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CENTRAL RAND GOLD LIMITED - 2016 Interim Report

Release Date: 28/09/2016 08:00:00      Code(s): CRD       PDF(s):  
2016 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”)


2016 Interim Report


Central Rand Gold today announces its unaudited Interim Results for the six months ended 30 June 2016 (“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
Lola Trollip / Nathan Taylor

Panmure Gordon (UK) Limited – Nominated Adviser & Broker                 +44 (0) 20 7886 2500
Adam James / James Greenwood

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

28 September 2016
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.
Non-executive Chairman’s report
Introduction
The Company had three key objectives during the first six months of 2016, namely to:
- continue necessary capital works in relation to the Company’s metallurgical plant, in particular the repair of
    Mill No 1;
- stabilise the operations of the Company; and
- progress discussions with capital providers.

Key salient features during the first six months of the year
- Loss before interest, tax and depreciation of US$1.9 million (2015: US$0.7 million) for the period;
- The rate of dewatering has stabilised, and the levels underground are gradually reducing;
- A Toll Treatment Agreement was concluded with a third party; and
- Post the period end and as previously announced, the Company have identified opportunities to raise
   additional funding from a number of parties in order to pursue growth opportunities identified and to continue as
   a going concern.

Safety

Safety statistics
 Type of injury                Six months ended          Six months ended
                                   30 June 2016              30 June 2015
 Dressing cases                               2                         -
 Lost-time injuries                           3                         2
 Fatalities                                   -                         -

Safety remains a key focus for the Company, irrespective of the environment in which it is operating. There were
two dressing cases in the six months ended 30 June 2016 compared to zero for the same period in 2015 and three
lost-time injuries in the six months ended 30 June 2016 compared to two for the same period in 2015. The
Company has embarked on a number of safety campaigns to invigorate the safety culture in the Company.

Acid Mine Drainage (“AMD”)
The High Density Sludge ("HDS") plant, operated by the Trans Caledon Tunnel Authority (“TCTA”), 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 following table:

                                    Average daily
                                     pumping rate         Water level below
 Month                                     (mlpd)             surface (mbs)
 January 2016                                  35                    143.57
 February 2016                                 33                    141.40
 March 2016                                    70                    143.20
 April 2016                                    66                    145.13
 May 2016                                      65                    147.92
 June 2016                                     65                    148.60
 July 2016                                     65                    147.58
 August 2016                                   59                    152.48

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 2016. As the pumps are imported, and a standby pump was not available, a
replacement submersible pump, from another pump station, was installed at the end of February 2016, 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 11 vertical meters since the
end of February 2016.

Various projects are being undertaken by the Company in order to evaluate the possibility of expediting the water
pumping, and of mining underground, using different mine plans and methodologies.
                                                        
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. Consequently, the Company focussed its attention and resources on
exploiting lower grade open cast mining and surface dumps, which had a significant impact on the Company.

The below table provides the current surface areas available for mining:

 Location                            Viable            Tonnes         Estimated             Average          Estimated                Reef
                                     strike                               grade           thickness             ounces             package
                                     length
                                        (m)               (t)             (g/t)                (cm)               (oz)
 Slot 1                                 420            35,310              1.52                 124              1,721           Kimberley
 N1 Bypass                            1,380            77,764              1.40                  84              3,496                Bird
 Slot 6                                 450            85,068              2.17                 113              5,929            Kimberly
 Slot 5 Nasrec                          120            13,191              1.29                  72                548                Bird
 Slot 5 CW Road                       1,300           130,317              0.54                  72              2,247                Bird
 Slot 10                                460            89,050                 -                 123                  -           Kimberley
 Slot 11 West                           820           288,302              1.98                 360             18,311                Bird
 Slot 11 East                           345           125,491              1.98                 131              7,970                Bird
 Slot 11 A west                         650            70,589              1.98                 131              4,483                Bird
 Slot 11 A east                         470           130,188              0.18                  47                771                Bird
 Slot 12                                460            90,283              1.29                 123              3,747           Kimberley
 Slot 4                                 836            60,162              1.83                 132              3,540           Kimberley
 Slot 5                             406,000            49,015              2.12                  92              3,342                Bird
 Slot 7                             190,460           150,708              2.23                 189             10,786                Bird

The quantity and grade described above has been derived from historical sampling data, together with current information gathered and verified
by both the Mining Engineer, and the Geologists at Central Rand Gold.

