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CENTRAL RAND GOLD LIMITED - Abridged Annual Results and Annual Report Release

Release Date: 01/07/2015 08:00:00      Code(s): CRD       PDF(s):  
Abridged Annual Results and Annual Report Release

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”)

Abridged Annual Results and Annual Report Release


Central Rand Gold today announces its annual results for the year ended 31 December 2014.

Full copies of the Company's Annual Report and Accounts, including the Company Profile, Directors' Report,
Corporate Governance and Sustainable Development Report, Directors' Responsibility Statement, Company
Secretarial Confirmation, Auditor's Report and full Financial Statements, are 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 / Nathan Taylor

Charles Stanley Securities Limited                                         +44 (0) 20 7149 6478
Marc Milmo / Mark Taylor

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

Jenni Newman Public Relations                                               +27 (0) 11 506 7351
Proprietary Limited
Jenni Newman
Chairman’s report

I present to you the 2014 Annual Report for your Company.

The year 2014 was an extraordinary one for the Company, with a number of key events occurring, such as:
- significant capital improvement works carried out on the metallurgical plant;
- temporary closure of the underground mine due to the rising water table; and
- significant strategic investor interest in acquiring 100% of Central Rand Gold (Netherlands Antilles) N.V.
  (“CRGNV”).

All of these events are over and above the ordinary course of business activities at Central Rand Gold. I believe that
the board of directors of Central Rand Gold (“the Board”), and more particularly the Executive Committee, have done
an excellent job in managing these extraordinary events whilst maintaining their focus on day-to-day operations.
There is no doubt in my mind that we have made some tremendous progress over the past 12 months, which will
enable the Company to be in a stronger operational position in 2015.

Undoubtedly, the most important event of the year was the strong interest in the Company from Asian based
investors. The Board and Executive Committee spent much of the year marketing to investors and strategic partners
throughout South Africa, London and Asia, with a view to attracting sufficient capital to better exploit the Company’s
vast gold reserves and resources. This initiative resulted in three Asian based companies submitting non-binding
Memoranda of Understanding (“MOU”) in Q4 2014. The MOUs contemplate Central Rand Gold selling 100 per cent
of its shares in CRGNV to the successful bidder.

The three Asian companies, Hiria Group Company Limited ("Hiria"), Beijing Ankong Investment ("Ankong") and
Shengbang Jiabo (Beijing) Consulting Company Limited ("Shengbang") submitted substantively similar offers of not
more than US$150 million, with a target date for completion of 31 March 2015. This target date was subsequently
extended to 12 June 2015 to accommodate a fourth interested party, Huili Resources Group Limited (“Huili”), who
put forward a further MOU on 12 February 2015, which again contained substantively similar terms to the previously
announced MOUs.

In June 2015, after the completion of the due diligence processes, both Huili and Hiria requested a one month
extension to 15 July 2015, to enable them both to complete their respective internal processes. Further, the Board
decided not to continue discussions with Ankong and Shengbang at that time, to enable it to focus on discussions
and negotiations with Huili and Hiria.

We eagerly await the completion of the final negotiation processes with the knowledge that an acquisition and
subsequent cash injection will finally allow the CRG project to reach its very significant potential.

“UPS AND DOWNS”
I find it useful to reflect on the ups and downs experienced throughout the year. In a year such as this it is often easy
to dwell on the negative aspects and not acknowledge the many significant positives experienced throughout the
year.

- It was with great sadness that in May 2014 we experienced our first fatality as a result of a fall of ground. This
  sad event triggered company wide introspection into safety practices and resulted in a number of improvements
  being made to our already rigorous and diligent safety protocols.
- On 28 May 2014, Trans Caledon Tunnel Authority ("TCTA") commenced with pumping and treatment operations
  of the High Density Sludge (“HDS”) plant.
- A notable highlight for the Company was re-joining the 10 million ounce club with the reinstatement of 4.5 million
  ounces of JORC and SAMREC compliant Resources.
- The significant improvements made to the metallurgical plant in 2013 and early 2014 have begun to yield fruit.
  The third ball mill and upgraded leach circuit were commissioned to provide additional processing capacity and
  create sufficient redundancy to enable proper and proactive maintenance to occur. The metallurgical plant, having
  long been the Company’s ‘Achilles heel’, is now consistently performing at or above expectation. Recoveries are
  strong and availability is typically above 85%. The new cone crushing circuit, specifically designed for harder
  underground ore, was commissioned and has performed consistently well throughout the year.
- Underground mining operations went from strength to strength in the early portion of the year. The Mine Call
  Factor (“MCF”) stabilised well above industry averages and insitu grades consistently exceeded expectations.
  Not only were we able to mine the orebody with conventional techniques, we were able to mine it efficiently and
  economically.
- The unfortunate delay in commencement of pumping and the initial teething issues experienced by the TCTA at
  the HDS plant forced the Company to cease underground mining due to a rising water table. This was a great
  pity as the underground operations had just gotten into their stride and significant momentum had been created.
- The Company embarked on an intense and systematic exploration and evaluation programme to identify and
  secure sufficient surface material to sustain operations across the short- to mid-term. The identification of more
  than 390,000 tonnes of ore on surface, coupled with a number of third party toll treatment transactions, has
  enabled the Company to not only continue to “fill the mills”, but to do so at a reduced cost.
- The exploration and evaluation programme identified very substantial low grade resources that would not
  ordinarily be economic. The conclusion of a “low grade Joint Venture” with fellow processor Mintails Limited has
  allowed both companies to monetise these low grade resources and add further to the revenue stream of the
  Company.

