Picture this. It is 1886 and Australian Prospector George Harrison is going about his business at the Langlaagte farm in Witwatersrand, Johannesburg, South Africa. He discovers gold within the region and our story begins.

But this tale of the intrepid lone explorer from Australia’s distant shores is far from ancient history.

Johan du Toit, C.E.O of Central Rand Gold, remembers when the company applied for their permit to begin mining at this site.

“Initially the thought of the South African market was that all the gold was taken out (of this site) and none had been left behind” he says.

Wayne Epstein, Executive Manager at Central Rand Gold agrees.

"The people of the industry here in South Africa thought to themselves ‘well, the old timers knew what they were doing, so there is probably no gold there” he says.

“We’re now sitting with 35 million ounces of resource in the area.”
This is the remarkable story of Central Rand Gold; a company who recognise that by doing things a little differently, a lot can be achieved.

Getting “That Permit”

Our next stop is the 1970’s. The site may have been mined for over 100 years nowadays, but Epstein explains that during this time it was closed down “due to a low gold price and lack of technologies to economically exploit the resource.”

“Now with the gold price being stronger and with more ways of extracting the gold we’re able to go in and take out what the old timers had to leave behind” he explains.

“There are full reefs that were left virtually untouched.”

By this time a total of 247m ounces had been mined at an average recovered grade of 8.2 grams per ton (g/t). Of course the landscape around the mine site has changed over the years it was out of operation.

“What we were concerned over was that bringing mining back to Johannesburg was going to be a massive task on its own because of all of the residential and commercial areas that had sprouted around the mining sites. But after going through the consultation process we found that people are actually quite excited about something like this starting up because of the prospects of jobs and procurement opportunities” Epstein says.

“What the Company also did was consolidate all the old mining tenements and whereas in the old days, each mining tenement was owned by a different mining house, we now have New Order Prospecting and Mining Rights over an area with a strike length in excess of 40km”. The specific tenements are the Consolidated Main Reef, Crown Mines and City Deep, AngloGold Ashanti, Langlaagte, Village Main and Robinson Deeps, Western Areas and Simmer & Jack tenements.”

The involvement of the local community and the wealth of public interest in their proposed mining has been a key factor in re-establishing the site today.
“There were a lot of sceptics who told us we’d never be able to get a mining right in a built up urban area. There were many challenges in getting the mining right but we did approach the mining right slightly differently. We saw as many community members as possible, over 20,000 people and we told them about the opportunities and how we would mine” Du Toit says.

“I think that was probably a first for South Africa – that so many people were involved in getting a mining right – and with this approach we were granted the right within 14 months of our first submission. “

Central Rand Gold went to great lengths to investigate the potential of the site too.

Morris and Richard Viljoen, two geologist brothers and honorary professor's of the Witwatersrand University Department of Geosciences, began studying the old mines on the site over an 18 year period.

“Through these studies they identified that were was a lot of gold left behind. They started speaking to investors and our founding fathers from Australia thought that this looked like a really interesting project” Du Toit says.

“They said “look here is a great resource left behind.” The studies eventually lead to the announcing of about 35 million ounces of resource. From there the company started getting more confident in the gold left behind and was then able to get the mining right in late 2008 to really start on the process of mining. We’re now in the phase of trialling and testing concept and making sure of the modelling. All of this work that’s behind this is to optimize that and say “can we actually mine this profitably?” and that’s the phase we’re in at the moment.”

Central Rand Gold Today

This brings us up to the present day.

“That’s how the company started – with a lot of exploration work, a lot of drilling to get some further idea of how much gold was really left behind and that led to us going to I.P.O (Initial Public Offering) on the main boards of the London Stock Exchange and JSE Limited in 2007” Du Toit says.

Early in 2008 the company identified a plant from Australian company Gekko Systems. This plant has a capacity of 20 tonnes per hour, 12,000 tonnes per month and works via a gravity and flotation recovery circuit.

“They built a modular small plant that really conceptually looked like something that we would require so we actually bought this plant from them and said that we wanted to test it and see if it would work in the South African conditions” Du Toit explains.

“We’re also fortunate in our surrounding areas to find a lot of reef and outcrops on surface. So we started extracting that material and feeding it through the plant and it was that surface material which resulted in our first gold pour.”

On Thursday December 4th 2008, just two months after acquiring their initial New Order Mining Right from the South African Department of Minerals and Energy, Central Rand Gold made this first gold pour at Rand Refinery from ore from their Consolidated Main Reef.

“It was quite a small gold pour; it was about half a kilogram of gold. It was really just an indication to us that there was gold there and the plant could work so in its small way it really started our process of becoming a gold producer” Du Toit says.