The above table does not include surrounding sand and slimes resources which the Company has sourced, and
earmarked for Research and Developmental projects together with the Zhejiang Golden Machinery Plant (“ZGMP”)
in China.

Production statistics
                                            30 June 2016                   30 June 2015
                                                                                                                 Variance
                                                  tonnes                         tonnes
 Underground                                           -                              -                                 -
 Surface                                          33,424                         62,856                          (29,432)
 Reclamation                                      36,892                         33,356                             3,536
 Total                                            70,316                         96,212                          (25,896)

Surface mining was largely focused at slots 5, 7 and 4. Current pits have been mined down to a depth of
approximately 30 metres. The average belt grade for these pits to date is 1.94g/t. The pits were put on care and
maintenance in April 2016, until the mining strategy has been revised. Focus is now being put on to the
rehabilitation of open and mined out pits.

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. A project
has been undertaken with ZGMP to test a metallurgical process, on the slimes/sands, and the outcome of this test
work is anticipated to ultimately result in a larger plant being built at Central Rand Gold SA, which will then be able
to process the dump material expediently.

Metallurgy

Production statistics
                                                2016                    2015
                                             January                 January
                                             to June                 to June
Internal
Tonnes processed (t)                          18,824                  87,895
Built up head grade (g/t)                       2.12                    1.45
Fine gold produced (oz)                        1,394                   3,435

External (Toll treatment)
Tonnes processed (t)                               -                   6,721
Delivered grade (g/t)                              -                    1.04
Fine gold produced (oz)                            -                     244
Total tonnes processed (t)                    18,824                  94,616
Total gold produced (oz)                       1,394                   3,679

Internal gold production for 2016 H1 was below that of 2015, being that the Mill No 1 was irreparable after a
breakdown, and the Company had to source another Mill. The Company also took the opportunity to cleanse the
full circuit, in preparation of the new Toll-milling contract. A second-hand Mill was purchased, repaired and installed
in September 2016. The aim is to reach an average throughput of 20,000 tonnes per month, by the end of October
2016 (the updated deadline). The anticipated deliveries and processing rates are conditional upon the Company
having sufficient working capital to fund operations.

Financial update

Results
The loss before interest, tax and depreciation for the period under review amounted to US$1.9 million, which is
higher than the prior year period operational loss of US$0.7 million. The increase in loss is largely attributed to the
cessation of open pit mining in March 2016. As a result, internal gold production decreased by 23% to 2,637 ozs
(2015: 3,435 ozs) and overall revenue decreased from US$4.4 million to US$1.8 million. The Company entered into
a Tolling Agreement in July 2016 with a third party, Nikkel Mining, who will provide product to be treated through
the plant. The Tolling agreement is in the form of a value per tonne of throughput in the plant, which is anticipated
to raise income for Central Rand Gold SA. This in turn will assist in the Company being right-sized and refocused.
Cash and cash equivalents at 30 June 2016 was US$0.4 million.

There remains a material uncertainty in respect of the Company's ability to continue as a going concern. For further
consideration, please refer to the basis of preparation set out in note 2 of the financial statements.

Looking forward
The focus over the next six months is to:
- finalise the US$4 million investment from an existing shareholder of the Company;
- continue to toll treat material through the Company’s metallurgical plant;
- process additional surface material, which the Company has sourced, through a Third Party metallurgical plant;
- ensure that the Research and Developmental test work is successful for the acquisition of further gold bearing
  surface material which is proximal to the Company’s existing metallurgical plant; and
- commence rehabilitation of the Company’s mined out open pit areas.

Various opportunities have been brought to the attention of Central Rand Gold, and project and task teams have
been formed to evaluate each one, and make recommendations to the Board for possible Joint Ventures, Mergers
and/or Mining opportunities.

As previously announced, the Company has been pursuing discussions with a number of sources over the
availability of both debt and equity funding to provide working capital and funding for growth initiatives at the
Company.

The Company is presently pursing a transaction with one existing shareholder of the Company for an investment of
US$4,000,000 (the “Strategic Investment”). The Strategic Investment currently envisages the investment into the
Company’s wholly owned immediate subsidiary Central Rand Gold (Netherlands Antilles) N.V. (“CRG NV”). The
final terms and structure of the Strategic Investment which remain subject to amendment, will be announced to
shareholders as soon as finalised, however the Company expects that the Strategic Investment will result in the
Company retaining a majority shareholding (in excess of 50 per cent. of the issued shares) and the full
management control of CRG NV and that the Group will continue to fully consolidate the Company’s subsidiaries
and operations. As part of the Strategic Investment, the Company is engaged in discussions with Redstone Capital
Limited to extend the expiry date of the US$7.25m Senior Secured Convertible Loan Notes.

