Water woes afflict Central Rand
RISING water that flooded parts of its mine caused Central Rand Gold to post an interim loss, and forced it to find new areas to exploit while pumping reduces water levels.
RISING water that flooded parts of its mine caused Central Rand Gold to post an interim loss, and forced it to find new areas to exploit while pumping reduces water levels.
Central Rand, which is traded on AltX and AIM, reported a net loss for the six months to end-June of $2.84m compared with a loss of $4.87m a year earlier.
Central Rand holds a swathe of properties south of central Johannesburg that were mined in the heyday of South African gold mining. It is extracting reefs left behind, focusing on shallow mining, which has been threatened by rising underground water levels, which leads to acid mine drainage.
“Gold production was affected by the reduction in mining area during the first six months of the year due to rising acid mine drainage, and as a result the company was forced to mine shallower and lower-grade mining channels,” Central Rand said on Friday.
“The company also reduced its reliance on the higher-cost tolltreatment option, rather processing its ore through its own plant.”
Central Rand produced 3,205oz of gold in the first half of the year at its own plant, compared with 4,246oz last year.
All-in cash operating costs were $1,987/oz against $2,425/oz a year before. Central Rand had cash of $4.4m at the end of the period.
Mining operations had been established at 225m below surface, but the water rose to 160m below surface during the six-month period. Mining was limited to a range of between 100m and 160m below surface. Pumps operated by Trans Caledon Tunnel Authority extracted 60-million litres a day by the end of last month and should reach 72million litres a day this month.
“It remains too early to fully understand the de-watering trend of the Central Basin,” Central Rand said, adding that it would develop accesses to unmined areas.
The underground production target was lowered to 4,500 tonnes a month from 14,000 tonnes and Central Rand said it would trim its workforce accordingly. It has secured extra mining ground to supplement the underground tonnages by 10,000 tonnes a month in future.