Central Rand Gold : 2014 Interim Report

August 15, 2014 at 04:28 am EDT

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: GG00B92NXM24

LSE share code: CRND JSE share code: CRD

("Central Rand Gold" or the "Company" or the "Group")

2014 I nterim Report

Central Rand Gold, the South African gold mining and exploration holding company, today announces its unaudited Interim Results for the six months ended 30 June 2014 ("period under review"). The full set of results is available on the Company's website: .

For further information, please contact:

Central Rand Gold +27 (0) 87 310 4400

Johan du Toit / Nathan Taylor

Charles Stanley Securities +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 Proprietary Limited +27 (0) 11 506 7351

Jenni Newman

15 August 2014

Johannesburg

Forward-looking statements

This Interim Report contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Central Rand Gold Group. The words "intend", "aim", "project", "anticipate", "estimate", "plan", "believe", "expect", "may", "should", "will", or similar expressions, commonly identify such forward-looking statements. Examples of forward-looking statements in this Interim Report include those regarding estimated Ore Reserves, anticipated production or construction dates, costs, outputs and productive lives of assets or similar factors. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors set forth in this Interim Report that are beyond the Group's control. For example, future Ore Reserves will be based in part on market prices that may vary significantly from current levels. These may materially affect the timing and feasibility of particular developments. Other factors include the ability to produce and transport products profitably, demand for our products, the effect of foreign currency exchange rates on market prices and operating costs, and activities by governmental authorities, such as changes in taxation or regulation, and political uncertainty.

In light of these risks, uncertainties and assumptions, actual results could be materially different from any future results expressed or implied by these forward-looking statements, which speak only as at the date of this Interim Report. Except as required by applicable regulations or by law, the Group does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, or future events. The Group cannot guarantee that its forward-looking statements will not differ materially from actual results.

Chief Executive Officer's report

Key salient features during the first six months of the year

· Revenue of US$5.77 million (2013: US$8.80 million).

· Loss before taxation reduced in the period to US$2.84 million (2013: US$4.87 million).

· The water table has been stabilised due to the commissioning of the High Density Sludge ("HDS") plant. The increase in pumping volumes, in August 2014, is expected to accelerate the drop in the water table.

· Doubling of resource base to 9.9 million ounces ("Moz") recognises the ability of the HDS plant to dewater the Central Basin.

· Lower gold production due to lower feed grade from underground operations and lower reliance on toll treatment. Improvements reported in mine call factor ("MCF") and metallurgical throughput.

· Commissioning of Mill 3 increasing production throughput by 55%.

· Temporary reduction in underground mine production, due to high water level.

· Access to new mining area, with surface and underground potential, to supplement lower production from underground mining.

Safety

Safety Statistics

Type of injury	Six months ended 30 June 2014	Six months ended 30 June 2013
Dressing cases	6	4
Lost-time injuries	4	12
Fatalities	1	-

The greatest disappointment during the first half of the 2014 financial year was our first fatality, in May 2014, from underground operations. All underground operations were stopped for 10 days, whilst an extensive investigation was carried out. The Company has embarked on a company-wide safety culture review, re-training of employees and supervisors, and also the review of the operating standards to objectively address and minimise as far as reasonably practicable all accidents, and especially accidents that may result in a fatality.

Acid Mine Drainage ("AMD")

After a five-month delay in the start-up of the HDS plant, we were greatly relieved when Trans Caledon Tunnel Authority ("TCTA") commenced with pumping and treatment operations of its HDS plant on 28 May 2014. Up to that point, no other means was available to dewater the Central Basin, and due to a very wet summer, the rate of rise in the Central Basin was accelerated. Since commissioning, the HDS plant has undergone a thorough commissioning phase under the guidance of TCTA. During the commissioning phase, no 'fatal flaws' in the design of the HDS plant were identified. However, the HDS plant did experience typical 'teething issues', which resulted in TCTA operating the HDS plant initially at a reduced rate, with only one of the two submersible pumps running at any given time. TCTA stabilised the plant at the end of June 2014, and started running the plant at around 48 million litres per day ("mlpd") during July 2014. The water table remained relatively stable during this time at around 160 metres below surface ("mbs"). As at the end of July 2014, pumping was increased to 60 mlpd and the target is to increase the pumping rate to 72 mlpd, by early August 2014. It remains too early to fully understand the de-watering trend of the Central Basin.

