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CENTRAL RAND GOLD LIMITED - 2013 Interim Report

Release Date: 19/08/2013 08:00:00      Code(s): CRD       PDF(s):  
2013 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: GG00B92NXM24
LSE share code: CRND JSE share code: CRD
("Central Rand Gold" or the “Company” or the “Group”)


2013 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 2013 (“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 Limited                                     +44 (0) 20 7149 6478
Marc Milmo / Mark Taylor

Merchantec Capital                                                      +27 (0) 11 325 6363
Monique Martinez / Marcel Goncalves

Buchanan Communications Limited                                        +44 (0) 20 7466 5000
Bobby Morse / Louise Mason

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

19 August 2013
Johannesburg


Forward-looking statements
This Interim Report 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 Interim Report 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 Interim Report
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 Interim 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 is the holding company for a group of companies (“Group”). Central
Rand Gold listed on the Official List of the UK Listing Authority and the Main Boards of
both the London Stock Exchange (“LSE”) and the JSE Limited (“JSE”) 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
The Group acquired seven New Order Prospecting Rights which constitute 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 approximately seven kilometres (the “Central Rand Project”). In addition,
the Southern Deeps New Order Prospecting Right Application (the “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 at 6,097 ounces (First half 2012: 8,246 and second half 2012: 5,463
       ounces);
-      Total mining production increased 9% to 130,216 tonnes;
-      Cash and cash equivalents of US$1.3 million at 30 June 2013 (31 December 2012:
       US$4.5 million);
-      The circular to shareholders, dated 2 August 2013, regarding the proposed raising of
       US$7.25 million (gross) through the issue of Loan Notes and the grant of Warrants to
       Redstone Capital Limited (“Redstone Capital”) to fund further capital expenditure
       required to upgrade production facilities, further develop underground mining and for
       general working capital purposes; and
-      The proposed cancellation of the listing of the Company’s Ordinary Shares on the
       Official List and trading on the Main Market of the LSE and admission to trading of
       the Ordinary Shares on the Alternative Investment Market (“AIM”) and the
       subsequent transfer from the Main Board of the JSE to the Alternative Exchange
       (“AltX”).



Overview
There is no doubt that the first half of the 2013 financial year was a tough six months for the
Company, with overall performance being negatively impacted by continued low
metallurgical plant availability, lower mined grade and a depressed gold price. The Company
has partially offset the impact of these challenges by strong results from underground mining
and excellent second quarter improvements were made in the Mine Call Factor (“MCF”)1,
factors which are key to the sustainability of our business.


1.The mine call factor is the ratio, expressed as a percentage, of the total quantity of recovered and
unrecovered mineral product after processing with the amount estimated in the ore based on sampling.



This report outlines operational activities that took place during the period – including safety,
water, underground and surface mining, metallurgy, processing and exploration – and the
financial position at the end of June 2013.


In addition, it also covers a major post balance sheet event which – subject to shareholder
approval – will lead to the recapitalisation of the Company.


Proposed Loan Note Investment to raise US$7.25 million
As set out in the circular to shareholders dated 2 August 2013 and using the terms defined
therein unless otherwise stated, shareholders were notified of the Company having entered
into a conditional agreement with Hong Kong-based Redstone Capital to raise
US$7.25 million (gross) through the issue of Loan Notes and the grant of Warrants to fund
the further capital expenditure required to upgrade the Company’s production facilities,
further develop its underground mining and for general working capital purposes.


The Loan Note Instrument and the Warrant Agreement, if approved by shareholders, may
result in Redstone Capital (assuming full conversion of the Loan Notes and Warrants) being
interested in a maximum of 81,273,654 Ordinary Shares representing 71.8% of the Enlarged
Issued Share Capital. As a result of holding more than 30% of the Enlarged Issued Share
Capital, Redstone Capital would be required under Rule 9 of the Takeover Code to make a
mandatory offer for the whole of the Issued Share Capital of Central Rand Gold not already
held by it, unless a waiver of that obligation is granted by the Takeover Panel and approved
by Independent Shareholders passing the Whitewash Resolution, on a poll, at the General
Meeting. The Board of Directors (the “Board”) is therefore seeking shareholder approval of
the Whitewash Resolution at the General Meeting to be held on 19 August 2013.


If shareholders approve the investment by Redstone Capital at the General Meeting,
US$3.325 million of the US$7.25 million available under the Loan Note Investment will be
drawn down immediately to improve and replace the existing crushing circuit and Bateman
Mill, and also to increase both the plant availability and plant capacity to between 20,000 –
25,000 tonnes per month (“tpm”) from the current 16,500 tpm capacity. The costs for the
upgrade are anticipated to be approximately US$2 million. The remaining US$1.325 million
will be utilised for the Company’s working capital requirements. The balance of US$3.75
million (gross) available under the Loan Note Investment will be drawn down by 31 October
2013 to enable Central Rand Gold to acquire additional underground equipment to develop
and expand its underground mining operations at CMR West and CMR East.