But the careful testing doesn’t stop here.

“We will be commissioning two additional plants around the mid-year which is the 30 tonnes per hour Bateman concentrator plant and the C.I.L which will take the concentrating to the refined gold product. Up to this point it has been a great amount of work and a great challenge” Du Toit says.

“And then there is the start of the portal which is our access to the reef which we commenced late in 2008. We expect to hit the reef by the end of July and that will move us into the next phase of really trialling the mining method.”

Du Toit highlights the different way in which Central Rand Gold has successfully approached this project.

“The mining approach has been slightly different and we are looking at mining at a fairly shallow level. The first reef is only about 50 metres below surface and we expect to mine in the 300 metre range for some time so from a South African perspective we are going to be a very shallow miner” he says.

“We are looking at accessing the ore by a decline shaft, not a vertical shaft. From an operational point of view we’re rather different from typical gold miners in South Africa.”

Their accomplishments speak volumes for the unique way the company has put their plans into practise.

“Here’s a relatively small upcoming gold mining company approaching the traditional industry of mining in a more innovative and different way and it’s shown over last two years that it’s doable and can be successful” he says.

“We’ve taken something that no one even felt is possible and over the last few years (we have) really focused on doing something no one thought could be done.”

Central Rand Gold Tomorrow

“Our focus in 2009 is trial mining – the test of concept phase to make sure we really come up with the most economical and efficient way of mining the gold that is left in our basin” Du Toit says.

“We’re about 120 metres in the decline. We will be issuing our first reserve conversion by the end of this month. The remainder of 2009 will really be about testing the mining method and making sure that we have the right stoping method.”

Du Toit is very clear about Central Rand’s operational goals today.

“Our first goal is to reach 100,000 ounces annualized gold production which we believe we will be able to do in early 2010. Then once we’ve signed off on the trial mining we will look at how quickly we want to ramp up this mine and our production. We’ve got a very large area so we don’t want to play at 100,000 ounces for too long, we believe to optimize the mining area that we have we need to grow beyond the 100,000 but we want to go through the trial mining process to understand how quickly we can ramp up and what the challenges are. When we get to the end of 2009 we’ll be putting out a growth plan for 2010 and beyond. For that we probably need to look at raising additional funds and that will be done by either the debt market or the equity market” he says.

And that’s not all. A company who draws the attention of over 20,000 individuals through public consultation prior to receiving their permit has a whole lot of eyes on them at all times, but at Central Rand Gold their local involvements go beyond by-the-book corporate responsibility.

“Although most mines place a strong focus on the community and community interaction our company has taken a very strong view of that. We look for every opportunity to get the community involved on the procurement side. On the recruitment side Close to 50 percent of our staff have been directly employed from the community” Du Toit says.

To date, the company have three successful community projects.

The first is a bursary scheme for exceptional local students.

“We’ve looked at certain candidates that have achieved phenomenal results and are looking at studying mining related courses, and have also come from very poor families” Du Toit says.

“This year we identified 13 of these learners. We gave them full bursaries, we’ve provided them with accommodation close to the universities, we’re paying all their fees, we’re giving them monthly allowances to buy food and clothes and that’s been a phenomenal success. We’re very excited about that.”

The second is a series of Saturday school classes which began this year.

“We identified some of the poorest performing school in our area; Over 30 schools that have pass rates between zero and 40 percent. Then we identified some of the top performing teachers in our region – those teachers who have achieved between 90 to 100 percent pass rates over the last few years and we have these teaching the students every Saturday” Du Toit says.

“Close to about 800 learners are going to extra classes where they get taught by the best teachers we could find in this region so we are hoping that by the end of the year the pass rates will improve significantly for these kids and give them a better opportunity for access to further formal education.”

Their third and most recent project is a football league which covers 29 local schools.

“In the past all these soccer leagues have been given a bit of money and told “okay run with it” and the guys don’t have any gear or facilities to play, but we’ve actually bought Nike gear for every player from soccer boots to shirts to shin pads and the rest. We’ve got some of the top referees within the region to referee some of the games” Du Toit says.

“We’ll also be setting up a training centre that will focus on training mining staff and communities too. Ultimately the community will be taking over this training centre.”

“In many ways we’ve shown one of the first ones in my mind would be ensuring that the mine benefits all.”

Perhaps it is Du Toit’s and Epstein’s respective backgrounds which have afforded them this new angle on the industry (Epstein, a chartered accountant and Du Toit, having worked in financial institutions for years previous).

Perhaps it’s the inspiration and fulfilment the company has enjoyed through their extensive work with the local communities.

One thing is certain. Central Rand Gold has a great story, exemplary ethics and a bright future.

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