Mining

With our mining operations established at 225 mbs, the increase in the water table above this level to around 160 mbs has undoubtedly had an impact on the mining operations. Mining operations have been limited to within the narrow band of 100 mbs to 160 mbs. Mining of the main reef within this mining band remains limited, due to the shallower oxides ground conditions. The Company i s currently targeting new development to access unmined main reef areas.

Additionally, two pay-shoots on the North Reef which have been identified; an unmined reef package approximately 10 metres below the Main Reef mining target area. If mining results remain positive, this could add an additional mining target to Central Rand Gold's portfolio, as the North Reef has remained largely unmined, across the entire Mining Right area. Recognising the current mining limitations, and until the water table drops substantially, Central Rand Gold has reduced the underground production target at its CMR mining operation from 14,000 tonnes per month ("tpm") to 4,500 tpm. The Company is in the process of reducing its current staffing numbers to account for these new targets.

Central Rand Gold has also obtained access to an additional mining area. The area has very exciting underground and surface mining potential. Central Rand Gold will initially target the surface potential and believes the area has the production capability for an amount in excess of 10,000 tpm. The Company plans to supplement the current reduction in underground mining with the above material.

Production statistics

	30 June 2014 tonnes	30 June 2013 tonnes	Variance
Underground	66,085	72,956	(6,871)
Surface	22,076	57,260	(35,184)
Total	88,161	130,216	(42,055)

Underground mining

Underground mining production was in line with the plan during the first quarter. In the second quarter, however, considerable face length was lost due to flooding by rising AMD levels. Underground mining production was also impacted by the stoppage of underground mining activities by the DMR, as a result of the fatal accident that occurred at the Company's operations in the month of May. These factors together had the effect of reducing mining production by 9% compared to the first half of the previous year.

Surface mining

Open pit mining only recommenced, in line with planning, in the second quarter of the year. The mining target for the second half of the year is a monthly target of 10,000 reef tonnes per month and it is envisaged that we can mine open pit resources until the end of the year.

Metallurgy

Primary Crushing Circuit

The primary jaw crusher and static screen has been successfully commissioned and is performing according to the required specification. The circuit allows for primary crushing of both oxide and sulphide at rates exceeding that required by the secondary crusher, allowing for a substantial buffer of crushed secondary ore feed, enabling reliable continuous operations.

Secondary Crushing Circuit Upgrade

The leased secondary Chameleon crusher continues to struggle with availability, which has placed the Company under pressure to produce adequate fines for the mills. Major areas of concern are the lubrication and filter system and ensuring that the feed material is free of any tramped steel and wood. Central Rand Goldhas decided to design and run its own secondary crushing circuit that will mainly comprise a Symons 4 ¼ short head cone crusher within a closed circuit configuration. We expect this to be operational by the end of the third quarter of 2014.

Milling capacity

A highlight for the first half of the year was the commissioning in May 2014 of Mill 3, which is a 9x10 feet Ball Mill with a capacity of 10,000 tpm. Predictive mill-modelling indicates a throughput capability of 17 tonnes per hour ("tph") which, when combined with the Company's two existing ball mills, is targeted to increase capacity by at least 55% to 25,000 tpm, which is in line with planned mining production following dewatering to below 225 mbs. The table below summarises the throughput characteristics of the Company's three individual mills from May 2014:

Mill	Dimension	Nameplate Feed Rate (tph)	Designed Uptime (%)	Monthly Capacity (tpm)
Mill 1 (Bateman Mill)	7 x 10ft	7	85%	4,200
Mill 2 (CIL Mill)	9 x 12ft	22.5	85%	13,700
Mill 3 (New Mill)	9 x 10ft	17	85%	10,400
				28,300

The increased feed capacity generated by Mill 3 significantly reduces the pressure on the existing milling circuit. This enables a more proactive and effective maintenance programme to be conducted, which in turn improves productivity and plant availability. It is anticipated that the increased milling capacity and availability will reduce the Company's reliance on external tolling, which will improve both revenue generation and operating margins. In addition, the discrete configuration of the milling units allows for preferential milling campaigns of ore feeds of different characteristics. As previously announced, the Company is in the process of upgrading its downstream leaching capacity. Until these upgrades come on stream, monthly production will be carefully managed, at approximately 20,000 tpm, to ensure that metallurgical recoveries do not deteriorate.