Share capital reorganisation
Over the last year, the share price of the Company has been trading below the nominal value
of the Company’s ordinary shares, being £0.01. Although the Companies (Guernsey) Law,
2008 (as amended) allows the Company to issue shares at a discount to the nominal value of
its shares, the Board considered that the perception of Central Rand Gold as a penny stock is
not beneficial to the Company. In the light of this, it was proposed to increase the market
value of the issued ordinary shares by way of a share capital reorganization.
At the Annual General Meeting of 7 June 2012, shareholders approved, inter alia, the
proposed share reorganisation which effectively reduced the issued number of ordinary
shares from 1,599,682,990 of £0.01 each to 31,993,443 ordinary shares of £0.01 each.


Update on negotiations with Puno Gold Investments (Proprietary) Limited (“Puno”)
On 27 November 2012, the Deputy Judge President issued a directive letter to both Puno and
Central Rand Gold setting out certain requirements for the further prosecution of the matter,
including but not limited to, the date upon which Puno was required to serve and file its heads
of argument, being 15 April 2013.


On or about 10 April 2013, five days before the 15 April 2013 deadline set by the Deputy
Judge President, Puno chose to terminate the mandate of its then attorneys of record. This
was followed on 12 April 2013 by a request to the office of the Deputy Judge President
seeking an indulgence for the late filing of Puno’s heads of argument, on 19 April 2013.


On 19 April 2013 and again on 25 April 2013, Puno filed further affidavits introducing new
defences, factual content and additional new information. Despite wanting to avoid a delay
and initially expressing their endeavour to reply before the hearing, the Company did not
have sufficient time to deal with the series of new issues contained in the new affidavits. The
amount of new information introduced by Puno’s own admission, very late in the day,
required such additional detailed research and investigation on the part of Central Rand Gold
that the Company was left with no option but to apply for the postponement of the scheduled
9 May 2013 hearing.


The Company is awaiting the Deputy Judge President to make a special allocation of a
further hearing date of the application in order to expedite the matter.


Geology


Mineral Resources
In January 2013, Dr Carina Lemmer, acting as an Independent Competent Person for Mineral
Resources, undertook the annual re-estimation of the Main Reef Resources underlain by the
current Consolidated Main Reef (“CMR”) mining operations. This incorporated additional
sampling captured subsequent to the previous Resource update and also discounted the ore
tonnage extracted during 2012.


SAMREC Compliant Mineral Resources
                                         June 2013                  February 2012
                            Tonnes        Grade      Content   Tonnes   Grade    Content
Area         Category            (Mt)       (g/t)     (Moz)      (Mt)    (g/t)      (Moz)
CMR          Measured             1.33      3.57        0.15     1.47    3.60        0.16
             Indicated           12.13      4.30        1.68    23.98    6.93        5.34
             Inferred             4.34      5.60        0.78     2.62    8.78        0.74
             Exploration
             Target              15.86      8.49        4.33     -        -             -
Crown        Indicated            2.58      5.67        0.47    20.29    9.18        5.99
             Inferred             2.77      7.19        0.64     9.41    8.79        2.66
             Exploration
             Target              24.34      9.61        7.52     -        -             -
City         Indicated            0.78      7.58        0.19    15.68    9.64        4.86
             Inferred             0.70      8.00        0.18     8.82    9.27        2.63
             Exploration
             Target              22.95      9.66        7.13    -        -             -
Village      Indicated            0.53      5.87        0.10    11.50    9.80        3.62
             Inferred             0.17     14.64        0.08     2.77   13.22        1.18
             Exploration
             Target              13.57     10.57        4.61     -        -             -
Simmers      Indicated            0.73      8.10        0.19     8.59   10.03        2.77
             Inferred             0.15      8.29        0.04     1.84   10.48        0.62
             Exploration
             Target               9.55     10.29        3.16     -        -             -
Other        Indicated               -          -          -     5.10    2.44        0.40
             Inferred                -          -          -    32.80    5.24        5.52
             Exploration
             Target              33.67      8.34        5.41     -        -             -
Total        Measured             1.33      3.57        0.15     1.47    3.57        0.16
              Resource
              Indicated
 Total        Resource           16.75      4.88         2.63    85.14   8.40       22.98
              Inferred
 Total        Resource            8.13      6.58         1.72    58.26   7.13       13.35
              Exploration
 Total        Target           119.94       8.34        32.16     -      -             -
 Grand
 Total*                        146.15       7.80        36.66   144.87   7.83       36.49
*Totals are based on additional decimal points resulting in minor total discrepancies.


The main year-on-year change in Mineral Resources was the downgrading of substantial
Indicated and Inferred Resources on the advice of Independent Competent Persons, Venmyn-
Deloitte, to reflect only ore material above 450 metres below surface as falling into the
Resource category as contemplated by SAMREC. The material below this level (which
represents the current pumping capacity of the AMD pumping solution), retains the same
inherent level of confidence in its gold content, with only the eventual economic extraction
requiring further demonstration. This can be achieved through additional capital and other
costing studies to demonstrate pumping below this level will be broadly economical and
thereby allow for the re-instatement of these downgraded resources.


