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2015 Interim Report

15th Sep 2015 07:00

RNS Number : 0182Z

Central Rand Gold Limited

15 September 2015

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")

2015 Interim Report

Central Rand Gold, the South African gold mining and exploration holding company, today announces its unaudited condensed consolidated Interim Results for the six months ended 30 June 2015 ("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

Johan du Toit / Nathan Taylor

Panmure Gordon (UK) Limited +44 (0) 20 7886 2500

Mark Taylor

Merchantec Capital +27 (0) 11 325 6363

Monique Martinez / Marcel Goncalves

15 September 2015

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.

Chief Executive Officer's report

Introduction

The Company had two key objectives during the first six months of 2015, namely to continue with discussions with the various investors for the acquisition of Central Rand Gold (Netherlands Antilles) N.V. and to stabilise the operations of the Company.

Key salient features during the first six months of the year

· Negotiations continued with Asian suitors regarding a potential transaction with Central Rand Gold and a conclusion is expected shortly;

· Loss before interest, tax and depreciation reduced in the period to US$0.7 million (2014: US$2.6 million);

· Significant reduction in cost structure for the Central Rand Group, with overall costs reducing by 40%;

· The rate of dewatering suggests that underground operations could resume in approximately 18 months; and

· Sufficient surface material identified and evaluated to compensate for cessation of underground mining.

Safety

Safety Statistics

Type of injury	Six months ended 30 June 2015	Six months ended 30 June 2014
Dressing cases	-	6
Lost-time injuries	2	4
Fatalities	-	1

Safety remains a key focus for the Company, irrespective of the environment in which it is operating. Positively the Company posted a reduction in all levels of safety incidents, with two lost-time injuries incurred versus four for the previous period.

Potential sale of Central Rand Gold (Netherlands Antilles) N.V.

Following a sustained period of marketing in Asia during 2014, the Company was able to engage in the discussions with four Asian Companies to acquire 100% of the share capital of Central Rand Gold (Netherlands Antilles) N.V.("CRGNV"). The four Asian Companies are Hiria Group Company Limited ("Hiria"), Beijing Ankong Investment ("Ankong"), Shengbang Jiabo (Beijing) Consulting Company Limited ("Shengbang") and Huili Resources Group Limited ("Huili"). All parties signed a similar Memorandum of Understanding ("MOU"), which set out the timing and terms for the negotiations and due diligence process. Huili's MOU includes a unique provision which entitles Huili to the right of first purchase within 21 days of a third party offer being received for the subsidiary.

Extensive desk top due diligence coupled with various site visits assisted in the due diligence process largely being completed by the end of June 2015. On 15 June 2015, the Company announced the decision to discontinue discussions with both Ankong and Shengbang. The Board is focused on ensuring that any transaction presented to shareholders must be as free from conditions as possible and be in a form which can be delivered on and be completed timeously. These considerations remain guiding principles of the Board, which will be applied when considering the various alternatives.

Discussions with Hiria and its financial partner, Hangzhou Everbright Private Equity Investment Management ("Hangzhou Everbright") are ongoing with various commercial structural alternatives being considered. The discussions have largely progressed along the lines of a significant initial strategic investment in Central Rand Gold Limited. This investment will provide the Group with the ability to increase its production capacity, upgrade its resource base and to re-capitalise the balance sheet. The Board believes that this alternative will provide the Company with a real opportunity to maximise the extraction of its vast resource base, thereby enhancing future shareholder return and value.

Discussions with Huili remain ongoing with a range of commercial issues and technical matters, largely focused on the continued dewatering of the Central Basin, being discussed and progressed.

The Company continues to caution that there can be no certainty that the discussions with both Huili or Hiria will lead to a binding agreement being entered into by either party, nor that the potential sale of Central Rand Gold (Netherlands Antilles) N.V., or any other transaction will be completed.

Acid Mine Drainage ("AMD")

The High Density Sludge ("HDS") plant 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 table below:

Month	Average daily pumping rate (mlpd)	Water level below surface (metres below surface)
January 2015	35	144
February 2015	33	140
March 2015	70	142
April 2015	66	143
May 2015	65	145
June 2015	65	149
July 2015	65	151
August 2015	59	153

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 2015. A replacement submersible pump was installed at the end of February 2015, 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 13 vertical meters since the end of February 2015.

Based on the current performance, and taking into account the potentially faster dewatering during the dry winter months, it is believed that the underground mining areas will become accessible between September 2016 and February 2017.