Optimisation of existing mills

In mid-January 2014, the Company initiated a pro-active refurbishment and maintenance programme on the existing mills ("Maintenance Program") with the objective of improving productivity and increasing mill availability. The Maintenance Programme has enabled the Company to migrate from a reactive maintenance strategy, where items were replaced post breakage, to a pro-active maintenance strategy, where components are closely monitored (through data analysis) and repaired or replaced before breakages or failures occur. Although the Maintenance Programme is a long-term initiative, results recorded over the last six months have been positive, with a significant increase in milling unit availabilities being recorded since inception. The following table indicates the step change in availability since the Maintenance Programme was launched in mid-January.

Period	Availability (%)
January 2014	67.9
February 2014	90.0
March 2014	89.6
April 2014	87.9
May 2014	90.7
June 2014	91.6

The focus for the remainder of 2014 will be to ensure that plant availability will remain above 90%.

The Company is also pleased to report that the long awaited replacement gearbox and spare trunnion bearings for Mill 2 have been received and there are plans to install the gearbox during the second half of 2014. Once installed, the ball charge of Mill 2 will be increased to the designed 30%, which will increase Mill 2 capacity from 17 tph to the designed 22.5 tph.

Elution, leaching and thickening

As part of the total plant capacity upgrade, the Company has, besides the new mill, also embarked on changes to its thickening, leaching and elution circuits.

The elution circuit was upgraded with a higher capacity elution heater and the installation of a new elution column. For the more expensive leach and thickening circuits, Central Rand Goldalso opted to utilise 'fit for purpose' available second-hand equipment as opposed to new equipment. The Company acquired three additional leach tanks and a 12m thickener that was initially planned to be commissioned during the second quarter of 2014. The additional thickener and leach tanks acquired will provide leach capacity in excess of 30,000 tpm. Good progress is being made with the installation of the first leach tank which is expected to be commissioned by mid-August 2014.

The completion of the 12m thickener has been postponed until the last quarter of 2014 due to a delay in the decommissioning and transport of the thickener from its current location. To compensate for the delay, a 7,500 tpm thickener was commissioned at the end July 2014. This now provides the Company with 27,500 tpm thickening capacity. Once the 12m thickener has been installed, the 7,500 tonnes thickener will be converted to a water clarification plant, which will further reduce the reliance on expensive municipal water. To date, Central Rand Goldhas achieved a significant reduction of 63% from the last quarter of 2013 to the second quarter of 2014, on monthly reliance on municipal water. This has been made possible by focussing on the efficient usage and recycling of mine water.

Production

Metallurgical

	2014	2013
	January to June	January to June
Internal
- Tonnes processed (t)	80,749	77,791
- Built up head grade (g/t)	1.77	1.91
- Fine gold produced (oz)	3,205	4,246

External (Toll treatment)
- Tonnes processed (t)	13,902	32,979
- Delivered grade (g/t)	2.35	1.87
- Fine gold produced (oz)	944	1,851
Total tonnes processed (t)	94,651	110,770
Total gold produced (oz)	4,149	6,097

Gold production was impacted by the reduction in mining area during the first six months of the year due to rising AMD and as a result the Company was forced to mine shallower and lower grade mining channels. This had an adverse effect on gold production for the first half. The Company also reduced its reliance on the higher cost toll treatment option, rather processing its ore through its own plant. This was partly offset by higher throughput due to the commissioning of the new mill which started up in May 2014, the monthly production throughput increased from an average of 13,000 tpm to 18,000 tpm in June 2014. The benefits of the additional throughput will only be realised during the second half of 2014. Another key factor that reported a great improvement was on the face to pour MCF. The MCF for 2013 was calculated at 71%, averaging just under the South African industry mean of 75%. The MCF for the year to date (ending June 2014) has been calculated at 82%, a substantial improvement in operating efficiency and better utilisation of plant.

Geology

Mineral Resources

The installation of the Ritz high capacity AMD pumps in March 2014, and the subsequent commissioning of the HDS plant on 23 May 2014, has enabled the Company to re-evaluate its Mineral Resources.