Execution of the Simmer and Jack Prospecting Right
The Simmer and Jack Prospecting Right (“Right”) was executed on 5 June 2013 following a
lengthy administrative delay. This Right covers a SAMREC-compliant shallow Main Reef
Leader Resource of 0.19 million ounces of Indicated Resource and 0.04 million ounces of
Inferred Resource, as well as a SAMREC-compliant Main Reef Leader Exploration Target of
3.16 million ounces.


In addition to the aforementioned detailed and established Resource base, considerable
untested and un-mined potential exists in the Kimberley and White Reef horizons located in
this area, which offers excellent targets for further development.
The execution of this Right, which marks the start of a new five-year exclusive prospecting
term, grants the Company, on the back of positive prospecting results, the sole right to apply
for a mining licence during this term.


NOTE: 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 the Geology Manager of
CRGSA and has over 19 years’ experience in exploration, mineral resource management and
mineral evaluation.


Safety
Safety statistics
 Type of injury           Six months ended          12 months ended     Six months ended
                              30 June 2013         31 December 2012          30 June 2012
 Dressing cases                            4                       6                     5
 Lost-time injuries                       12                      13                     2


The number of incidents during the period under review was disappointing with 12 lost-time
injuries occurring.


The safety department has also been reorganised in order to give more attention to safety
issues across the mine. There is continued focus on and commitment to safety in the mining
operations.


Mining


                    30 June 2013 30 June 2012         Variance
                         tonnes           tonnes        to 2012
 Underground             72,956           44,966         27,990
 Surface                 57,260           74,238       (16,978)
 Total                  130,216          119,204         11,012
Underground mining
Underground mining production continued to perform well. The Company continues to grow
in confidence in its ability to mine the underground ore body, using traditional South African
conventional mining techniques. Whilst the key focus remains on improving processes,
significant progress has already been made with underground throughput and competitive
sourcing with the average mining cash operating costs improving to US$51/tonne compared
to US$71/tonne reported in 2012.


Underground grades dropped off during February, March and April 2013 as expected, with
an average in-situ grade of 2.83 g/t measured on the face. This localised drop in grade was
anticipated in the mine planning and was linked to an inter-channel thinning of the Main Reef
in the various working panels. This trend was reversed in late May 2013 with the average
June 2013 in-situ grade averaging 3.32 g/t and continuing through July 2013 with a grade of
3.69 g/t on the face. The Main Reef channel widths also increased from 58 cm in April 2013
to 82 cm in July 2013 mirroring the increasing grade trend.


Significantly, the western dyke has successfully been accessed in order to open up ground
towards the west of the current mining area. Strategies are being put together to open up the
area below 210 metres, the lowest point on the main decline. This will provide additional face
length in the short-term.


It is anticipated that underground tonnage will be maintained at 14,000 tpm for the remainder
of 2013.


Surface mining
Surface production performed well in the first and second quarters of 2013. Currently, Nasrec
Pit 1 is being mined at a production target of 10,000 tpm. The Company has carefully
managed its surface mining cash operating costs at US$24/tonne, which is in line with 2012
levels. The prospects for additional surface mining resources are being studied.


Mine Call Factor
The MCF continued to show steady improvement throughout the first four months of 2013,
with operations in the month of June 2013 retaining a solid 77% of gold from working face to
gold pour. This improved MCF has been brought about by continuous improvements in the
stockpile management and ore handling process, as well as adjustments to the blasting and
sorting routines required when handling the thin channel high grade ore, which has become a
feature of production since late February 2013.


Metallurgy


Production update
Metallurgical production, during the period under review, struggled to achieve the levels of
production seen during the first half of 2012, with planned and unplanned downtime
experienced during the latter part of 2012 extending through the first quarter of 2013. A drop
in mined grades from underground, coupled with the decrease in plant availability, negatively
impacted gold production during the period under review. Toll treatment of ore was stepped
up to compensate for the plant milling and crushing issues. However, this too suffered as a
direct result of the lower overall mining grade.
Year-on-year plant operating statistics
                                            2013                        2012
                                            January       January          July to
                                             to June       to June     December           Total
 Tonnes processed internally (t)              77,791        93,526         77,584      171,110
 Built up head-grade (g/t)                      1.91        2.15            1.96        2.06
 Fine gold produced (oz)                       4,246         6,076          4,167       10,243


 Plant recovery (%)                                 90           95             93           94
 CIL availability (%)                               77           93             82           88


 Tonnes processed externally (t)              32,979        28,119         20,145       48,264
 Landed grade (g/t)                              1.87        2.31            2.14        2.24
 Fine gold produced (oz)                       1,851         2,170          1,296         3,466
 Total fine gold produced (oz)                 6,097         8,246          5,463       13,709



The plant availability issues stem from two distinct sources. The crushing circuit
commissioned in the first quarter of 2012 proved unable to handle the very hard quartzite reef
in the required quantities, creating a mill feed bottleneck. Continuous failures of the gearbox
and drive train configuration of the Bateman 7’ x 10’ ball mill caused significant milling
downtime, resulting in the reported decrease in processed tonnes.


