Central Rand Gold secures new financing for concentrator circuit

The AIM-traded firm firstly confirmed it had entered into a new loan agreement with Mr Jia Bang Wang for funding in the amount of $1m.

It said the loan would be provided in two tranches, with the first tranche of $0.5m having already been received by the company and a further $0.5m becoming available on or by 31 March.

The principal and accrued interest on the loan, at the UK's prime lending rate plus 2% per annum, would be repayable by the company on or by 9 July 2017.

Its board confirmed that interest would accrue and capitalise from day to day, from the day any part of the loan is advanced until and including the day the whole of the loan is repaid.

“The board of directors of Central Rand Gold believe that the loan will provide the company with sufficient working capital for the immediate future and for the procurement, shipping, instalment and commissioning of a concentrator circuit,” the board said in a statement.

“As announced on 6 October 2016, the company has executed an agreement to acquire mine waste dumps that contain 2.3 million tonnes of gold bearing materials, with an average in-situ grade of 0.7g/t.

“As a result of the successful conclusion of the concentrator test work conducted in 2016, the company has resolved to procure a concentrator circuit to upgrade the gold grade of the mine waste dumps materials before further metallurgical processing.”

Central Rand said the concentrator circuit would contain centrifugal concentrators, a scrubber, dewatering screens, water and slurry pumps, and other ancillary equipment.

“The board, which is currently in negotiations with the concentrator circuit's manufacturers, anticipates that it will be in a position to start placing orders for the equipment this quarter, thus allowing for shipment and installation by the second quarter of 2017.”

With regard to its operations, Central Rand pointed to its commissioning of Mill No 1 in November, saying that together with Mill No 3, both mills were able to provide a name plate milling capacity of 800 tonnes per day.

“Subject to production downtime, the company has been processing approximately 500 tonnes of toll treatment materials per day for the past six weeks.

“Management is committing to minimising production downtime and improving production efficiency to carry the current operation until the concentrator circuit has been installed and commissioned.”

Central Rand said the pumping of the water in the Central Basin is, and has always been, the responsibility of Trans-Caledon Tunnel Authority, a South African government institution.

“During the past two months, Johannesburg has experienced higher than normal rainfall, causing the water levels to rise to 143.2 vertical meters below surface, being the same level as at the beginning of 2016.”