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Central Rand Gold, Mwana Africa, URU Metals news briefs

Contributed by Fox-Davies Capital

Central Rand Gold has released an operational update for FY'12 ahead of its final results expected in April.

In this news:
- FY'12 production 13,709Koz Au, 98% of 3Q'12 guidance and now extracting 14kt pm ROM
- Processing remains an issue, especially through ore handling through primary and secondary crusher, limited availability of the Bateman Mill and planned 5 day shutdown of the CIP mill in January took 12 days
- CRG commenced toll treating some of its surplus underground ore to the Mintails Limited Mogale gold facility at the end of January 2013 to limit production and cash loses during January
- Cash and equivalents unchanged between end of 3Q'12 and 4Q'12 at US$4.5m
- Acid Mine Drainage - construction of the High Density Sludge Treatment Plant started 14th January and should be completed and operational during the course of this year
- At end of year water was 310m below surface and rising at 0.2m to 0.3m per day
- Based on current production FY'13 guidance of 14Koz to 15koz
- CRG plans to finalise its medium and long term growth strategy by June 2013.

FD Comment:
Whilst the Trans-Caledon Tunnel Authority starting construction of the High Density Sludge Treatment Plants positive for the Company if it is to be able to access resources below the 400m level and stop the continued rise in water level, the Company continues to be dogged by breakdowns in its processing plant which have continued throughout the year. In 3Q'12 the mine call factor fell to 57% against the long-term target of 85% with production falling from 3,045oz in 2Q'12 to 1,437oz. The 4Q'12 results indicate the issues were not resolved and although major modifications were made to the VSI crushing circuit in January the Company is now targeting a mine call factor of between 75% - 85%. The Company needs to get a grip on this if investors are to have any confidence in management's ability to operate the mine and the fact the Company switched to toll treating at the end of January doesn't suggest this will happen in the short term.

Mwana Africa has announced the formal signing of the Joint Venture Agreement with Zhejiang Hailiang Company Limited covering 28 licences held by Mwana in the Katanga province of the Democratic Republic of Congo.

In this news:
- In August 2012, Companies entered into a Cooperation and Development Agreement to jointly explore the copper licence areas in the Katanga Province of the DRC
- The CDA required that the parties enter into a detailed joint venture agreement to implement the CDA.

FD Comment:
This has, not unexpectedly taken a while, but hopefully this should accelerate progress in the DRC, especially at Kibolwe which will diversify the Company further outside Zimbabwe.

URU Metals has announced that it has signed an exclusive option agreement yesterday with Cameco Corporation to earn a majority interest in Nueltin Lake Gold-Uranium Project in the Kivalliq Region of the Territory of Nunavut, Canada.

In this news:
- URU to fund C$2.5m on exploration over 3 years for 51% stake
- Can earn additional 19% by funding a further C$8.0m in exploration over a four-year period
- URU will be the project operator over the option earn-in period and after completing the earn-in requirement parties will enter into standard JV agreement
- After URU completes its earn-in requirement under the Option Agreement, the parties will enter into a standard joint venture agreement, the form of which has already been agreed to and appended to the Option Agreement.
- Project contains the Sandybeach Gold-Uranium Zone, discovered by Cameco in 2008 with assay grades up to 8.95g/t gold over 5.95m, 3.27g/t gold over 7.25m, and 0.23% U3O8 over 1.25m
- The Project is located on lands that are currently subject to a land treaty negotiation between the Government of Canada and the Sayisi Dene and Northlands Denesuline First Nations that if successfully completed, would give the First Nations ownership of surface and mineral rights on the Project.

FD Comment:
This looks a good low risk development for URU, but we would hope they wait until the land treaty negotiations are complete before spending any money. This is not unreasonable as the Company will have to raise funds before it can start work and we anticipate investors will expect this to be the case.