Central Rand Gold shares get pumped up

Central Rand Gold was boosted by news that water drainage problems, which have plagued the firm in the Central Basin, were a step closer to being solved.

The business said it had signed deal to donate pumps to the Trans Caledon Tunnel Authority for the planned construction of a new High Density Sludge Treatment Plant for the Central Basin.

Construction of the treatment plant is scheduled to commence on January 8th 2013.

Last year the company temporarily lost its mining rights in the Central Basin after failing to overcome problems with the rising water table.

The pumps will provide the means to contain the rising water table below the Environmental Critical Level of 186 metres below surface (mbs), Central Rand said.

In addition, the pumps and the treatment plant will further enable Central Rand Gold to gradually dewater the Central Basin, at an incremental operating cost, to the maximum operating depth of the pumps of 400mbs.

Despite the pumps' operating capacity being limited to 400mbs, the agreement gives the company the option to undertake further dewatering activities.

This would allow the "liberation" of its resources lying below the 400mbs level, as future mining operations may dictate, the business said.

Shares were up 9.8% at 11:00 following the news.