Current modifications to the Bateman Mill appear to have resolved many of these issues, but
this situation will remain under constant review. Procurement inquiries to source an
additional larger 9’ x 12’ ball mill are underway to ultimately replace the smaller Bateman
Mill.


An agreement has been signed to lease a gyratory cone crusher with a 100 tonne per hour
crushing capacity. Pilot test-work has shown that the crushing rate experienced using this
technology is more than sufficient to feed the current milling configuration on a single shift
basis. The crushed product is superior to the previous Vertical Shaft Impactor product and it
is expected that this will allow for an increase in milling throughput.


Water
In January 2013, Trans Caledon Tunnel Authority (“TCTA”), via its appointed contractors,
began the construction of the new Acid Mine Drainage (“AMD”) plant that will contribute
towards dewatering the Central Basin below the Environmentally Critical Level (“ECL”). It
is expected that the construction phase will be completed by the end of October 2013 and that
the pumping and dewatering facility will become fully operational in early 2014. The Ritz
pumps purchased by the Company will be utilised as part of the ongoing dewatering solution,
illustrating Central Rand Gold’s commitment to maintaining AMD levels below ECL on a
regular basis.


Financial review
Net attributable loss for the period under review is reported at US$4.87 million (June 2012:
US$1.62 million), translating to a basic loss per share of 15.22 cents (June 2012: 5.06 cents -
restated). The US$3.25 million increase in losses is mainly attributed to:
-       A 26% decrease in gold production to 6,097 ounces (First half 2012: 8,246 ounces) on
        the back of poor plant availability, lower realised in-situ grades and MCF especially
        in the first quarter of 2013.
-       Higher than expected repair costs for plant and aging mobile underground mine
        equipment.
-      Higher external toll treatment costs to mitigate lost internal processing capacity.
-      Reduced by profit realised on sale of redundant plant and waste rock sales.



The outcome of the above is lower economies of scale, in a predominantly fixed cost
environment, resulting in higher than benchmark all-in cash operating costs per ounce of
US$2,236 (June 2012: US$1,695). With improved underground mining and ore sorting
protocols expected when the upgraded process plant is commissioned, production and
economies of scale are expected to normalise to benchmark levels.


As at 30 June 2013, the net cash position of the Company is reported at approximately
US$1.3 million (December 2012: US$4.5 million).


Proposed move to AIM from the Main Market of the LSE and subsequent transfer from
the Main Board of the JSE to AltX
After consulting with advisers, it has been decided that it would be preferable for the
Company to move its listing to AIM from the Main Board of the LSE.


In conjunction with the move to AIM, the Board is intending to seek approval from the JSE,
the Company’s secondary listing regulator, subject to obtaining shareholder approval at the
General Meeting of the Delisting and Admission, as required by the Company’s primary
listing regulator, to transfer the listing of the Ordinary Shares from the Main Board of the JSE
to the AltX.


As set out in the circular to shareholders dated 2 August 2013 and, using the terms defined
therein unless otherwise stated, it is expected that the last day of dealings in the Ordinary
Shares on the Main Market will be 17 September 2013. Cancellation of the listing of
Ordinary Shares on the Official List will take effect on 18 September 2013. Admission is
expected to take place and dealings in Ordinary Shares are expected to commence on AIM on
18 September 2013. It is anticipated that the date of transfer of listing of Ordinary Shares
from the Main Board of the JSE to AltX will be on 18 September 2013.


The Board believes that a move to AIM and AltX will provide a market and environment
more suited to the Company’s current size and strategic intent to enhance shareholder value
through the further development of its production capabilities, development of its
underground mining operations and future utilisation of its mining rights. In addition, it
believes that the Company and its shareholders would benefit significantly from the lower
transactional costs and simpler administration and regulatory requirements of AIM and AltX.
Given the Company’s strategy, the Board believes that the move is likely to be of significant
benefit to the Company, going forward.


The Way Forward
The Company recognises it has got through a very tough six months, with the lower mined
grade, a depressed gold price and an unreliable metallurgical plant all putting pressure on its
financial position.


The Company can, however, report a number of positives from the period under review:
-      Certain initiatives that were implemented earlier in the year are beginning to prove
       successful.
-      The MCF process improvement has continued to pay dividends through the year with
       a steady increase in face to pour gold recovery realising a high of 77% in June 2013,
       which is in line with the South African industry average of between 75% - 77%. The
       Company believes it can further improve this measure with the reduction of ore
       handling processes.
-      The overall crushing circuit that has become such a production bottleneck is in the
       process of being replaced. The Company plans to acquire a primary crushing and
       screening circuit, which if funding is made available, can be fully commissioned by
       the end of September 2013. A new secondary crushing circuit has been commissioned
       and is currently undergoing final modifications and should be fully operational by the
       end of August 2013. Once the secondary crushing circuit is fully operational it will
       provide the Company with a crushing capacity of up to 30,000 tpm and will eliminate
       the need to use external crushing contractors, which will provide significant
       operational savings for the Company.
-      The Company is currently in the procurement process of sourcing an additional larger
       capacity and mechanically simpler 9’ x 12’ foot ball mill.
-      The Company recognises that there are scale issues with the current cost structure
       which puts the Company under strain in the current depressed gold market. In
       response to this, the Company is currently undertaking a full review of the existing
       cost structure with the aim of managing down costs where possible, with a particular
       emphasis on outsourced and rental contracts.



