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CENTRAL RAND GOLD LIMITED - 2015 Interim Report

Release Date: 15/09/2015 08:00:00      Code(s): CRD       PDF(s):  
2015 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”)

2015 Interim Report

Central Rand Gold, the South African gold mining and exploration holding company, today announces its
unaudited condensed consolidated Interim Results for the six months ended 30 June 2015 (“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 / Nathan Taylor

Panmure Gordon (UK) Limited                                                 +44 (0) 20 7886 2500
Mark Taylor

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

15 September 2015
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.

Chief Executive Officer’s report

Introduction

The Company had two key objectives during the first six months of 2015, namely to continue with discussions
with the various investors for the acquisition of Central Rand Gold (Netherlands Antilles) N.V. and to stabilise
the operations of the Company.

Key salient features during the first six months of the year
-     Negotiations continued with Asian suitors regarding a potential transaction with Central Rand Gold and a
      conclusion is expected shortly;
-     Loss before interest, tax and depreciation reduced in the period to US$0.7 million (2014: US$2.6 million);
-     Significant reduction in cost structure for the Central Rand Group, with overall costs reducing by 40%;
-     The rate of dewatering suggests that underground operations could resume in approximately 18 months;
      and
-     Sufficient surface material identified and evaluated to compensate for cessation of underground mining.

Safety

Safety Statistics

Type of injury              Six months ended           Six months ended
                                30 June 2015               30 June 2014
Dressing cases                             -                          6
Lost-time injuries                         2                          4
Fatalities                                 -                          1

Safety remains a key focus for the Company, irrespective of the environment in which it is operating. Positively
the Company posted a reduction in all levels of safety incidents, with two lost-time injuries incurred versus four
for the previous period.

Potential sale of Central Rand Gold (Netherlands Antilles) N.V.

Following a sustained period of marketing in Asia during 2014, the Company was able to engage in the
discussions with four Asian Companies to acquire 100% of the share capital of Central Rand Gold (Netherlands
Antilles) N.V.(“CRGNV”). The four Asian Companies are Hiria Group Company Limited ("Hiria"), Beijing Ankong
Investment ("Ankong"), Shengbang Jiabo (Beijing) Consulting Company Limited ("Shengbang") and Huili
Resources Group Limited (“Huili”). All parties signed a similar Memorandum of Understanding (“MOU”), which
set out the timing and terms for the negotiations and due diligence process. Huili’s MOU includes a unique
provision which entitles Huili to the right of first purchase within 21 days of a third party offer being received for
the subsidiary.

Extensive desk top due diligence coupled with various site visits assisted in the due diligence process largely
being completed by the end of June 2015. On 15 June 2015, the Company announced the decision to
discontinue discussions with both Ankong and Shengbang. The Board is focused on ensuring that any
transaction presented to shareholders must be as free from conditions as possible and be in a form which can
be delivered on and be completed timeously. These considerations remain guiding principles of the Board,
which will be applied when considering the various alternatives.

Discussions with Hiria and its financial partner, Hangzhou Everbright Private Equity Investment Management
("Hangzhou Everbright") are ongoing with various commercial structural alternatives being considered. The
discussions have largely progressed along the lines of a significant initial strategic investment in Central Rand
Gold Limited. This investment will provide the Group with the ability to increase its production capacity, upgrade
its resource base and to re-capitalise the balance sheet. The Board believes that this alternative will provide the
Company with a real opportunity to maximise the extraction of its vast resource base, thereby enhancing future
shareholder return and value.

Discussions with Huili remain ongoing with a range of commercial issues and technical matters, largely focused
on the continued dewatering of the Central Basin, being discussed and progressed.

The Company continues to caution that there can be no certainty that the discussions with both Huili or Hiria will
lead to a binding agreement being entered into by either party, nor that the potential sale of Central Rand Gold
(Netherlands Antilles) N.V., or any other transaction will be completed.

