8th Jul 2009 07:00
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Immediate release |
8 July 2009 |
Central Rand Gold Limited
("Central Rand Gold" or "CRG")
(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: GG00B24HM601
Share code on LSE: CRND
Share code on JSE: CRD
Operations Update
Central Rand Gold ("CRG" or "the Company"), the gold mining company with assets in Southern Johannesburg, announces an operations update, a summary of which is:
A mining plan to extract initially two higher grade reef zones using a long hole stoping mining method and cemented backfill for regional ground support;
Decline development has now reached 200m with 100m to go before reaching reef;
Underground trial mining starts with reef development in August and trial stoping will commence December 2009/January 2010;
New 30tph Bateman crushing and concentrating plant and Carbon In Leach plant are being commissioned; and
Cash on hand as at June 30, 2009 - US$ 46.3 million.
(For the release with pictures and schematics, please refer to the Company's website: www.centralrandgold.com)
Central Rand Gold will host a conference call for analysts on Wednesday 08 July 2009 at 10:00 am UK time / 11:00am South Africa.
Participants may join the call by dialling one of the two following numbers, approximately 10 minutes before the start of the call.
From the UK: (toll free) 0808 109 1498
From South Africa: (toll free) 0800 999 539
Participant pass code: 878026#
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Contact: Johan du Toit |
+ 27 (0) 11 551 4000 |
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Wayne Epstein |
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Enquiries: |
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Evolution Securities Limited Simon Edwards/ Chris Sim/Neil Elliot |
+ 44 (0) 20 7071 4300 |
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Macquarie First South Advisers (Pty) Ltd Thato Morojele/ Annerie Britz/ Melanie de Nysschen /Manisha Ramlakhan |
+ 27 (0) 11 583 2000 |
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Buchanan Communications Limited Bobby Morse/ Ben Willey Jenni Newman Public Relations (Pty) Ltd Jenni Newman/ Megann Outram/ Lerato Tlatlane |
+ 44 (0) 20 7466 5000 +27 (0) 11 772 1033 |
1. Mine Plan, Mining Method and Reserve Update
As advised in the Company's Interim Management Statement in May 2009, Central Rand Gold engaged independent mining consultants, Snowden Mining Consultants ("Snowden"), to review its proposed development strategy and mining methods to extract the Main Reef on the Consolidated Main Reef ("CMR") tenement (See figure 1).
(For the release with pictures and schematics, please refer to the Company's website: www.centralrandgold.com)
Figure 1
Extensive work has continued between the CRG team, lead by Mr Don Harper (recently appointed as the Company's Head of Mining) and Snowden to develop a detailed and optimised plan for mining from the initial decline. Details of the new mine plan and mining method are outlined in Appendix 1 and focus on a high grade channel located between 50m and 750m below surface at Slot 8. This will be followed by a second high grade channel and decline to the West of the first (See figure 2). The aim of this plan is to generate the parameters for a Resource to Reserve conversion for these mining areas which, in turn, could become the template for much of the remainder of CRG's near surface Resource.
(For the release with pictures and schematics, please refer to the Company's website: www.centralrandgold.com)
Figure 2
As the method chosen (long hole, mechanised stoping) is new to the Witwatersrand Goldfields, there remains a range of uncertainties which probably only physical mining will clear up. Key amongst these are:
The extent and distribution of gold outside of the reef zone;
Dilution generated during on reef development and stoping;
Consequently the head grade to be expected in practice and the amount of development required relative to payable reef; and
The percentage of cement required in the backfill
Trial mining and mining optimisation is expected to provide answers to these key questions and drive any future revisions to the mine plan and overall project economics.
CRG and Snowden are in the process of completing studies relating to the geotechnical program and detailed costings required for Snowden to prepare the initial Reserve estimate based on the current mine plan. The initial ore Reserve estimate will relate specifically to the conversion of the two higher grade channels of the Main Reef Resource described above. Revised Cash costs estimates and forecast of production build up will be communicated at the time of release of the Snowden Reserve statement. The Resource to be converted in this area is approximately 4.38mt @ 4 g/t Au although, when mining parameters are applied, it is expected that not all of this Resource will be converted to Reserves.
The Company is continuing to progress its decline from the surface towards the first higher grade zone using the Eastern decline (as shown in the figure 2 above). To date, the Company has achieved approximately 200m of development, with approximately a further 100m required to reach the zone where the next phase of trial mining will commence with development of the reef drives.
Underground trial mining is expected to commence in August 2009 once the reef has been intersected and trial stoping is expected to commence at the end of 2009/January 2010.
2. Metallurgical Plant Progress
The new Bateman 30tph crushing and concentrating plant is being commissioned along with the Carbon-in-Leach ("CIL") concentrate treatment plant with gold on carbon already being achieved. The plants have been processing surface material from the Main Reef and Main Reef Leader outcrops.
The existing 20tph Gekko crushing and concentrating plant continues to process surface outcrop material. To June 25, 2009, approximately 40,800t have been processed producing a concentrate with an estimated 2,950 oz of contained gold (excluding some gold already refined at Rand Refinery Limited).
3. Cash Position
CRG's cash on hand as at June 30, 2009 was US$ 46.3 million. As advised in the Company's Interim Management Statement in May 2009, the Company is undertaking significant cost cutting initiatives which is minimising the Company's cash burn rate.