It is pleasing to note that the lower grades encountered underground during the first few
months of the year have steadily increased to upwards of 3.5 g/t. Whilst this low grade area
was anticipated and incorporated into the mid-term planning, it came at a time when the gold
price took an unexpected downturn, putting the operation under pressure.


Finally, the additional funding by Redstone Capital, if approved by shareholders, will allow
for further upgrades to the gold process plant, allowing gold production to match mine
production. These funds will also be used to kick-start underground development to access
additional mining areas and provide a greater amount of mining flexibility and will enable the
continued strategy of seeking opportunities to fully maximise our current Mining Right area,
creating value for our shareholders.


Johan du Toit
Chief Executive Officer
Condensed Group Statement of Financial Position
as at 30 June 2013

                                                         30 June 31 December      30 June
                                                            2013        2012         2012
                                               Notes    US$ '000     US$ '000 US$ '000
                                                     (Unaudited)    (Audited) (Unaudited)
ASSETS
Non-current assets
Property, plant and equipment                    5         3,570        4,485       2,761
Intangible assets                                          3,326        3,874           -
Security deposits and guarantees                             225          262         268
Environmental guarantee investment               6         3,507        4,003       4,034
Loans receivable                                 8         8,641        9,560       9,284
                                                          19,269       22,184      16,347

Current assets
Security deposits and guarantees                              70           79         151
Prepayments and other receivables                          1,239          952       5,239
Inventories                                      9         1,029        1,241       2,387
Cash and cash equivalents                                  1,311        4,512       6,386
Non-current assets held-for-sale                 7             -            -       2,536
                                                           3,649        6,784      16,699

Total assets                                              22,918       28,968      33,046

EQUITY
Attributable to equity holders of the parent
Share capital                                   10        25,604       25,604       25,604
Share premium                                   10       213,377      213,377      213,377
Share-based compensation reserve                          28,176       28,176       28,020
Treasury shares                                               (6)          (6)          (6)
Foreign currency translation reserve                    (29,675)     (28,658)     (28,121)
Accumulated losses                                     (236,370)    (231,499)    (228,610)
                                                           1,106        6,994       10,264
Non-controlling interest                                        -            -            -
Total equity                                               1,106        6,994       10,264

LIABILITIES
Non-current liabilities
Environmental rehabilitation and other
provisions                                      11         5,842        6,223       6,669
Loan payable                                               8,641        9,560       9,284
                                                          14,483       15,783      15,953

Current liabilities
Trade and other payables                                   7,235         6,081       5,057
Taxation payable                                              94           110       1,761
Operating lease liability                                      -            -          11
                                                           7,329         6,191        6,829

Total liabilities                                          21,812        21,974      22,782

Total equity and liabilities                               22,918        28,968      33,046
Condensed Group Statement of Financial Performance
for the six months ended 30 June 2013

                                                Six months        12 months        Six months
                                                     ended             ended            ended
                                                   30 June     31 December            30 June
                                                       2013              2012             2012
                                       Notes      US$ '000          US$ '000         US$ '000
                                               (Unaudited)         (Audited)      (Unaudited)
Other income and gains                  12            9,281            23,208           13,852
Employee benefits expense                           (2,080)           (4,387)          (2,151)
Directors' emoluments                   13            (436)             (959)            (436)
Depreciation and amortisation                         (433)             (589)            (756)
Inventory write-down                                  (169)           (1,010)            (265)
Impairment of assets                                       -          (1,218)            (528)
Operating lease expense                               (280)           (1,006)            (227)
Mining costs                            14          (8,934)          (13,723)          (8,574)
Operational expenses                    15            (631)           (4,211)            (957)
Other expenses                          16          (1,274)           (2,582)          (1,631)
Operating loss                                      (4,956)           (6,477)          (1,673)
Finance income                                           581            1,331               615
Finance costs                                         (469)           (1,019)            (540)
Foreign exchange transaction losses                     (27)              (38)             (20)
Loss before income tax                              (4,871)           (6,203)          (1,618)
Income tax expense                      17                 -            1,696                 -
Loss for the period                                 (4,871)           (4,507)          (1,618)

Loss is attributable to:
Non-controlling interest                                  -                 -                -
Equity holders of the parent                        (4,871)           (4,507)          (1,618)
                                                    (4,871)           (4,507)          (1,618)


Shares in issue                                 31,993,443     1,599,682,990     1,599,682,990
Weighted average number of
ordinary shares in issue                        31,993,443     1,599,682,990     1,599,682,990
Fully diluted weighted average
number of ordinary shares in issue              31,993,443     1,599,682,990     1,599,682,990
Basic loss per share (US cents per
share)                                    19        (15.22)            (0.28)           (0.10)
Diluted loss per share (US cents per
share)                                    19        (15.22)            (0.28)           (0.10)
Condensed Group Statement of Comprehensive Income
for the six months ended 30 June 2013