Acid Mine Drainage (“AMD”)

The High Density Sludge ("HDS") plant has been operational since mid-2014. The Company continues to
monitor the water level at its mining operations as well as the daily discharge pumped out of the Central Basin
from the HDS plant. The Company has observed that when the flow rate is maintained at approximately 60
million litres per day ("mlpd"), which equates to approximately 80% of nameplate capacity, a reduction in the
water level occurs, as indicated in the table below:
                                                     Water level
                           Average daily           below surface
                            pumping rate           (metres below
 Month                            (mlpd)                surface)
 January 2015                         35                     144
 February 2015                        33                     140
 March 2015                           70                     142
 April 2015                           66                     143
 May 2015                             65                     145
 June 2015                            65                     149
 July 2015                            65                     151
 August 2015                          59                     153

The above table provides an overview of the average daily pumping rate and the resultant impact on the water
table. Due to maintenance on one of the Ritz submersible pumps, pumping was limited to only one pumping
station during January and February 2015. A replacement submersible pump was installed at the end of
February 2015, and an immediate drop in the water table was observed. Since then the submersible pumps
have been pumping at a rate exceeding 60 mlpd, which has resulted in the water table dropping by
approximately 13 vertical meters since the end of February 2015.

Based on the current performance, and taking into account the potentially faster dewatering during the dry
winter months, it is believed that the underground mining areas will become accessible between September
2016 and February 2017.

Mining

Mineral Resources

The Mineral Resources remain unchanged as of June 2015 due to the cessation of underground workings.
Surface operations are classified as ‘Exploration Target’ in terms of the SAMREC code.

The temporary cessation of underground mining in September 2014, due to the rising water levels, precipitated
a dramatic shift in the mining operations. The Company started moving away from open cast mining to target
the higher grade underground ore body. The shift back to surface did have a significant impact on the
Company.

Open pit mining was stepped up and additional reclamation sources of ore were sourced, evaluated and
exploited. The Company’s aim was to secure sufficient resource base to enable the surface operations to
continue, whilst dewatering of the underground mine occurred.

There has been a considerable amount of work undertaken to identify sufficient surface material for processing.
The below table provides the current surface target areas:


                                                                                                                          Approximate
Slot              Target area            Reef                    Dip         V. Depth          Tonnage range (t)               grade
 
Slot 5            Pits 1 to 3            White                40 deg              30m          4 000 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 (Pty) Limited and has over 21 years’ experience in exploration, mineral resource management and mineral
evaluation.

The Company considers the above table to be a conservative estimate of available material and is presently
conducting testwork to determine if the Exploration Target can be increased. Further, the above table does not
include surrounding sand and slimes resources which the Company has sourced.

Production statistics

                              30 June 2015           30 June 2014                    Variance
                                    tonnes                 tonnes
Underground                              -                 66 085                    (66 085)
Surface                             62 856                 22 076                      40 780
Reclamation                         33 356                      -                      33 356
Total                               96 212                 88 161                       8 051

Surface mining was largely focused at slots 5 and 7. Current pits have been mined down to a depth of
approximately 15 metres. The average belt grade for these pits to date is 2.13g/t. It is believed that
conventional drilling and cushion blasting will allow the existing pits to be further pushed back allowing mining at
twice the current operating depths.

With over 100 years of significant mining in the Johannesburg region, there remains a significant amount of old
rock and slimes dumps, which surround the Company’s metallurgical plant. Where economical grades have
been identified and with the consent of the resource owners, the Company has removed this material and
processed it through its metallurgical plant. This activity has an added benefit of rehabilitating the surrounding
area.