PUNO
The situation with Puno Gold Investments Proprietary Limited (“Puno”), our Black Economic Empowerment partner,
remains a work in progress. The appeal process to set aside the 2013 decision is progressing slowly and has little
to no impact on the Company’s operational performance. I am pleased to state that communication channels with
Puno have improved materially over the past 12 months and the two parties are actively working toward an amicable
and mutually agreed solution. The Board truly hopes that the matter will be shortly concluded and energies can be
redirected into a more fruitful endeavour.

APPRECIATION
I would like to thank Michael McMahon, who resigned as Director and Chairman during the year, for his sterling
efforts and steady hand in guiding the Company during his tenure. I would also like to thank Miklos Salamon, former
Non-executive Director, for his unsurpassed technical guidance and strategic foresight. The Company has greatly
benefited from the combined stewardship of Michael and Miklos over the past number of years and we thank them
for their dedication to the Company. Furthermore, Patrick Malaza must also be acknowledged for his strong work
ethic and dedication he brought to the role of Finance Director until his resignation during the year.

I welcome to the Board new Non-executive Director, Allen Phillips, with the confidence that his years of metallurgical
experience in operations will be transferred to the production team. The Company has already seen the benefits of
Allen’s involvement through the metallurgical plant upgrade process which has been extremely successful. Allen’s
experience and ‘hands on’ approach has brought a new dimension and energy to the Company’s metallurgical
division and we look forward to him continuing to drive improvements over the coming 12 months.

I also must acknowledge Jason Hou for his tireless work in marketing the Company within mainland China and Hong
Kong. He has been instrumental in identifying and engaging with the four Asian-based parties which signed MOUs
to purchase CRGNV. His guiding hand and insight into the Asian region has enabled the Company to engage
effectively and meaningfully with our MOU counterparties.

Additionally, the Executive Committee must be commended on their focus and unwavering determination. As
aforementioned, the Executive Committee has worked tirelessly to improve the operations and grow shareholder
value, whilst also playing a significant role in the MOU negotiations and due diligence process. Johan du Toit has
once again led by example and I wish to thank him for working so effectively with myself and the rest of the Board.

Finally, I thank the shareholders of Central Rand Gold for their continued support and believe the Company is in a
strong position to embark on 2015.


Nathan Taylor
Chairman
Chief Executive Officer’s report

INTRODUCTION
2014 has been a year full of unexpected events, from the Company encountered its first fatality, to the temporary
suspension of its underground mining operations due to the rising water table, to finding new economic surface
mining opportunities potential and concluding the year with the potential sale of CRGNV.

SAFETY
The Company’s already strong focus on safety was heightened throughout 2014 post the Company’s first fatality. An
underground worker installing support died as a result of loose rocks becoming dislodged from historically mined out
areas up-dip from the working area. This sad event led the Company to modify the mining and support layout to
ensure better safety at the working face.

ACID MINE DRAINAGE (“AMD”)
The HDS plant has now been operational since May 2014. Despite a good start to the operations, with the observation
of a drop in the water table in June 2014, the flow rate was unfortunately reduced in mid-August 2014 as a result of
the decision by the TCTA to strengthen the mechanical components of the two 42 million litre thickeners at the HDS
plant. This upgrade was required in order to improve, manage and control the AMD sludge and to ensure the longer
term improved performance of the HDS plant. The final upgrade is planned for completion during 2015.

Whilst the pumping solution is showing positive signs of basin wide dewatering, which will ultimately greatly benefit
the Company, the delays in the initiation of the pumping and the subsequent teething problems have had a temporary
but significant impact on our underground mining operation.

Mining on the high grade Main Reef horizon began to tail off from April 2014 as the water levels began to flood the
lower Main Reef workings. In July 2014, with most of the Main Reef submerged, focus shifted to the much lower
grade North Reef. Finally, as the water level reached the ventilation shaft and secondary access way in October
2014, crews were pulled out of the decline and underground mining was halted.

The Company has been carefully gathering information regarding HDS performance and water level movement at
our mining operations. It seems that if the flow rate can be maintained at approximately 60 million litres per day
("mlpd"), which equates to approximately 80% of nameplate capacity of the HDS plant, a reduction in the water level
occurs.

Positively since March 2015, the flow rate has been fairly consistently maintained at approximately 72 mlpd, resulting
in a drop in the water table of approximately 4.5 vertical metres, from March to end of May 2015, which is very
positive as it indicates that the central basin water level can be dropped even during the raining season.

MINING UPDATE
Highlights
- Underground production on the Main and North Reefs was halted in October 2014 as a result of the rising AMD
   blocking the secondary escape route and ventilation shaft.
- Underground production for the year was 99,546 tonnes at an average grade of 3.1g/t. The average Main Reef
   grade was 3.78g/t. The average North Reef grade was 1.78g/t.
- Open Pit production was 69,747 tonnes at an average grade of 2.41g/t.

Production
The following table shows key mining statistics for 2014, comparing the actual statistics with those achieved in 2013.

