Operational Update

Central Rand Gold today provides a brief update detailing significant events that have occurred subsequent to the release of the 2013 Interim Report on 19 August 2013.

Highlights:

· US$7.25 million (gross) raised via the issue of Loan Notes to the new Strategic Investor, Redstone Capital Limited

· Proceeds will be used to improve milling and crushing circuits to increase overall plant capacity, reduce primary crushing costs and increase overall production

· Simultaneous delisting from the London Stock Exchange ("LSE") Main Market and admission to the Alternative Investment Market ("AIM")

· Ritz pumps, contributed by the Company to the Acid Mine Drainage, have arrived in South Africa

· Encouraging initial sampling results from the Crown East Joint Venture with Goldplat Recovery Proprietary Limited  

Capital Upgrade Funding

The raising of US$7.25 million (gross) via the issue of Loan Notes to Redstone Capital Limited was approved by shareholders at a General Meeting on 19 August 2013. The Company has received the first tranche of US$3.5 million, which has been set aside to finance the scheduled capacity and reliability upgrades to the existing metallurgical plant and also for general working capital purposes. Cash and cash equivalent balance at the end of August 2013 was US$3.8 million. The second tranche of US$3.75 million will be drawn down by no later than 31 October 2013.

Admission to AIM

On 18 September 2013, the Company effected the cancellation of the listing of its Ordinary Shares on the Official List and trading on the Main Market of the LSE and simultaneous admission to trading of the Ordinary Shares on the AIM and the subsequent transfer from the Main Board of the JSE Limited ("JSE") to the Alternative Exchange ("AltX").

Milling and Crushing Circuit Upgrades

As previously announced, since late 2012 the Company has been struggling with its metallurgical processing plant.

The Company's focus, on the back of receiving the Redstone Capital Limited funding, has been to undertake a number of upgrades to the metallurgical processing plant to improve reliability and to increase the overall plant capacity to approximately 25,000 tonnes per month, which is in line with the current monthly surface and underground mining production. The following progress can be reported:

Crushing and screening circuit

The Company has procured a primary jaw crusher that, once installed, will have a crushing capacity in excess of 30,000 tonnes per month. This primary jaw crusher will be able to reduce hard underground sulphide ore from a Run of Mine feedstock of 700mm to a secondary crusher feedstock of 90mm whilst simultaneously screening the high grade 10mm fine fraction. The civil works for the primary jaw crusher and screening circuit have been completed and the fabrication of the primary jaw crusher itself is well underway with an expected delivery timeframe of mid October 2013. The use of this primary jaw crusher will result in a reduction in primary crushing costs from R24 per tonne to an estimated R12 per tonne.

The Company is evaluating options for an appropriately sized secondary crusher with nameplate capacity of 30,000 tonnes per month matching the output capacity of the primary jaw crusher. In the interim, a secondary gyratory cone crusher has been rented as a pilot test, to further reduce the primary jaw product down to top size of 10mmwith up to 25% passing 75 micrometres, representing a much improved mill feedstock. The test cone crusher is currently being commissioned and is expected to be fully operational by the end of September 2013. The Company has the option to continue renting or to purchase the aforementioned gyratory cone crusher if it meets production requirements.

The high capacity crushing circuit is designed to allow for multiple screening and stockpile options and will further reduce gold losses through crushing and allow for further improvements in the overall Mine Call Factor ("MCF").

Milling capacity

The Company has procured an additional 8 x 16 foot Ball Mill ("Ball Mill") that will effectively increase milling capacity by 15,000 tonnes per month. Once the aforementioned Ball Mill has been commissioned, the Company will have milling capacity in excess of 25,000 tonnes per month. Furthermore, the existing 9 x 12 foot ball mill is being upgraded to utilise the same type of drive train as the newly acquired Ball Mill which will allow for a single set of critical spares to be used for both mills, thereby reducing overall critical spare inventory. The increased milling capacity and availability will lessen the reliance on external tolling which will improve both revenue generation and operating margin. The mill is expected to be commissioned by the end of 2013.

Further metallurgical upgrades

The upgrades of the crushing and milling areas will allow for a significant increase in overall production. The increased overall production will however, require a capacity upgrade for the thickener and leach circuit to accommodate the additional ore tonnage and also an upgrade in the elution circuit to allow for the increase in gold production.

These additional upgrades are in an advanced planning and execution phase, and are expected to be completed in early 2014.

Production

July and August 2013 production from both Underground and Surface has progressed well with tonnage call targets consistently being achieved; 47,221 tonnes for the two months, and blasted grades in excess of 3g/t from the combined mining operation.

Acid Mine Drainage Update

The construction of the 84 million litre High Density Sludge ("HDS") plant to stop the rising Acid Mine Drainage ("AMD") in the Witwatersrand Central Basin continues. The project has been delayed by approximately three weeks, due to the national strike in the construction industry. This delay is not expected to impact on the Company's production outlook. Photographs reflecting the progress of the HDS plant can be found on the Company's website, www.centralrandgold.com.

The Ritz pumps that Central Rand Gold has contributed to the dewatering solution have arrived in South Africa, and will be delivered to site by 20 September 2013. These pumps, which were acquired at a cost of €3.5 million, are capable of pumping 1,500 kilolitres of water per hour at 43 bar pump pressure differential with a pump efficiency rate of 81%.

Mine Call Factor

The on-going modification and construction of the high capacity crushing circuit during late August and September 2013 has, as anticipated, depressed the MCF. It is expected that this depressed MCF will continue during October 2013, and then climb steadily as components of the crushing circuit come online toward the end of the year. The new crushing modifications should allow for the MCF to approach and stabilise and thereafter, maintain the Board's long term MCF target of 80%.

Crown East Joint Venture

Initial results from the Crown East Main Reef Joint Venture with Goldplat Recovery Proprietary Limited ("Goldplat") are very encouraging; with initial sampling results on the Main Reef indicating grades in excess of 10 g/t. Under the terms of the agreement Goldplat will have the right to assume mining, at its own cost and risk, at Crown East in return for a 5% net smelter royalty to Central Rand Gold. Whilst the tonnage mined by Goldplat has been modest, the sampling results to date seem to confirm that the high grade pay-shoot modelled in the Crown area exist and suggest that there may be further economic upside to the recent Crown West Scoping Study undertaken by the Company. The exploration potential in this area will continue to be assessed on an on-going basis.

For further information, please contact:

Central Rand Gold +27 (0) 11 674 2304

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

18 September 2013

Sponsor

Merchantec Capital