CRG enters pilot phase
Ines Schumacher | Tue, 25 Aug 2009 10:29
miningmx.com
[miningmx.com] -- JUNIOR gold producer Central Rand Gold (CRG) is preparing to prove to the market over the next six months that its mining plans are practical and workable.
"Essentially, the July-December 2009 period will serve as a vital test or pilot phase, which will determine the future direction of the company," the company's CEO Johan du Toit said.
CRG released the Snowden Mining Industry Consultants report along with its interim results for the six months to end-June 2009 on Tuesday.
The report estimates a reserve of 271,000 ounces of gold just for the main reef.
CRG originally proposed a drift-and-fill mining method which would produce the 90,000 tonnes originally required. However, Snowden pointed out this would result in an unsustainable headgrade.
The company has elected to use the long hole mechanised stoping mining method. "This should result in lower development costs, higher headgrades but lower tonnages extracted," the company said in its interim results.
As a result, CRG chopped its forecast gold production for 2009 to 20,000 ounces from the original estimate of 40,000 oz.
CRG is aware that it must now prove this mining method is economic and technically feasible. Trial stoping is expected to begin at the end of 2009 or in January 2010.
"Over the next six months we will be entering into the reef horizon and looking at what's available outside the main reef the Snowden report looked at," executive director of CRG Wayne Epstein told Miningmx.
He said CRG is looking to prove to the market that the assumptions the company made are robust. "After that, we will look at how best we can scale the project up," Epstein said.
CRG's loss for the interim period amounts to $14.5m, a loss of 5.89 cents per share. As at 30 June, its cash and cash equivalents totalled $46m, down from $69m at 31 December 2009.
Even though CRG originally estimated to require funding towards the mid-end of 2009, it has now indicated it will only need additional capital from about the middle of 2010.
"We will use this capital to increase the scope of our project," Epstein said.
The Central Rand Basin saw its first gold smelt in 40 years as CRG poured its first gold on-site towards the end of July.
CRG wants to re-establish mining operations in various parts of the old Central Witwatersrand gold field, stretching from near Roodepoort on the West Rand to Germiston on the East Rand.
The first mine is being developed on the West Rand in the Consolidated Main Reef lease area, where mining was abandoned in the 1970s. |
