28th Feb 2013 07:00
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: GG00B24HM601 LSE share code: CRND JSE share code: CRD ("Central Rand Gold" or the "Company")
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| CROWN WEST SCOPING STUDY |
The Company is pleased to announce the completion of a positive scoping study on the Crown West project. The Crown West project, which will be mined in a manner similar to the Company's existing mining operations, is located approximately 5 kilometres east of the CMR West mine and represents a fully stand alone operation. The Crown West project is included within the existing New Order Mining Right of the CMR West operation and is fully permitted for ore extraction.
The scoping study, the salient features of which are set out in the table below, undertaken by Mohloki Mining CC, the mining engineering consultants (www.mohlokimining.co.za), confirms a ten year life of mine ("LOM") operation with tonnage production profile building up over four years to a steady state of approximately 40,000 tonnes per month production generating a steady state average of 53,000 ounces of gold annually. As this is a scoping study the LOM is based on the bulk of the Mineral Resources of SAMREC compliant Inferred Resources. This scoping study does not impart Reserve status on the grades and a tonnage portrayed and does not purport to be a definitive economic study.
Summary of Scoping Study:
Input Variables | Output Metrics | |||
Gold Price | $1600/Oz | Life of Mine | 10 years | |
Exchange Rate | R8:$1 | Peak Production Rate | 522 658 tpa | |
Mine Call Factor | 85% | Average Life of Mine State Annual Gold Production | 33 326 Oz | |
Over-break | 10% | Cash Cost per tonne | $86/t | |
Metallurgical Recovery | 94% | Cash Cost per Ounce | $782/Oz | |
Mineral Inventory | 3.02mt @ 4.3g/t | Capital Expenditure | $26 million | |
Discount Rate | 12% | Payback Period | 4 years | |
Royalty Rate | 5% | IRR | 31% | |
Inflation Rate | 6% | NPV | $63 million | |
Operating costs are drawn from current operations in CMR West (specifically mining and processing costs) and have been optimised to reflect the benefits of economies of scale of a larger operation. Mining and Processing Cash Costs (excluding Capital, Royalties, overheads and other Head Office costs) are estimated at $782/ounce ($86/processed tonne), which compares very favourably with similar sized peers. General overheads, water table pumping and Head Office costs will be shared with the existing CMR West and planned CMR East mines, thereby leveraging off the existing fixed cost base of the Company's operations.
This scoping study was undertaken as an initial low confidence assessment of mineral potential in the area geared at determining whether further work towards improving Resource confidence was warranted.
The positive economic output, whilst only at scoping level, amply illustrates that further work towards the generation of Mineral Reserves and associated Feasibility study is recommended. This further work will consist of a diamond drilling programme aimed at upgrading the existing Inferred Resources to at least Indicated Resources coupled with a comprehensive Pre Feasibility study to convert Resources to Reserves.
Further details and time frames will be announced at a later date.
The full scoping study 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 / Patrick Malaza
Charles Stanley Securities Limited +44 (0) 20 7149 6478
Marc Milmo / Mark Taylor
Merchantec Capital +27 (0) 11 325 6363
Monique Martinez / Marcel Goncalves
Buchanan +44 (0) 20 7466 5000
Bobby Morse / Louise Mason
Jenni Newman Public Relations +27 (0) 11 506 7351
Proprietary Limited
Jenni Newman
Johannesburg
28 February 2013
Sponsor
Merchantec Capital
Related Shares:
Central Rand Gold