Production schedule
CRG's first surface mining unit, expected to be operational during 2009 (assuming the requisite mining rights shall have been granted by the DME), is expected to process 175,000 tons of ore per month. Steady state production of 250,000ozs is anticipated by 2010. Underground mining operations are currently estimated to potentially reach a steady state of 1 million ounces during 2012. The development programme is designed to reach steady state production at an industry competitive cash cost of $320/oz. As CRG adds more mining units in the years to come, it could potentially process upwards of three million ounces a year. In global terms, CRG would at this point be a substantial operation in the league of some of the senior gold mining companies.

Life of the proposed mine
With the anticipated production rates, the expected life of the mines is at least 50 years based on present indications. The resource statement is continually being revised and updated as the results of the current exploration programme are processed and integrated into the Group's geological resource model. Further confirmation of the resource will be addressed through underground exploratory work, which is designed to confirm the validity of the conceptual mine plans and the availability of individual reefs for exploitation.

Mining licence
Central Rand Gold South Africa is applying for a new Mining Right for gold and associated minerals in the 3 C's and Langlaagte portions of the Central Rand Goldfield area in Johannesburg, Gauteng in terms of Section 22 of the Mineral and Petroleum Development Resources Act 2002 (MPRDA). A mining right must be obtained from the DME before any mining activities are undertaken. Central Rand Gold South Africa, which was established in 2006 to "re-explore" and "re-mine" the Central Rand Goldfield, is the chief operating subsidiary of the Group and will conduct the mining activities, should any mining right be granted by the DME.

Rand Quest Syndicate has certain prospecting rights in respect of which Section 11 Applications have been lodged in favour of Central Rand Gold South Africa, in addition to which Central Rand Gold has certain contractual rights to obtain the remainder of the prospecting rights comprising the Central Rand Project, in respect of which Section 11 Applications have been lodged. In the interim Central Rand Gold South Africa has the contractual right to conduct prospecting activities throughout the project area and complete a feasibility study to determine whether gold mining would be viable. The feasibility study includes a financial, technical and socio-economic/environmental component.

Proactive baseline environmental studies to determine the environmental risks form part of the feasibility study. Due to the area's rich history, vigorous prospecting activities by Central Rand Gold and the availability of vast information on the project area, the complexities of the area (including the environmental risks), are well understood.

Results from the prospecting programme indicate that mining could be feasible. However, feasibility of the proposed mining activity from an environmental perspective needs to be confirmed by the EIA and EMP that are being conducted.

Use it or lose it
The requirements of the MPRDA include the "use it or lose it" principle. This means that holders of unused old order mineral rights which did not apply for an appropriate mineral right within one year of the coming into effect of the MPRDA have lost any entitlement to those rights. Similarly, used old order prospecting rights remained valid for two years after the MPRDA came into effect and used old order mining rights for five years. Within these periods, the holders of such rights had to apply to the Department of Minerals and Energy to convert into a new order Prospecting or Mining Right, meeting the requirements of the MPRDA. Rand Quest Syndicate, the former parent company of Central Rand Gold South Africa, identified an opportunity to investigate the possibility of mining gold and secured the Prospecting Rights. All of the Prospecting Rights to which CRG and/or Central Rand Gold South Africa may become entitled to as a result of the granting of the Section 11 Applications are new order Prospecting Rights and are valid for a period of 5 years.

Geology of the area and previous mining activities
The Central Rand Project comprises a 7km wide sequence of quartz pebble reefs, where heavy minerals, including gold, pyrite and potentially uranium, have been concentrated to a greater or lesser extent.

The Main Reef package near the base of the Central Rand Goldfield is considered the most important and contains several distinct sheet-like reefs. In the past, when mining occurred here, the Main Reef Leader was comprehensively mined out (except for a few small reef blocks) down to a vertical depth of about 2 800m below surface.

The Main Reef, although well developed, was not mined extensively in much of the Central Rand Goldfield, with the exception of the old Simmer and Jack lease area in the east, where it was mined over a wide area. The South Reef was also mined quite extensively. Mining was however terminated at a shallower depth than in the case of the Main Reef Leader, as gold grades diminished progressively down-dip.

Mining of a particular reef band within the Bird Reef package occurred on a relatively minor scale, with mining restricted to the west of the project area. Again, only one of numerous pebble reefs, the K9A, was mined to a limited extent in the Kimberley Reef package.

Geology of the different reef packages

Proposed mining methods
At this stage, mining operations are planned for the three reef packages, namely the Main, Bird and Kimberley Reef packages. Where available, other reef packages intersected within the prospecting right area will be explored for economical extraction.

Mine design philosophy
The mine design process has been approached with a view to achieve optimal gold resource extraction with minimal surface impact. This will be achieved through a trackless mining layout, which in comparison with conventional narrow reef mining, lends itself to better mining efficiencies and substantially safer mining conditions for mining personnel.

It is envisaged that the major reefs will be exploited by means of slot, undercut and shallow mining, as well as mining of the deeper ore resource with operations ultimately concentrated in underground workings.

Slot and undercut mining
Initially a "slot" will be cut at surface by ripping or excavating (i.e. no blasting) a crevasse that is approximately 100m long by 20m wide and 10m deep. The bedrock will be processed through a mobile "plant" which consists of a primary and secondary crusher, a gravity concentrator and floatation concentrator. These plants will be relocated underground as soon as possible.

This will result in a concentrate of approximately 10% of the volume of bedrock mined. The concentrate will then be pumped to a central extraction plant (standard CIP or CIL plant). The remaining 90% will be utilised as backfill either replaced directly or first, processed through a backfill plant to create classified backfill and then replaced in the ground.

Concurrently, a footwall decline will be developed for access to the undercut and creating water drainage levels. The undercut will be performed by utilising the decline and cutting into the reef beneath the slot. The mining void will be systematically backfilled and rehabilitated. Topsoil will be stockpiled and replaced during the final rehabilitation. If and where feasible, shallow ore will be mined from underground haulages to a depth of approximately 70 metres below surface (mbs). These haulages will be accessed from underground workings or from the freshly excavated surface slot cuts.

Typical slot mining operation

Shallow mining
Reef from depths of 70-170 mbs will be accessed through a surface portal and a decline developed in the footwall of the reef horizon. All shallow reef will be hauled to surface via this portal for processing at the slot. Concentrate will be pumped to a central extraction plant.

Typical surface decline portal

Mining of the deeper ore resource
Ore in excess of 170 mbs, will be processed in mobile processing plants. These plants will be initially located at an elevation of 170 mbs and will be moved to deeper elevations of approximately 300, 600, and 900 mbs when required. The deeper resource will be accessed through extended declines from surface.