The future period will also see board renewal at Central Rand Gold Limited. The Company’s Board will be re-
compositioned over the coming weeks due to external changes in the professional working arrangements of myself
and Mark Austin. The Board has identified and invited two individuals to join the Board as Non-Executive Directors
as soon as the necessary on-boarding paperwork has been completed. The two individuals have strong mining
backgrounds as well as financial experience.


Nathan Taylor
Non-executive Chairman


Mark Austin, Non-Executive Director of the Company with over thirty five years' experience in the exploration and
mining industry, has read and approved the geological disclosure in this regulatory announcement. Mr Austin holds
a B.Sc. Hons. in Geology, is a registered Natural Scientist ('SACNASP') and a Fellow of the Geological Society of
South Africa and is currently serving on the Steering Committees of the South African Code for the Reporting of
Exploration Results, Mineral Resources And Mineral Reserves ('SAMREC') and the South African Code for the
Reporting of Mineral Asset Valuation ('SAMVAL').

The information communicated in this document is inside information for the purposes of Article 7 of Market Abuse
Regulation 596/2014 ("MAR").


Condensed Group Statement of Financial Position
as at 30 June 2016
                                                              30 June       31 December        30 June
                                                                 2016              2015           2015
                                               Notes         US$ '000          US$ '000       US$ '000
                                                          (Unaudited)         (Audited)    (Unaudited)
ASSETS
Non-current assets
Property, plant and equipment                    5              2,194             2,271          3,172
Intangible assets                                               2,219             2,114          2,669
Security deposits and guarantees                                   49                46             59
Environmental guarantee investment                              2,712             2,584          3,119
Loans receivable                                 6              8,071             7,236          8,619
                                                               15,245            14,251         17,638
Current assets
Security deposits and guarantees                                   26                26             32
Prepayments and other receivables                                 508               480            712
Inventories                                      7                 79               120            112
Cash and cash equivalents                                         435               556          1,177
Derivative asset                                                    -                 -            720
                                                                1,048             1,182          2,753

Total assets                                                   16,293            15,433         20,391
EQUITY
Attributable to equity holders of the parent
Share capital                                    8             27,283            26,617         26,617
Share premium                                    8            225,255           224,037        224,048
Share-based compensation reserve                               28,238            28,238         28,187
Treasury shares                                                   (6)               (6)            (6)
Foreign currency translation reserve                         (29,097)          (28,993)       (29,433)
Accumulated losses                                          (262,484)         (260,117)      (262,743)
                                                             (10,811)          (10,224)       (13,330)
Non-controlling interest                                            -                 -              -
Total equity                                                 (10,811)          (10,224)       (13,330)
LIABILITIES
Non-current liabilities
Environmental rehabilitation                                    3,858            3,676           4,622
Loan payable                                     9              8,071            7,236          14,392
                                                               11,929           10,912          19,014
Current liabilities
Trade and other payables                                        6,981            6,999           6,078
Royalties taxation payable                                        147              140             181
Loan payable                                     9              7,400            6,959               -
Derivative liability                                              647              647           8,448
                                                               15,175           14,745          14,707

Total liabilities                                              27,104           25,657          33,721
Total equity and liabilities                                   16,293           15,433          20,391



Condensed Group Statement of Profit or Loss 
for the six months ended 30 June 2016
                                                                 Six months      12 months      Six months
                                                                      ended          ended           ended
                                                                    30 June    31 December         30 June
                                                                       2016           2015            2015
                                                   Notes           US$ '000       US$ '000        US$ '000
                                                                (Unaudited)      (Audited)     (Unaudited)

Revenue                                             10                1,765          8,093           4,352
Production costs                                    11              (1,553)        (6,079)         (2,776)
Employee benefits expense                                             (907)        (2,252)         (1,293)
Directors' emoluments                               12                (124)          (468)           (103)
Operating lease expense                                               (285)          (872)           (250)
Operational expenses                                13                (138)          (505)           (174)
Other expenses                                      14                (665)        (1,098)           (560)
Other income and gains                              15                    5            305             107
Foreign exchange transaction gains/(losses)                              16           (75)            (16)
Loss before interest, tax and depreciation                          (1,886)        (2,951)           (713)
Depreciation                                                          (192)          (425)           (229)
Impairment of assets                                                      -          (346)               -
Fair value movement in embedded derivative                                -          7,081               -
Finance and investment income                                           463          1,149             546
Finance costs                                                         (752)        (3,066)           (788)
(Loss)/profit before income tax                                     (2,367)          1,442         (1,184)
Income tax expense                                  16                    -              -               -
(Loss)/profit for the period                                        (2,367)          1,442         (1,184)

