CRG production impacted by summer rains

JOHANNESBURG (miningweekly.com) – Ongoing adverse weather conditions that have negatively affected JSE-listed Central Rand Gold’s (CRG’s) cash flow as a result of production downtime, have prompted the miner to introduce programmes and plans to address the issues.

This includes the openpit mining and processing of CRG’s own material, interspersed with the batch treatment of tolling companies’ materials.

The company is currently crushing and screening its own material on site, running down material available from previously mined out areas.

In January, 44% of the material processed through the plant was CRG’s own material. From the start of February, 86% of the material processed through the plant was its own.

The tolling companies’ material is being stockpiled and sampled and will be processed in batches.

The company on Thursday explained that heavy rainfall made run-of-mine material problematic to crush and screen, with the wet conditions further affecting the feed material as it became muddy and challenging to handle, resulting in clogging, which, in turn, leads to a reduction in processing capacity.

A steel structure has now been ordered, which, once erected, will assist in keeping the feed materials dry during the wet season.

Recent storms have also led to interruptions in power supply. In January, power outages accounted for a 7.5% loss in capacity and, during the first two weeks of February, this accounted for a 25% loss.

As such, CRG would explore alternate power sources, as well as the use of a diesel generator to provide back-up power during any power outages.

Other unusual costs, including the ongoing litigation costs in terms of the dispute with the company’s black economic empowerment partners, have also impacted on the company’s balance sheet.