Metallurgy

Production Statistics
                                                           2015                 2014
                                                        January              January
                                                        to June              to June
Internal
Tonnes processed (t)                                     87 895               80 749
Built up head grade (g/t)                                  1.45                 1.77
Fine gold produced (oz)                                   3 435                3 205

External (Toll treatment)
Tonnes processed (t)                                      6 721               13 902
Delivered grade (g/t)                                      1.04                 2.35
Fine gold produced (oz)                                     244                  944
Total tonnes processed (t)                               94 616               94 651
Total gold produced (oz)                                  3 679                4 149

Internal gold production for 2015 H1 was on par with 2014 H1 on a gold output context with the lower feed
grade being compensated by higher tonnage throughput, as a result of recent plant upgrades The benefit of the
plant upgrades have resulted in an improvement in plant performance with 18,532 wet tonnes being processed
through the plant in August 2015. The aim is to reach 20,000 tonnes by end October 2015.The external tolling
was impacted both by lower tonnage and lower delivered grades. This is a direct result of the new low grade
Joint Venture entered into with neighbouring producer Mintails Proprietary Limited (“Mintails”).

Mine Call Factor

During H1 2015, the Mine Call Factor (“MCF”) continued on the same positive trajectory seen during 2014. The
“face to pour” MCF reconciliation averaged at 81% for the period, with the belt MCF averaging 94%. This
compares very favourably to the MCF industry average of 74%.

                         Dry
                      tonnes
                   processed                     Face to
Date                     (t)      Belt MCF      pour MCF
January 2015          11 759           91%           84%
February 2015         15 300           93%           77%
March 2015            14 306           96%           89%
April 2015            14 634          101%           78%
May 2015              15 587           96%           85%
June 2015             16 309           90%           70%

Total                 87 895           94%           81%

Plant improvement

The focus remains on improving plant efficiency. One of the highlights of the first half of 2015 was the
construction and commissioning of the new 243 m 3 leach tank in June 2015. The new tank will increase the
leach residence time from 14 hours to 22 hours, resulting in a significant drop in gold in tailings and
corresponding increase in gold production.

Financial update

Results

The loss before interest, tax and depreciation for the period under review amounted to US$0.7m, which is a
significant improvement on prior year period operational loss of US$2.6m. Revenue from internal gold
production is up by 7% to 3 435 ozs (2014: 3 205 ozs), despite the average grade dropping from 1.77g/t to
1.45g/t. Overall revenue is down from US$5.8m to US$4.3m due to the Company sending less material for toll
treatment by Mintails and the reduction in gold price. Significant restructuring occurred within the Company to
realign the business to its new focus on surface mining resulting in a reduction of 40% in the Group’s cost base.
These savings were not only reported through the elimination of underground mining costs but also as a result
of the re-negotiation of key contracts, improving operational processes and eliminating inefficiencies in
consumable usage. A key example is the reduction in the average cost per tonne for surface mining reducing
from US$19 per tonne to US$11 per tonne, a 42% improvement. Although the trend is positive the key focus
remains to move the organisation into sustainable cash generative and profitable position. Cash and cash
equivalents at 30 June 2015 was $1.1m. Cash generated from operations will be utilised to further upgrade the
metallurgical plant and to further reduce the Company’s net working capital position.

Looking forward

The focus over the next six months is to build on the momentum gained during the first half of 2015, with the
following areas being the main focus for the Company:
-     Finalise the negotiations with Hiria and Huili;
-     Continue to identify and mine sufficient surface material until underground mining operations are
      recommenced; and
-     Continual improvement of the Group’s operational processes thereby ensuring the efficiency of spend.

Johan du Toit
Chief Executive Officer

Condensed Group Statement of Financial Position
as at 30 June 2015
                                                           30 June      31 December          30 June
                                                              2015             2014             2014
                                             Notes        US$ '000         US$ '000         US$ '000
                                                       (Unaudited)        (Audited)      (Unaudited)
ASSETS

Non-current assets
Property, plant and equipment                    5           3 172            3 592            4 763
Intangible assets                                            2 669            2 830            3 104
Security deposits and guarantees                                59              191              210
Environmental guarantee investment                           3 119            3 177            3 361
Loans receivable                                 6           8 619            8 646            8 961
                                                            17 638           18 436           20 399
Current assets
Security deposits and guarantees                                32               65               71
Prepayments and other receivables                              712            1 239            1 004
Inventories                                      7             112               76              813
Cash and cash equivalents                                    1 177              914            4 389
Non-current assets held-for-sale                 8               -                -                -
Derivative asset                                               720              720                -
                                                             2 753            3 014            6 277