(Loss)/profit for the period is attributable to:
Non-controlling interest                                                  -              -               -
Equity holders of the parent                                        (2,367)          1,442         (1,184)
                                                                    (2,367)          1,442         (1,184)

Shares in issue                                                 141,400,341     95,195,808      95,195,808
Weighted average number of ordinary shares in
issue                                                           109,517,964     91,501,233      95,195,808
Fully diluted weighted average number of
ordinary shares in issue                                        110,121,964    258,689,069      95,195,808
Basic (loss)/earnings per share (US cents per
share)                                              18               (2.16)           1.58          (1.24)
Diluted loss per share (US cents per share)         18               (2.15)         (2.23)          (1.24)



                                                          
Condensed Group Statement of Comprehensive Income
for the six months ended 30 June 2016
                                                     Six months     12 months     Six months
                                                          ended         ended          ended
                                                        30 June   31 December        30 June
                                                           2016          2015           2015
                                                       US$ '000      US$ '000       US$ '000
                                                    (Unaudited)     (Audited)    (Unaudited)

(Loss)/profit for the period                            (2,367)         1,442        (1,184)
Other comprehensive (loss)/income:
Item that may be reclassified subsequently to
profit and loss
Exchange differences on translating foreign
operations                                                (104)           541            101
Other comprehensive (loss)/income for the
period, net of tax                                        (104)           541            101
Total comprehensive (loss)/income for the
period                                                  (2,471)         1,983        (1,083)
Total comprehensive (loss)/income is
attributable to:
Non-controlling interest                                      -             -              -
Equity holders of the parent                            (2,471)         1,983        (1,083)
                                                        (2,471)         1,983        (1,083)

                                       
Condensed Group Statement of Changes in Equity
for the six months ended 30 June 2016
                                                            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                  8           127        1,085               -            -             -              -       1,212                -      1,212
Employees' and Directors'       20          
shares-based payments                      
                                               -            -            (51)            -             -              -        (51)                -       (51)
Balance at 30 June 2015                   26,617      224,048          28,187          (6)      (29,433)      (262,743)    (13,330)                -   (13,330)
                                               

                                                            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 2015               26,617      224,037          28,238         (6)       (28,993)      (260,117)    (10,224)                -   (10,224)
Total comprehensive income
for the period ended 
30 June 2016
Loss for the period                            -            -               -           -              -        (2,367)     (2,367)                -    (2,367)
Other comprehensive
income
Foreign currency adjustments                   -            -               -           -          (104)              -       (104)                -      (104)
Transactions with owners,
recorded directly in equity
Issue of Shares:
Capital raising                  8           666        1,218               -           -              -              -       1,884                -      1,884
Balance at 30 June 2016                   27,283      225,255          28,238         (6)       (29,097)      (262,484)    (10,811)                -   (10,811)


Condensed Group Statement of Cash Flow
for the six months ended 30 June 2016
                                                         Six months       12 months      Six months
                                                              ended           ended           ended
                                                            30 June     31 December         30 June
                                                               2016            2015            2015
                                                           US$ '000        US$ '000        US$ '000
                                                        (Unaudited)       (Audited)     (Unaudited)

CASH FLOWS FROM OPERATING
ACTIVITIES                                      Notes
(Loss)/profit before tax                                    (2,367)           1,442         (1,184)
Adjusted for :
Depreciation                                                    192             425             229
Employment benefit expenditure (share-based
payments)                                                         -               -            (51)
Profit on disposal and scrapping of property,
plant and equipment                                               -           (146)             (9)
Impairment of assets                                              -             346               -
Net (gain)/loss on foreign exchange                            (16)              75              16
Finance income                                                (463)         (1,149)           (546)
Finance costs                                                   752           3,066             788
Fair value movement in embedded derivative                        -         (7,081)               -
Changes in working capital
(Increase)/decrease in prepayments and other
receivables                                                    (28)             689             527
Decrease/(increase) in inventory                                 41            (44)            (36)
(Decrease)/increase in trade and other payables                (18)             173           (833)
Decrease in provisions                                            -               -           (282)
Cash flows used in operations                               (1,907)         (2,204)         (1,381)
Finance income                                                    4             203              66
Finance costs                                                 (289)             580               -
Net cash used in operating activities                       (2,192)         (1,421)         (1,315)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment       5                -            (92)             (5)
Proceeds from disposal of property, plant and
equipment                                                         -             180               -
Increase in environmental guarantee deposit                       -              65            (17)
Net cash from/(used in) investing activities                      -             153            (22)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares for cash                        2,062            1,261          1,260
Cost relating to the issue of shares                          (178)             (60)           (48)
Net proceeds from issue of convertible notes                    441                -              -
Net cash from financing activities                            2,325            1,201          1,212

