineral Reserve conversion was conducted by Mr M L Mohloki of
Mohloki Mining CC (“Mohloki”) using actual mining performance and typical Witwatersrand
gold mining ratios.

Independent Valuation

In March 2012, as part of the scope of work of compiling an Independent Competent
Person’s Report (“ICPR”), Venmyn were requested to undertake a valuation of the mineral
assets of the Company.

The approach taken by Venmyn in ascribing a value to the extensive asset base was two-
fold.

The primary method considered all of the Company’s SAMREC compliant resources on an
area by area ‘sum of parts’ basis utilising a ‘market related ounce value in the ground’.

Valuation of project areas per unit of Mineral Resource

                                                              High
                                            Low unit                   Low      High
                                                              unit                      Mean
                              Content          value         value    value    value    value
Project          Category       (Moz)       (US$/oz)      (US$/oz)   (US$m)   (US$m)   (US$m)

                 Measured        0.16          80.00       140.00     12.80    22.40    17.60

                 Indicated       1.67          40.00        70.00     66.80   116.90    91.85

                 Inferred        0.79           6.00        10.00      4.71     7.85     6.28

                 Resource
Consolidated     Target          4.33           0.60         1.00      2.60     4.33     3.46

Main Reefs       Sub-total       6.95         12.51         21.81     86.91   151.48   119.19

                 Indicated       0.47          40.00        70.00     18.92    33.11    26.02

                 Inferred        0.64           6.00        10.00      3.86     6.43     5.14

                 Resource
                 Target          7.52           0.60         1.00      4.51     7.52     6.02

Crown Mines      Sub-total       8.63           3.16         5.45     27.29    47.06    37.18

                 Indicated       0.19          40.00        70.00      7.60    13.30    10.45

City Deep        Inferred        0.18           6.00        10.00      1.07     1.78     1.42
                Resource
                Target           7.13          0.60       1.00      4.28      7.13     5.70

                Sub-total        7.50          1.73       2.96     12.95    22.21     17.57

                Indicated        0.10         40.00      70.00      3.96      6.93     5.45

                Inferred         0.08          6.00      10.00      0.47      0.79     0.63

                Resource
Village and     Target           4.61          0.60       1.00      2.77      4.61     3.69

 Robinson       Sub-total        4.79          1.50       2.58      7.20    12.33      9.77

                Indicated        0.19         40.00      70.00      7.76    13.58     10.67

                Inferred         0.04          6.00      10.00      0.24      0.40     0.32

                Resource
                Target           3.16          0.60       1.00      1.90      3.16     2.53
Simmer and
Jack            Sub-total        3.39          2.92       5.05      9.90    17.14     13.52

                Resource
                Target           5.41          0.60       1.00      3.25      5.41     4.33

Other Reefs     Sub-total        5.41          0.60       1.00      3.25     5.41      4.33

Grand total / average           36.67          4.02       6.97     147.5   255.63    201.56

This valuation method is particularly useful, allowing the Company to realise value for
individual areas by adopting customised development strategies. An average market related
value of US$202 million is ascribed to the total Mineral asset base of the Company.

As a secondary method, the declaration of Mineral Reserves through the undertaking of an
appropriate Pre-Feasibility Study has allowed for a further valuation approach to be
undertaken. A Discounted Cashflow (“DCF”) Analysis and Net Present Value (“NPV”)
determination was also undertaken by Venmyn on the CMR West Main Reef mining
operation (note 2).

As an addendum to the ICPR, Venmyn has also undertaken a production scenario analysis in
respect of CMR West to gauge the impact of changing production rates and staged capital
deployment. These scenarios have been completed using an externally funded, partially
externally funded and self-funded basis representing the different approaches available. The
approach the Company will ultimately pursue will depend on prevailing market and
economic conditions at the time of capital requirement. The funding scenarios return NPVs
of ZAR934 million (US$117 million), ZAR658 million (US$82 million) and ZAR344 million
(US$43 million) respectively, with an externally funded approach indicating an overall
greater return. The externally funded model forms the base case represented in the ICPR.

Surface exploration

Exploration through systematic mechanical trenching, geological mapping and sampling
continued through the period under review, resulting in the identification and delineation of
further open pit “Exploration Target” areas within the New Order Mining Right.

As illustrated in the table below, the remaining surface oxide material found in close
proximity to the plant is limited and is anticipated to be exhausted in the coming months.
This material includes an estimate of gold bearing material that is expected to be generated
through final surface oxide cleanup operations.

This run-down of surface ore in the second quarter has resulted in the depressed grades
which, as a consequence, resulted in the significant plant crushing and milling upgrades, in
preparation for the transition from a mainly surface oxide operation to an underground
sulphide operation.

An additional exploration target has been identified outside of the immediate plant area
due to generally lower grades and increased trucking distances involved. This material will
only be exploited in the event of underground ore deficit and surplus milling capacity.

Exploration target summary as at 30 June 2012 (note1)

 Mining area                            Reef           Exploration target material

                        SLOTS 8 and 9 (Areas within 3 km of Plant)

 Central                        MR and MRL        2.4 - 3.1 g/t            9,000 – 18,000 t

 ROM Pad Cleanup                     Various      1.6 - 3.2 g/t           20,000 – 50,000 t



                      SLOTS 5 and 7 (Areas more than 3 km of Plant)

 Avon Target                    MR and MRL        2.9 - 3.3 g/t           36,000 – 64,000 t

 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 1: The potential quantity and grade described by the term “Exploration Target” is
         conceptual in nature and there has been insufficient exploration to define a
         Mineral Resource. It is uncertain if further exploration will result in the definition
         of a Resource. Further exploration work is ongoing and includes trial mining and
         processing of this shallow target to establish grade and ore body continuity,
         mineability, dilution and throughput characteristics.