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. The Company started moving away from open cast mining to target the higher grade underground ore body. The shift back to surface did have a significant impact on the Company.

Open pit mining was stepped up and additional reclamation sources of ore were sourced, evaluated and exploited. The Company's aim was to secure sufficient resource base to enable the surface operations to continue, whilst dewatering of the underground mine occurred.

There has been a considerable amount of work undertaken to identify sufficient surface material for processing. The below table provides the current surface target areas:

Slot	Target area	Reef	Dip	V. Depth	Tonnage range (t)	Approximate grade
Slot 5	Pits 1 to 3	White	40 deg	30m	64 000 to 125 900	2.8g/t
Slot 7	Main Pit	White	45 deg	30m	60 000 to 174 000	2.7g/t
Slot 4	K7 Top	Kimberly	45 deg	10m	5 000 to 22 000	1.7g/t
Slot 4	K7 Middle	Kimberly	45 deg	10m	5 000 to 20 000	1.8g/t
Slot 4	K7 Bottom	Kimberly	45 deg	10m	5 000 to 15 000	1.7g/t
NASREC	Pits 1, 2 and 3	Main	45 deg	40m	30 000 to 37 800	2.7g/t

					170 000 to 395 000	2.6g/t

The potential quantity and grade described by the term "Exploration Target" is conceptual in nature and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the definition of a Resource. Further exploration work is ongoing, and includes trial mining and processing of this shallow target to establish grade and ore body continuity, mineability, dilution and throughput characteristics.

NOTE: The information in this statement relating to Mineral Resources and geology has been reviewed and approved by Mr Keith Matier, BSc (Hons), GDE, PrSci Nat, who is a Competent Person in terms of the SAMREC code. Mr Matier is the Geology Manager of Central Rand Gold South Africa (Pty) Limited and has over 21 years' experience in exploration, mineral resource management and mineral evaluation.

The Company considers the above table to be a conservative estimate of available material and is presently conducting testwork to determine if the Exploration Target can be increased. Further, the above table does not include surrounding sand and slimes resources which the Company has sourced.

Production statistics

	30 June 2015 tonnes	30 June 2014 tonnes	Variance
Underground	-	66 085	(66 085)
Surface	62 856	22 076	40 780
Reclamation	33 356	-	33 356
Total	96 212	88 161	8 051

Surface mining was largely focused at slots 5 and 7. Current pits have been mined down to a depth of approximately 15 metres. The average belt grade for these pits to date is 2.13g/t. It is believed that conventional drilling and cushion blasting will allow the existing pits to be further pushed back allowing mining at twice the current operating depths.

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.

Metallurgy

Production Statistics

	2015	2014
-	January to June	January to June
- Internal
- Tonnes processed (t)	87 895	80 749
- Built up head grade (g/t)	1.45	1.77
- Fine gold produced (oz)	3 435	3 205

External (Toll treatment)
- Tonnes processed (t)	6 721	13 902
- Delivered grade (g/t)	1.04	2.35
- Fine gold produced (oz)	244	944
Total tonnes processed (t)	94 616	94 651
Total gold produced (oz)	3 679	4 149

Internal gold production for 2015 H1 was on par with 2014 H1 on a gold output context with the lower feed grade being compensated by higher tonnage throughput, as a result of recent plant upgrades The benefit of the plant upgrades have resulted in an improvement in plant performance with 18,532 wet tonnes being processed through the plant in August 2015. The aim is to reach 20,000 tonnes by end October 2015.The external tolling was impacted both by lower tonnage and lower delivered grades. This is a direct result of the new low grade Joint Venture entered into with neighbouring producer Mintails Proprietary Limited ("Mintails").

Mine Call Factor

During H1 2015, the Mine Call Factor ("MCF") continued on the same positive trajectory seen during 2014. The "face to pour" MCF reconciliation averaged at 81% for the period, with the belt MCF averaging 94%. This compares very favourably to the MCF industry average of 74%.

Date	Dry tonnes processed (t)	Belt MCF	Face to pour MCF
January 2015	11 759	91%	84%
February 2015	15 300	93%	77%
March 2015	14 306	96%	89%
April 2015	14 634	101%	78%
May 2015	15 587	96%	85%
June 2015	16 309	90%	70%

Total	87 895	94%	81%

Plant improvement

The focus remains on improving plant efficiency. One of the highlights of the first half of 2015 was the construction and commissioning of the new 243 m3 leach tank in June 2015. The new tank will increase the leach residence time from 14 hours to 22 hours, resulting in a significant drop in gold in tailings and corresponding increase in gold production.