Total assets                                                20 391           21 450           26 676

EQUITY

Attributable to equity holders of the parent
Share capital                                    9          26 617           26 490           26 314
Share premium                                    9         224 048          222 963          218 630
Share-based compensation reserve                            28 187           28 238           28 187
Treasury shares                                                (6)              (6)              (6)
Foreign currency translation reserve                      (29 433)         (29 534)         (29 348)
Accumulated losses                                       (262 743)        (261 559)        (249 133)
                                                          (13 330)         (13 408)          (5 356)
Non-controlling interest                                         -                -               -
Total equity                                              (13 330)         (13 408)          (5 356)

LIABILITIES
Non-current liabilities
Environmental rehabilitation                                4 622             4 904            5 904
Loan payable                                    10         14 392            14 418           19 336
                                                           19 014            19 322           25 240
Current liabilities
Trade and other payables                                    6 078             6 911            6 792
Taxation payable                                              181               177                -
Derivative liability                                        8 448             8 448                -
                                                           14 707            15 536            6 792

Total liabilities                                          33 721            34 858           32 032

Total equity and liabilities                               20 391            21 450           26 676


Condensed Group Statement of Profit or Loss
for the six months ended 30 June 2015
                                                       Six months          2 months       Six months
                                                            ended             ended            ended
                                                          30 June       31 December          30 June
                                                             2015              2014             2014
                                              Notes      US$ '000          US$ '000         US$ '000
                                                      (Unaudited)         (Audited)      (Unaudited)

Revenue                                          11         4 352             8 212            5 774
Production costs                                 12       (2 776)           (9 844)          (4 856)
Employee benefits expense                                 (1 293)           (3 223)          (1 607)
Directors' emoluments                            13         (103)             (717)            (434)
Inventory write-down                                            -             (705)             (40)
Operating lease expense                                     (250)             (787)            (304)
Operational expenses                             14         (174)             (502)            (639)
Other expenses                                   15         (560)           (1 702)            (882)
Other income and gains                           16           107               543              131
Foreign exchange transaction (losses)/gains                  (16)               129              261
Loss before interest, tax and depreciation                  (713)           (8 596)          (2 596)
Depreciation                                                (229)             (460)            (226)
Impairment of assets                                            -             (158)                -
Loss on fair value of convertible loan note                     -           (5 108)                -
Finance income                                                546             1 233              456
Finance costs                                               (788)           (2 179)            (476)
Loss before income tax                                    (1 184)          (15 268)          (2 842)
Income tax expense                               17             -               -                  -
Loss for the period                                       (1 184)          (15 268)          (2 842)
Loss is attributable to:
Non-controlling interest                                        -                 -                -
Equity holders of the parent                              (1 184)          (15 268)          (2 842)
                                                          (1 184)          (15 268)          (2 842)

Shares in issue                                        95 195 808        87 180 808       75 180 808
Weighted average number of ordinary shares in
issue                                                  95 195 808        87 180 808       75 180 808
Fully diluted weighted average number of
ordinary shares in issue                               95 195 808        87 180 808       75 180 808
Basic loss per share (US cents per share)        19        (1.24)           (17.51)           (3.78)
Diluted loss per share (US cents per share)      19        (1.24)           (17.51)           (3.78)

Condensed Group Statement of Comprehensive Income
for the six months ended 30 June 2015
                                                       Six months         12 months       Six months
                                                            ended             ended            ended
                                                          30 June       31 December          30 June
                                                             2015              2014             2014
                                                         US$ '000          US$ '000         US$ '000
                                                      (Unaudited)         (Audited)      (Unaudited)