                                            Six months      12 months     Six months
                                                 ended          ended          ended
                                               30 June   31 December         30 June
                                                  2013           2012           2012
                                              US$ '000        US$ '000      US$ '000
                                           (Unaudited)       (Audited)   (Unaudited)

Loss for the period                            (4,871)         (4,507)       (1,618)
Other comprehensive (loss)/income:
Items that may be reclassified
subsequently to profit or loss
Exchange differences on translating
foreign operations                             (1,017)          (336)           201
Other comprehensive (loss)/income for
the period, net of tax                         (1,017)           (336)           201
Total comprehensive loss for the period        (5,888)         (4,843)       (1,417)

Total comprehensive loss is attributable
to:
Non-controlling interest                             -               -             -
Equity holders of the parent                   (5,888)         (4,843)       (1,417)
                                               (5,888)         (4,843)       (1,417)
Condensed Group Statement of Changes in Equity
for the six months ended 30 June 2013

                                        Attributable to equity holders of the Group
                                      Ordinary       Share      Share-based Treasury
                                         share premium         compensation        shares
                                        capital                      reserve
                              Notes
                                      US$ '000    US$ '000          US$ '000    US$ '000
Balance at 31 December
2011                                     25,604     213,377           28,018          (6)
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 options                            -           -                2            -
Balance at 30 June 2012                  25,604     213,377           28,020          (6)

Balance at 31 December
2012                                     25,604     213,377           28,176          (6)
Total comprehensive
income for the period
ended 30 June 2013
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             21             -           -                -            -
Balance at 30 June 2013                  25,604     213,377           28,176          (6)
                                    Attributable to equity holders of
                                               the Group
                                        Foreign
                                       currency                          Non-
                                        transla- Accumu-              contro-
                                            tion      lated              lling  Total
                              Notes      reserve     losses     Total interest equity
                                       US$ '000 US$ '000 US$ '000 US$ '000 US$ '000
Balance at 31 December
2011                                   (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'
shares and options                            -          -        2       -         2
Balance at 30 June 2012                (28,121) (228,610)    10,264       -    10,264

Balance at 31 December
2012                                   (28,658) (231,499)     6,994       -     6,994
Total comprehensive
income for the period
ended 30 June 2013
Loss for the period                           -   (4,871)    (4,871)      -   (4,871)
Other comprehensive
income
Foreign currency
adjustments                             (1,017)          -   (1,017)      -   (1,017)
Transactions with owners,
recorded directly in equity
Employee Share Option
Scheme:
Share-based payments:
Employees' and Directors'
shares and options             21             -         -         -       -         -
Balance at 30 June 2013                (29,675) (236,370)     1,106       -     1,106
Condensed Group Cash Flow Statement
for the six months ended 30 June 2013

                                                       Six months    12 months Six months
                                                            ended        ended        ended
                                                          30 June 31 December       30 June
                                                             2013         2012         2012
                                                         US$ '000      US$ '000    US$ '000
                                                      (Unaudited)     (Audited) (Unaudited)
CASH FLOWS FROM OPERATING
ACTIVITIES                                    Notes
Loss before tax                                            (4,871)      (6,203)     (1,618)
Adjusted for :
Depreciation and amortisation                                 433          589         756
Employment benefit expenditure (share-
based payments)                                                   -        158          95
Profit on disposal and scrapping of property,
plant and equipment                                          (457)         (54)        (92)
Impairment of inventory                         9              169          595         265
Impairment of assets                                             -        1,218         528
Net loss on foreign exchange                                    27           38          20
Decrease in operating lease liability                            -         (11)           -
Sundry income                                  12             (26)        (380)       (141)
Finance income                                               (581)      (1,331)       (615)
Finance costs                                                  469        1,019         540
Changes in working capital
(Increase)/decrease in prepayments and other
receivables                                                  (287)          401        (12)
Decrease/(increase) in inventory                                 43         470       (346)
Increase in trade and other payables                         1,154        1,699         675
(Decrease)/increase in provisions                            (381)          185          22
Cash flows (used in)/from operations                       (4,308)      (1,607)          77
Finance income                                                 114          324         114
Finance costs                                                   (1)        (13)        (10)
Sundry income                                                    26         380         141

Net cash (used in)/from operating activities               (4,169)        (916)        322

CASH FLOWS FROM INVESTING
ACTIVITIES
Purchases of property, plant and equipment      5             (61)        (227)        (26)
Proceeds from disposal of property, plant and
equipment                                                        -         287           -
Decrease in security deposits                                    -           -         435
Net cash (used in)/from investing activities                  (61)          60         409
CASH FLOWS FROM FINANCING
ACTIVITIES

Net cash used in financing activities                           -            -           -

Net (decrease)/increase in cash and cash
equivalents                                                  (4,230)       (856)       731
Cash and cash equivalents at 1 January                         4,512        5,376    5,376
Effects of exchange rate fluctuations on cash
balances                                                        1,029       (8)        279
Cash and cash equivalents at end of period                       1,311    4,512      6,386
Notes to the Condensed Interim Group Financial Statements
for the six months ended 30 June 2013

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 and
Interpretations (collectively “IFRS”) issued by the International Accounting Standards
Board (“IASB”) as adopted by the European Union (“EU”). The Condensed Interim Group
Financial Statements have been prepared applying the accounting policies and presentation
that were applied in the preparation of the Company’s published consolidated financial
statements for the year ended 31 December 2012 except for the changes described 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, CRGSA is South African Rand (“ZAR” or
“Rand”).

