Central Rand Gold Limited Operational Update (6580X)
February 23 2017 - 5:00AM
UK Regulatory
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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