Note 2: Key assumptions used in the CMR West DCF are:
       ?      Production of 3.5million tonnes at 3.54g/t;
       ?      Plant recovery of 95%;
       ?      Mine call factor of 85% for sulphides and 65% for oxides;
       ?      Gold price US$1,600/oz;
       ?      Average exchange rate of ZAR8/US$; and
       ?      Life of mine total cash costs US$927/oz (US$85/tonne).


MINING

Underground mining

Underground mining totaled 44,966 tonnes of ore in the first six months of 2012, which is
6.7% below target, mitigated by an improvement in the grade through a focus on the best
cut. Underground mine cash costs averaged US$71/tonne against prior of US$132/tonne.
The mining crews are ramping up mining tonnage that will see an ore rate of 12,000 tpm
achieved in the third quarter of 2012.

Measures are being put in place to cross the western dyke and to open up ground towards
the centre of the mining area, as well as to progress beyond the topmost level of 105 mbs,
to open up additional shallow areas.

Table 1: Underground mining results
2012                           CPR tonnes               Actual tonnes                Variance
First quarter                       20,167                     18,275                 (1,892)
Second quarter                      28,050                     26,691                 (1,359)
Total                               48,217                     44,966                 (3,251)

Surface mining
Surface production performed well in the second quarter. Currently, only one pit, the
Central Extension pit, is being mined. The pits at Slot 8, namely the New Unified pit and the
Spencer pit, ceased production as the stripping ratios became excessive, rendering these
pits uneconomical. Surface mining cash costs averaged US$24/tonne against prior year of
US$25/tonne.
Table 2: Surface mining results

2012                                CPR tonnes          Actual tonnes                  Variance
First quarter                           35,000                 36,221                     1,221
Second quarter                          34,500                 38,017                     3,517
Total                                   69,500                 74,238                     4,738

Table 3: Total mining results
2012                                CPR tonnes          Actual tonnes                  Variance
Underground                             48,217                 44,966                   (3,251)
Surface                                 69,500                 74,238                     4,738
Total                                  117,717               119,204                      1,487

Safety

Central Rand Gold continues to maintain strong safety standards within all of its operational
areas.

Table 1: Safety statistics
Type of injury           Six months ended 30      12 months ended 31 Six months ended 30
                                   June 2012          December 2011            June 2011

Dressing cases                                5                       7                        7
Lost-time injuries                            2                       5                        3

It is encouraging to note that dressing cases and lost time injuries were lower in the first half
of 2012 than in the first half of 2011. Central Rand Gold is fully focused on running as safe a
mining operation as possible and always regards employee safety as a top priority across all
on-site activities.

Goldplat Recovery (Proprietary) Limited (“Goldplat”) royalty agreement

Central Rand Gold, through its wholly-owned subsidiary, Ferreira Estates and Investment
Company Limited, signed a contract mining and beneficiation agreement with Goldplat
(AIM: GDP), a gold producer quoted on AIM of the London Stock Exchange, to recommence
gold mining at the Crown East Main Reef (strike 1.2 km) and CMR Bird Reef mines (strike 2
km) in the West Rand area near Johannesburg in South Africa. The above mining areas fall
outside of Central Rand Gold’s near term target areas of CMR Main Reef (East and West)
and Crown West.

Subject to due diligence under the terms of the agreement, Goldplat will have the rights to
assume mining, at its own cost and risk, of the two sites in return for a 5% net smelter
royalty to Central Rand Gold. Central Rand Gold extended the evaluation period until 30
September 2012.
METALLURGY AND PROCESSING

Production update

Metallurgical production achieved during the first half of 2012 has built on the solid
foundation established during the June to December 2011 period, with an overall increase
of 50% in tonnage throughput and an approximate increase of 40% in gold smelted
internally. This increase arose largely from the milling section upgrade and engineering
retrofit undertaken during the first quarter of 2012.

Year-on-year plant operating statistics

                                               2012                   2011

                                          January to   January to       July to
                                               June         June     December          Total

Tonnes processed internally (t)              93,526       98,578        64,811      163,389

Built up head-grade (g/t)                      2.15          2.47          2.26         2.39

Internal plant operating cost
(US$/t)                                          27           50             47           49

Fine gold produced (oz)                       6,076        6,139          5,212      11,351



Plant recovery (%)                               95           84             95           89

CIL availability (%)                             93           81             92           86



Tonnes processed externally (t)              28,119       12,397        58,919       71,316

Landed grade (g/t)                             2.31          2.66          1.45         1.67

Tolling cost (US$/t)                             61           63             52           54

Fine gold produced (oz)                       2,170        1,050          2,455        3,505

Total fine gold produced (oz)                 8,246        7,189          7,667      14,856

An increase in production has transpired, despite a drop-off in grades in the oxide ore from
surface mining operations that were experienced in the second quarter due to the winding
down of open pit mining and the last remaining Resources are extracted. The main driver
for the aforementioned milling upgrade was to match the increased mining production rate
with internal processing capacity and thereby decrease the reliance on external toll treating
to utilise surplus mined ore. To this end, 28,119 tonnes of ore was toll treated at the
Mintails Limited (“Mintails”) facility compared with 58,919 tonnes in the previous period.

