Central Rand Gold Ltd. entered an agreement to acquire mine waste dump material located near its metallurgical plant in South Africa, which started processing operations in late July.
The company signed the agreement after confirming that the first-phase mine waste dump contains 2.3 million tonnes of gold-bearing material, with an average in situ grade of 0.7 g/t of gold, according to its Oct. 6 statement.
Phase-one material was subjected to drilling and concentrator trials, while the rest of the material is undefined. Concentrator test work by Central Rand indicated that the material can be upgraded from the average gold grade of 0.7 g/t to grades of between 2.5 g/t and 5.0 g/t.
The joint owners of the dumps, a South African company and its Black Economic Empowerment partner, have submitted the requisite mining right applications over the various mine waste dumps.
Under the agreement, Central Rand will manage and undertake the mining, transportation, milling, leaching, smelting and gold refining of the dumps' materials. The company will pay the vendor a nominal rand-per-tonne fee and a percentage of EBITDA.
Central Rand, which outlined plans to raise US$4.0 million in August when it also extended US$7.3 million worth of loan notes, said it will focus on finalizing financing, with proceeds earmarked for working capital and the development of the waste dumps.