Net increase/(decrease) in cash and cash
equivalents                                                     133             (67)          (125)
Cash and cash equivalents at 1 January                          556              914            914
Effects of exchange rate fluctuations on cash
balances                                                      (254)            (291)            388
Cash and cash equivalents at end of period                      435              556          1,177

Notes to the Condensed Interim Group Financial Statements
for the six months ended 30 June 2016

1. Basis of preparation
This condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial
Reporting as adopted by the EU. The annual Financial Statements of the Group are prepared in accordance with
International Financial Reporting Standards and Interpretations (collectively “IFRS”) issued by the International
Accounting Standards Board (“IASB”) as adopted by the European Union (“EU”). The condensed interim Group
financial statements have been prepared applying the accounting policies and presentation that were applied in
the preparation of the Company’s published consolidated financial statements for the year ended
31 December 2015 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, is the US
Dollar. The functional currency of its principal subsidiary, Central Rand Gold SA is the South African Rand (“ZAR”
or “Rand”).

The interim financial information for the six months to 30 June 2016 and 30 June 2015 is unaudited and does not
constitute statutory financial information. The comparatives for the full year ended 31 December 2015 are not the
Group's full statutory accounts for that year. It does not include all disclosures that would otherwise be required in
a complete set of financial statements and should be read in conjunction with the 2015 Annual Report. The
auditor's report on those accounts was (i) unqualified, (ii) included an emphasis of matter in respect of going
concern and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Going concern
The Board has prepared the condensed THIS ALL Group financial statements on the going concern basis
notwithstanding net current liabilities at 30 June 2016 of US$14.1 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 2015 year end, the
Group ceased open pit mining operations and will instead temporarily focus on toll treatment operations under a
binding tolling agreement with a third party which is expected to be cash flow generative to Central Rand Gold SA.
The Group has also raised a further US$1.9 million from share placements that took place during the period under
review. Furthermore, the Company have identified opportunities to raise additional funding from a number of
parties and expect to enter into binding documentation shortly.

Central Rand Gold entered into an agreement with Redstone Capital Limited to extend both the maturity of the
Loan Notes and the expiry date of the Warrants to 31 October 2016 which will enable the Company to continue to
progress the capital raising work stream. All other terms of the Loan Notes and Warrants remained the same.

The Board has prepared cash flow projections until 30 September 2017 that reflect the current toll treating plan
adopted by the Directors. This updated plan is based on a contract concluded with Nikkel Mining, and is valid for
a period of one year, with an option to extend the contract and terms beyond that period. The tolling plan
incorporates the upgrade to Mill number 1, and is based on an average capacity of 19,000 tonnes per month, as
from October 2016. The Company is presently pursing a transaction with one existing shareholder of the
Company for an investment of US$4,000,000 (the “Strategic Investment”) into the Company’s wholly owned
immediate subsidiary Central Rand Gold (Netherlands Antilles) N.V. (“CRG NV”). The final terms and structure of
the Strategic Investment have not been finalised yet. There are current fund-raising initiatives within the Group,
and the Board will direct the monies to various projects, as well as to the working costs of the Group. Some of the
material uncertainties that existed as at 31 December 2015 have been addressed during the period under review,
while others still exist. Therefore, there still is doubt on the Group’s ability to continue as a going concern.
Nevertheless, after taking account the Group’s cash flow projections, 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 Board has prepared the condensed interim Group financial statements on a
going concern basis.
The Board is optimistic about the future of the Company with agreements for tolling in place, as well as the
various initiatives on acquisitions and joint venture projects. The Board believes that this will collectively improve
the Company’s position in the market.