Plant availability and plant recoveries remained high during the period under review,
averaging 93% and 95%, respectively.

It is important to note that to date, all oxides and surface ore has been processed by Central
Rand Gold and that majority of sulphides and underground ore has been processed
externally. However, Central Rand Gold is now considering producing sulphides on its own
premises without having to use external parties.

MONTHLY PRODUCTION STATISTICS

Internal production in July 2012 was negatively impacted by modifications required to
transition the metallurgical plant to process predominately the harder sulphide ore. Further
production loss was incurred in August 2012 due to unplanned maintenance being required
for both production mills, which resulted in the Metallurgical plant being shut down for a
three week period. Maintenance and upgrades have largely been completed and both
production mills should be fully operational by 25 August 2012. External toll processing was
commensurately increased to mitigate as far as possible any production loss during this
down time.

Whilst these stoppages are unfortunate in terms of short-term production, the remedial
work undertaken on the mills during this time should lead to long-term benefits as the mill
ore feed is changed from predominantly surface oxide to predominantly underground
sulphide.

Crusher plant upgrade

The winding down of the surface mining operations has triggered the start of the
metallurgical transition from predominantly soft oxide feed to much harder underground
sulphide feed. This transition to the higher grade sulphide material has required a re-
engineering of the previously redundant Bateman crushing circuit, a process which began in
late May 2012.

Initial test work on this upgraded crushing section has thus far demonstrated that up to 80%
of the tonnage throughput required to service both the milling sections is currently possible
and that in the coming months the mills may be converted to an exclusively (100%) higher
grade sulphide only feed.
MINING RIGHT

In line with our communication to the DMR, Central Rand Gold has applied for and has
submitted a Section 102 Amendment to its original Mine Works Programme, Environmental
Plan and Social Labour Plan. Central Rand Gold believes that the amendments reflect the
reality of what is achievable within its current mining right area.

To complete the amendment to the Social Labour Plan, Central Rand Gold engaged with
various regional stakeholders such as the City of Johannesburg, regional municipalities and
local elected councillors. This process was to ensure that proposed projects would be
aligned to the City of Johannesburg’s integrated development plans and also to have the
support of local community elected councillors. Due to this engagement, Central Rand Gold
and the City of Johannesburg have signed a Memorandum of Understanding to work
together in the implementation of the Company’s community related projects.

BROAD-BASED BLACK ECONOMIC EMPOWERMENT

Central Rand Gold remains in dispute with its broad-based black economic empowerment
partner, Puno. In an effort to finally conclude the dispute, the Company has launched
application proceedings requesting that the courts order the dispute to proceed to
arbitration as well as set out the final terms governing such arbitration process. It is hoped
that by proceeding as such, any possibility for Puno to employ deliberate and obtuse
methods to further delay the conclusion of this dispute will be eliminated.

After receiving Puno’s Answering affidavit, Central Rand Gold is now in the process of
finalising its Replying affidavit after which the matter will be set down for hearing where it is
hoped that this ongoing dispute will be finally resolved.

FINANCIAL REVIEW

The Company achieved its first cash flow positive quarter in the final quarter of 2011 and
this trend continued in the first and second quarters of 2012.

The operating loss for the period under review decreased by 88% to US$1.67 (30 June 2011:
US$14.4 million).

This decrease is mainly attributable to:

   -   Higher gold revenue on the back of 14.7% higher gold ounces produced at 8,246
       ounces against 7,189 ounces in the prior year and a stronger realised Rand gold
       price.
   -   Extended surface mining areas.
   -   Lower salary costs subsequent to right sizing programme in the prior year.
   -   Migration from mechanised to conventional mining with focus on extracting already
       opened stope areas.
   -   Increased gold processing plant capacity, reliability and efficiency measures.
   -   Strategic sourcing initiatives to reduce cost of mining and processing.
Net attributable loss for the period under review decreased by 89% to US$1.62 million (30
June 2011: US$14.8 million) after taking into account the lower interest received, lower
transactional foreign exchange losses on the back of a weaker Rand/US$ rate and lower
average cash balances. As a result we report a basic loss per share of 0.10 cents (June 2011
– 1.01 cents per share).

As at 30 June 2012, the net cash position of the Company is reported at approximately
US$6.4 million (30 June 2011: US$4.8 million).

Major cash flows during the period under review are set out in the abridged cash flow table
below:

                                                                                 US$ (million)

Cash and cash equivalents at 1 January 2012                                              5.38

Gold sales                                                                              13.47

Other income                                                                             0.38

Cash used in operations                                                               (13.22)

Interest received                                                                        0.10

Effect of exchange movement on cash balances                                             0.28

Cash and cash equivalents at 30 June 2012                                                6.39



Move to AIM from the Main Market of London Stock Exchange

During the first half of 2012, Central Rand Gold executives engaged with several of the
Company’s large shareholders with regards to a proposed move to AIM. Based on these
discussions, and further advice from the Company’s new advisors, it has been agreed that at
present it would be more appropriate to remain on the Main Market of the London Stock
Exchange. The Board of Directors of Central Rand Gold will, on an annual basis, review this
decision.

CONCLUSION

After successfully negotiating several challenges during 2011, Central Rand Gold made
considerable headway in the first six months of 2012, positioning the Company to
thoroughly explore its short, medium, and longer-term growth prospects and strategies.
In the short-term, the Company’s growth strategy will focus on building production from
CMR West. In the medium-term, the focus will be on studying the viability of production
coming from CMR East and Crown West. In the longer-term, the focus will include
examining the possibility of joint ventures to maximise potential gold output and
exploitation of Resources to extract shareholder value.

