CRG reports ‘encouraging’ drop in Central basin water levels

JOHANNESBURG (miningweekly.com) – Dual-listed Central Rand Gold (CRG) has witnessed an “encouraging” gradual drop in the water table in the Central basin and will continue to monitor underground water levels to determine when it can restart underground operations.

The company on Monday said the water table had reduced by 11 m since July, with the water level at about 153.46 m below surface.

“While the rate of dewatering is slow, the gradual decrease in the water table is encouraging, as it illustrates that the Central basin can be dewatered,” the company noted.

CRG had halted underground mining in October 2014 as a result of rising water levels.

The company in June this year also discontinued openpit mining operations and is now focused on joint venture (JV) tolling with a third-party supplier of gold-bearing material.

CRG is also progressing discussions with another party, the owner of a tailings deposit located in close proximity to its metallurgical plant, which is considered to host several million tonnes of gold-bearing material.

CRG conducted testwork on the target tailings deposit material and is contemplating a transaction structure that will allow its existing tolling JV and the target tailings deposit to operate concurrently.

Meanwhile, two CRG board members Nathan Taylor and Mark Austin will step down in coming weeks owing to external changes in their working arrangements.

Taylor accepted an executive role at a financial institution in Sydney, Australia, that will require him to relinquish all public company directorships in the near term.

However, he will remain an indirect shareholder of the company through his shareholding of Redstone Capital – a significant shareholder of CRG and the holder of the $7.25-million senior secured convertible notes.

Austin will resign owing to a potential conflict of interest with a client. While relinquishing his directorship, the company will retain his geological services through a consulting agreement.

The board of directors has identified and invited two individuals to join the board as nonexecutive directors as soon as the necessary paperwork has been completed. The two individuals have strong mining backgrounds as well as financial experience.