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CENTRAL RAND GOLD LIMITED - Operational Update

Release Date: 18/09/2013 08:00:00      Code(s): CRD       PDF(s):  
Operational Update

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”)


OPERATIONAL UPDATE


Central Rand Gold today provides a brief update detailing
significant events that have occurred subsequent to the release of
the 2013 Interim Report on 19 August 2013.


Highlights:


  -   US$7.25 million (gross) raised via the issue of Loan Notes to
      the new Strategic Investor, Redstone Capital Limited
  -   Proceeds will be used to improve milling and crushing
      circuits to increase overall plant capacity, reduce primary
      crushing costs and increase overall production
  -   Simultaneous delisting from the London Stock Exchange (“LSE”)
      Main Market and admission to the Alternative Investment
      Market (“AIM”)
  -   Ritz pumps, contributed by the Company to the Acid Mine
      Drainage, have arrived in South Africa
  -   Encouraging initial sampling results from the Crown East
      Joint Venture with Goldplat Recovery Proprietary Limited


Capital Upgrade Funding

The raising of US$7.25 million (gross) via the issue of Loan Notes
to Redstone Capital Limited was approved by shareholders at a
General Meeting on 19 August 2013. The Company has received the
first tranche of US$3.5 million, which has been set aside to
finance the scheduled capacity and reliability upgrades to the
existing metallurgical plant and also for general working capital
purposes. Cash and cash equivalent balance at the end of August
2013 was US$3.8 million. The second tranche of US$3.75 million
will be drawn down by no later than 31 October 2013.

Admission to AIM

On 18 September 2013, the Company effected the cancellation of the
listing of its Ordinary Shares on the Official List and trading on
the Main Market of the LSE and simultaneous admission to trading
of the Ordinary Shares on the AIM and the subsequent transfer from
the Main Board of the JSE Limited (“JSE”) to the Alternative
Exchange (“AltX”).

Milling and Crushing Circuit Upgrades

As previously announced, since late 2012 the Company has been
struggling with its metallurgical processing plant.

The Company’s focus, on the back of receiving the Redstone Capital
Limited funding, has been to undertake a number of upgrades to the
metallurgical processing plant to improve reliability and to
increase the overall plant capacity to approximately 25,000 tonnes
per month, which is in line with the current monthly surface and
underground mining production. The following progress can be 
reported:

Crushing and screening circuit

The Company has procured a primary jaw crusher that, once
installed, will have a crushing capacity in excess of 30,000
tonnes per month. This primary jaw crusher will be able to reduce
hard underground sulphide ore from a Run of Mine feedstock of
700mm to a secondary crusher feedstock of 90mm whilst
simultaneously screening the high grade 10mm fine fraction. The
civil works for the primary jaw crusher and screening circuit have
been completed and the fabrication of the primary jaw crusher
itself is well underway with an expected delivery timeframe of mid
October 2013. The use of this primary jaw crusher will result in a
reduction in primary crushing costs from R24 per tonne to an
estimated R12 per tonne.


The Company is evaluating options for an appropriately sized
secondary crusher with nameplate capacity of 30,000 tonnes per
month matching the output capacity of the primary jaw crusher. In
the interim, a secondary gyratory cone crusher has been rented as
a pilot test, to further reduce the primary jaw product down to
top size of 10mm with up to 25% passing 75 micrometres,
representing a much improved mill feedstock. The test cone crusher
is currently being commissioned and is expected to be fully
operational by the end of September 2013. The Company has the
option to continue renting or to purchase the aforementioned
gyratory cone crusher if it meets production requirements.


The high capacity crushing circuit is designed to allow for
multiple screening and stockpile options and will further reduce
gold losses through crushing and allow for further improvements in
the overall Mine Call Factor (“MCF”).


Milling capacity

The Company has procured an additional 8 x 16 foot Ball Mill
(“Ball Mill”) that will effectively increase milling capacity by
15,000 tonnes per month. Once the aforementioned Ball Mill has
been commissioned,the Company will have milling capacity in
excess of 25,000 tonnes per month. Furthermore, the existing 9 x
12 foot ball mill is being upgraded to utilise the same type of
drive train as the newly acquired Ball Mill which will allow for a
single set of critical spares to be used for both mills, thereby
reducing overall critical spare inventory. The increased milling
capacity and availability will lessen the reliance on external
tolling which will improve both revenue generation and operating
margin. The mill is expected to be commissioned by the end of
2013.


Further metallurgical upgrades

The upgrades of the crushing and milling areas will allow for a
significant increase in overall production. The increased overall
production will however, require a capacity upgrade for the
thickener and leach circuit to accommodate the additional ore
tonnage and also an upgrade in the elution circuit to allow for
the increase in gold production.


These additional upgrades are in an advanced planning and
execution phase, and are expected to be completed in early 2014.

Production

July and August 2013 production from both Underground and Surface
has progressed well with tonnage call targets consistently being
achieved; 47,221 tonnes for the two months, and blasted grades in
excess of 3g/t from the combined mining operation.


Acid Mine Drainage Update
The   construction of the 84 million litre High Density Sludge
(“HDS”) plant to stop the rising Acid Mine Drainage (“AMD”) in the
Witwatersrand Central Basin continues. The project has been
delayed by approximately three weeks, due to the national strike in
the construction industry. This delay is not expected to impact on
the Company’s production outlook. Photographs reflecting the
progress of the HDS plant can be found on the Company’s website,
www.centralrandgold.com.


The Ritz pumps that Central Rand Gold has contributed to the
dewatering solution have arrived in South Africa, and will be
delivered to site by 20 September 2013. These pumps, which were
acquired at a cost of €3.5 million, are capable of pumping 1,500
kilolitres of water per hour at 43 bar pump pressure differential
with a pump efficiency rate of 81%.

Mine Call Factor

The on-going modification and construction of the high capacity
crushing circuit during late August and September 2013 has, as
anticipated, depressed the MCF. It is expected that this depressed
MCF will continue during October 2013, and then climb steadily as
components of the crushing circuit come online toward the end of
the year. The new crushing modifications should allow for the MCF
to approach and stabilise and thereafter, maintain the Board’s
long term MCF target of 80%.


Crown East Joint Venture
Initial results from the Crown East Main Reef Joint Venture with
Goldplat Recovery Proprietary Limited (“Goldplat”) are very
encouraging; with initial sampling results on the Main Reef
indicating grades in excess of 10 g/t. Under the terms of the
agreement Goldplat will have the right to assume mining, at its
own cost and risk, at Crown East in return for a 5% net smelter
royalty to Central Rand Gold. Whilst the tonnage mined by Goldplat
has been modest, the sampling results to date seem to confirm
that the high grade pay-shoot modelled in the Crown area exist and
suggest that there may be further economic upside to the recent
Crown West Scoping Study undertaken by the Company. The
exploration potential in this area will continue to be assessed on
an on-going basis.




For further information, please contact:
Central Rand Gold                     +27 (0) 11 674 2304
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                              +44 (0) 20 7466 5000
Bobby Morse / Louise Mason

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



Johannesburg
18 September 2013

Sponsor
Merchantec Capital

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