Mining production, has maintained its momentum from the first 6 months, with
underground mining, for the month of July, achieving planned production of 10,000 tonnes
at an average insitu grade of 4.7g/t. As previously reported the metallurgical plants have
encountered some production challenges during July and August. The Company remains
confident that it will be able to transition to predominately higher grade sulphides by the
end of September 2012. To mitigate some of the production loss, additional ore will be toll
treated.

Underpinning the investment case is the known Resource base comprising:

*   26.2 million tonnes grading 5.34 g/t (4.5 million ounces of gold) from surface to 450
    mbs; and
*   120 million tonnes grading 8.34 g/t (32.2 million ounces of gold) from 450 mbs to 3,000
    mbs.


The total Mineral Resource has been valued at between US$148 million and US$256 million,
providing strong justification for the Company’s existence and future plans and strategies.

The management and staff of the Company are committed to advancing Central Rand Gold’s
progress towards realising the investment case and narrowing the value gap in the interests
of all of the Company’s stakeholders.

Any general forecast information included in this 2012 Interim Report and the condensed
interim Group financial statements have not been reviewed and reported on by the
Company’s auditors.

The information in this statement relating to Mineral Resources and Geology has been
reviewed and approved by Mr Keith Matier, BSc (Hons), GDE, PrSci Nat, who is a Competent
Person in terms of the SAMREC Code. Mr Matier is Geology Manager of CRGSA and has over
17 years’ experience in exploration, mineral resource management and mineral evaluation.

Johan du Toit
Chief Executive Officer
Condensed Group Statement of Financial Position as at 30 June 2012

                                                      30 June   31 December         30 June
                                                        2012            2011          2011
                                          Notes      US$ '000        US$ '000      US$ '000
                                                  (Unaudited)       (Audited)   (Unaudited)
  ASSETS
  Non-current assets
  Property, plant and equipment            5           2,761           3,460         9,140
  Security deposits and guarantees                       268             273         6,332

  Environmental guarantee investment                   4,034           4,058              -

  Loans receivable                         7           9,284           8,956        10,073
                                                      16,347          16,747        25,545

  Current assets
  Security deposits and guarantees                       151             581         3,630

  Prepayments and other receivables                    5,239           5,227         5,752

  Inventories                               8          2,387           2,306         1,087
  Cash and cash equivalents                            6,386           5,376         4,803
  Non-current assets held-for-sale          6          2,536           2,584           595

                                                      16,699          16,074        15,867

  Total assets                                        33,046          32,821        41,412

  EQUITY
  Attributable to equity holders of the
  parent

  Share capital                             9         25,604          25,604        25,604
  Share premium                             9        213,377         213,377       213,377
  Share-based compensation reserve                    28,020          28,018        28,262

  Treasury shares                                         (6)            (6)            (6)
  Foreign currency translation reserve               (28,121)       (28,322)       (26,690)

  Accumulated losses                                (228,610)      (226,992)      (225,708)
                                                       10,264         11,679
                                                                (22(226,992)         14,839
  Non-controlling interest                                  -              -              -
  Total equity                                         10,264         11,679         14,839

  LIABILITIES
  Non-current liabilities
   Environmental rehabilitation and other   10    6,669    6,038    6,291
provisions
   Loan payable                                   9,284    8,956   10,073
   Operating lease liability                          -        -        -
   Borrowings                                         -        -        -
                                                 15,953   14,994   16,364

   Current liabilities
   Trade and other payables                       5,057    4,382    7,596
   Environmental rehabilitation and other   10        -        -     851
provisions
   Taxation payable                               1,761    1,755    1,756
   Operating lease liability                         11       11        6
   Borrowings                                         -        -        -
                                                  6,829    6,148   10,209

  Total liabilities                              22,782   21,142   26,573

  Total equity and liabilities                   33,046   32,821   41,412
Condensed Group statement of financial performance
for the six months ended 30 June 2012
                                  Notes      Six months      12 months       Six months
                                                  ended           ended           ended
                                                 30 June   31 December           30 June
                                                   2012            2011            2011
                                                US$’000         US$’000         US$’000
                                            (Unaudited)        (Audited)    (Unaudited)
Other income and gains                11          13,852         25,055           10,950
Employee benefits expense                        (2,151)         (7,851)         (6,509)
Directors’ emoluments                 12           (436)         (1,078)           (537)
Depreciation and amortisation                      (756)         (3,416)         (1,816)
Inventory write-down                               (265)           (332)            (17)
Impairment of assets                               (528)           (470)            489
Operating lease expense                            (227)           (533)           (313)
Mining costs                          13         (8,574)        (19,266)        (12,945)
Operational expenses                               (957)         (2,332)           (955)
Other expenses                        14         (1,631)         (4,187)         (2,743)
Operating loss                                   (1,673)        (14,410)        (14,396)
Interest receivable                                 615           1,443             784
Finance costs                                      (540)         (1,072)           (527)
Foreign exchange transaction losses                 (20)         (2,056)           (672)
Loss before income tax                           (1,618)        (16,095)        (14,811)
Income tax expense                    15              –               –               –
Loss for the period                              (1,618)        (16,095)        (14,811)
Loss is attributable to:
Non-controlling interest                              –               –               –
Equity holders of the parent                     (1,618)        (16,095)        (14,811)
                                                 (1,618)        (16,095)        (14,811)
Shares in issue                            1,599,682,990   1,599,682,990   1,599,682,990
Weighted average number of ordinary        1,599,682,990   1,599,682,990   1,599,682,990
shares in issue
Fully diluted weighted average number of   1,599,682,990   1,599,682,990   1,599,682,990
ordinary shares in issue
Condensed Group statement of comprehensive income
for the six months ended 30 June 2012


