TIDMCRND

RNS Number : 6580X

Central Rand Gold Limited

23 February 2017

 
             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) 
                 ISIN: GG00B92NXM24 
      LSE share code: CRND JSE share code: CRD 
       ("Central Rand Gold" or the "Company") 
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                 Operational Update 
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Operational Update

Shareholders are referred to the announcement dated 10 January 2017 wherein the Company advised of the November 2016 commissioning of Mill No 1 in November 2016. Together, Mill No 1 and Mill No 3, have capacity to provide a nameplate milling of 800 tonnes per day, with production at that stage being approximately 500 tonnes of toll treatment materials per day.

In the months of January and February 2017, excessive rainfall was experienced. This is also due to the tail end of cyclone Dineo passing over the interior of South Africa. The negative effects of the rain are that the run of mine material is problematic to crush and screen when wet, and also that the wet conditions affect the feed material as it becomes muddy and challenging to handle, resulting in clogging, which in turn leads to a reduction in the processing capacity.

The storms also created lightning, which caused various power outages at the plant, at the site, and at the power stations supplying Central Rand Gold. In January 2017, power outages accounted for a 7.5% loss in capacity, and for the period 1 February 2017 to 12 February 2017, a 25% loss in production. The Company is exploring alternate power sources, as well as the use of a diesel generator to provide back-up power during any power outages.

In November 2016, water restrictions were imposed on the whole of Gauteng, due to the severe drought throughout the country, and the extremely low water levels in the dams. Central Rand Gold has purchased and installed pumps and introduced a water reticulation system, so that recycled water can be utilised to keep the plant operational. This additional expenditure was not envisaged before the water restrictions were imposed.

The tolling companies have also reduced their feed to Central Rand Gold, as the material that is available is not always suitable for the plant requirements. This issue has been addressed, and smaller quantities are being sourced from reliable tolling companies. Central Rand Gold is currently crushing and screening their own material on site, which has been made available from previously mined out areas. In January 2017, 44% of the material processed through the plant was Central Rand Gold's own material, and for the period from 1 February 2017 to 22 February 2017, 86% of the material processed through the plant was Central Rand Gold's own material.

The tolling companies' material is being stockpiled and sampled, and will be processed in batches throughout the period.

Cashflows have been negatively affected due to the production down-times, as well as costs for unusual items (not previously forecast). Such unusual costs include the ongoing litigation costs in terms of the dispute with the Company's Black Economic Empowerment partners.

In order to address the issues faced over the past two months, various programmes and plans have been put into place, which include the open-pit mining and processing of Central Rand Gold's own material, interspersed with the batch treatment of tolling companies' materials. As South Africa enters into autumn, the rain is expected to reduce, thereby alleviating the issues of wet and muddy feed material.

A steel structure has also been ordered, which, once erected, will assist in keeping the feed materials dry during the wet seasons.

Management is committed to minimising production downtime and improving production efficiency in order to support the current operation until the Concentrator Circuit has been installed and commissioned.

For further information, please contact:

Central Rand Gold +27 (0) 87 310 4400

Lola Trollip

ZAI Corporate Finance Limited - Nominated Adviser +44 (0) 20 7060 2220

John Treacy / Jamie Spotswood

Brandon Hill Capital Limited - Broker +44 (0) 20 3463 5000

Jonathan Evans / Wei Jiao

Merchantec Capital - JSE Sponsor +27 (0) 11 325 6363

Monique Martinez / Marcel Goncalves

Johannesburg

23 February 2017

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

This information is provided by RNS

The company news service from the London Stock Exchange

END

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February 23, 2017 05:00 ET (10:00 GMT)

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