                                                 2014                         2013                      Difference
                                     Metres (m)        Grade      Metres (m)        Grade      Metres (m)        Grade
  Activity
                                     Tonnes (t)         (g/t)     Tonnes (t)          (g/t)    Tonnes (t)        (g/t)
  Waste Development (m)                     313                          595                          282
  Reef Development (m)                      200                          559                          359
  Total (m)                                 513                        1,154                          641
  Stoping (t)                            99,546          3.14        111,671           4.66        12,125        1.52
  Open Pits (t)                          69,747          2.41         91,038           3.13        21,291        0.72
  Total Tonnes                          169,293                      202,709                       33,416

Mining update
Underground production and grades showed a large drop from 2013 due to the rising water levels cutting off the
higher grade Main Reef stopes progressively from April to July 2014. Underground stoping moved to lower grade
North Reef as a last resort in July 2014 but by October 2014 this too was cut off by the water levels.

Notwithstanding the temporary cessation of underground mining, the conventional mining methods employed have
been a resounding success with the key metrics of tonnage, grade and MCF all being met and generally exceeded.
Hanging wall dilution was effectively controlled and backstope sweepings were systematically undertaken.

During 2014, in an attempt to minimise staff redundancies, the Company reviewed mining opportunities at Middelvlei
Mine and trialled a sweeping and vamping operation at one of Gravelotte Mines Limited’s (“Gravelotte”) (a mining
operation on the east rand of Johannesburg) old shafts. After completing some reef picking at Middelvlei rock dumps,
operations were stopped, due to limited further low cost opportunities in the area. The Gravelotte operations provided
some interesting results, however it did not achieve the Company’s minimum investment return and the operations
were stopped at the end of December 2014.

METALLURGICAL UPDATE
Production
The year 2014 saw the completion of the metallurgical plant expansion projects which were initiated in 2013. These
capital projects were undertaken to improve overall plant availability, MCF and gold recovery and tonnage
throughput. The results of the capital projects have been strong with a demonstrable improvement in the key plant
metrics aforementioned. Unfortunately however, other factors such as the temporary cessation of underground
mining which reduced the availability of quality ore have lessened the expected impact of these improvements.

 Plant             Jan      Feb       Mar       Apr       May          Jun       Jul      Aug     Sep     Oct     Nov     Dec
 production
 Mill 1           4,116    8,704     8,867     9,636     9,995      10,057     8,555    6,811   6,217   8,285   4,617   7,535
 (tonnes)
 Mill 3           2,960    3,683     3,470     3,899     2,430         468         -        -       -       -       -       -
 (tonnes)
 Mill 3                -         -         -         -   3,492       7,472     7,183    5,779   4,587   7,036   6,678   5,988
 (tonnes)
 Mill
 availability
 Mill 1            40.6     91.3      84.4      89.4      93.7        92.1      94.6     75.4    91.6    87.4    61.0    84.9
 Availability
 (%)
 Mill 2            93.2     89.3      88.6      86.3      93.2        94.6       Off      Off     Off     Off     Off     Off
 Availability
 (%)
 Mill 3            N/A      N/A       N/A       N/A       78.9        91.8      94.4     82.3    95.5    93.2    90.6    80.7
 Availability
 (%)

Gold recovery throughout the year was somewhat variable, due largely to the changing nature of the feedstock. The
move from Main Reef to North Reef to sands and slimes and open pit oxides did place the equilibrium of the plant
under strain. However, the overall recoveries remained acceptable at 82%.

                           Jan       Feb       Mar       Apr     May      Jun      Jul     Aug     Sep     Oct    Nov     Dec
 Plant recovery (%)         94        92        90        87      82       84       77      60      73      78     87      79

Crushing and Screening
The Company completed the installation of its new Symons 4 ¼ cone crusher and commissioned the unit in
November 2014. The unit has thus far demonstrated excellent availability and reliability. The commissioning of the
cone completed the crushing and screening upgrades which commenced in 2013 with the building of the Jaw crusher
and screening train. The upgraded crushing and screening circuit allows the Company to reduce both hard sulphide
ore from underground as well as softer oxide ore sourced from the open pits to the required minus 12mm for milling.
The circuit has proven to be able to produce in excess of 40ktpm.

Milling capacity
The additional 9’ x 10’ ball mill acquired toward the end of 2013 was commissioned on 15 May 2014 and has
performed exceptionally well, showing a 33% upgrade in the processing capacity of the entire metallurgical plant.
The availability of the new mill has increased from 73% on hot commissioning to the current steady state of 92%.
Further metallurgical upgrades
The cash injection from the Redstone Capital Limited (“Redstone”) further enabled the refurbishment and upgrade
of the water reticulation system and a full rebuild and upgrade of the elution column and heat exchanger.

The Company also started the installation of the new leach tank which provides substantially more residence time
allowing for improved gold recoveries. The leach tank installation is scheduled to be completed by early July 2015.
The thickener project has been put on hold pending the outcome of the potential sale of CRGNV.

GEOLOGICAL UPDATE
Resources
SAMREC Mineral Resources for the Company were updated in July 2014, with the reclassification of previous
Exploration Target material between 450 metres and 900 metres as Mineral Resource. This was achieved through
the demonstration of the ability of the Ritz pumps to dewater the entire basin simultaneously as well as the completion
of capital and economic studies showing that further de-watering beneath the 450 metre level can be done efficiently
and economically. With the installation of additional pumps and piping, this hurdle for “eventual economic extraction”,
a key aspect in the definition of ‘Mineral Resources’ in terms of the SAMREC Code, can be satisfied.

This has allowed the Company and the Independent Competent Person, Venmyn Deloitte Proprietary Limited, to re-
rate the gold mineralisation between 450 metres and 900 metres below surface from “Exploration Target” to “Mineral
Resource”. This reclassification has more than doubled the resource base of the Company from 4.51 Moz to 9.90
Moz of contained gold.