                                              Six months       12 months      Six months
                                                    ended           ended          ended
                                                  30 June    31 December          30 June
                                                     2012            2011           2011
                                                 US$’000          US$’000        US$’000
                                             (Unaudited)         (Audited)   (Unaudited)
Loss for the period                                (1,618)        (16,095)       (14,811)
Other comprehensive income/(loss):
Exchange differences on translating                   201          (1,367)           265
foreign operations
Income tax relating to components of                    –               –              –
other comprehensive income
Other comprehensive income/(loss) for                 201          (1,367)           265
the period, net of tax
Total comprehensive loss for the period           (1,417)        (17,462)       (14,546)
Total comprehensive income is attributable to:
Non-controlling interest                                –               –              –
Equity holders of the parent                      (1,417)        (17,462)       (14,546)
                                                  (1,417)        (17,462)       (14,546)
Condensed Group statement of changes in equity
for the six months ended 30 June 2012
                                                 Attributable to equity holders of the Group
                                                   Ordinary          Share     Share-based
                                                      share       premium         Compen-
                                                     capital                         sation
                                                                                   reserve
                                        Notes       US$’000        US$’000         US$’000
Balance at 31 December 2010                          25,604        213,377           27,925
Total comprehensive income for the period
ended 30 June 2011
Loss for the period                                        –              –               –
Other comprehensive income
Foreign currency adjustments                               –              –               –
Transactions with owners, recorded directly in
equity
Employee Share Option Scheme:
Share-based payments:
Employees’ and Directors’ shares and options               –              –             337
Balance at 30 June 2011                              25,604        213,377           28,262
Balance at 31 December 2011                          25,604        213,377           28,018
Total comprehensive income for the period
ended 30 June 2012
Loss for the period                                        –              –               –
Other comprehensive income
Foreign currency adjustments                               –              –               –
Transactions with owners, recorded directly in
equity
Employee Share Option Scheme:
Share-based payments:


Employees’ and Directors’ shares and        19             –              –               2
options
Balance at 30 June 2012                              25,604        213,377           28,020
                                       Attributable to equity holders of the Parent
                                                        Company
                                         Trea-     Foreign       Accu-        Total      Non-       Total
                                          sury    currency     mulated                    Con-     equity
                                        shares       trans-     losses                 trolling
                                                     lation                           interest
                                                   reserve
                               Notes   US$’000    US$’000      US$’000     US$’000    US$’000     US$’000
Balance at 31 December 2010                 (6)   (26,955)    (210,897)     29,048           –     29,048
Total comprehensive income for the
period ended 30 June 2011
Loss for the period                           –          –     (14,811)    (14,811)          –    (14,811)
Other comprehensive income
Foreign currency adjustments                  –        265            –        265           –        265
Transactions with owners, recorded
directly in equity
Employee Share Option Scheme:
Share-based payments:
Employees’ and Directors’ shares and          –          –            –        337           –        337
options
Balance at 30 June 2011                     (6)   (26,690)    (225,708)     14,839           –     14,839
Balance at 31 December 2011                 (6)   (28,322)    (226,992)     11,679           –     11,679
Total comprehensive income for the
period ended 30 June 2012
Loss for the period                           –          –      (1,618)     (1,618)          –     (1,618)
Other comprehensive income
Foreign currency adjustments                  –        201            –        201           –        201
Transactions with owners, recorded
directly in equity
Employee Share Option Scheme:
Share-based payments:
Employees’ and Directors’        19           –          –            –           2          –          2
shares and options
Balance at 30 June 2012                     (6)   (28,121)    (228,610)     10,264           –     10,264
Condensed Group statement of cash flow
for the six months ended 30 June 2012
                                        Notes    Six months      12 months      Six months
                                                      ended           ended          ended
                                                     30 June   31 December          30 June
                                                       2012            2011           2011
                                                    US$’000         US$’000        US$’000
                                                (Unaudited)        (Audited)   (Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax                                      (1,618)       (16,095)       (14,811)
Adjusted for:
Depreciation and amortisation                           756           3,416          1,816
Bad debts written off                                     –               –              –
Employment benefit expenditure (Share-                   95              93            336
based payments)
Profit on disposal and scrapping of                     (92)          (991)          (458)
property, plant and equipment
Impairment of inventory                                 265             332             17
Impairment/(Reversal of impairment) of                  528             470          (489)
assets
Net loss on foreign exchange                             20           2,056            672
Increase in operating lease liability                     –               7              3
Sundry income                                         (141)           (510)            (16)
Interest received                                     (615)          (1,443)         (784)
Finance costs                                           540           1,072            527
Changes in working capital
(Increase)/Decrease in prepayments and                  (12)          4,887            873
other receivables
Increase in inventory                                 (346)          (2,431)         (880)
Increase/(Decrease) in trade and other                  675          (4,502)        (1,288)
payables
Increase in provisions                                   22             812            668
Cash flows used in operations                            77        (12,827)       (13,814)
Interest received                                       114             395            258
Finance costs                                           (10)            (24)            (1)
Sundry income                                           141             581              –
Net cash from/(used in) operating                       322        (11,875)       (13,557)
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and           5          (26)           (2,387)          (2,128)
equipment
Proceeds from disposal of property,                      –            4,756            5,043
plant and equipment
Decrease in security deposits                         435             1,070              605
Net cash from investing activities                    409             3,439            3,520
CASH FLOWS FROM FINANCING ACTIVITIES
Repayment of borrowings                                  –               (6)              (6)
Net cash used in financing activities                    –               (6)              (6)
Net increase/(decrease) in cash and cash              731            (8,442)        (10,043)
equivalents
Cash and cash equivalents at 1 January               5,376           14,624           14,624
Effects of exchange rate fluctuations on              279              (806)             222
cash balances
Cash and cash equivalents at end of                  6,386            5,376            4,803
period