Going concern
The condensed financial statements have been prepared using the going concern
assumption on the basis that a positive outcome is expected in the shareholder vote on the
proposed Convertible Loan Note investment to raise US$7.25 million. If the shareholders
reject the investment by Redstone Capital at the General Meeting on 19 August 2013 then
the Group will need to approach its current shareholders for funding, if this also proves
unsuccessful, then the Group may not be a going concern.
This represents a material uncertainty that may cast significant doubt on the Group’s ability
to continue as a going concern. The condensed financial statements do not include the
adjustments that would result if the Group was unable to continue as a going concern.

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 2012, as
described in those consolidated financial statements.

The Group has adopted the following standards and amendments to standards, including
any consequential amendments to other standards, with a date of initial application of 1
January 2013:
-      Presentation of Items of Other Comprehensive Income - amendment to IAS1 (see
       below)
-      IFRIC 20 – Stripping costs
-      Disclosures – Offsetting Financial Assets and Liabilities – amendments to IFRS 7
-      IFRS 13 – Fair Value Measurement
-      Improvements to IFRS: IAS1, IAS34, IAS16, IAS32
The nature and effect of the material changes as a result of the adoption of the new
standards are further explained below:

Presentation of Items of Other Comprehensive Income - amendment to IAS1: As a result
of the amendment to IAS 1, the Group has modified the presentation of items of other
comprehensive income to present separately items that would be reclassified to profit or
loss in the future from those that would never be. The adoption of this amendment to IAS1
has no impact on the recognised assets, liabilities and comprehensive income of the Group.

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

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 2012.

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 2012.

Fair value
The aggregate net fair values of all current financial assets and financial liabilities, as well
as non-current receivables, instalment sales and finance leases approximate the carrying
amounts at the financial reporting date.

Foreign currency rates

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

                                                2013            2012            2012
                                       Six months to      Year ended   Six months to
                                             30 June    31 December          30 June
                                     Closing Average Closing Average Closing Average

South African Rand                       0.10      0.11      0.12      0.12      0.12      0.13
Pound Sterling                           1.52      1.54      1.62      1.59      1.56      1.58
5. Property, plant and equipment

During the six months ended 30 June 2013, the Group spent US$61,276 to purchase items
of property, plant and equipment. In the six month period ending 30 June 2012, US$93,099
was spent on the purchase of items of property, plant and equipment.

The decrease in property, plant and equipment is due to the depreciation charge as well as
the weakening of the South African Rand against the US Dollar during the period under
review.

6. Environmental guarantee investment

The decrease in the environmental guarantee investment is due to the weakening of the South
African Rand against the US Dollar during the period under review.

7. Non-current assets held-for-sale

No additional items were classified as held-for-sale during the six months ended 30 June
2013.

8. Loans receivable

Puno Gold Investments (Proprietary) Limited ("Puno")

Since the last report for the year ended 31 December 2012 there has been no resolution to
the dispute relating to alleged procedural breaches of the CRGSA Shareholders’
Agreement between CRGSA and its current Black Economic Empowerment 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.

During the period under review, Puno filed further new defences, factual content and
additional new information leaving Central Rand Gold with no option but to postpone the
scheduled 9 May 2013 hearing. Subsequently, the Company submitted all answers to the
abovementioned new material. The Company is now waiting for the allocation of a court
date 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.

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

                                                                  Group
                                                       June       December             June
                                                       2013           2012             2012
                                                    US$ '000       US$ '000         US$ '000
9. Inventories

Consumables                                               218             331             364
Ore stockpiles                                            811             909           2,023
Stationery and office consumables on hand                   -               1               -
Total inventories                                       1,029           1,241           2,387
The amount of the write-down of ore stockpiles to net realisable value and recognised as an
expense is US$169,183 (2012: US$265,273).

10. Share capital and share premium

Central Rand Gold Limited underwent a share capital reorganisation during the six months
ending 30 June 2013, whereby 49 of every 50 ordinary shares of £0.01 each in the capital
of the Company (ordinary shares) were redesignated as deferred shares of £0.01 each. The
share capital reorganisation resulted in a reduction of ordinary shares from 1,599,682,990
ordinary shares to 31,993,443 ordinary shares of £0.01 each. There has been no change in
share capital and share premium during the period under review.