Financial update

Results

The loss before interest, tax and depreciation for the period under review amounted to US$0.7m, which is a significant improvement on prior year period operational loss of US$2.6m. Revenue from internal gold production is up by 7% to 3 435 ozs (2014: 3 205 ozs), despite the average grade dropping from 1.77g/t to 1.45g/t. Overall revenue is down from US$5.8m to US$4.3m due to the Company sending less material for toll treatment by Mintails and the reduction in gold price. Significant restructuring occurred within the Company to realign the business to its new focus on surface mining resulting in a reduction of 40% in the Group's cost base. These savings were not only reported through the elimination of underground mining costs but also as a result of the re-negotiation of key contracts, improving operational processes and eliminating inefficiencies in consumable usage. A key example is the reduction in the average cost per tonne for surface mining reducing from US$19 per tonne to US$11 per tonne, a 42% improvement. Although the trend is positive the key focus remains to move the organisation into sustainable cash generative and profitable position. Cash and cash equivalents at 30 June 2015 was $1.1m. Cash generated from operations will be utilised to further upgrade the metallurgical plant and to further reduce the Company's net working capital position.

Looking forward

The focus over the next six months is to build on the momentum gained during the first half of 2015, with the following areas being the main focus for the Company:

· Finalise the negotiations with Hiria and Huili;

· Continue to identify and mine sufficient surface material until underground mining operations are recommenced; and

· Continual improvement of the Group's operational processes thereby ensuring the efficiency of spend.

Johan du Toit

Chief Executive Officer

Condensed Group Statement of Financial Position
as at 30 June 2015

		30 June	31 December	30 June
		2015	2014	2014
	Notes	US$ '000	US$ '000	US$ '000
		(Unaudited)	(Audited)	(Unaudited)
ASSETS
Non-current assets
Property, plant and equipment	5	3 172	3 592	4 763
Intangible assets		2 669	2 830	3 104
Security deposits and guarantees		59	191	210
Environmental guarantee investment		3 119	3 177	3 361
Loans receivable	6	8 619	8 646	8 961
		17 638	18 436	20 399
Current assets
Security deposits and guarantees		32	65	71
Prepayments and other receivables		712	1 239	1 004
Inventories	7	112	76	813
Cash and cash equivalents		1 177	914	4 389
Non-current assets held-for-sale	8	-	-	-
Derivative asset		720	720	-
		2 753	3 014	6 277

Total assets		20 391	21 450	26 676

EQUITY
Attributable to equity holders of the parent
Share capital	9	26 617	26 490	26 314
Share premium	9	224 048	222 963	218 630
Share-based compensation reserve		28 187	28 238	28 187
Treasury shares		(6)	(6)	(6)
Foreign currency translation reserve		(29 433)	(29 534)	(29 348)
Accumulated losses		(262 743)	(261 559)	(249 133)
		(13 330)	(13 408)	(5 356)
Non-controlling interest		-	-	-
Total equity		(13 330)	(13 408)	(5 356)

LIABILITIES
Non-current liabilities
Environmental rehabilitation		4 622	4 904	5 904
Loan payable	10	14 392	14 418	19 336
		19 014	19 322	25 240
Current liabilities
Trade and other payables		6 078	6 911	6 792
Taxation payable		181	177	-
Derivative liability		8 448	8 448	-
		14 707	15 536	6 792

Total liabilities		33 721	34 858	32 032

Total equity and liabilities		20 391	21 450	26 676

Condensed Group Statement of Profit or Loss
for the six months ended 30 June 2015

		Six months	12 months	Six months
		ended	ended	ended
		30 June	31 December	30 June
		2015	2014	2014
	Notes	US$ '000	US$ '000	US$ '000
		(Unaudited)	(Audited)	(Unaudited)

Revenue	11	4 352	8 212	5 774
Production costs	12	(2 776)	(9 844)	(4 856)
Employee benefits expense		(1 293)	(3 223)	(1 607)
Directors' emoluments	13	(103)	(717)	(434)
Inventory write-down		-	(705)	(40)
Operating lease expense		(250)	(787)	(304)
Operational expenses	14	(174)	(502)	(639)
Other expenses	15	(560)	(1 702)	(882)
Other income and gains	16	107	543	131
Foreign exchange transaction (losses)/gains		(16)	129	261
Loss before interest, tax and depreciation		(713)	(8 596)	(2 596)
Depreciation		(229)	(460)	(226)
Impairment of assets		-	(158)	-
Loss on fair value of convertible loan note		-	(5 108)	-
Finance income		546	1 233	456
Finance costs		(788)	(2 179)	(476)
Loss before income tax		(1 184)	(15 268)	(2 842)
Income tax expense	17	-	-	-
Loss for the period		(1 184)	(15 268)	(2 842)

