Central Rand Gold says operational difficulties hit output in 2012

Central Rand Gold on Wednesday said operational difficulties had had a negative impact on gold production last year.

Shares fell 4.17% to 0.69 at 11:26 as the South-Africa focused gold mining company highlighted the challenges that hit output in the year to December 31st.

Throughout the year the group focused on reducing its gold losses.

A majority of the losses occurred as a result of ore handling during primary and secondary crushing processes.

Major modifications to the VSI crushing circuit were undertaken in January to optimise production, eliminate costs and minimise fine gold losses during the primary crushing stage.

Another factor drawing down production was a marked decrease in the availability of the Bateman Mill. Several gearbox failures led to a two week shutdown last month. The gearboxes have now been modified to take up the extra load required and the mill has performed well since.

A planned five-day shutdown of the Carbon In Pulp Mill in early January, to replace a worn pinion gear, was extended for a further seven days upon discovering a bent pinion coupling shaft which required additional fabrication.

The mill returned to full production last week and it is expected that production targets will be achieved.

The company said it generated $4.5m closing cash and cash equivalents at December 31st, down from $5.3m a year ago.

Central Rand Gold expects full year production of 14,500 ounces to 15,000 ounces, based on the current underground production profile of 14,000 tons per month.

It plans to finalise its strategy by June 2013 in an effort to improve production.

RD