Economic capital and operating cost studies have shown that further de-watering beneath the 450 metre level can be done efficiently and economically. With the installation of additional pumps and piping, this hurdle for "eventual economic extraction", a key aspect in the definition of 'Mineral Resources' in terms of the SAMREC Code, can be satisfied.

This has allowed the Company and the Independent Competent Person, Venmyn Deloitte, to re-rate the gold mineralisation between 450 metres and 900 metres below surface from "Exploration Target" to "Mineral Resource". This reclassification has more than doubled the resource base of the Company from 4.51 Moz to 9.90 Moz of contained gold.

SAMREC Compliant Mineral Resources

		July 2014			February 2014
Area	Category	Tonnes	Grade	Content	Tonnes	Grade	Content
		(Mt)	(g/t)	(Moz)	(Mt)	(g/t)	(Moz)
CMR	Measured	1.46	3.65	0.17	1.46	3.65	0.17
	Indicated	14.43	4.22	1.97	11.30	4.53	1.64
	Inferred	5.64	6.65	1.23	4.34	5.60	0.78
	Exploration	12.02	9.26	3.59	15.86	8.49	4.33
	Target
Crown	Indicated	5.78	5.83	1.11	2.58	5.67	0.47
	Inferred	3.11	8.03	0.80	2.77	7.19	0.64
	Exploration	20.81	10.07	6.73	24.34	9.61	7.52
	Target
City	Indicated	2.88	6.97	0.63	0.78	7.58	0.19
	Inferred	2.43	6.99	0.55	0.70	8.00	0.18
	Exploration	19.12	9.66	6.32	22.95	9.66	7.13
	Target
Village	Indicated	1.80	6.48	0.39	0.53	5.87	0.10
	Inferred	0.20	13.60	0.10	0.17	14.64	0.08
	Exploration	12.27	10.93	4.30	13.57	10.57	4.61
	Target
Simmers	Indicated	1.53	8.80	0.43	0.73	8.10	0.19
	Inferred	0.15	8.20	0.04	0.15	8.29	0.04
	Exploration	8.75	10.35	2.92	9.55	10.29	3.16
	Target
Other	Indicated	3.16	1.22	0.13	-	-	-
	Inferred	20.47	3.61	2.36	-	-	-
	Exploration	10.04	9.07	2.92	33.67	8.34	5.41
	Target
Total	Measured	1.46	3.57	0.17	1.46	3.57	0.17
	Resource
Total	Indicated	29.58	4.85	4.66	15.92	5.06	2.59
	Resource
Total	Inferred	32.00	4.92	5.08	8.13	6.58	1.72
	Resource
Total	Exploration	83.01	10.03	26.78	119.94	8.34	32.16
	Target
Grand		146.05	7.80	36.69	145.45	7.84	36.64
Total*

Note: Rounding may result in minor computational discrepancies. The potential quantity and grade described by the term "Exploration Target" is conceptual in nature and there has been insufficient exploration to define a Mineral Resource and it is uncertain if further exploration will result in the definition of a Resource. Further exploration work is ongoing, and includes trial mining and processing of this shallow target to establish grade and ore body continuity, mineability, dilution and throughput characteristics.

This basin wide increase in Mineral Resources will also significantly augment Reserve scheduling and Pre-Feasibility level studies on adjacent mining targets such as Crown and City Deep.

NOTE: The information in this statement relating to Mineral Resources and geology has been reviewed and approved by Mr Keith Matier, BSc (Hons), GDE, PrSci Nat, who is a Competent Person in terms of the SAMREC code. Mr Matier is the Geology Manager of CRGSA and has over 20 years' experience in exploration, mineral resource management and mineral evaluation.

Financial update

Results

The net loss for the period under review amounted to US$2.84 million (3.78 cents per share) against a loss of US$4.87 million for the six months ended 30 June 2013 (15.22 cents per share). The loss was driven by lower head grade and lower reliance on toll revenue during the first half of the year. The loss was partly mitigated by a focus on the reduction of costs in the following areas:

· Decrease in production costs through the more effective use of utilities. Water cost was reduced by 70% through the more effective use of recycling processed water;

· Lower staff costs due to the strong focus on reducing contract staff as well as improvements in plant availability significantly reduced overtime costs;

· Significantly lower plant hire costs indicating the benefit of owned primary crushing plant; and

· Upgrade of current plant resulting in improved availability and operational efficiencies.