                                                                    Group
                                                   June             December              June
                                                   2013                  2012             2012
                                               US$ '000              US$ '000          US$ '000
11. Environmental rehabilitation and other provisions

Provisions consist of the following:

Non-current
Environmental rehabilitation                              5,842           6,223            6,669
                                                          5,842           6,223            6,669

The decrease in the environmental rehabilitation provision is due to the weakening of the South
African Rand against the US Dollar during the period under review.

                                                                     Group
                                                         June        December             June
                                                         2013            2012             2012
                                                      US$ '000        US$ '000         US$ '000
12. Other income and gains

Sundry income1                                              483             434              233
Revenue2                                                  8,798          22,774           13,619
                                                          9,281          23,208            13,852

1. Sundry income mainly relates to profit on the disposal of assets and waste rock sales.

2. The revenue relates to the sale of gold derived from surface and underground mining
activities and the sale of carbon. 5,837 (30 June 2012: 8,199) ounces of gold were sold.

13. Directors' emoluments

During the period under review, there was no change in the composition and remuneration
of the Board.
                                                            Group
                                                   June     December        June
                                                   2013         2012        2012
                                                US$ '000     US$ '000    US$ '000
14. Mining costs

Mining costs comprises the following items:
Consumables                                        2,717        4,362       2,011
Utilities                                          1,050        1,599         869
Plant hire                                         2,319        3,480       1,914
Labour hire                                            -          146        (39)
Environmental rehabilitation provision             1,789          752       1,839
Other                                              1,059        3,384       1,980
                                                   8,934       13,723       8,574

                                                            Group
                                                    June    December         June
                                                   2013         2012        2012
                                                US$ '000     US$ '000    US$ '000
15. Operational expenses

Operational expenditure comprises         the
following items:
Assaying costs                                          -            -          -
Consulting services                                   341          900        462
Environmental costs                                     -           17          -
Geological preparation and drilling                     -            -          -
Mine development expense                                -        2,617        485
Mineral property options paid                         491          470         10
Consumables and small tools written off                 -           14          -
Other expenses                                      (201)          193          -
                                                      631        4,211        957

                                                            Group
                                                    June    December         June
                                                   2013         2012        2012
                                                US$ '000     US$ '000    US$ '000
16. Other expenses

Auditor's remuneration                               128          243         417
Corporate social investment                             8           70          61
Legal costs                                            44          168          37
Travel and accommodation                               18           52          45
Telecommunications                                     53          132          71
Other expenses                                      1,023        1,917       1,000
                                                    1,274        2,582       1,631
17. Income tax expense

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 2013 is 0% (2012: 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
                                                      2013           2012            2012
                                                   US$ '000       US$ '000        US$ '000
18. Commitments

Fees payable to iProp Limited for prospecting               -            500               -
Fees payable to Sekgwa Mining Services
(Proprietary) Limited for underground mining
services                                                    -          6,099               -
Fees payable to Stallion Security (Proprietary)
Limited for security services                               -            262               -
Acquisition of tangible assets contracted for               -              -              67
                                                            -          6,861              67

The only commitments outstanding at 30 June 2013 are similar in nature to those disclosed at
the 31 December 2012 year end and are those incurred in the normal course of business.

                                                                  Group
                                                        June      December             June
                                                        2013          2012             2012
19. Loss per share


Headline loss per share (US cents per share)          (15.22)         (14.26)         (3.70)

Diluted headline loss per share (US cents per
share)                                                (15.22)         (14.26)         (3.70)

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$'000)                                       (4,871)         (4,507)        (1,618)
Less: Profit on disposal of property, plant and
equipment (US$'000)                                          -           (54)           (92)
Less: Reversal on measurement of assets to
recoverable amount (US$'000)                                 -              -            528
Headline loss attributable to equity holders of
the Group (US$'000)                                   (4,871)         (4,561)        (1,182)
If the effects of the share reorganisation were applied retrospectively, the restated
comparative earnings per share would have been:
                                                                    December           June
                                                                         2012          2012
Basic loss per share (US cents per share)                              (14.09)        (5.06)
Diluted loss per share (US cents per share)                            (14.09)        (5.06)
Headline loss per share (US cents per share)                           (14.26)        (3.70)
Diluted headline loss per share (US cents per share)                   (14.26)        (3.70)

20. 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.

21. Share-based payments

No additional shares and share options in the Company were granted during the six months
ending 30 June 2013.

22. Related parties

No disclosable related party transactions occurred during the period.

23. Events occurring after reporting date

As per the circular published on 2 August 2013, the Company has, subject to Shareholder’s
approval at the forthcoming General Meeting of 19 August 2013:
-     Entered into a conditional agreement to raise US$7.25 million (gross) through the issue
      of Loan Notes to Redstone Capital. The capital is proposed to fund the Company’s
      required upgrade to production facilities, further develop underground mining and for
      general working capital purposes.
-     Proposed that AIM, rather than the Main Market, would be more appropriate for the
      trading of Ordinary Shares in Central Rand Gold and in conjunction would propose to
      transfer the listing of Ordinary Shares from the Main Board of the JSE to the AltX.

Date: 19/08/2013 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
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