The information in this statement has been reviewed and approved in writing by Mr. Keith Matier, BSc (Hons), GDE, Pr Sci Nat, who is a competent person in terms of the SAMREC and JORC codes. Mr. Matier is Geology Manager of Central Rand Gold South Africa (Pty) Ltd and has over 16 years experience in exploration, mineral resource management and mining.. Appendix 1
The Proposed Mining Method
The key parameters that influence underground mining of the Main Reef at CMR are:
The Main Reef, which underlies the Main Reef Leader, is a well developed conglomerate reef dipping at about 35° to the south, which averages 130 cm over channel width. Economic mineralisation is predicted to occur in two broad shoots within the area of the CMR lease currently under review.
The Main Reef Leader was extensively mined in the early to mid 1900s. The Main Reef was also sporadically stoped at this time. The parting between the Main Reef and Main Reef Leader ranges from aproximately 0.5 m to 3.0 m thick. It will be difficult to safely maintain the parting as a stable beam and it will therefore be extracted concurrently with the Main Reef. As the parting is, for these purposes, assumed to be unmineralised it will be removed from the run-of-mine ore stream using selective blasting and ore sorting.
The stability of the Main Reef Leader hangingwall will be maintained by rock bolting from the reef drives and filling approximately 25% of the Main Reed Leader void with a stiff (1.2 MPa) backfill prior to extracting underlying Main Reef between the 3m wide Main Reef Leader geotechnical pillars.
An unquantifiable volume of broken sweepings and vamping may be recovered from the Main Reef Leader concurrently with Main Reef stoping.
CRG will trial a mechanised mining method to extract the Main reef. Each shoot will be accessed using a conventional decline and crosscuts to intersect the Main Reef at about 11m vertical intervals. Reef drives will be developed east and west to the limits of the high grade shoot using singleboom development rigs (jumbos) and small load-haul-dump loaders (LHDs). Blasted development rock will be trucked to surface, where the high grade material will be separated from the the waste, using tried and tested traditional hand-sorting. This is expected to improve the development grade significantly. Sampling of the reef drives will identify the payable zones on each level. Within these payable zones, the overlying Main Reef Leader will be stabilised with cemented backfill. Only every second stope panel will require backfill. The backfill crew will gain entry to the Main Reef Leader stope by progressively installing pre-stressed elongate supports, which will be used to support the backfill bags. Any Main Reef Leader sweepings and vamping will be removed at this time.
A mechanised drill will be used to drill up to 15 m long blast holes on dip in the waste parting and the Main Reef. The parting will be blasted and either trucked to surface or tipped into old stope voids. The Main Reef will then be blasted and removed to surface. The stope void will be filled with cemented backfill.
Main Reef material will be trucked to surface initially as it is not planned to relocate the concentrators underground unless technical and financial studies demonstrate that this is an economically feasible option for the upper levels. Waste is planned to be backfilled into the open stope voids between the cemented backfilled pillars.
For schematics of the mining method, please refer to appendix 2.
Geological Resource Model
As previously indicated the Company is targeting the Main Reef Mineral Resource estimated for the Consolidated Main Reef tenement and prepared by Dr C Lemmer in 2007. Dr. Lemmer applied a minimum channel width of 100 cm for the reef. Where channel widths were less than 100 cm, they were bulked up at zero grade. This bulking retains the metal content, but at a lower grade.
The Main Reef Mineral Resource estimate over CMR, from 70m below surface to 900m below surface comprises an Indicated Resource of 8.7 Mt at 4.7 g/t Au and an Inferred Resource of 0.3 Mt at 5.8 g/t.
Metallurgical Process
The metallurgical plants will consist of three modular crushing and concentrating plants and a CIL concentrate treatment plant. The crushing and concentrating plants will comprise a 20 tph concentrator, purchased from Gekko Systems in Australia and commissioned in October 2008, a 30 tph plant from Bateman Projects currently being commissioned and a 50 tph Gekko plant with commissioning scheduled for the last quarter of 2009. These will have combined capacity of 60,000 tonnes per month ("tpm") be utilised to concentrate the gravity and flotation recoverable gold. A 10,000 tpm CIL concentrate treatment plant will be utilised to treat the concentrate from the crushing and concentrating plants.
Run of mine (ROM) material will be delivered by truck or from the handsorting belt to a stockpile. It will then be fed into a jaw crusher and then to the concentrator to recover the gravity recoverable gold. The concentrate tail will pass through flotation cells to produce a flotation concentrate. The two concentrate streams will be processed in a CIL circuit to recover the gold by electrowinning and smelting. Flotation and CIL tailings will be disposed of as backfill in the underground voids.
Overall actual recoveries and unit costings from the metallurgical process will be confirmed once the complete CIL cycle has been commissioned and optimised. However, the six phases of metallurgical test work that have been undertaken provide confidence that a metallurgical recovery of 80% is achievable from unoxidised underground reefs.
Appendix 2
Pre-mining schematic view:
(For the release with pictures and schematics, please refer to the Company's website: www.centralrandgold.com)
Step 1: Create Reef drives (reef material transported to surface and hand sorted), insert appropriate support utilising rockbolts in the Main Reef Leader roof and backfill bags. Collect all available old gold, sweepings and vampings from above the middling
(For the release with pictures and schematics, please refer to the Company's website: www.centralrandgold.com)
Step 2: Blast out the middling (assuming no gold), muck out and send to waste disposal point underground.
(For the release with pictures and schematics, please refer to the Company's website: www.centralrandgold.com)
Step 3: blast out the Main Reef and transport to surface utilising LHD's for metallurgical treatment.
(For the release with pictures and schematics, please refer to the Company's website: www.centralrandgold.com)
Step 4: Repeat this process on the lower levels
(For the release with pictures and schematics, please refer to the Company's website: www.centralrandgold.com)
Step 5: Rehabilitate and support the void by backfilling with cemented tailings
(For pictures and schematics, please refer to the Company's website: www.centralrandgold.com)
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Central Rand Gold