As a consequence, all-in cash operating costs per ounce decreased to US$1,987 per ounce (June 2013: US$2,268) against the prior year's US$2,425 per ounce.

As at 30 June 2014, the net cash position of the Company stood at US$4.39 million (December 2013: US$2.48 million).

Looking forward

Over the next six months the following will be the main focus areas for the Company:

· Underground mining at CMR, which will largely be driven by the progress of the de-watering of the Central Basin to 225mbs as well as the grade on the North Reef.

· The new mining area carries exciting new opportunities and the Company will commence with surface mining and will further study the area to identify other target areas and future underground potential.

· The completion of the Metallurgical downstream plant, to enable the operation to process optimally around the 25,000 tpm level.

Johan du Toit

Chief Executive Officer

Condensed Group Statement of Financial Position
as at 30 June 2014

		30 June	31 December	30 June
		2014	2013	2013
	Notes	US$ '000	US$ '000	US$ '000
		(Unaudited)	(Audited)	(Unaudited)
ASSETS
Non-current assets
Property, plant and equipment	5	4,763	3,619	3,570
Intangible assets		3,104	3,131	3,326
Security deposits and guarantees		210	194	225
Environmental guarantee investment		3,361	3,338	3,507
Loans receivable	6	8,961	8,571	8,641
		20,399	18,853	19,269

Current assets
Security deposits and guarantees		71	70	70
Prepayments and other receivables		1,004	914	1,239
Inventories	7	813	910	1,029
Cash and cash equivalents		4,389	2,475	1,311
Non-current assets held-for-sale	8	-	174	-
		6,277	4,543	3,649

Total assets		26,676	23,396	22,918

EQUITY
Attributable to equity holders of the parent
Share capital	9	26,314	25,604	25,604
Share premium	9	218,630	213,377	213,377
Share-based compensation reserve		28,187	28,224	28,176
Treasury shares		(6)	(6)	(6)
Foreign currency translation reserve		(29,348)	(29,442)	(29,675)
Accumulated losses		(249,133)	(246,291)	(236,370)
		(5,356)	(8,534)	1,106
Non-controlling interest		-	-	-
Total equity		(5,356)	(8,534)	1,106

LIABILITIES
Non-current liabilities
Environmental rehabilitation		5,904	5,713	5,842
Loan payable	10	19,336	19,091	8,641
		25,240	24,804	14,483

Current liabilities
Trade and other payables		6,792	6,971	7,235
Taxation payable		-	155	94
		6,792	7,126	7,329

Total liabilities		32,032	31,930	21,812

Total equity and liabilities		26,676	23,396	22,918


Condensed Group Statement of Financial Performance
for the six months ended 30 June 2014

		Six months	12 months	Six months
		ended	ended	ended
		30 June	31 December	30 June
		2014	2013	2013
	Notes	US$ '000	US$ '000	US$ '000
		(Unaudited)	(Audited)	(Unaudited)

Revenue	11	5,774	14,627	8,798
Production costs	12	(4,856)	(16,344)	(8,977)
Employee benefits expense		(1,607)	(3,969)	(2,080)
Directors' emoluments	13	(434)	(850)	(436)
Inventory write-(down)/up		(40)	39	(169)
Operating lease expense		(304)	(523)	(280)
Operational expenses	14	(639)	(1,588)	(868)
Other expenses	15	(882)	(2,855)	(994)
Other income and gains	16	131	622	483
Foreign exchange transaction gains/ (losses)		261	(121)	(27)
Loss before interest, tax and depreciation		(2,596)	(10,962)	(4,550)
Depreciation		(226)	(536)	(433)
Impairment of assets		-	(224)	-
Loss on fair value of convertible loan note		-	(3,234)	-
Finance income		456	1,287	581
Finance costs		(476)	(1,123)	(469)
Loss before income tax		(2,842)	(14,792)	(4,871)
Income tax expense	17	-	-	-
Loss for the period		(2,842)	(14,792)	(4,871)

Loss is attributable to:
Non-controlling interest		-	-	-
Equity holders of the parent		(2,842)	(14,792)	(4,871)
		(2,842)	(14,792)	(4,871)

