Acquisition

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").