| Tue 12 Jun 2012, 8:00 | | CRD - Central Rand Gold Limited - Independent Competent Person`s Report |
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CRD
CRD
CRD - Central Rand Gold Limited - Independent Competent Person`s Report
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")
INDEPENDENT COMPETENT PERSON`S REPORT
The Company is pleased to announce the completion of a new South African Mining
Code compliant Independent Competent Person`s Report ("ICPR") undertaken by
mineral industry experts, Venmyn Rand Proprietary Limited ("Venmyn"). Three key
areas were targeted in this report:
1 To independently adjust the Company`s Resource base in line with the
rising water table;
2 To re-establish and confirm the South African Code for the Reporting
of Exploration Results, Mineral Resources and Mineral Reserves
("SAMREC Code") compliant Probable Reserves based on conventional
South African mining techniques; and
3 To ascribe an independent market related value to the Company based on
all of its mineral assets.
* Adjustment of Resources in line with the rising water table
The Company has embarked on a strategic reassessment of the potential impact of
the rising water table on the substantial Resource base the Company currently
controls. The Company and Venymn have decided that Mineral Resources deeper than
450 metres below surface ("mbs") should be considered temporarily inaccessible
pending signature of agreements between the South African Department of Water
Affairs and Forestry ("DWAF") and South African Government contracted service
provider, Trans Caledon Tunnel Authority ("TCTA") allowing for pumping of water
below this level. This has the effect of downgrading all Resources below 450
metres in depth to the SAMREC category of Exploration Target. It must be
emphasised that the confidence in gold content and continuity remains unchanged
and that the category may be restored upon signature of the aforementioned
agreements and appropriate capital costing and economic assessments.
SAMREC Compliant Mineral Resources above 450mbs
Area Category Reef Width Tonnes(Mt) Grade Content
(g/t) (Moz)
Consolidated Measured Main Reef 143 1.47 3.57 0.16
Main Reefs
Indicated 133 5.73 3.98 0.73
Indicated Main Reef 100 0.71 9.98 0.23
Leader
Inferred 100 1.11 11.18 0.40
Indicated White 164 2.99 4.21 0.40
Reef
Inferred 166 2.64 3.45 0.31
Indicated Kimberley 151 2.60 3.69 0.31
Reef
Inferred 146 0.59 3.71 0.07
Crown Mines Indicated Main Reef 110 2.57 5.63 0.47
Inferred 120 2.21 4.81 0.34
Indicated Main Reef 112 0.01 18.02 0.01
Leader
Inferred 123 0.56 16.76 0.30
City Deep Indicated Main Reef 112 0.78 7.63 0.19
Inferred 118 0.17 6.42 0.04
Inferred Main Reef 102 0.53 8.29 0.14
Leader
Simmer and Indicated Main Reef 101 0.73 8.45 0.19
Jack Leader
Inferred 121 0.15 8.20 0.04
Village Main Indicated Main Reef 140 0.53 6.30 0.10
Reefs and
Robinson
Deep
Inferred Main Reef 116 0.17 14.35 0.08
Leader
Total 134 26.24 5.34 4.51
Note, Rounding may result in minor computational discrepancies
* Re-establishment and restatement of SAMREC Compliant Mineral Reserves
As set out in the Company`s 2011 Annual Report, due to the change in mining
technique from mechanised stoping to conventional hand held stoping, which was
brought about as a result of excessive dilution and costs, a review of the
Company`s Mineral Reserves was required. Prior to December 2011, the Reserve
base was estimated at approximately 482,000oz of Probable Reserve. This estimate
was based on the now abandoned mechanised long hole stoping method. Reserves
were largely defined around two high grade payshoots and tested to depths of
around 900mbs at the deepest point.
The new Reserve presented in the ICPR is estimated at approximately 406,900oz of
Probable Reserve. Aside from the change in mining method to reflect the methods
now employed by the Company, this estimate differs from the former in that it is
only defined to a depth of 450mbs and that it incorporates mining of the lower
grade area between the two payshoots.
Reserve comparison December 2011 and May 2012
December 2011 May 2012
Area CMR West CMR West
Category Probable Probable Reserve
Reserve
Tonnage 3.73 3.55
(MT)
Grade (g/t) 4.00 3.56
Content 482 407
(Koz)
Maximum 900 450
Depth (m)
This aforementioned change in estimated Probable Reserve is a significantly
positive endorsement of the Company`s new strategy and the decision to revert to
a more traditional mining method in that, whilst the overall quantum of Reserves
is lower than that previously established, the declaration depth is considerably
less. The February 2012 Resource upgrade which incorporated additional sampling
information gleaned from surface trenching, has demonstrated that the area
between the two payshoots is of a higher grade than previously believed and has
thus become a more viable economic proposition. The Mineral Resource to Mineral
Reserve conversion was conducted by Mr M L Mohloki of Mohloki Mining CC
("Mohloki") using actual mining performance and typical Witwatersrand gold
mining ratios.
