JOHANNESBURG (miningweekly.com) - JSE- and LSE-listed Central Rand Gold (CRG) said on Tuesday that with its trial mining completed it was now committed to the implementation of sustainable and profitable gold mining operations.
The junior miner, responsible for the resumption of gold-mining on the central rand of Johannesburg after a nearly 40-year hiatus, said that it would focus on establishing its underground mining operations during the second half of the year, having made good progress in the first half of 2010, with 1 256 m of development completed.
CRG CEO Johan du Toit said that the company would continue to seek to optimise its mining methodology, thereby improving the speed that it could access mineable reef when poor ground conditions were encountered.
He noted that while underground development at its CMR West tenement were progressing well, with decline development at 158 m below the surface at the end of June, the process was somewhat hindered before the company's fund raising in July.
CRG's cash position stood at $4-million at the end of the first six months of the year, however, this was significantly boosted by the fundraising and stood at $36,4-million at the end of July, which Du Toit said would now be used to finance the reef development and to acquire further mining equipment.
"After the successful fundraising we have now entered into meaningful discussions with a number of equipment suppliers in an attempt to secure essential underground mining equipment. However, a global increase in the demand for mining equipment over the last six months has resulted in delivery lead times increasing substantially."
Currently, CRG is awaiting the delivery of a long-hole rig to start underground stoping. Any delay in delivery could have short-term production implications as the miner's production forecast for 2010 predominantly relies on the processing of higher-grade underground ore.
In order to mitigate the effects, CRG had undertaken extended surface exploration and surface mining, which ensured the optimal use of its metallurgical plants.
Meanwhile, from a metallurgy point of view, the emphasis would be on successfully implementing an optical ore sorter, which was expected in January 2011.
Du Toit said that should underground production at the mine ramp-up occur before delivery of the new unit, the company would rent an ore sorter in the interim.
The ore sorter would provide an effective mechanism to remove waste from underground ore linked to the mining method being used. "It will also deal with dilution and provide an efficient way of ‘high-grading' material so that recoveries can be increased."
During the six-months period ended June 30, 2010, CRG was able to extract 38 497 t of underground ore and 45 664 t of surface material.
An updated mine plan showed that the mine was expected to produce 476 190 oz of gold over a mine life of 12-years with an average operational cash, including pumping costs, of $582/oz from CMR West.
Du Toit noted that discussion with the South African government, regarding the threat of acid water decant was progressing well, with government expected to take on 70% of the costs of a pumping solution for the Central basin.
In the interim the company had placed an order for submersible pumps to limit the extent that the water table will rise. These R10-million pumps are currently the project's longest lead item and will form part of CRG's total committed contribution R36-million.
Meanwhile, the company said that another important emphasis would be the completion of the CMR East feasibility study by early 2011. CMR East is CRG's next development target.
During the first half of 2010, CRG produced a total of 3 368 oz of gold.
"The second half of 2010 promises to be an exciting period for CRG, as it will build on the trial mining experience and create a platform for strong development and production progress to be made in the years that lie ahead," concluded Du Toit.