Loss for the period                                       (1 184)          (15 268)          (2 842)
Other comprehensive income/(loss):
Item that may be reclassified subsequently to
profit and loss
Exchange differences on translating foreign
operations                                                    101              (91)               94
Other comprehensive income/(loss) for the
period, net of tax                                            101              (91)               94
Total comprehensive loss for the period                   (1 083)          (15 359)          (2 748)

Total comprehensive loss is attributable to:
Non-controlling interest                                        -                 -                -
Equity holders of the parent                              (1 083)          (15 359)          (2 748)
                                                          (1 083)          (15 359)          (2 748)

Condensed Group Statement of Changes in Equity
for the six months ended 30 June 2015

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
2013                                     25 604      213 377          28 224         (6)       (29 442)      (246 291)     (8 534)                 -      (8 534)
Total comprehensive income
for the period ended 30 June
2014
Loss for the period                           -            -               -          -               -        (2 842)     (2 842)                 -      (2 842)
Other comprehensive
income
Foreign currency adjustments                  -            -               -          -              94              -          94                 -           94
Transactions with owners,
recorded directly in equity
Issue of Shares:
Capital raising                             710       5 253                -          -               -              -       5 963                 -        5 963
Employee Share Option                            
Scheme:                                         
Share-based payments:                           
Employees' and Directors'                       
shares and options                            -           -             (37)          -               -              -        (37)                 -         (37)
Balance at 30 June 2014                  26 314     218 630           28 187         (6)       (29 348)      (249 133)     (5 356)                 -      (5 356)
                                                
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
2014                                     26 490     222 963          28 238         (6)       (29 534)      (261 559)    (13 408)                  -    (13 408)
Total comprehensive income
for the period ended 30 June
2015
Loss for the period                           -           -               -           -              -        (1 184)     (1 184)                  -     (1 184)
Other comprehensive
income
Foreign currency adjustments                  -           -               -           -            101              -         101                  -         101
Transactions with owners,
recorded directly in equity
Issue of Shares:
Capital raising                    9        127       1 085               -           -              -              -       1 212                  -       1 212
Employee Share Option
Scheme:
Share-based payments:
Employees' and Directors'
shares and options                21          -           -            (51)           -              -              -        (51)                  -        (51)
Balance at 30 June 2015                  26 617     224 048          28 187         (6)       (29 433)      (262 743)    (13 330)                  -    (13 330)

Condensed Group Statement of Cash Flow
for the six months ended 30 June 2015
                                                         Six months       12 months       Six months
                                                              ended           ended            ended
                                                            30 June     31 December          30 June
                                                               2015            2014             2014
                                                           US$ '000        US$ '000         US$ '000
                                                        (Unaudited)       (Audited)      (Unaudited)

CASH FLOWS FROM OPERATING
ACTIVITIES                                      Notes
Loss before tax                                             (1 184)        (15 268)          (2 842)
Adjusted for :
Depreciation                                                   229             460               226
Employment benefit expenditure (share-based
payments)                                                      (51)              14             (37)
(Profit)/loss on disposal and scrapping of
property, plant and equipment                                   (9)            (17)                9
Impairment of inventory                             7             -             705               40
Impairment of assets                                              -             158                -
Net loss/(gain) on foreign exchange                              16           (129)            (261)
Finance income                                                (546)         (1 233)            (456)
Finance costs                                                   788           2 179              476
Loss on fair value of convertible loan note                       -           5 108                -
Changes in working capital
Decrease/(increase) in prepayments and other
receivables                                                     527           (325)             (90)
(Increase)/decrease in inventory                               (36)             129               57
Decrease in trade and other payables                          (833)            (60)            (179)
(Decrease)/increase in provisions                             (282)             809              258
Cash flows used in operations                               (1 381)         (7 470)          (2 799)
Finance income                                                   66             273                -
Finance costs                                                     -               -             (15)
Sundry income                                                     -         (1 204)                -
Net cash used in operating activities                       (1 315)         (8 401)          (2 814)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment          5           (5)         (1 049)          (2 022)
Proceeds from disposal of property, plant and
equipment                                                         -             186                -
Increase in environmental guarantee deposit                    (17)            (53)             (54)
Net cash used in investing activities                          (22)           (916)          (2 076)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares for cash                        1 260           4 254                -
Cost relating to the issue of shares                           (48)           (257)                -
Net proceeds from exercise of share options                       -          3 732                 -
Net proceeds from issue of share capital                          -              -             5 963
Net cash from financing activities                            1 212           7 729            5 963
Net (decrease)/increase in cash and cash
equivalents                                                   (125)         (1 588)            1 073
Cash and cash equivalents at 1 January                          914           2 475            2 475
Effects of exchange rate fluctuations on cash
balances                                                        388              27              841
Cash and cash equivalents at end of period                    1 177             914            4 389