Shares in issue		75,180,808	31,993,443	31,993,443
Weighted average number of ordinary shares in issue		75,180,808	31,993,443	31,993,443
Fully diluted weighted average number of ordinary shares in issue		75,180,808	31,993,443	31,993,443
Basic loss per share (US cents per share)	19	(3.78)	(46.23)	(15.22)
Diluted loss per share (US cents per share)	19	(3.78)	(46.23)	(15.22)

Condensed Group Statement of Comprehensive Income
for the six months ended 30 June 2014

	Six months	12 months	Six months
	ended	ended	ended
	30 June	31 December	30 June
	2014	2013	2013
	US$ '000	US$ '000	US$ '000
	(Unaudited)	(Audited)	(Unaudited)

Loss for the period	(2,842)	(14,792)	(4,871)
Other comprehensive income/(loss):
Item that may be reclassified subsequently to profit or loss
Exchange differences on translating foreign operations	94	(784)	(1,017)
Other comprehensive income/(loss) for the period, net of tax	94	(784)	(1,017)
Total comprehensive loss for the period	(2,748)	(15,576)	(5,888)

Total comprehensive loss is attributable to:
Non-controlling interest	-	-	-
Equity holders of the parent	(2,748)	(15,576)	(5,888)
	(2,748)	(15,576)	(5,888)

Condensed Group Statement of Changes in Equity
for the six months ended 30 June 2014

		Attributable to equity holders of the Group
	Notes	Ordinary share capital	Share premium	Share-based compensa-tion reserve	Treasury shares	Foreign currency translation reserve	Accumula-ted losses	Total	Non-controlling interest	Total equity
		US$ '000	US$ '000	US$ '000	US$ '000	US$ '000	US$ '000	US$ '000	US$ '000	US$ '000

Balance at 31 December 2012		25,604	213,377	28,176	(6)	(28,658)	(231,499)	6,994	-	6,994
Total comprehensive income for the period ended 30 June 2013
Loss for the period		-	-	-	-	-	(4,871)	(4,871)	-	(4,871)
Other comprehensive income
Foreign currency adjustments		-	-	-	-	(1,017)	-	(1,017)	-	(1,017)
Transactions with owners, recorded directly in equity

Attributable to equity holders of the Group

Notes

Ordinary share capital

Share premium

Share-based compensa-tion reserve

Treasury shares

Foreign currency translation reserve

Accumula-ted losses

Total

Non-controlling interest

Total equity

US$ '000

Balance at 31 December 2013

25,604

213,377

28,224

(6)

(29,442)

(246,291)

(8,534)

Total comprehensive income for the period ended 30 June 2014

Condensed Group Statement of Cash Flow
for the six months ended 30 June 2014

		Six months	12 months	Six months
		ended	ended	ended
		30 June	31 December	30 June
		2014	2013	2013
		US$ '000	US$ '000	US$ '000
		(Unaudited)	(Audited)	(Unaudited)

CASH FLOWS FROM OPERATING ACTIVITIES	Notes
Loss before tax		(2,842)	(14,792)	(4,871)
Adjusted for :
Depreciation		226	536	433
Employment benefit expenditure (share-based payments)		(37)	48	-
Loss/(profit) on disposal and scrapping of property, plant and equipment		9	(541)	(457)
Impairment of inventory	7	40	(39)	169
Impairment of assets		-	224	-
Net (gain)/loss on foreign exchange		(261)	121	27
Sundry income	16	-	-	(26)
Finance income		(456)	(1,287)	(581)
Finance costs		476	1,123	469
Loss on fair value of convertible loan note		-	3,234	-
Changes in working capital
(Increase)/decrease in prepayments and other receivables		(90)	38	(287)
Increase in inventory		57	370

Notes to the Condensed Interim Group Financial Statements

for the six months ended 30 June 2014

1. Basis of preparation

This condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union (" EU"). The annual Financial Statements of the Group are prepared in accordance with International Financial Reporting Standards and Interpretations (collectively "IFRS") issued by the International Accounting Standards Board ("IASB") as adopted by the EU. The condensed interim Group financial statements have been prepared applying the accounting policies and presentation that were applied in the preparation of the Company's published consolidated financial statements for the year ended 31 December 2013 except for the changes described in note 2.