SAMREC Compliant Mineral Resources
                                                          July 2014                              February 2014
                                               Tonnes        Grade       Content       Tonnes        Grade      Content
  Area             Category
                                                 (Mt)        (g/t)         (Moz)         (Mt)        (g/t)        (Moz)
  CMR              Measured                      1.46         3.65          0.17         1.46         3.65         0.17
                   Indicated                    14.43         4.22          1.97        11.30         4.53         1.64
                   Inferred                      5.64         6.65          1.23         4.34         5.60         0.78

                   Exploration Target           12.02         9.26          3.59        15.86         8.49         4.33
  Crown            Indicated                     5.78         5.83          1.11         2.58         5.67         0.47
                   Inferred                      3.11         8.03          0.80         2.77         7.19         0.64

                   Exploration Target           20.81        10.07          6.73        24.34         9.61         7.52
  City             Indicated                     2.88         6.97          0.63         0.78         7.58         0.19
                   Inferred                      2.43         6.99          0.55         0.70         8.00         0.18

                   Exploration Target           19.12         9.66          6.32        22.95         9.66         7.13
  Village          Indicated                     1.80         6.48          0.39         0.53         5.87         0.10
                   Inferred                      0.20        13.60          0.10         0.17        14.64         0.08

                   Exploration Target           12.27        10.93          4.30        13.57        10.57         4.61
  Simmers          Indicated                     1.53         8.80          0.43         0.73         8.10         0.19
                   Inferred                      0.15         8.20          0.04         0.15         8.29         0.04

                   Exploration Target            8.75        10.35          2.92         9.55        10.29         3.16
  Other            Indicated                     3.16         1.22          0.13            -            -            -
                   Inferred                     20.47         3.61          2.36            -            -            -

                   Exploration Target           10.04         9.07          2.92        33.67         8.34         5.41


  Total            Measured Resource             1.46         3.57          0.17         1.46         3.57         0.17


  Total            Indicated Resource           29.58         4.85          4.66        15.92         5.06         2.59


  Total            Inferred Resource            32.00         4.92          5.08         8.13         6.58         1.72
  Total            Exploration Target           83.01        10.03         26.78       119.94         8.34        32.16


  Grand Total*                                 146.05         7.80         36.69       145.45         7.84        36.64

*Totals are based on additional decimal points resulting in minor total discrepancies.

The cessation of underground mining during the year means that no further changes or updates to the Mineral
Resources were undertaken as only a nominal amount of ore was extracted prior to the cessation.

There was a significant focus on exploration and evaluation throughout the year, brought on by the need to source
replacement ore as a result of the short to mid-term cessation of underground operations. The introduction of
concentric ripper machinery to the mining fleet has facilitated the exploitation of surface deposits containing very
hard rock which has previously been considered uneconomic due to the need for explosives. Consequently, the
introduction of the concentric ripper machinery has enabled the Company to re-evaluate known deposits which
contain very hard rock such as Slots 4, 5 and 7.

The re-evaluation of these slots has shown that they can be strongly economic and have been reclassified as Shallow
Exploration Target in terms of the SAMREC code. Operations in early 2015 have demonstrated that the grades
actually exceed expectations and significant further potential exists in these areas over and above that already
discovered.

  Slot         Target area         Reef                  Dip   V. Depth       Tonnage range (t)      Approximate grade
  Slot 5       Pits 1 to 3         White           40 deg          30m        64,000 to 125,900                 2.8g/t
  Slot 7       Main Pit            White           45 deg          30m        60,000 to 174,000                 2.7g/t
  Slot 4       K7 Top              Kimberly        45 deg          10m          5,000 to 22,000                 1.7g/t
  Slot 4       K7 Middle           Kimberly        45 deg          10m          5,000 to 20,000                 1.8g/t
  Slot 4       K7 Bottom           Kimberly        45 deg          10m          5,000 to 15,000                 1.7g/t
  NASREC       Pits 1, 2 and 3     Main            45 deg          40m         30,000 to 37,800                 2.7g/t

                                                                             170,000 to 395,000                 2.6g/t

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 and 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: 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 Central Rand Gold South Africa Proprietary Limited and has over 21 years’
experience in exploration, mineral resource management and mineral evaluation.

Mine Call Factor
The MCF during 2014 continued on the same positive trajectory seen during 2013. The “face to pour” MCF
reconciliation averaged a solid 78% for the year. The wind down and changeover from underground operations to
surface operations during September 2014 had a predictable negative impact on that month’s figures; however this
was quickly rectified in October.

                             Jan   Feb     Mar     Apr     May     Jun     Jul     Aug     Sep      Oct     Nov   Dec
 MCF (%)                      66    65      94     127      73      67      74      72      57       85      75    77

Whilst 78% is a very satisfying result brought about by several years of focus on gold preservation, it is believed that
further improvement is possible.

FINANCIAL REVIEW
The financial performance was negatively impacted during the year, mainly from the rising water table and the
resultant cessation of underground mining. What was disappointing was that the year started well, with underground
mining performing in line with expectations. Operational plans were being implemented for the Company’s medium
term growth strategy, which included the successful commissioning of the new mill, in May 2014, which provided the
operations with additional processing capacity.
The delay in commissioning of the HDS plant, coupled with the resultant rise of the water table during the first half of
2014, resulted in the active underground mining areas being flooded. As the Company was unsure how the HDS
would perform, once commissioned and how quickly the water table could be dropped, it decided to retain as many
key mining skills and resources so that it would have the ability to quickly restart underground mining operations. As
an alternative it decided to mine a new target area being the North reef, to maintain some form of underground mining
presence. In September 2014, based on the performance of the HDS plant and its commissioning issues, the
Company realised that in the short term it would not be able to restart normal underground operations. With the North
Reef grades becoming sub-economic and the second access way being flooded, the Company made the decision
to suspend underground operations.