Notes to the Condensed Interim Group Financial Statements for the six months ended 30 June 2015

1. Basis of preparation

This condensed set of consolidated financial statements have 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 2014 except for the changes described in note 2.

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 prior year from the British Pound to the US Dollar as its main source of funding is now the US Dollar.
The functional currency of its principal subsidiary, Central Rand Gold South Africa Proprietary Limited (“CRGSA”)
is the South African Rand (“ZAR” or “Rand”).

Going concern

The Directors have prepared the condensed Group financial statements on the going concern basis
notwithstanding net current liabilities at 30 June 2015 of US$12.0 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 2014 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.

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. 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 show that the Group has sufficient funding for at least
the next 12 months from the date of approval of these condensed interim Group financial statements and hence
the Directors have prepared the condensed interim Group financial statements on a going concern basis.

The Directors are optimistic about the future of the Company and the dewatering may give the Company
improved access to deeper mining levels over time. However, the risks inherent in any single metal mining
operation remain for the longer term.

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 2014, 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 2015:
• IFRS 9: Financial Instruments

The adoption of these standards is not expected to have a significant impact upon the Group’s net results, net
assets or disclosures.

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 2014.

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 2014.

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 period are as follows:

                                                        2015                  2014                  2014
                                               Six months to            Year ended         Six months to
                                                     30 June           31 December               30 June
                                            Closing  Average      Closing  Average      Closing  Average

South African Rand                             0.08     0.08         0.09     0.09         0.09     0.09
Pound Sterling                                 1.57     1.52         1.55     1.65         1.70     1.67

5. Property, plant and equipment

During the six months ended 30 June 2015, the Group spent US$5 280 to purchase other items of property, plant
and equipment. In the six month period ending 30 June 2014, the Group spent US$1 894 534 to upgrade the plant
and US$127 634 to purchase other items of property, plant and equipment.

6. Loans receivable

Puno Gold Investments Proprietary Limited ("Puno")
Since the last report for the year ended 31 December 2014 there has been no resolution to the dispute relating to
alleged procedural breaches of the Central Rand Gold South Africa (Proprietary) Limited (“CRGSA”)
Shareholders’ Agreement between CRGSA and its current Black Economic Empowerment (“BEE”) shareholder,
Puno. The dispute surrounds the allocation of intercompany loans which fund the budget and work programme
and the incurring of, and level of, certain costs.

During the previous financial year, the Company was granted the right to appeal the December 2013 ruling.

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.

7. Inventories

                                                                                Group
                                                             June            December                June
                                                             2015                2014                2014
                                                         US$ '000            US$ '000            US$ '000

Consumables                                                    39                  30                  80
Ore stockpiles                                                 73                  46                 733
Total inventories                                             112                  76                 813


The amount of the write-down of ore stockpiles to net realisable value, and recognised as an expense is US$0 (2014: US$881 109).

8. Non-current assets held-for-sale

During the previous financial year, the Group disposed the flotation plant for US$168 265, resulting in a loss of
US$9 220. No additional items were classified as held-for-sale during the period under review.