The consolidated financial statements are presented in United States Dollars ("US$" or "US Dollar") and rounded to the nearest thousand. The functional currency of the parent company, Central Rand Gold Limited, changed during the prior year from the British Pound to the US Dollar as its main source of funding is now the US Dollar. The functional currency of its principal subsidiary, CRGSA is the South African Rand ("ZAR" or "Rand").

Going concern

The Directors have prepared the condensed interim Group financial statements on the going concern basis having considered the current operations, the current funding position and the projected funding requirements of the business for at least 12 months from the date of approval of the financial statements as detailed below.

The Directors have prepared cash flow projections until 2024 that reflect the current mine plan adopted by the Directors. These projections show that the Group has sufficient funding for at least the next 12 months from the date of approval of these condensed interim Group financial statements and hence the Directors have prepared the condensed interim Group financial statements on a going concern basis.

Following the successful completion of the Open Offer in January 2014 and Redstone Capital's exercise of the options available to it in March 2014, additional funds of US$2.2 million (£1.69 million) and US$3.4 million (£2.11 million), respectively, were raised. The Directors consider that there is now adequate funding in place and, based on the current mine plan, no further capital raises are considered necessary for the life-of-mine.

The Directors are optimistic about the future of the Company and the dewatering may give the Company improved access to deeper mining levels over time. However, the risks inherent in any single metal mining operation remain for the longer term.

2. Accounting policies

Except as described below, the accounting policies applied by the Group in these condensed interim Group financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2013, as described in those consolidated financial statements.

The Group has adopted the following standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 1 January 2014:

• IFRS 10: Consolidated Financial Statements

• IFRS 12: Disclosure of Interests in Other Entities

• IAS 27: Consolidated and Separate Financial Statements

• IAS 32: Financial Instruments - Presentation

• IAS 36: Impairments of Assets

The adoption of these Standards is not expected to have a significant impact upon the Group's net results, net assets or disclosures.

Taxes on income in the interim periods are accrued using the tax rate that would be applicable to expected total annual earnings.

3. Estimates and judgements

The preparation of condensed interim Group financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.

In preparing this condensed interim Group financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated annual financial statements as at and for the year ended 31 December 2013.

4. Financial risk management

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated annual financial statements as at and for the year ended 31 December 2013.

Fair value

The aggregate net fair values of all current financial assets and financial liabilities, as well as non-current receivables, instalment sales and finance leases approximate the carrying amounts at the financial reporting date.

Foreign currency rates

The US Dollar rates of exchange applicable to the period are as follows:

2014

2013

Six months to

Year ended

6. Loans receivable

Puno Gold Investments Proprietary Limited ("Puno")
Since the last report for the year ended 31 December 2013 there has been no resolution to the dispute relating to alleged procedural breaches of the CRGSA Shareholders' Agreement between CRGSA and its current Black Economic Empowerment ("BEE") shareholder, Puno. The dispute surrounds the allocation of intercompany loans which fund the budget and work programme and the incurring of, and level of, certain costs.

During the period under review, the Company was granted the right to appeal the December 2013 ruling.

The Group still believes that ultimately their position will prevail. The Board is still of the opinion that this will not have any material consequences in respect of the consolidated accounts of the Group.

The loan payable to Puno contains the same allocations referred to above.

7. Inventories
	Group
	June	December	June
	2014	2013	2013
	US$ '000	US$ '000	US$ '000

Consumables	80	130	218
Ore stockpiles	733	780	811
Total inventories	813	910	1,029

The amount of the write-down of ore stockpiles to net realisable value, and recognised as an expense is US$881,109 (2013: US$169,183).

8. Non-current assets held-for-sale
At 31 December 2013, the Group classified an item of plant and machinery, being the flotation plant (net realisable value: US$172,517) as non-current assets held-for-sale. During the six months ended 30 June 2014, the Group disposed the flotation plant for US$161,512, resulting in a loss of US$9,363. No additional items were classified as held-for-sale during the period under review.

9. Share capital and share premium
On 20 January 2014, the Company allotted and issued 19,196,065 new Ordinary Shares at a price of 8.78 pence per Ordinary Share in the Open Offer raising approximately US$2.61 million (£1.59 million) net proceeds. On 25 March 2014, Redstone Capital exercised 73.6% of the options available to it following the Open Offer and had accordingly acquired 23,991,300 shares for a net consideration of US$3.36 million (£2.04 million).