Notes to the condensed interim Group financial statements
for the six months ended 30 June 2012



1. BASIS OF PREPARATION


This condensed set of financial statements has been prepared in accordance with IAS 34
Interim Financial Reporting as adopted by the EU. The annual financial statements of the
Group are prepared in accordance with International Financial Reporting Standards (IFRSs)
as adopted by the EU. The condensed set of financial statements has been prepared
applying the accounting policies and presentation that were applied in the preparation of
the Group’s published consolidated financial statements for the year ended 31 December
2011, except as explained in note 2.


The condensed interim Group financial statements are presented in United States Dollars
(“US$” or “US Dollar”) and rounded to the nearest thousand. The functional currency of the
parent company, Central Rand Gold Limited, is British Pound Sterling (“£”) 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 condensed interim Group 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 as detailed below.


Current operations


In the Annual Report 2011 released on 2 April 2012, the Group set out a five-point action
plan. Significant progress has been made since then:

*   Stabilise mine operations on conventional method and ramp up production to 12,000
    tonnes per month by the end of 2012 – The Group is still on target to achieve this
    despite some speed bumps earlier in the year.
*   Calculate and report a new reserve base taking into account its new mining
    methodology – A competent person report (“CPR”) was completed and announced on
    12 June 2012.
*   Complete a mine scoping study for the Crown Mining Right area – This is currently in
    progress for completion at end of fourth quarter 2012.
*   Explore opportunities with other interested stakeholders and extract value from its
    extensive Mining Right and Prospecting areas – As announced on 16 February 2012, a
    contract mining and beneficiation agreement was signed with Goldplat to recommence
    gold mining at Crown East Main Reef and CMR Bird Reef for 5% net smelter royalty to
    Central Rand Gold .There are other innovative proposals with other parties currently at
    early stage of negotiations.
*   Submit, and receive approval for, the revised Social and Labour Plan (“SLP”) and Mine
    Work Programme (“MWP”) from SAGDMR (South African Government, Department of
    Mineral Resources) by the end of June 2012 – A Section 102 Amendment to its original
    Mine Works Programme, Environment Plan and Social Labour Plan has been applied for
    and submitted to DMR. We still await feedback on this. The Group believes that the
    amendments reflect the reality of what is achievable within current mining right area.

While significant progress has been made towards achievement of the stated five-point
Plan, some challenges remain as detailed below.

Rising water table

An agreement is expected to be reached between Central Rand Gold and TCTA, which will
see Central Rand Gold contributing the Ritz pumps it acquired in 2010, in the form of a
donation, towards the AMD project. This contribution will allow Central Rand Gold to de-
water the Central Basin below ECL, at an incremental operational cost.
It is encouraging to note that the rate of rise of the acid mine drainage water level has
remained constant at around 0.3 mpd. This is below the expected rate of rise of 0.5 mpd.
The water level at the end of July 2012 was 365 meters below surface as measured at 14
shaft, which is in the Crown mining area. Based on the latest estimate, ECL will only be
breached during the second quarter of 2013. It is hoped that construction of the new High
Density Sludge Plant will commence by the end of August 2012.

If the rising water table problem is resolved, the Group will require further funding to
develop the mine and gain access to the underground ore (see below).

Current and projected funding requirements

At 30 June 2012, the Group had cash of US$6.38 million. At 31 July 2012, the Group had
cash of US$5.6 million, the decrease resulting mainly from production shortfall due to plant
modifications required to allow for predominantly sulphide hard rock processing. The plant
is expected to be predominately sulphide operational by the end of September 2012. In the
meantime, any surplus material is toll treated with Mintails.

The Directors have prepared cash flow projections until 2020 that reflect the current mine
plan adopted by the Directors. 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 condensed interim Group financial statements on a
going concern basis.

The current mining activities are forecast to keep cash levels broadly flat over the next 18
months by continuing to process surface ore and mining the currently accessible
underground ore. The current plan assumes the resolution of the rising water table problem
and so retaining full access to the reserves and resources. In order to develop the mine to
gain access to the underground ore and increase production beyond what is achievable over
the next 18 months, further funding would be required in the last quarter of 2013. However,
the timing of the resolution of the water table problem and the timing of fundraising will
determine whether the Group is able to follow the current plan beyond the last quarter of
2013.

In addition, the risk 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 key assumptions such as the gold price, exchange rate, mining production
and the metallurgical recovery and production rates.

Conclusion

During the six months to June 2012, the Group made considerable progress in the
achievement of its five-point plan as stated in the Annual Report 2011. The Directors have
now stabilised the operations. The stabilising of the operations is an essential part to getting
the business ready for a potential capital raise in the future and to achieving long-term
sustainable production. Nevertheless, the Group remains exposed to external factors which
could disrupt the business. The continued uncertainty around the timing of the resolution of
the rising water table problem, together with the need for additional fundraising required
by the current mine plan in the last quarter of 2013, are material uncertainties that may cast
significant doubt on the Group’s ability to continue as a going concern and it may therefore
be unable to realise its assets and discharge its liabilities in the normal course of business.