With lower underground production, the Company needed to find an appropriate substitute ore body to continue to
produce gold. The Company immediately commenced a review process to re-analyse all open cast opportunities.
During this time the Company strived to maintain its plant throughput by processing available material which was
accessed from numerous sources including old waste rock and sand dumps. As can be seen from the below gold
production graph, during April – September 2014, the high variability and low reliability of this material resulted in the
Company’s gold production and ultimately cash reserves being placed under serious strain.

In September 2014, the assessment of new open cast potential was completed and the Company commenced mining
at Slot 5. During the last quarter of 2014, the Company restructured it business and started the process of staff
reductions (which was effective early 2015), to closely reflect its new operational business requirements. Overall with
lower gold production due to the transition from underground to surface mining coupled with redundancy costs all
put significant strain on the Company’s balance sheet. The cash resources at the end of the year were US$0.9
million.

POST BALANCE SHEET EVENT
In order to strengthen its balance sheet and in pursuit of achieving its stated mine plan, the Company has subsequent
to year-end completed the following fundraising:
? A share placement on 17 June 2015 of 6,015,000 new ordinary shares at 10 pence per ordinary share, which
    raised £0.602 million.
? A further share placement on 18 June 2015, of 2,000,000 new ordinary shares at 10 pence per ordinary share,
    which raised £0.2 million.

In June 2015, after the completion of the due diligent processes, both Huili and Hiria requested a one month extension
to 15 July 2015, to enable them both to complete their respective internal processes. Further, the Board decided not
to continue discussions with Ankong and Shengbang at that time, to enable it to focus on discussions and
negotiations with Huili and Hiria. It is important to note that the transaction will still be subject to obtaining regulatory
and exchange approvals. In addition, shareholder approval for the transaction will be required.

LOOKING FORWARD
The transition from underground mining to surface mining was undoubtedly a painful process during 2014. The
exploration work undergone in 2014 has put the Company on a steady footing while it waits to re-commence
underground mining. With just under 400,000 tonnes of open cast potential and the Company identifying other
surface mining opportunities outside its mining right area, it believes based on its smaller organisational structure,
that it can be operationally sustainable during this time. The Company has plans to further increasing its Metallurgical
capacity, which should come on line during the second half of 2015. This additional revenue coupled with the small
June 2015 fundraise will be used to strengthen the Company’s balance sheet.

The sale of CRGNV remains a key focus for the Company. As stated by Nathan Taylor, in the Chairman’s statement:
“We eagerly await the completion of the final negotiation processes with the knowledge that an acquisition and
subsequent cash injection into the Company will finally allow the CRG project to reach its very significant potential.”
If the Company is unsuccessful in effecting the above transaction, it will continue to market the project to international
investors.

In August 2016, the US$7.25 million convertible loan note (“loan note”) issued to Redstone, becomes repayable.
Redstone has the right to covert this loan note to equity at any time before this date. If this conversion is not effected,
then the Company will look at either re-negotiating the terms of the agreement with Redstone, possibly extending
the expiry date, or consider approaching the capital markets, where it has successfully raised funds over the last 18
months, to fund the repayment of this debt. The Board will ultimately, at the appropriate time, consider and adopt the
best possible solution to manage this position.

The Company expects to recommence underground mining, by end 2016. The Company will continue to monitor the
water table, and effect plans to recommence underground operations as soon as practically possible. An amended
Mine Works Programme was submitted to the DMR in 2015, to reflect the cession of underground works and the
refocus on open pit mining.

THANKS
Sincere thanks must go to everyone who has played a role in the Company successfully negotiating another
challenging, yet rewarding year. All stakeholders have made a meaningful contribution to Central Rand Gold’s
ongoing development as a sustainable junior mining enterprise – this includes Directors, managements, staff,
suppliers, shareholders and community members.


Johan du Toit
Chief Executive Officer
Statement of Financial Position
as at 31 December 2014

                                                          Group
                                                    2014          2013
                                                 US$'000       US$'000
ASSETS
Non-current assets
Property, plant and equipment                      3,592         3,619
Intangible assets                                  2,830         3,131
Security deposits and guarantees                     191           194
Environmental guarantee investment                 3,177         3,338
Loans receivable                                   8,646         8,571
                                                  18,436        18,853

Current assets
Security deposits and guarantees                      65            70
Prepayments and other receivables                  1,239           914
Inventories                                           76           910
Cash and cash equivalents                            914         2,475
Non-current assets held-for-sale                       -           174
Derivative asset                                     720             -
                                                   3,014         4,543

Total assets                                      21,450        23,396
EQUITY
Attributable to equity holders of the parent
Share capital                                     26,490        25,604
Share premium                                    222,963       213,377
Share-based compensation reserve                  28,238        28,224
Treasury shares                                      (6)           (6)
Foreign currency translation reserve            (29,534)      (29,442)
Accumulated losses                             (261,559)     (246,291)
                                                (13,408)       (8,534)
Non-controlling interest                               -             -
Total equity                                    (13,408)       (8,534)
LIABILITIES
Non-current liabilities
Environmental rehabilitation                      4,904          5,713
Loan payable                                     14,418         13,719
                                                 19,322         19,432
Current liabilities
Trade and other payables                          6,911          6,971
Taxation payable                                    177            155
Derivative liability                              8,448          5,372
                                                 15,536         12,498