Loss is attributable to:
Non-controlling interest		-	-	-
Equity holders of the parent		(1 184)	(15 268)	(2 842)
		(1 184)	(15 268)	(2 842)

Shares in issue		95 195 808	87 180 808	75 180 808
Weighted average number of ordinary shares in issue		95 195 808	87 180 808	75 180 808
Fully diluted weighted average number of ordinary shares in issue		95 195 808	87 180 808	75 180 808
Basic loss per share (US cents per share)	19	(1.24)	(17.51)	(3.78)
Diluted loss per share (US cents per share)	19	(1.24)	(17.51)	(3.78)

Condensed Group Statement of Comprehensive Income
for the six months ended 30 June 2015

	Six months	12 months	Six months
	ended	ended	ended
	30 June	31 December	30 June
	2015	2014	2014
	US$ '000	US$ '000	US$ '000
	(Unaudited)	(Audited)	(Unaudited)

Loss for the period	(1 184)	(15 268)	(2 842)
Other comprehensive income/(loss):
Item that may be reclassified subsequently to profit and loss
Exchange differences on translating foreign operations	101	(91)	94
Other comprehensive income/(loss) for the period, net of tax	101	(91)	94
Total comprehensive loss for the period	(1 083)	(15 359)	(2 748)

Total comprehensive loss is attributable to:
Non-controlling interest	-	-	-
Equity holders of the parent	(1 083)	(15 359)	(2 748)
	(1 083)	(15 359)	(2 748)

Condensed Group Statement of Changes in Equity
for the six months ended 30 June 2015

			Attributable to equity holders of the Group
	Notes	Ordinary share capital		Share premium	Share-based compensation reserve	Treasury shares	Foreign currency translation reserve	Accumulated losses	Total	Non-controlling interest	Total equity
		US$ '000		US$ '000	US$ '000	US$ '000	US$ '000	US$ '000	US$ '000	US$ '000	US$ '000

Balance at 31 December 2013		25 604		213 377	28 224	(6)	(29 442)	(246 291)	(8 534)	-	(8 534)
Total comprehensive income for the period ended 30 June 2014
Loss for the period		-		-	-	-	-	(2 842)	(2 842)	-	(2 842)
Other comprehensive income
Foreign currency adjustments		-		-	-	-	94	-	94	-	94
Transactions with owners, recorded directly in equity
Issue of Shares:
Capital raising		710		5 253	-	-	-	-	5 963	-	5 963
Employee Share Option Scheme:
Share-based payments: Employees' and Directors' shares and options		-		-	(37)	-	-	-	(37)	-	(37)
Balance at 30 June 2014		26 314		218 630	28 187	(6)	(29 348)	(249 133)	(5 356)	-	(5 356)


		Attributable to equity holders of the Group
	Notes	Ordinary share capital	Share premium	Share-based compensation reserve	Treasury shares	Foreign currency translation reserve	Accumulated losses	Total	Non-controlling interest	Total 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	9	127	1 085	-	-	-	-	1 212	-	1 212
Employee Share Option Scheme:
Share-based payments: Employees' and Directors' shares and options	21	-	-	(51)	-	-	-	(51)	-	(51)
Balance at 30 June 2015		26 617	224 048	28 187	(6)	(29 433)	(262 743)	(13 330)	-	(13 330)

