memorandum of Understanding

The Board of Directors of Central Rand Gold ("the Board") wishes to advise shareholders that on 12 February 2015 has signed an non-binding Memorandum of Understanding ("MOU") with Huili Resources (Group) Limited ("Huili Resources') in relation to the potential sale of the Company's subsidiary Central Rand Gold (Netherlands Antilles) N.V. .

Huili Resources is listed on the Hong Kong Stock Exchange (1303:HK). Huili Resources is an investment holding company and its subsidiaries are principally engaged in the mining, ore processing and sales of nickel, copper, lead, zinc and gold products in the People's Republic of China. One of the significant shareholders of Huili Resources is CRRC Investment Ltd, a wholly owned subsidiary of China Railway Resources Group Co.,Ltd.

The MOU with Huili Resources (" H uili MOU"), is substantively consistent with the terms and conditions of the other MOU's signed, and also contemplates the potential disposal of 100% of the shares held by Central Rand Gold in its wholly-owned subsidiary, Central Rand Gold (Netherlands Antilles) N.V. (the "Subsidiary") to Huili Resources for consideration of no more than USD150 million (the "Transaction"). Pursuant to the agreement it is agreed that both parties will seek to enter into a formal sale agreement of the Subsidiary within four months of the date of the agreement. In addition, within this four month period, this MOU also includes a unique provision which entitles Huili Resources to the right of first purchase within 21 days of a third party offer being received for the subsidiary. Importantly, this provision does not prevent the Company from completing diligence and advancing final form documentation for a potential transaction with any or all of the MOU Parties.

The Huili Resources offer is subject to a number of conditions including:

·      mutual completion of due diligence by both Central Rand Gold and Huili Resources;

·      Central Rand Gold obtaining all necessary regulatory and exchange approvals for the potential sale of the Subsidiary;

·      Huili Resources obtaining relevant regulatory approvals;

·      the entering into a formal share sale agreement for the sale of the Subsidiary; and

·      finalisation of all required due diligence and the execution of a formal share sale agreement.

All MOU Parties have been given full access to the CRG virtual data room. The Company remains fully engaged with all MOU Parties during this due diligence process. The Company will continue to expedite, where possible, the due diligence Process; however this will not be done at the expense of shareholder value. The Company continues to target 31 March 2015 to complete the due diligence process, however this period may need to be extended to ensure Huili Resources completes the due diligence process.  

The Company further advises that it is hosting site vists from a number of the MOU Parties in the month of February and looks forward to their continued engagement through to the completion of the Transaction.    

The Board cautions that at this time there can be no certainty that the discussions with any of the interested parties will lead to a formal share sale agreement being entered into nor that the potential sale of the Subsidiary will be completed.

A further announcement relating to the Transaction will be made in due course.

Further Information on Huili Resources

Hami Jinhua Mineral Resources Exploiture Limited ("Hami Jinhua") and Hami Jiatai Mineral Resources Exploitture Limited ("Hami Jiatai")

Hami Jinhua and Hami Jiatai hold three mining permits, namely No.2 Mine, No.20 Mine and Baiganhu Mine in Xinjiang Uygur Autonomous Region of China. In addition to this, four exploration permits, namely Baiganhu Gold, H-989, Heishan and Huangshan were held by Hami Jiatai in Xinjiang Uygur Autonomous Region of China.

It was reported by Huili Resources that No.2 Mine, No.20 Mine and H-989 have a total reserve of 10,554t of nickel with an average grade of 0.64% and 3,699t of copper with an average grade of 0.23%. Total resources of 55,340t of nickel with an average grade of 0.56% and 21,990t of copper with an average grade of 0.22%.

Baiganhu Mine is a lead and zinc deposit with a reserve of 62,773t of zinc with an average grade of 5.95% and 39,352t of lead with an average grade of 3.73%. Total resources of 251,450t of zinc with an average grade of 6.49% and 156,580t of lead with an average grade of 4.03%.

Huili Resources owns 95% of Hami Jiatai and Hami Jinhua, and operates a zinc/lead and a copper/nickel processing plant with throughput capacity of 1500 tpd respectively. 

Further information can be viewed at the following link : http://www.huili.hk/html/bus_project.php.

Shanxi Jiahe Mining Exploitation Limited ("Shangxi Jiahe")

Shangxi Jiahe is 95% owned by Huili Resources and holds a mining permit, namely Huangjinmei Mine which produces gold ore. Huangjinmei Mine is based in Shangxi Province, China, it was reported to have a total gold resources of 9.4 ton (approximately 300,000 oz) with an average grade of 2.95g/t. Shangxi Jiahe has summited application for approvals related to mine engineering, infrastructure and construction and ore processing plant; and was expected to start production in the near future. Further information can be viewed at the following link : http://www.huili.hk/html/bus_project.php.

For further information, please contact:

Central Rand Gold                                                                     +27 (0) 87 310 4400

Johan du Toit / Nathan Taylor

Charles Stanley Securities Limited                                              +44 (0) 20 7149 6478

Marc Milmo / Mark Taylor

Merchantec Capital                                                                    +27 (0) 11 325 6363

Monique Martinez / Marcel Goncalves

Jenni Newman Public Relations                                                   +27 (0) 11 506 7351

Proprietary Limited Jenni Newman

Johannesburg

12 February 2015

Sponsor

Merchantec Capital