Total liabilities                                34,858         31,930

Total equity and liabilities                     21,450         23,396


Statement of Profit or Loss
for the year ended 31 December 2014

                                                                        Group
                                                                      2014        2013
                                                                    US$'000     US$'000

Revenue                                                                8,212      14,627
Production costs                                                     (9,844)    (16,344)
Employee benefits expense                                            (3,223)     (3,969)
Directors' emoluments                                                  (717)       (850)
Inventory write-(down)/up                                              (705)          39
Operating lease expense                                                (787)       (523)
Operational expenses                                                   (502)     (1,583)
Other expenses                                                       (1,702)     (2,860)
Other income and gains                                                   543         622
Foreign exchange transaction gains/(losses)                              129       (121)
Loss before interest, tax and depreciation                           (8,596)    (10,962)
Depreciation                                                           (460)       (536)
Impairment of assets                                                   (158)       (224)
Loss on fair value of convertible loan note                          (5,108)     (3,234)
Finance income                                                         1,233       1,287
Finance costs                                                        (2,179)     (1,123)
Loss before income tax                                              (15,268)    (14,792)
Income tax expense                                                         -           -
Loss for the year                                                   (15,268)    (14,792)
Loss is attributable to:
Non-controlling interest                                                   -           -
Equity holders of the parent                                        (15,268)    (14,792)
                                                                    (15,268)    (14,792)
Loss per share for loss attributable to the equity holders during
the year (expressed in US cents per share)
Basic loss per share                                                 (17.51)     (46.23)
Diluted loss per share                                               (17.51)     (46.23)


Statement of Comprehensive Income
for the year ended 31 December 2014

                                                                           Group
                                                                       2014        2013
                                                                    US$'000     US$'000

Loss for the year                                                  (15,268)    (14,792)
Other comprehensive loss:

Item that may be reclassified subsequently to profit or loss

Exchange differences on translating foreign operations                 (91)       (784)
Other comprehensive loss for the period, net of tax                    (91)       (784)
Total comprehensive loss for the period                            (15,359)    (15,576)
Total comprehensive loss is attributable to:
Non-controlling interest                                                  -           -
Equity holders of the parent                                       (15,359)    (15,576)
                                                                   (15,359)    (15,576)


Statement of Changes in Equity
for the year ended 31 December 2014

                                                                Attributable to equity holders of the Group
                                                                                            Foreign
                                       Ordinary                Share-based                 currency
                                          share       Share   compensation   Treasury   translation   Accumulated               Non-controlling       Total
                               Notes     capital    premium        reserve     shares       reserve        losses      Total           interest      equity
                                       US$ '000    US$ '000       US$ '000   US$ '000      US$ '000      US$ '000   US$ '000           US$ '000    US$ '000

Balance at
31 December 2012                         25,604     213,377        28,176         (6)      (28,658)     (231,499)      6,994                 -        6,994
Total comprehensive income
for the year
Loss for the year


                                              -           -             -           -            -       (14,792)   (14,792)                 -     (14,792)
Other comprehensive
income
Foreign currency adjustments                  -           -             -           -        (784)             -       (784)                 -        (784)
Transactions with owners,
recorded directly in equity
Employee Share Option
Scheme:
Share-based payments:
Employees' and Directors'
shares and options                            -           -            48           -           -              -         48                  -          48
Balance at
31 December 2013                         25,604     213,377        28,224         (6)    (29,442)      (246,291)    (8,534)                  -     (8,534)
                                                          
                                                                 Attributable to equity holders of the Group
                                                                                           Foreign
                                       Ordinary               Share-based                 currency
                                          share       Share  compensation    Treasury  translation  Accumulated              Non-controlling       Total
                                Notes   capital     premium       reserve      shares      reserve       losses      Total          interest      equity
                                       US$ '000    US$ '000      US$ '000    US$ '000     US$ '000     US$ '000   US$ '000          US$ '000    US$ '000
Total comprehensive income
for the year
Loss for the year                             -           -             -           -           -      (15,268)   (15,268)                 -    (15,268)
Other comprehensive
income
Foreign currency adjustments                  -           -             -           -        (92)             -       (92)                 -        (92)
Transactions with owners,
recorded directly in equity
Issue of shares:
Capital raising                             886       9,586             -           -           -             -     10,472                 -     10,472
Employee Share Option
Scheme:
Share-based payments:
Employees' and Directors'
shares and options                            -           -            14           -           -             -         14                 -         14
Balance at
31 December 2014                         26,490     222,963        28,238         (6)    (29,534)     (261,559)   (13,408)                 -   (13,408)
Statement of Cash Flow
for the year ended 31 December 2014

                                                                              Group
                                                                         2014          2013
                                                                      US$'000       US$'000


CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax                                                      (15,268)      (14,792)
Adjusted for :
Depreciation                                                              460           536
Employment benefit expenditure (share-based payments)                      14            48
Profit on disposal and scrapping of property, plant and equipment        (17)         (541)
Impairment of inventory                                                   705          (39)
Impairment of assets                                                      158           224
Net (gain)/loss on foreign exchange                                     (129)           121
Decrease in operating lease liability                                       -             -
Sundry income                                                               -             -
Finance income                                                        (1,233)       (1,287)
Finance costs                                                           2,179         1,123
Loss on fair value of convertible loan note                             5,108         3,234
Changes in working capital
(Increase)/decrease in prepayments and other receivables                (325)            38
Decrease in inventory                                                     129           370
(Decrease)/increase in trade and other payables                          (60)           935
Increase in provisions                                                    809           974
Cash flows used in operations                                         (7,470)       (9,056)
Finance income                                                            273             -
Finance costs                                                               -         (245)
Sundry income                                                         (1,204)             -
Net cash used in operating activities                                 (8,401)       (9,301)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment                            (1,049)         (839)
Proceeds from disposal of property, plant and equipment                   186           566
Increase in environmental guarantee deposit                              (53)          (60)
Net cash used in investing activities                                   (916)         (333)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares for cash                                 4,254          7,027
Cost relating to the issue of shares                                   (257)              -
Net proceeds from exercise of share options                            3,732              -
Net cash from financing activities                                     7,729          7,027

Net decrease in cash and cash equivalents                             (1,588)       (2,607)
Cash and cash equivalents at 1 January                                  2,475         4,512
Effects of exchange rate fluctuations on cash balances                     27           570
Cash and cash equivalents at 31 December                                  914         2,475

Notes to the Annual Financial Statements

1.      General information

These are the non-statutory financial statements, extracted from the Group annual financial statements for the year
ended 31 December 2014.

Central Rand Gold Limited (“Central Rand Gold”) is a Guernsey incorporated company and it is also registered in
South Africa as an external company. One of its subsidiaries, Central Rand Gold (Netherland Antilles) N.V.
(“CRGNV”), was incorporated in the Netherlands Antilles. Central Rand Gold's operating subsidiary is Central Rand
Gold South Africa Proprietary Limited (“CRGSA”). Central Rand Gold has a primary listing on the London Stock
Exchange (“LSE”) and a secondary listing on JSE Limited (“JSE”).

Central Rand Gold complies with the company laws of its place of incorporation being Guernsey and the company
laws of the place of its external registration being South Africa. One of its subsidiaries, CRGNV, is incorporated in
the Netherlands Antilles, therefore the Group is also impacted by the company laws of the Netherlands Antilles.

The Group’s annual financial statements for the year ended 31 December 2014 were approved for issue on 30 June
2015. The auditor has issued his opinion on the Group’s financial statements for the year ended 31 December 2014
which is unmodified but does contain an emphasis of matter paragraph in respect of the matters referred to under
note 2 ‘Going concern’ and is available for inspection at the Company’s registered address.

Emphasis of matter – Going concern
In forming our opinion on the financial statements, which is not modified, we have considered the adequacy of the
disclosures set out in the financial statements concerning the Group’s ability to continue as a going concern which
depends, in particular, upon a number of key factors. These key factors include achieving the improved operating
performance forecast, the continued support of the Group’s creditors, the Group having no liability under the recent
changes in South African tax legislation and the outcome of discussions regarding the possible sale of the trade and
assets of the Group. These factors, together with the other matters outlined in the audited financial statements,
indicate the existence of a material uncertainty that may cast significant doubt on the Group’s ability to continue as
a going concern. The financial statements do not include the adjustments that would result if the Group was unable
to continue as a going concern.

2.      Basis of preparation

The consolidated financial statements have been 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 consolidated 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, changed during
the year from the GB Pound to the US Dollar as its main source of funding is now US Dollar. The functional currency
of its principal subsidiary, CRGSA is the South African Rand (“ZAR” or “Rand”).

Going concern
The Directors have prepared the financial statements on the going concern basis notwithstanding net current
liabilities at 31 December 2014 of US$12.5 million, having considered the current operations, the current funding
position and the projected funding requirements for the business for at least 12 months from the date of approval of
the financial statements as detailed below. Since the year end the Group has continued with its surface mining
operations and processing of third party ore and has also raised a further US$1.2 million from share placements in
June 2015. As at 26 June 2015 the Group had cash and cash equivalents of US$1 million.

The Directors have prepared cash flow projections until December 2016 that reflect the current mine plan adopted
by the Directors. The mine plan is based on surface mining only as the underground mine remains on care and
maintenance until the water level reduces following the re-commissioning of the dewatering plant. In addition, the
Group has deferred payments to existing creditors of US$6 million which together with the cash held has allowed
the Group to commence work on plant upgrades. The Group will settle those creditors over the next 18 months. The
mining plan assumes that the upgrades will increase processing plant capacity from 16,000 tonnes per month to
20,000 tonnes per month from January 2016.
These projections, which are based on current levels of ore processing but increasing own and third party processing
in accordance with the enhanced plant capacity, show that the Group will generate sufficient cash to fund both the
planned plant upgrades and meet the rescheduled repayment of the trade creditors whilst maintaining a headroom
of at least US$1 million. On this basis the Directors believe that the Group has sufficient funding for at least the next
12 months from the date of approval of these financial statements and hence have prepared the financial statements
on a going concern basis.

However, the cash flow projections are sensitive to a number of factors including: the mine call factor assumption
(the mine call factor is the ratio, expressed as a percentage, of the total quantity of recovered mineral product after
processing with the amount estimated in the ore based on sampling) being maintained at existing levels; the
increased ore processing and the agreement of the trade creditors to defer payments on the basis informally agreed.

Any changes to the assumptions, individually or in aggregate, may alter the going concern conclusion and a
reasonably possible change in assumptions may result in the Group not having sufficient funding.