Condensed Group Statement of Cash Flow
for the six months ended 30 June 2015

		Six months	12 months	Six months
		ended	ended	ended
		30 June	31 December	30 June
		2015	2014	2014
		US$ '000	US$ '000	US$ '000
		(Unaudited)	(Audited)	(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES	Notes
Loss before tax		(1 184)	(15 268)	(2 842)
Adjusted for :
Depreciation		229	460	226
Employment benefit expenditure (share-based payments)		(51)	14	(37)
(Profit)/loss on disposal and scrapping of property, plant and equipment		(9)	(17)	9
Impairment of inventory	7	-	705	40
Impairment of assets		-	158	-
Net loss/(gain) on foreign exchange		16	(129)	(261)
Finance income		(546)	(1 233)	(456)
Finance costs		788	2 179	476
Loss on fair value of convertible loan note		-	5 108	-
Changes in working capital
Decrease/(increase) in prepayments and other receivables		527	(325)	(90)
(Increase)/decrease in inventory		(36)	129	57
Decrease in trade and other payables		(833)	(60)	(179)
(Decrease)/increase in provisions		(282)	809	258
Cash flows used in operations		(1 381)	(7 470)	(2 799)
Finance income		66	273	-
Finance costs		-	-	(15)
Sundry income		-	(1 204)	-
Net cash used in operating activities		(1 315)	(8 401)	(2 814)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment	5	(5)	(1 049)	(2 022)
Proceeds from disposal of property, plant and equipment		-	186	-
Increase in environmental guarantee deposit		(17)	(53)	(54)
Net cash used in investing activities		(22)	(916)	(2 076)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares for cash		1 260	4 254	-
Cost relating to the issue of shares		(48)	(257)	-
Net proceeds from exercise of share options		-	3 732	-
Net proceeds from issue of share capital		-	-	5 963
Net cash from financing activities		1 212	7 729	5 963

Net (decrease)/increase in cash and cash equivalents		(125)	(1 588)	1 073
Cash and cash equivalents at 1 January		914	2 475	2 475
Effects of exchange rate fluctuations on cash balances		388	27	841
Cash and cash equivalents at end of period		1 177	914	4 389


Notes to the Condensed Interim Group Financial Statements
for the six months ended 30 June 2015

1. Basis of preparation
This condensed set of consolidated financial statements have 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 2014 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, changed during the prior year from the British Pound to the US Dollar as its main source of funding is now the US Dollar. The functional currency of its principal subsidiary, Central Rand Gold South Africa Proprietary Limited ("CRGSA") is the South African Rand ("ZAR" or "Rand").

Going concern REQUESTED FROM PATRICK. PER PATRICK, THIS ALL DEPENDS ON THE REVISED
The Directors have prepared the condensed interim Group financial statements on the going concern basis notwithstanding net current liabilities at 30 June 2015 of US$12.0 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 2014 year end the Group has continued with its surface mining operations and processing of third party ore and has also raised a further US$1.2 million from share placements in June 2015.

The Directors have prepared cash flow projections until December 2016 that reflect the current mine plan adopted by the Directors. The mine plan is based on surface mining only as the underground mine remains on care and maintenance until the water level reduces following the re-commissioning of the dewatering plant. The mining plan assumes that the upgrades will increase processing plant capacity from 16 000 tonnes per month to 20 000 tonnes per month from January 2016. 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 Directors have prepared the condensed interim Group financial statements on a going concern basis.

The Directors are optimistic about the future of the Company and the dewatering may give the Company improved access to deeper mining levels over time. However, the risks inherent in any single metal mining operation remain for the longer term.

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 2014, 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 2015:
• IFRS 9: Financial Instruments

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 2014.

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 2014.

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:

	2015	2014	2014
	Six months to	Year ended	Six months to
	30 June	31 December	30 June
	Closing Average	Closing Average	Closing Average

South African Rand	0.08 0.08	0.09 0.09	0.09 0.09
Pound Sterling	1.57 1.52	1.55 1.65	1.70 1.67

5. Property, plant and equipment
During the six months ended 30 June 2015, the Group spent US$5 280 to purchase other items of property, plant and equipment. In the six month period ending 30 June 2014, the Group spent US$1 894 534 to upgrade the plant and US$127 634 to purchase other items of property, plant and equipment.

6. Loans receivable

Puno Gold Investments Proprietary Limited ("Puno")
Since the last report for the year ended 31 December 2014 there has been no resolution to the dispute relating to alleged procedural breaches of the Central Rand Gold South Africa (Proprietary) Limited ("CRGSA") Shareholders' Agreement between CRGSA 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.

During the previous financial year, the Company was granted the right to appeal the December 2013 ruling.

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
	2015				2014
	US$ '000				US$ '000

Consumables	39				30
Ore stockpiles	73				46
Total inventories	112				76

The amount of the write-down of ore stockpiles to net realisable value, and recognised as an expense is US$0 (2014: US$881 109).

8. Non-current assets held-for-sale
During the previous financial year, the Group disposed the flotation plant for US$168 265, resulting in a loss of US$9 220. No additional items were classified as held-for-sale during the period under review.

9. Share capital and share premium
On 17 June 2015, the Company allotted and issued 6 015 000 New Ordinary Shares at 10 pence, which raised US$0.94 million (£0.60 million). On 18 June 2015, the Company allotted and issued a further 2 000 000 New Ordinary Shares at 10 pence, which raised US$0.32 (£0.20 million).

