CENTRAL RAND GOLD LIMITED - Acquisition of Mine Waste Dumps - Agreement ExecutedRelease Date: 06/10/2016 08:00:00 Code(s): CRD PDF(s):
Acquisition of Mine Waste Dumps - Agreement Executed
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 2007/019223/10)
LSE share code: CRND JSE share code: CRD
("Central Rand Gold" or “CRG” or the “Company”)
Acquisition of Mine Waste Dumps - Agreement Executed
The Board of Directors (“the Board”) of Central Rand Gold is pleased to announce the execution
of an agreement to acquire mine waste dump material located in close proximity to the
Company’s metallurgical plant (“Mine Waste Dumps”).
Mine Waste Dumps Acquisition
The Mine Waste Dumps are jointly owned by a South African company and their Black
Economic Empowerment partner (“Vendor”). The Vendor has also submitted the requisite
Mining Right Applications over the various Mine Waste Dumps. The Mine Waste Dumps are
located approximately 10km, via sealed roads, from CRG’s metallurgical plant. The Mine Waste
Dumps are a result of mining operations that took place in the area in the late 1890s.
Due Diligence Completed
CRG has conducted legal and technical due diligence on the Mine Waste Dumps over the past
nine months. The due diligence involved a drill program, 3D-modelling, gravity concentrator
trial processing and metallurgical testwork.
The size of the Mine Waste Dumps complex is significant, and at this stage, still undefined. The
Company has focussed its due diligence on a portion of the Mine Waste Dump whereon a drill
program has been conducted, and from which material has been sourced to conduct concentrator
trials (“Phase 1 Mine Waste Dump”). The Company has confirmed that the Phase 1 Mine
Waste Dump contains 2.3 million tonnes of gold-bearing material, with an average in-situ grade
of 0.7g/t gold.
The material contained in the Phase 1 Mine Waste Dump lies on a surface that does not support
any vegetation, with a maximum height of 16 metres. Further, there were no contaminants
identified in the material sourced from the Phase 1 Mine Waste Dump.
The Company has conducted concentrator testwork in order to determine how the Mine Waste
Dump material performs under a variety of conditions. The testwork was conducted with the use
of a pilot Centrifugal Concentrator located on the Company’s site (“Concentrator Testwork”).
The Concentrator Testwork has indicated that the Mine Waste Dump material can be upgraded
from an average gold grade of 0.7g/t to gold grades between 2.5g/t to 5.0g/t. The results of the
Concentrator Testwork were in line with the Company’s expectations and the expectations of the
industry specialists which were engaged by the Company.
The Company has also conducted metallurgical testwork on the concentrate material from the
Concentrator Testwork, which achieved encouraging recovery outcomes ranging from 88-97%.
Whilst the above results are encouraging, the Company wishes to highlight that these were
achieved under small scale test conditions. The Company will continue with further testwork to
determine how to optimise the Concentrator Testwork and to ensure the results translate into the
full scale operations.
Key Terms of Mine Waste Dump Agreement
Under the agreement with the Vendor, CRG will be responsible for the conducting and
managing of the mining, transportation, milling, leaching, smelting and gold refining of the Mine
Waste Dumps’ materials.
Under the Mine Waste Dumps agreement, the Company is required to pay the Vendor a
nominal Rand per tonne fee and a percentage of the earnings before interest, tax, depreciation
Future Strategy to Process Mine Waste Dumps
The Research and Development carried out at Central Rand Gold South Africa by Zhejiang
Golden Machinery Plant will be crucial in the processing of the Mine Waste Dumps material.
The Board is presently evaluating a variety of processing alternatives for the concentrated
material from the Mine Waste Dumps, including the processing of material through the
Company’s existing metallurgical plant (on a batching basis), as well as the processing of
material through third party metallurgical plants. Regardless of which strategy is adopted, the
Board will seek to maintain its current arrangement with the existing third party supplier of ore
to the Company’s metallurgical plant. The Board is pleased to advance the Mine Waste Dump
opportunity, which will diversify and expand the Company’s revenue stream.
Funding Discussion Update
Having secured the Mine Waste Dump agreement, the Company will focus on finalising the
capital raising initiatives which will be applied to fund working capital and the development of
the Mine Waste Dump opportunity. As previously announced on 22 August 2016, the Board is
advancing funding discussions with a variety of counterparties, including existing shareholders
of the Company.
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 2977
Adam James / James Greenwood
Merchantec Capital – JSE Sponsor +27 (0) 11 325 6363
Monique Martinez / Marcel Goncalves
6 October 2016
The information communicated in this announcement is inside information for the purposes of
Article 7 of Market Abuse Regulation 596/2014 ("MAR").
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