Central Rand Gold Limited Acquisition (7942L)
October 06 2016 - 2:00AM
UK Regulatory
TIDMCRND
RNS Number : 7942L
Central Rand Gold Limited
06 October 2016
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 "CRG" or the "Company")
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Acquisition of Mine Waste Dumps - Agreement Executed
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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
Background
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.
Metallurgical Testwork
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 and amortisation.
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").
This information is provided by RNS
The company news service from the London Stock Exchange
END
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