10. Loan payable

2.61

3.36

Net proceeds (USD million)

Group

June

December

June

2014

2013

US$ '000

Loan payable consists of the following:

14. Operational expenses
	Group
	June			December			June
	2014			2013			2013
	US$ '000			US$ '000			US$ '000
Operational expenditure comprises the following items:
- Assaying costs	155			550			232
- Consulting services	355			490			346
- Environmental costs	5			5			-
- Mineral property options paid	124			543			491
- Other expenses	-			-			(201)
	639			1,588			868

15. Other expenses
		Group
		June			December			June
		2014			2013			2013
		US$ '000			US$ '000			US$ '000
Auditor's remuneration		39			228			128
Corporate social investment		2			8			8
Fees and subscriptions		181			203			56
Insurance and financial services		95			187			112
Legal costs		140			374			82
Repairs and maintenance		35			158			53
Security		149			320			163
Travel and accommodation		4			37			18
Information technology		65			193			112
Other expenses		172			1,147			262
		882			2,855			994

16. Other income and gains
			Group
			June			December			June
			2014			2013			2013
			US$ '000			US$ '000			US$ '000

Sundry income1			131			622			483

1. Sundry income mainly relates to profit on the disposal of property, plant and equipment and other sundry income.

17. Income tax expense
Income tax expense is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used for the year to 30 June 2014 is 0% (2013: 0%) due to assessable losses available to CRGSA and the Guernsey resident status of CRG LTD resulting in 0% effective rates.

18. Commitments

Group

June

December

June

2014

2013

US$ '000

Company profile

Our business

Central Rand Gold Limited ("Central Rand Gold" or "the Company") is engaged in a gold mining and exploration project that aims to bring profitable and sustainable gold mining back to the City of Johannesburg, bringing many benefits to the City, the communities surrounding its mining operations, its staff, its shareholders and other stakeholders. The Company plans to extract all profitable gold from its resource base using appropriate mining, processing and environmentally friendly technologies. Once the mineralised areas are worked out, stabilised and rehabilitated, the land will become available for urban development.

History

Central Rand Gold is the holding company for a group of companies ("Group"). Central Rand Gold listed on the Official List of the UK Listing Authority and the Main Boards of both the London Stock Exchange ("LSE") and the JSE Limited ("JSE") in November 2007, after consolidating contiguous exploration permits covering approximately 138 square kilometres in the most prolific gold-producing area of the world - the Central Rand Goldfields on the southern outskirts of Johannesburg. On 18 September 2013, Central Rand Gold opted to transfer its listing to AIM in London and to the AltX in Johannesburg.

Mining Rights and Prospecting Rights

The Group acquired seven New Order Prospecting Rights which constitute from west to east, Western Areas A, B and E, the three Cs (one Prospecting Right for Consolidated Main Reef, Crown Mines and City Deep), Anglodeeps area, Village Main and Robinson Deep (one Prospecting Right) and the mining area of the defunct Simmer and Jack Gold Mine. The Prospecting Rights extend over an area from west to east of approximately 40 kilometres and north to south of approximately seven kilometres (the "Central Rand Project"). In addition, the Southern Deeps New Order Prospecting Right Application (the "Prospecting Application"), if granted, would extend the Central Rand Project by a further 13 kilometres to the south. On 27 February 2012, it was announced that the Prospecting Rights in respect of Western Areas A, B and E had been transferred from Rand Quest Syndicate Limited ("RQS") to Central Rand Gold South Africa Proprietary Limited ("CRGSA") via Section 11 applications lodged with the South African Department of Mineral Resources ("DMR"). The Southern Deeps Prospecting Application is still in the process of being transferred. The Anglodeeps Prospecting Right renewal was submitted to the DMR but was unfortunately rejected on a technicality. This is currently being taken on appeal.

The Company received its first New Order Mining Right from the DMR on 17 September 2008. This Mining Right, which was awarded 14 months after the initial application, enables Central Rand Gold to mine gold at its Consolidated Main Reef, Langlaagte and Crown Mines tenements.

This information is provided by RNS

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Central Rand Gold Limited

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Central Rand Gold : 2014 Interim Report

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