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 2015, 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 2016:
• IFRS 5: Non-current Assets Held for Sale and Discontinued Operations
• IFRS 7: Financial Instruments: Disclosures
• IFRS 10: Consolidated Financial Statements
• IAS 1: Presentation of Financial Statements
• IAS 16: Property, Plant and Equipment
• IAS 19: Employee Benefits
• IAS 27: Separate Financial Statements
• IAS 34: Interim Financial Reporting
• IAS 38: Intangible Assets

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 2015.

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 2015.

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:

                                                      2016                    2015                   2015
                                             Six months to              Year ended          Six months to
                                                   30 June             31 December                30 June
                                           Closing Average         Closing Average        Closing Average

South African Rand                          0.07     0.07           0.08      0.08         0.08      0.08
Pound Sterling                              1.34     1.43           1.48      1.53         1.57      1.52
Australian Dollar                           0.74     0.74           0.73      0.75         0.77      0.78

5. Property, plant and equipment
During the six months ended 30 June 2016, the Group did not purchase any items of property, plant and
equipment (2015: US$5,280).

6. Loans receivable
Puno Gold Investments Proprietary Limited ("Puno")
Since the last report for the year ended 31 December 2015 there has been no resolution to the dispute relating to
alleged procedural breaches of the Central Rand Gold SA Shareholders’ Agreement between Central Rand Gold
SA 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.

On 1 April 2016 judgment was handed down in the appeal and Central Rand Gold SA was successful in so far as
the preliminary points were concerned. Costs in the appeal, including wasted costs pertaining to the preliminary
points have been granted against Puno which are currently in the process of being ‘taxed’ legally before the
taxing masters of the relevant courts and will be recovered from Puno. The remainder of the arguments pertaining
to the merits of the matter need to be addressed by the court of first instance. Central Rand Gold SA took the
necessary steps for the matter to be referred back to the Judge in order to give judgment on the remainder of the
issues.

On 29 April 2016, Puno served on Central Rand Gold SA an application on the basis of sections 344(f) and 345 of
the Companies Act 2008, (Act 71 of 2008), as amended, for an order to wind up (liquidation) Central Rand Gold
SA. Upon advice from Central Rand Gold SA’s legal advisors, Central Rand Gold SA is opposing the application
and lodged answering affidavits. The time period for Puno to file their replying affidavit lapsed on 22 June 2016.
Puno’s opportunity to file further affidavits has now lapsed and Central Rand Gold SA awaits Puno’s confirmation
whether they intend to persist in their application. The Company is of the opinion that, as a subsidiary of a listed
Company, it has sufficient support from the Holding Company to successfully trade out of the loss making
situation.

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
                                                             2016               2015               2015
                                                         US$ '000           US$ '000           US$ '000

Consumables                                                    42                 29                 39
Ore stockpiles                                                 37                 91                 73
Total inventories                                              79                120                112

8. Share capital and share premium
The Company issued the following shares during the period under review:
- A first share placement on 9 February 2016 of 14,279,371 new ordinary shares at 3.5 pence, which raised
    US$0.72 million (£0.50 million).
- A second share placement on 9 March 2016 of 20,719,644 new ordinary shares at 3.5 pence, which raised
    US$1.05 million (£0.73 million).
- A subscription of 4,620,005 new ordinary shares on 7 June 2016 at an issue price of 3 pence each, which
    raised US$0.20 million (£0.14 million).
- 6,585,513 new ordinary shares were issued to Bergen Global Opportunity Fund, LP on 7 June 2016 at par
    value, which raised US$0.09 (£0.07 million).

9. Loan payable
                                                                                              
                                                                                Group   
                                                              June           December             June
                                                              2016               2015             2015
                                                          US$ '000           US$ '000         US$ '000

Non-current                                                  8,071              7,236           14,392
Current                                                      7,400              6,959                -
                                                            15,471             14,195           14,392

Loan payable consists of the following:

                                                                                Group
                                                              June           December             June
                                                              2016               2015             2015
                                                          US$ '000           US$ '000         US$ '000

Puno Gold Investments Proprietary Limited                   8,071               7,236            8,620
Redstone Capital Limited                                    6,959               6,959            5,772
Bergen Global Opportunity Fund, LP                            441                   -                -
                                                           15,471              14,195           14,392

10. Revenue
                                                                                Group
                                                             June            December             June
                                                            2016                 2015             2015
                                                         US$ '000            US$ '000         US$ '000

Gold sales                                                  1,764               8,056            4,314
Other by-product sales                                          1                  37               38
                                                            1,765               8,093            4,352

The revenue relates to the sale of gold derived from mining activities that take place in South Africa and the sale
of other by-products. 1,417 (30 June 2015: 4,316) ounces of gold was sold.