* Independent Market Related Valuation of Mineral Assets
The approach taken by Venmyn in ascribing a value to the extensive asset base
was twofold. The primary method considered all of the Company`s SAMREC
compliant Resources on an area by area `sum of parts` basis utilising a `market
related ounce value in the ground`.
Valuation of project areas per unit of Mineral Resource
PROJECT CATEGORY CONTENT LOW UNIT HIGH LOW HIGH MEAN
(Moz) VALUE UNIT VALUE VALUE VALUE
(USD/oz) VALUE (USDm) (USDm) (USDm)
(USD/oz)
Consolidated Measured 0.16 80.00 140.00 12.80 22.40 17.60
Main Reefs
Indicated 1.67 40.00 70.00 66.80 116.90 91.85
Inferred 0.79 6.00 10.00 4.71 7.85 6.28
Resource 4.33 0.60 1.00 2.60 4.33 3.46
Target
Sub-total 6.95 12.51 21.81 86.91 151.48 119.19
Crown Mines Indicated 0.47 40.00 70.00 18.92 33.11 26.02
Inferred 0.64 6.00 10.00 3.86 6.43 5.14
Resource 7.52 0.60 1.00 4.51 7.52 6.02
Target
Sub-total 8.64 3.16 5.45 27.29 47.06 37.18
City Deep Indicated 0.19 40.00 70.00 7.60 13.30 10.45
Inferred 0.18 6.00 10.00 1.07 1.78 1.42
Resource 7.13 0.60 1.00 4.28 7.13 5.70
Target
Sub-total 7.50 1.73 2.96 12.94 22.21 17.58
Village and Indicated 0.10 40.00 70.00 3.96 6.93 5.45
Robinson
Inferred 0.08 6.00 10.00 0.47 0.79 0.63
Resource 4.61 0.60 1.00 2.77 4.61 3.69
Target
Sub-total 4.79 1.50 2.58 7.20 12.33 9.77
Simmer and Indicated 0.19 40.00 70.00 7.76 13.58 10.67
Jack
Inferred 0.04 6.00 10.00 0.24 0.40 0.32
Resource 3.16 0.60 1.00 1.90 3.16 2.53
Target
Sub-total 3.39 2.92 5.05 9.90 17.14 13.52
Other Reefs Resource 5.41 0.60 1.00 3.25 5.41 4.33
Target
Sub-total 5.41 0.60 1.00 3.25 5.41 4.33
GRAND TOTAL / AVERAGE 36.67 4.02 6.97 147.48 255.63 201.56
Note: In view of the approach that mineral resources deeper than 450mbs should
be considered temporarily inaccessible, for the purposes of this valuation
exercise, everything below 450 m is classified as "Resource Target"
This valuation method is particularly useful in that it allows the Company to
realise value for individual areas by adopting customised development
strategies. An average market related value of USD202 million is ascribed to the
total Mineral asset base of the Company.
The declaration of Mineral Reserves through the undertaking of an appropriate
Pre-Feasibility Study has allowed for a further valuation approach to be
undertaken. A Discounted Cashflow ("DCF") Analysis and Net Present Value ("NPV")
determination was also undertaken by Venmyn on the Consolidated Main Reef West
Main Reef mining operation ("CMRW").
As an addendum to the ICPR, Venmyn has also undertaken a production scenario
analysis in respect of CMR West to gauge the impact of changing production rates
and staged capital deployment. These scenarios have been completed using an
externally funded, partially externally funded and self funded basis
representing the different approaches available to the Company. The approach the
Company will ultimately pursue will depend on prevailing market and economic
conditions at the time of capital requirement. The funding scenarios return NPVs
of ZAR934 million (USD117 million), ZAR658 million (USD82 million) and ZAR344
million (USD43 million) respectively, with an externally funded approach
indicating an overall greater return. The externally funded model forms the base
case represented in the ICPR.
The following information will be available on the Company`s website
www.centralrandgold.com
* A synopsis ICPR report;
* The Full ICPR report;
* Short form ICPR report for CMRW; and
* Addendum: Assessing of differing valuation scenarios for CMRW.
Note: The information in this statement relating to Mineral Resources and
geology has been reviewed and approved 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 the Geology Manager of Central Rand Gold South Africa Proprietary
Limited and has over 18 years` experience in precious metal exploration, mineral
resource management and evaluation.
For further information please contact:
Central Rand Gold + 27 (0) 87 310 4400
Johan du Toit/Patrick Malaza
Charles Stanley Securities + 44 (0) 20 7149 6000
Mark Taylor/Marc Milmo/Darren
Vickers
Merchantec Capital + 27 (0) 11 325 6363
Monique Martinez/Marcel Goncalves
Buchanan + 44 (0) 20 7466 5000
Bobby Morse/James Strong
Jenni Newman Public Relations + 27 (0) 11 506 7351
12 June 2012
Johannesburg
JSE Sponsor
Merchantec Capital
Date: 12/06/2012 08:00:03 Produced by the JSE SENS Department.
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