9. Share capital and share premium

On 17 June 2015, the Company allotted and issued 6 015 000 New Ordinary Shares at 10 pence, which raised
US$0.94 million (£0.60 million). On 18 June 2015, the Company allotted and issued a further 2 000 000 New
Ordinary Shares at 10 pence, which raised US$0.32 (£0.20 million).

10. Loan payable
                                                                                Group                       
                                                             June            December                June
Net proceeds (USD million)                                   2015                2014                2014
                                                         US$ '000            US$ '000            US$ '000
Loan payable consists of the following:       

Puno Gold Investments Proprietary Limited                   8 620               8 646               8 961
Redstone Capital Limited                                    5 772               5 772              10 375
                                                           14 392              14 418              19 336

11. Revenue
                                                                                Group
                                                             June            December                June
                                                             2015                2014                2014
                                                         US$ '000            US$ '000            US$ '000
Gold sales                                                  4 314               7 840               5 337
Other by-product sales                                         38                 372                 437
                                                            4 352               8 212               5 774

The revenue relates to the sale of gold derived from surface and underground mining activities and the sale of
other by-products. 4 316 (30 June 2014: 4 150) ounces of gold was sold.

12. Production costs
                                                                                Group
                                                             June            December                June
                                                             2015                2014                2014
                                                         US$ '000            US$ '000            US$ '000
Production costs comprise the following items:
- Consumables                                                 791               2 930               1 307
- Utilities                                                   404               1 739                 465
- Plant hire                                                  957               2 023               1 090
- Labour hire                                                 199               2 066               1 259
- Toll treatment                                              425               1 161                 470
- Environmental rehabilitation provision                        -                (75)                 265
                                                            2 776               9 844               4 856

13. Changes to the Board

During the period under review, there was no change in the composition of the Board.

14. Operational expenses
 
                                                                                Group
                                                             June            December                June
                                                             2015                2014                2014
                                                         US$ '000            US$ '000            US$ '000
Operational expenditure comprises the following items:
- Assaying costs                                               98                 337                 155
- Consulting services                                          58                 294                 355
- Environmental costs                                           3               (168)                   5
- Mineral property options paid                                15                  39                 124
                                                              174                 502                 639

15. Other expenses
    
                                                                                Group
                                                             June            December                June
                                                             2015                2014                2014
                                                         US$ '000            US$ '000            US$ '000
Auditor's remuneration                                          -                 232                  39
Corporate social investment                                     -                   8                   2
Legal costs                                                    40                 208                 140
Travel and accommodation                                       26                  20                   4
Telecommunications                                            174                 113                  65
Other expenses                                                320               1 121                 632
                                                              560               1 702                 882

16. Other income and gains
  
                                                                                Group
                                                                June         December                June
                                                                2015             2014                2014
                                                            US$ '000         US$ '000            US$ '000

Sundry income                                                    107              543                 131

In 2015, sundry income included US$89 321 from Gravelotte Mine Limited for consumables, US$9 420 (2014:
US$16 851) for profit on disposal of property, plant and equipment, US$0 (2014: US$308 438) for the sale of
carbon, US$0 (2014: US$118 563) for a diesel refund claimed from the South African Revenue Service (SARS),
US$5 194 (2014: US$52 269) for a royalty paid to Central Rand Gold by Goldplat Recovery Proprietary Limited for
exploration work performed by Goldplat Recovery Proprietary Limited on the Company's site and US$3 331
(2014: US$46 772) for other sundry income.

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 period to 30 June
2015 is 0% (2014: 0%) due to assessable losses available to CRGSA and the Guernsey resident status of the
Company resulting in 0% effective rates.

18. Commitments
                                                                                Group
                                                                  June       December                June
                                                                  2014           2013                2013
                                                              US$ '000       US$ '000            US$ '000
Fees payable to Sekgwa Mining Services Proprietary
Limited for underground mining services                              -              -                 209
Acquisition of tangible assets contracted for                        -              -                  48
                                                                     -              -                 257


The only commitments outstanding at 30 June 2015 are similar in nature to those disclosed at the 31 December
2014 year end and are those incurred in the normal course of business.

