Central Rand Gold (CRG) is the holding company for a group of companies engaged in gold mining and exploration (refer to Figure 1 below to view the group's corporate structure). CRG has a primary listing on the London Stock Exchange and a secondary listing on the JSE Securities Exchange. CRG's operating subsidiary Central Rand Gold South Africa is currently involved in prospecting an area south of the Johannesburg Central Business District, known as the 3C's (Consolidated Main Reef, Crown Mines and City Deep) as well as Langlaagte (refer to Figure 2 below), the farm where gold was first discovered in the Witwatersrand in 1886 by Australian prospector George Harrison.

Figure 1: Corporate Structure as at December 2007

Figure 2: Location of the 3C's and Langlaagte

Central Rand Gold South Africa is 26% owned by Puno Gold Investments (Proprietary) Limited ("Puno"), a consortium of seven BEE groups, all of which add value not only to the consortium but to the Group as well. The Group's BEE arrangements were formalised on 14 June 2007, at which date Puno acquired 26% of Central Rand Gold South Africa's shares from Central Rand Gold Netherlands Antilles.

The Central Rand Project area 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. Though this area has been extensively worked since gold was first discovered here in 1886, detailed analysis of data from previously operating mines suggests the potential for recovery of a further 120m ounces at an average grade of 4.5 grams a ton (g/t) using both open cut and underground mining methods.

Previous mining operations lacked the technology to exploit fully the mineral-bearing reefs in the vicinity of the city. Lower grade ore was left behind and other areas, undetected by the kind of modern prospecting techniques available today, were simply ignored. Minerals typically associated with gold, such as uranium and silver, were often ignored by previous mining operations. Using state-of-the-art mining and environmental technology, CRG plans to extract these minerals fully so that once the mineralised areas have been worked out and then stabilised, they will never have to be revisited. Once fully mined out and rehabilitated, this land will become available for other forms of development.

Most mining activity in the areas was suspended in the 1970s due to low gold prices and increasing depths (2 800m). By this time, a total of 247m ounces were mined at an average recovered grade of 8.2 grams per ton (g/t).

The application of new mining technology such as ore sorting and mechanised rock handling will allow the financially viable recovery of gold (and metal by-products) from underground sources, which were previously considered to be uneconomic.

The FEIC Mining Right Application was lodged with the DME in July 2007 and all the additional information sought by the DME has been supplied. CRG's former parent company, Rand Quest Syndicate, has already secured prospecting licences over much of the Central Rand Goldfield under the "use it or lose it" principle contained in the Mineral and Petroleum Development Resources Act 2002, which is intended to promote equitable access to mineral rights in South Africa.

It is intended that the mine will be operational by 2009, though the first production will commence in late 2008. Though the Central Rand Goldfield was extensively mined until the 1970s, during which period 247m ounces of gold were extracted, detailed analysis of the area shows the potential for a further 120m ounces, over a projected 50 year life of mine. Production is expected to increase to more than 1m ounces a year by 2012.

The development of the Central Rand Goldfield is an exciting project for the people of Johannesburg, since it involves the return of commercial-scale mining to the city in a manner which will uplift the surrounding communities through job creation, training, and social responsibility programmes aimed at generating sustainable economic upliftment for thousands of people in the surrounding areas.