11. Production costs
                                                                                       Group
                                                                   June             December                 June
                                                                   2016                 2015                 2015
                                                               US$ '000             US$ '000             US$ '000
Production costs comprise the following items:
- Consumables                                                       347                1,864                  791
- Utilities                                                         452                1,153                  404
- Plant hire                                                        534                2,276                  957
- Labour hire                                                       131                  467                  199
- Toll treatment                                                     89                  649                  425
- Environmental rehabilitation provision                              -                (330)                    -
                                                                  1,553                6,079                2,776

12. Changes to the Board
During the period under review, Mr A Phillips resigned as a Director of the Group on 6 June 2016.

13. Operational expenses
                                                                                       Group
                                                                   June             December                June
                                                                   2016                 2015                2015
                                                               US$ '000             US$ '000            US$ '000
Operational expenditure comprises the following items:
- Assaying costs                                                     41                  196                  98
- Consulting services                                                93                  293                  58
- Environmental costs                                                 4                    7                   3
- Mineral property options paid                                       -                    9                  15
                                                                    138                  505                 174

14. Other expenses
                                                                                       Group
                                                                   June             December                June
                                                                   2016                 2015                2015
                                                               US$ '000             US$ '000            US$ '000

Auditor's remuneration                                              113                  146                   -
Accounting fees                                                     126                    -                   -
Corporate social investment                                          13                    1                   -
Legal costs                                                          64                  169                  40
Travel and accommodation                                             12                   40                  26
Telecommunications                                                   42                  109                 174
Other expenses                                                      295                  633                 320
                                                                    665                1,098                 560
15. Other income and gains
                                                                                       Group
                                                                   June             December                June
                                                                   2016                 2015                2015
                                                               US$ '000             US$ '000            US$ '000

Sundry income                                                         5                  305                 107


16. Income tax expense
Income tax expense is recognised based on management’s best estimate of the weighted average annual income
tax rate expected for the full financial year. The estimated average annual tax rate used for the year to
30 June 2016 is 0% (2015: 0%) due to assessable losses available to Central Rand Gold SA and the Guernsey
resident status of Central Rand Gold resulting in 0% effective rates.

17. Commitments
There are no commitments outstanding at 30 June 2016.

18. Loss/earnings per share
                                                                                 Group
                                                                   June       December                June
                                                                   2016           2015                2015
Headline (loss)/earnings per share (US cents per share)          (2.16)           1.42              (1.24)
Diluted headline loss per share (US cents per share)             (2.15)         (2.29)              (1.24)

Reconciliation between loss attributable to the
equity holders of the Group and the headline loss
attributable to the equity holders of the Group:
(Loss)/profit attributable to equity holders of the Group
(US$'000)                                                       (2,367)          1,442             (1,184)
Less: Profit on disposal of property, plant and
equipment (US$'000)                                                   -          (146)                 (9)
(Loss)/profit used in calculating headline
(loss)/earnings per share (US$'000)                             (2,367)          1,296             (1,193)

19. 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.

20. Share-based payments
No additional shares and share options in the Company were granted during the six months ended 30 June 2016.

21. Related parties
No disclosable related party transactions occurred during the period.

22. Contingent liability
During the previous financial year, the following contingent liability existed and still exists as at 30 June 2016:

Thin capitalisation
The tax legislation with regards to thin capitalisation changed with effect from 1 April 2012 and is 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.
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 (“DWT”), at a rate of
15%.

In prior years, management 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 finalising a full Transfer Pricing benchmarking study applying OECD
(Organisation for Economic Co-operation and Development) principles.

23. Events occurring after reporting date

Operating
The Company has subsequent to 30 June 2016:
- Completed and executed the definitive documents which govern the Joint Venture Tolling Agreement (“Tolling
  Venture”) with the third party supplier of gold bearing ore (“Ore Supplier”). The Company has received multiple
  deliveries of gold bearing ore from the Ore Supplier and has commenced processing the gold bearing ore.
- Continued to advance due diligence and negotiations with additional third parties regarding a variety of joint
  venture alternatives.
- Completed the refurbishment of Mill 1.
- Had discussions with the owner of a tailings deposit located in close proximity to the Company’s metallurgical
  plant (the “Target Tailings Deposit”). The Target Tailings Deposit is considered to host several million tonnes of
  gold bearing material. The Company conducted test work on the Target Tailings Deposit material, the results of
  which are not yet available and the commercial terms of the agreement relating to the Target Tailings Deposit
  have not been finalised yet. The Company is contemplating a transaction structure that will allow both the
  Tolling JV and the Target Tailings Deposit to operate concurrently however the Board highlights that no
  assurances can be given with respect to the Target Tailings Deposit at this stage.