In addition, the cash flow projections assume that, on the basis of legal advice received by the Directors, no payments
are to be made resulting from changes to the thin capitalisation legislation and changes to Section 8F of the Income
Tax act in South Africa. Should this legal advice not be accurate then this may result in the Group not having sufficient
funding.

If, in either of these cases, the Group had insufficient funding, the Directors would have to explore alternative
arrangements such as raising additional equity which would require shareholder approval. However, the Group is
also in discussion with a number of potential bidders about the possible sale of the trading operations of the Group.
Any sale would be subject to successful due diligence by any potential acquirer and also subject to shareholder
approval. Should it proceed, the Group would no longer be a going concern.

For the longer term, the risks inherent in any single metal mining operation remain. In addition, there are further
uncertainties relating to, the possible choice by Redstone Capital in September 2016 to request repayment of US$3.7
million loan notes in cash rather than their conversion into shares; the renewal of the mining licences at the end of
2016; the successful operation of the dewatering plant to reduce the water level to the environmental critical level;
and the successful redevelopment of the underground mine. Given the current level of operations the Directors have
no reason to believe that Redstone Capital will not take the conversion option; the licenses will not be renewed and
the continued positive progress towards dewatering and ultimate mining of the underground mine will not continue.

The Directors have concluded that the above circumstances give rise to a material uncertainty 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 risks and uncertainties associated with these projections, 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 financial statements on a
going concern basis. These financial statements do not include any adjustments that would result from the going
concern basis of preparation being inappropriate.

3.      Accounting policies

The accounting policies have been consistently applied to all years presented.

(a) New and amended standards adopted by the Group

In 2014 the Group adopted the amendments to IFRS 10 ‘Consolidated Financial Statements’, IFRS 11 ‘Joint
Arrangements’, IFRS 12 ‘Disclosure of Interests in Other Entities’, IAS 27 ‘Separate Financial Statements’, IAS 28
‘Investments in Associates and Joint Ventures’, IAS 32 ‘Offsetting Financial Assets and Financial Liabilities’ and IAS
36 ‘Recoverable amount disclosures for non-financial assets’. These have no significant impact on the Group’s net
assets.

As a result of IFRS 10, the Group has changed its accounting policy for determining whether it has control over and
consequently whether it consolidates its investees. IFRS 10 introduces a new control model that focuses on whether
the Group has power over an investee, exposure or rights to variable returns from its involvement with the investee
and ability to use its power to affect those returns.

In accordance with the transitional provisions of IFRS 10, the Group reassessed the control conclusion for its
investees at 1 January 2014. No modifications of previous conclusions about control regarding the Group’s investees
were required.

(b) New standards, amendments and interpretations not yet adopted

A number of new standards, amendments to standards and interpretations are effective for annual periods beginning
after 1 January 2014, and have not been applied in preparing these consolidated financial statements. Those which
may be relevant to the Group are set out below. The Group does not plan to adopt these standards early.

IFRS 9 ‘Financial Instruments’ was reissued in October 2010. It is applicable to financial assets and financial
liabilities. For financial assets it requires classification and measurement in either the amortised cost or the fair value
category. For a company’s own debt held at fair value, the standard requires the movement in the fair value as a
result of changes in the company’s own credit risk to be included in other comprehensive income. It is effective for
accounting periods beginning on or after 1 January 2015. The standard has not yet been endorsed by the EU. The
adoption of IFRS 9 is not expected to have a significant impact upon the Group’s net results or net assets.

4.        Directorate

 During the financial period under review, the composition of the Board of Directors was as follows:

     Name                                              Position
     Mr Nathan Taylor                                  Non-executive Chairman
     Mr Johan du Toit                                  Chief Executive Officer
     Mr Jason Hou                                      Non-executive Director
     Mr Allen Phillips                                 Independent Non-executive Director

5.         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.

6.        Share-based payments

During the year, no further share options were granted to employees.

7.        Dividends

No dividends were declared or paid during the year under review.

8.        Reconciliation between loss and headline loss attributable to equity holders of the Group

                                                                                               Group
                                                                                     2014                       2013
                                                                                  US$’000                    US$’000
Loss attributable to equity holders of the Group                              (15,267,972)               (14,791,863)
Less: Profit on disposal of property, plant and equipment                         (16,851)                  (541,436)
Loss used in calculating headline loss per share                              (15,284,823)               (15,333,299)

9.        Events occurring after reporting date

Share placement
In order to strengthen its balance sheet and in pursuit of achieving its stated mine plan, the Company has
subsequent to year-end completed the following fundraising:
- On 17 June 2015, 6,015,000 New Ordinary Shares were issued at 10 pence, which raised £0.602 million.
- On 18 June 2015, 2,000,000 New Ordinary Shares were issued at 10 pence, which raised £0.2million.

Asset held for sale
During 2014, the Board and executive committee marketed the Group to investors and strategic partners
throughout South Africa, London and Asia with the view to attracting sufficient capital to better exploit the Group’s
gold reserves and resources. This resulted in three Asian based companies submitting non-binding memoranda
of understanding in Q4 2014. The memoranda of understanding contemplated Central Rand Gold Limited selling
100% of its shares in Central Rand Gold Dutch Netherlands Antilles. However, the highly probably criteria (as per
IFRS 5 – Non-current assets held for sale) was not met at 31 December 2014 as the memoranda of understanding
was still subject to certain conditions such as the successful completion of due diligence and obtaining regulatory
and exchange approvals. In addition, shareholder approval for the transaction will be required.




Issued on behalf of: Central Rand Gold Limited
Date: 30 June 2015

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