19. Loss per share
 
                                                                                Group
                                                                  June        December               June
                                                                  2015            2014               2014
Headline loss per share (US cents per share)                     (1.24)        (17.53)             (3.76)
Diluted headline loss per share (US cents per share)             (1.24)        (17.53)             (3.76)

Reconciliation between loss attributable to the
equity holders of the Group and the headline loss
attributable to the equity holders of the Group:
Loss attributable to equity holders of the Group
(US$'000)                                                       (1 184)       (15 268)            (2 842)
Add: Loss on disposal of property, plant and
equipment (US$ '000)                                                  -              -                  9
Less: Profit on disposal of property, plant and
equipment (US$ '000)                                                (9)           (17)                  -
Headline loss attributable to equity holders of the
Group (US$ '000)                                                (1 193)       (15 285)            (2 833)

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 2015.

22. Related parties

No disclosable related party transactions occurred during the period.

23. Contingent liability

During the previous financial year, the following contingent liability existed:

Thin capitalisation

The tax legislation with regards to thin capitalisation changed with effect from 1 April 2012 and applicable in
respect of years of assessment commencing on or after that date. The safe harbour ratio of 3:1 included in the
previous legislation was replaced with the concept of “arm’s length.” In instances where the loans are considered
not to be on an arm’s length basis all or part of the interest charged could be disallowed as a deduction. Any
interest not allowed as a deduction will be treated as an adjustment in terms of Section 31 of the Income Tax Act
1962 (Act 58 of 1962), as amended (“Income Tax Act”). In terms of Section 31(3) of the Income Tax Act, any
adjusted amount for transfer pricing and thin capitalisation purposes, prior to 1 January 2015, constituted a
deemed loan. As per the amended law, should this amount, plus interest deemed to have accrued on it, not have
been repaid to the taxpayer by the relevant non-resident connected person by 31 December 2014, the outstanding
“deemed loan” must “be deemed to be a dividend consisting of a distribution of an asset in specie, that was
declared and paid by that resident to that other person on 1 January 2015”. Such deemed dividend will be subject
to Dividends Withholding Tax, at a rate of 15%.

Management has obtained legal opinion based on which they concluded that there is no deemed loan. In further
assessing the impact of the amendments on its intercompany loans, management concluded that due to the lack in
industry guidance pertaining to the application of the “arm’s length” concept, management will be unable to confirm
their conclusion without performing a full Transfer Pricing benchmarking study applying OECD (Organisation for
Economic Co-operation and Development) principles.

Section 8F

Section 8F of the Income Tax Act was introduced with effect from 1 April 2014, in terms of which any interest
bearing instrument in respect of which a company owes an amount during the year of assessment could be seen
as a hybrid debt instrument. Should this be the case the interest paid on shareholders’ the loan from 1 April 2014
to 31 December 2014 would be deemed to be a dividend in specie and therefore subject to withholding tax at a
rate of 15%. Management obtained legal counsel opinion which focusses on the reasonable time in which payment
was anticipated by the contracting parties. Based upon this opinion management has concluded that the
shareholders’ loan does not fall within the ambit of section 8F.

During 2007, a dispute arose between the shareholders of CRGSA in regard to the allocation of intercompany
loans which fund the budget and work programme and the incurring of, and level of, certain costs by CRGSA. To
date the dispute has not been resolved and consequently management has been unable to amend the funding
structure of CRGSA.

24. Events occurring after reporting date

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

Our business

Central Rand Gold Limited (“Central Rand Gold” or “the Company”) 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. On 18 September 2013, Central Rand Gold opted to transfer its listing to AIM
in London and to the AltX in 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 to CRGSA via
Section 11 applications lodged with the South African Department of Mineral Resources (“DMR”). The Prospecting
Application is still in the process of being transferred. The Anglodeeps Prospecting Right renewal was submitted to
the DMR but was unfortunately rejected on a technicality. This is currently being taken on appeal.

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.

Date: 15/09/2015 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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