Financing
The Company has subsequent to 30 June 2016:
- Issued a total of 12,959,882 new ordinary shares (“Conversion Shares”) in respect of a total of US$213,000 of
  convertible security pursuant to the convertible securities issuance deed entered into with Bergen Global
  Opportunity Fund, LP (“Bergen”) on 7 June 2016.
- Issued a total of 20,642,637 ordinary shares in respect of a partial exercise of the convertible securities
   previously entered into with Bergen.
- Entered into an agreement with Redstone Capital to extend both the maturity of the Loan Notes and the expiry
  date of the Warrants to 31 October 2016 which will enable the Company to continue to progress the capital
  raising work stream. All other terms of the Loan Notes and Warrants remained the same.
- Pursued a transaction with one existing shareholder of the Company for an investment of up to US$4,000,000
  (the “Strategic Investment”). The Strategic Investment envisages the investment into the Company’s wholly
  owned immediate subsidiary Central Rand Gold (Netherlands Antilles) N.V. (“CRG NV”). The final terms and
  structure of the Strategic Investment are still to be finalised.

Intended Board changes
It is intended that Nathan Taylor and Mark Austin will resign from the Board in the short term. The Board has
identified and invited two individuals to join the Board as Non-executive Directors as soon as the necessary on-
boarding paperwork has been completed.

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.

Due to the flooding of the Central Basin, the Company suspended underground operations in October 2014 until
the Central Basin water table reduces sufficiently to enable underground mining to recommence. The Company
has subsequently focused on mining surface and open pit operations. However, due to the grade variability from
the surface operations, the Company ceased open pit mining operations in May 2016 and its short term focus will
be on the rehabilitation of opened up areas, as well as processing material under the Tolling Agreement (the
“Tolling Agreement”), which commenced in July 2016, in order to maintain operations.
According to the Tolling Agreement, a third party supplier of ore will source and deliver gold-bearing material to
Central Rand Gold’s metallurgical plant for processing by Central Rand Gold. Under the Tolling Agreement, Central
Rand Gold will receive a graduated fee for processing the material in accordance with the number of tonnes
processed through the metallurgical plant.

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 the
alternative exchanges of AIM in London and to the AltX in Johannesburg.

Mining Rights and Prospecting Rights
Previously, 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),
Anglo Deep, Village Main and Robinson Deep and the defunct Simmer and Jack Gold Mine. The Prospecting
Rights extended over an area from west to east of approximately 40 kilometres and north to south of approximately
seven kilometres (the “Central Rand Project”). The Southern Deeps New Order Prospecting Right Application (the
“Prospecting Application”), which has been pending a decision since 2007, was refused by the Department of
Mineral Resources (“DMR”) in 2015. A letter disputing reasons for the refusal has been lodged with the Deputy
Director General of Mineral Regulations with no updates as yet. Central Rand Gold South Africa Proprietary Limited
(“Central Rand Gold SA”) has decided not to pursue the matter. The South Deep Prospecting Right renewal, that
was rejected on a technicality issue by the DMR, is still under appeal with no outcome of the decision as yet.

Currently, there are five of the seven New Order Prospecting Rights that still remain active, namely the Western
Areas A, B and E, Village Main and Robinson Deep and Simmer and Jack. The Western Areas A, B and E and
Village Main and Robinson Deep Prospecting Rights are currently under renewal for an additional three year
period. All Prospecting Rights, except for one, have since been transferred from Rand Quest Syndicate Limited
(“RQS”) to Central Rand Gold SA via Section 11 applications lodged with the DMR. A Section 11 application for the
Simmer and Jack Prospecting Right has been lodged but is still pending approval by the DMR.

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, Crown Mines and City Deep tenements. The Company’s current mining right
renewal has been submitted to the DMR, using the SAMRAD online application system. The renewal is for a
period of 20 years. The Company has yet to receive notification in writing from the Regional Manager of Mineral
Resources confirming the acceptance of the application.

Date: 28/09/2016 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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