Nevertheless, after taking account of the Group’s funding position and its cash flow
projections and having considered the following:

*   The risks and uncertainties associated with these projections; and
*   The current trading position which has not provided the Directors with any evidence
    that their assumptions for the next 18 months are not achievable, the Directors have a
    realistic expectation that the Group has 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 condensed interim Group financial
    statements on a going concern basis. These condensed interim Group financial
    statements do not include any adjustments that would result from the going concern
    basis of preparation being inappropriate.

2. ACCOUNTING POLICIES

Except as described below, the accounting policies applied by the Group in these condensed
interim Group financial statements are the same as those applied by the Group in its
consolidated financial statements as at and for the year ended 31 December 2011, as
described in those consolidated financial statements.

Taxes on income in the interim periods are accrued using the tax rate that would be
applicable to expected total annual earnings.

The following new standards and amendments to standards are mandatory for the first time
for the financial year beginning 1 January 2012.

IFRS 7: Financial instruments: Disclosures. From 1 January 2012 the Group has applied IFRS 7
in accounting for disclosures of transfers of financial assets.

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 Central Rand Gold retains continuing
involvement.
IAS 12: Income taxes. From 1 January 2012 the Group has applied the amendment to IAS 12
in accounting for income taxes.

The amendment provides a solution to whether an entity expects to recover the carrying
amount of the asset through use or sale by introducing a presumption that recovery of the
carrying amount will, normally, be through sale.

The following new standards and amendments to standards and interpretations have been
issued, but are not effective for the financial year beginning 1 January 2012 and have not
been early adopted:

IFRS 7: Financial Instruments: Disclosures

IFRS 9: Financial Instruments: Classification and Measurement

IFRS 10: Consolidated Financial Statements

IFRS 12: Disclosure of Interests in Other Entities

IFRS 13: Fair Value Measurement

IAS 1: Presentation of Financial Statements

IAS 16: Property, Plant and Equipment

IAS 19: Employee Benefits

IAS 27: Consolidated and Separate Financial Statements

IAS 32: Financial Instruments: Presentation

IAS 34: Interim Financial Reporting

3. ESTIMATES AND JUDGEMENTS

The preparation of condensed interim Group financial statements requires management to
make judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.

In preparing this condensed interim Group financial statements, the significant judgements
made by management in applying the Group’s accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the consolidated annual
financial statements as at and for the year ended 31 December 2011.
4. FINANCIAL RISK MANAGEMENT

The Group’s financial risk management objectives and policies are consistent with those
disclosed in the consolidated annual financial statements as at and for the year ended 31
December 2011.

Foreign currency rates

The US Dollar rates of exchange applicable to the year are as follows:

                             2012                     2011                       2011
                     Six months to 30 June   Year ended 31 December      Six months to 30 June
                     Closing       Average    Closing       Average      Closing       Average
South African Rand    0.12           0.13      0.12          0.14         0.15           0.14
British Pound         1.56           1.58      1.55          1.60         1.60           1.62

5. PROPERTY, PLANT AND EQUIPMENT

During the six months ended 30 June 2012, the Group spent US$93,099 to purchase items of
property, plant and equipment. In the six month period ending 30 June 2011, US$950,909
was spent on the purchase of the optical sorter and US$1,176,958 was spent on other items
of property, plant and equipment.

6. NON-CURRENT ASSETS HELD-FOR-SALE

At 31 December 2011, the Group classified items of plant and machinery, being the
Bateman plant, with a value of US$1,398,210, the Optical Ore Sorter, with a value of
US$281,943, the Gekko 20 tonne per hour processing plant, with a value of US$101,169, the
Sandvick jumbo, with a value of US$181,350, and the GIA charger, with a value of
US$573,311, were classified as held-for-sale. These items of plant and machinery were not
disposed of during the period under review and therefore remain classified as held-for-sale
as at 30 June 2012.

Efforts to sell the assets held-for-sale have commenced, and sale is expected before the end
of the 2012 financial year.

No additional items were classified as held-for-sale during the six months ended 30 June
2012.

7. LOANS RECEIVABLE

Puno Gold Investments (Proprietary) Limited (“Puno”)

Since the last report for the year ended 31 December 2011 there has been no resolution to
the dispute relating to alleged procedural breaches of the Central Rand Gold South Africa
(Proprietary) Limited (“CRGSA”) Shareholders’ Agreement between CRGSA and its current
Black Economic Empowerment (“BEE”) shareholder, Puno. The dispute surrounds the
allocation of intercompany loans which fund the budget and work programme and the
incurring of, and level of, certain costs.

Due to the dilatory tactics being employed by Puno, the Company launched application
proceedings in December 2011 in an effort to obtain a court ordered arbitration process.
Although such application proceedings remain in process, the pleadings in the matter have
recently closed and consequently the matter will now be set down for hearing where it is
hoped that this ongoing dispute will be finally resolved .

The Group still believes that ultimately their position will prevail. The Board is still of the
opinion that this will not have any material consequences in respect of the consolidated
accounts of the Group. Notwithstanding this position, the Group have, pending the outcome
of any dispute, allocated 100% of the additional intercompany loans directly from the
Company to CRGSA. During the six month period ending 30 June 2012, CRGSA made a
repayment on the loan to the Company. This repayment amounted to ZAR4,898,689
(US$619,292). There was no drawdown on the loan from the Company to CRGSA and
therefore, the additional 26% of intercompany debt, excluding interest, amounts to
ZAR0 (US$0) between 1 January and 30 June 2012 and ZAR15,852,103 (US$2,204,552)
between 1 January and 31 December 2011.

