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CENTRAL RAND GOLD LIMITED - Status of plant upgrade

Release Date: 28/05/2014 08:00:00      Code(s): CRD       PDF(s):  
Status of plant upgrade

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”)


                              Status of Plant Upgrade


Highlights
   - New mill (“Mill 3”) installed on time, within budget and with a
     perfect safety record;
   - Commission of Mill 3 complete and operating in line with
     expectations;
   - Plant upgrade is set to increase total milling capacity by over
     55%;
   - Availability rates of existing milling circuit have improved
     significantly over the past quarter.

_________________________________________________________________________

Further to the announcement of our unaudited preliminary results on
16 May 2014, the Company is pleased to announce the successful
installation and commencement of operations of Mill 3.


1. Mill 3 procurement and installation


As previously announced, during the fourth quarter of 2013 the Company
embarked on a comprehensive review and upgrade program with respect to
its milling circuit (the “Program”). The Program comprised two discrete
work streams:


     1. Installation of a new mill; and
     2. Optimisation / Enhancement of existing mills.

The common goal of these workstreams was to increase the Company’s
milling capacity and improve general efficiency and reliability of the
expanded milling circuit.
Following an internally conducted analysis of a broad range of new and
second-hand equipment, the Company determined to utilise ‘fit for
purpose’ available second-hand equipment as opposed to new equipment.
The following were key drivers of the Company’s decision making process:


     1. Minimising capital expenditure;
     2. Reducing long lead delivery associated with the supply of heavy
        engineering items of equipment; and
     3. Accessing spares that would normally have long lead items.

All the equipment purchased was thoroughly evaluated to ensure that no
latent defects were present. This included full non-destructive testing
of the mill shell and ends. Where necessary, a comprehensive
refurbishment exercise was completed on equipment purchased.


Mill 3 is a 9x10 feet Ball Mill, fitted with rubber liners. Predictive
mill modelling indicates a throughput capability of 17 tonnes per hour
(“tph”) which, when combined with the Company’s two existing ball mills
is targeted to increase capacity by at least 55% to 25,000 tonnes per
month (‘tpm’), which is in line with current mining production. The table
below summarises the throughput characteristics of the Company’s three
individual mills which will be experienced from May 2014 onward.


Mill                  Dimension         Nameplate              Designed              Monthly
                          (feet)        Feed Rate                Uptime             Capacity
                                              (tph)                   (%)               (tpm)
Mill 1                    7 x 10                7.0                   85               4,200
(Bateman
Mill)
Mill 2                    9 x 12               22.5                   85              13,700
(CIL Mill)
Mill 3                    9 x 10               17.0                   85              10,400
(New Mill)
                                                                                      28,300




The installation of Mill 3, including feeding and discharge arrangement
has been completed safely, within budget and within the four month
planned schedule. The commissioning of Mill 3 was successfully completed
during mid May 2014 and is now fully operational. The increased feed
capacity generated by Mill 3 will significantly reduce the current
pressure on the existing milling circuit. This will enable a more
proactive and effective maintenance program to be conducted, which will
in turn improve productivity and plant availability. It is anticipated
that the increased milling capacity and availability will reduce the
Company’s reliance on external tolling which will improve both revenue
generation and operating margins. In addition, the discrete configuration
of the milling units will allow for preferential milling campaigns of ore
feeds of different characteristics.


As previously announced the Company is in the process of upgrading its
downstream leaching capacity. Until these upgrades come on stream,
monthly production will be carefully managed, at approximately 20,000
tpm, to ensure that metallurgical recoveries do not deteriorate.


2. Optimisation of existing mills


In mid January 2014, the Company initiated a pro-active refurbishment and
maintenance program on the existing mills (“Maintenance Program”) with
the objective of improving productivity and increasing mill availability.
The Maintenance Program has enabled the Company to migrate from a re-
active maintenance strategy where items were replaced post breakage to a
pro-active maintenance strategy where components are closely monitored
(through data analysis) and repaired or replaced before breakages or
failures occur.


Although the Maintenance Program is a long-term initiative,results
recorded over the last two months have been positive, with a significant
increase in milling unit availabilities being recorded since inception.
The table below indicates the step change in availability since the
Maintenance Program was launched in mid January 2014.


                                Availability
Period                               %
January 2014                        67.9
February 2014                       90.0
March 2014                          89.6
April 2014                          87.9

The focus for 2014 will be to ensure that the plant availability will be
above 90%.


Commenting on the upgrade, Johan Du Toit, Chief Executive Officer of
Central Rand Gold, said “I am delighted with the advancements we have
made on the milling units. In particular, I am extremely proud of the
Mill 3 installation. To deliver such an important project on time, within
budget and with limited input from external advisers is fantastic. The
team has shown a lot of skill, discipline and ingenuity in delivering
this project. This performance is something we will look to replicate and
build on as we continue to improve the rest of the operation.”


Nathan Taylor, newly elected Interim Chairman of the Company, said “I
would firstly like to congratulate the board and executive team for
achieving another key milestone, towards the improvement of the
metallurgical plant. Secondly, I would also like to take the opportunity
to thank our shareholders for their continued support. Approximately
eight months ago, the Company embarked on an exciting journey to improve
the performance at its metallurgical plant. Over that period, a
significant amount of work was completed, with yet more work to be done
over the coming months. With a significant number of initiatives
underway, the board is looking forward to engaging with shareholders more
regularly as such key strategies and initiatives mature and are
completed. The coming months will be a very important phase for the
Company.”


Images of the upgrades can be viewed on the Company’s website:
www.centralrandgold.com


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
28 May 2014

Sponsor
Merchantec Capital

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