10. Loan payable
			Group
		June					December
		2015					2014
		US$ '000					US$ '000
Loan payable consists of the following:

Puno Gold Investments Proprietary Limited			8 620					8 646
Redstone Capital Limited			5 772					5 772
			14 392					14 418

11. Revenue
				Group
				June		December
				2015		2014
				US$ '000		US$ '000

Gold sales				4 314		7 840
Other by-product sales				38		372
				4 352		8 212

The revenue relates to the sale of gold derived from surface and underground mining activities and the sale of other by-products. 4 316 (30 June 2014: 4 150) ounces of gold was sold.

12. Production costs
				Group
				June					December
				2015					2014
				US$ '000					US$ '000
Production costs comprise the following items:
- Consumables				791					2 930
- Utilities				404					1 739
- Plant hire				957					2 023
- Labour hire				199					2 066
- Toll treatment				425					1 161
- Environmental rehabilitation provision				-					(75)
				2 776					9 844

13. Changes to the Board
During the period under review, there was no change in the composition of the Board.

14. Operational expenses
					Group
					June					December
					2015					2014
					US$ '000					US$ '000
Operational expenditure comprises the following items:
- Assaying costs					98					337
- Consulting services					58					294
- Environmental costs					3					(168)
- Mineral property options paid					15					39
					174					502

15. Other expenses
						Group
						June					December
						2015					2014
						US$ '000					US$ '000
Auditor's remuneration						-					232
Corporate social investment						-					8
Legal costs						40					208
Travel and accommodation						26					20
Telecommunications						174					113
Other expenses						320					1 121
						560					1 702

16. Other income and gains
	Group
	June						December
	2015						2014
	US$ '000						US$ '000

Sundry income	107						543

In 2015, sundry income included US$89 321 from Gravelotte Mine Limited for consumables, US$9 420 (2014: US$16 851) for profit on disposal of property, plant and equipment, US$0 (2014: US$308 438) for the sale of carbon, US$0 (2014: US$118 563) for a diesel refund claimed from the South African Revenue Service (SARS), US$5 194 (2014: US$52 269) for a royalty paid to Central Rand Gold by Goldplat Recovery Proprietary Limited for exploration work performed by Goldplat Recovery Proprietary Limited on the Company's site and US$3 331 (2014: US$46 772) for other sundry income.

17. 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 period to 30 June 2015 is 0% (2014: 0%) due to assessable losses available to CRGSA and the Guernsey resident status of the Company resulting in 0% effective rates.

18. Commitments
		Group
		June						December
		2014						2013
		US$ '000						US$ '000
Fees payable to Sekgwa Mining Services Proprietary Limited for underground mining services			-					-
Acquisition of tangible assets contracted for			-					-
			-					-

					June					December
					2015					2014
Headline loss per share (US cents per share)					(1.24)					(17.53)
Diluted headline loss per share (US cents per share)					(1.24)					(17.53)

Reconciliation between loss attributable to the equity holders of the Group and the headline loss attributable to the equity holders of the Group:
Loss attributable to equity holders of the Group (US$'000)					(1 184)					(15 268)
Add: Loss on disposal of property, plant and equipment (US$ '000)					-					-
Less: Profit on disposal of property, plant and equipment (US$ '000)					(9)					(17)
Headline loss attributable to equity holders of the Group (US$ '000)					(1 193)					(15 285)

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.

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 AIM in London and to the AltX in Johannesburg.

Mining Rights and Prospecting Rights

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), Anglodeeps area, Village Main and Robinson Deep (one Prospecting Right) and the mining area of the defunct Simmer and Jack Gold Mine. The Prospecting Rights extend over an area from west to east of approximately 40 kilometres and north to south of approximately seven kilometres (the "Central Rand Project"). In addition, the Southern Deeps New Order Prospecting Right Application (the "Prospecting Application"), if granted, would extend the Central Rand Project by a further 13 kilometres to the south. On 27 February 2012, it was announced that the Prospecting Rights in respect of Western Areas A, B and E had been transferred from Rand Quest Syndicate Limited to CRGSA via Section 11 applications lodged with the South African Department of Mineral Resources ("DMR"). The Prospecting Application is still in the process of being transferred. The Anglodeeps Prospecting Right renewal was submitted to the DMR but was unfortunately rejected on a technicality. This is currently being taken on appeal.

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 and Crown Mines tenements.

This information is provided by RNS

The company news service from the London Stock Exchange

END

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