The loan payable to Puno contains the same allocations referred to above.


                                                                                Group
                                                                        June December             June
                                                                       2012        2011           2011
                                                                    US$‘000     US$‘000     US$‘000
8.   INVENTORIES
     Consumables                                                         364         339           271
     Ore stockpiles                                                    2,023       1,967           715
     Stationery and office consumables on hand                             –            –          101
     Total inventories                                                 2,387       2,306          1,087
The amount of the write-down of ore stockpiles to net realisable value and recognised as an
expense is US$265,273 (2011: US$332,335).

9. SHARE CAPITAL AND SHARE PREMIUM

There has been no change in share capital and share premium during the six months ending
30 June 2012.
                                                                           Group
                                                                    June December         June
                                                                   2012      2011        2011
                                                                 US$‘000   US$‘000     US$‘000
10. ENVIRONMENTAL           REHABILITATION     AND     OTHER
    PROVISIONS
      Provisions consist of the following:
      Non-current
      Environmental rehabilitation                                 6,669     6,038       6,291
      Current
      Restructuring                                                   –            –      851
      Environmental rehabilitation                                    –            –         –
                                                                   6,669     6,038       7,142

                                                                           Group
                                                                    June December         June
                                                                   2012      2011        2011
                                                                 US$‘000   US$‘000     US$‘000
11.    OTHER INCOME AND GAINS
       Sundry income                                                 233     1,501        474
                 1
       Revenue                                                    13,619    23,554      10,476
                                                                  13,852    25,055      10,950
       1.The revenue relates to the sale of gold derived from
       surface mining activities and the sale of carbon. 8,199
       (30 June 2011: 7,189) ounces of gold were sold.
12. DIRECTORS’ EMOLUMENTS

During the current period, the composition of the Board of Directors did not change.
                                                                             Group

                                                                     June December        June

                                                                    2012        2011     2011

                                                                 US$‘000     US$‘000   US$‘000

13. MINING COSTS
     Mining costs comprises the following items:
     Consumables                                                    2,011      4,349     3,069
     Utilities                                                        869      1,083      458
     Plant hire                                                     1,914      6,535     4,973
     Labour hire                                                     (39)      2,276     2,994
     Environmental rehabilitation provision                         1,839        812      354
     Other                                                          1,980      4,211     1,097
                                                                    8,574     19,266    12,945
14. OTHER EXPENSES
     Auditor's remuneration                                           417        540      380
     Corporate social investment                                       61        127      100
     Legal costs                                                       37        212       90
     Travel and accommodation                                          45         89       72
     Telecommunications                                                71        198      120
     Other expenses                                                 1,000      3,021     1,981
                                                                    1,631      4,187     2,743
15. INCOME TAXES
    Income tax expense is recognised based on management’s best estimate of the weighted
    average annual income tax rate expected for the full financial year. The estimated average
    annual tax rate used for the year to 30 June 2012 is 0% (2011: 0%) due to assessable losses
    available to CRGSA and the Guernsey resident status of CRG LTD resulting in 0% effective
    rates.

                                                                               Group

                                                                     June December            June

                                                                    2012         2011        2011

                                                                  US$‘000      US$‘000     US$‘000

16. COMMITMENTS
    Water pump                                                         –               –     3,367
    Fees payable to iProp Limited for prospecting                      –          500            –
    Fees payable to Sekgwa Mining Services (Proprietary)
    Limited
    for underground mining services                                    –         2,145           –
    Fees payable to Stallion Security (Proprietary) Limited for
    security services                                                  –          501            –
    Acquisition of tangible assets contracted for                     67          458            –
                                                                      67         3,604       3,367
                                                                               Group
                                                                     June December            June
                                                                    2012         2011        2011
                                                                  US$‘000      US$‘000     US$‘000
17. LOSS PER SHARE
   Basic loss per share (US cents per share)                        (0.10)       (1.01)      (0.93)
   Headline loss per share (US cents per share)                     (0.07)       (1.01)      (0.99)
   Diluted loss per share (US cents per share)                      (0.10)       (1.01)      (0.93)
   Diluted headline loss per share (US cents per share)             (0.07)       (1.01)      (0.99)
   Reconciliation between loss attributable to the equity
   holders of the Group and the headline loss attributable to
   the equity holders of the Group:
   Loss attributable to equity holders of the Group (US$'000)      (1,618)     (16,095)    (14,811)
   Plus: Loss on measurement of non-current assets held-
   for-sale to fair value, less costs to sell (US$'000)                    –       940           –
      Less: Profit on disposal of property, plant and equipment
      (US$'000)                                                         (92)      (991)          (458)
      Less: Reversal on measurement of assets to recoverable
      amount (US$'000)                                                  528           –          (489)
      Headline loss attributable to equity holders of the Group
      (US$'000)                                                     (1,182)    (16,147)    (15,758)

18.     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.

19.     SHARE BASED PAYMENTS

No additional shares and share options in the Company were granted during the six months
ending 30 June 2012.

20.     RELATED PARTIES

No disclosable related party transactions occurred during the period.

21.     EVENTS AFTER REPORTING DATE

No material changes, other than those highlighted in this report, have occurred in the affairs
of the Group between the end of the half year and the date of this report.

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