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Mining & Exploration

ASSMANG: A MINE IS A MINE

LESEGO PLATINUM

BRIDGESTONE

LAYNE DRILLING

UK £4.95 CAN $14.75 USA $7.99 EUR €7.90 SA ZAR 58.00

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Mining & Exploration

ASSMANG: A MINE IS A MINE

LESEGO PLATINUM

BRIDGESTONE

LAYNE DRILLING

UK £4.95 CAN $14.75 USA $7.99 EUR €7.90 SA ZAR 58.00

Editor’s note

Inspired by your success

Heads of Departments Editorial: Editor in Chief Ian Charles-Romero info@littlegatepublishing.com Research: Director of Research Don Campbell doncampbell@littlegatepublishing.com Finance: Corporate Director Anthony Letchumaman anthonyl@littlegatepublishing.com Studio: Lead Designer Alina Sandu studio@littlegatepublishing.com Publisher: Stephen Warman stevewarman@littlegatepublishing.com Any enquiries or subscriptions can be sent to info@littlegatepublishing.com ENDEAVOUR MAGAZINE is published by Littlegate Publishing LTD which is a Registered Company in the United Kingdom. Company Registration: 07657236 Registered office: 343 City Road London EC1 V1LR VAT registration number:116 776007 Littlegate Publishing Ltd The Glasshouse, Kings Lane Norwich, NR1 3PS United Kingdom

By Ian Charles-Romero

Chief Editor Endeavour Magazine: Mining & Exploration Wherever resources are found, businesses are sure to follow. Today the value of an entire country can be sourced from their mineral worth, businesses are built, millionaires are made and whether it’s gold, platinum, diamonds or rock it’s something you just have to dig. Like any industry, the mining sector has had to grow and evolve with the times. Larger companies have had to consolidate services and products under a single banner to offer a more conclusive one stop shop. Suppliers have in turn needed to offer more specific services into their industry to make a name for themselves as preferred partners. Mines themselves have benefitted from diversification with the best mines producing a range of resources, a number of which require entirely different methods of extraction and as these extraction methods develop the mine shafts become an ever increasingly crowded place. Another point to consider is that as one of the biggest employers, the mining sector ensures careers for millions of people globally either directly or through supplier/sub-contractors routes and this is as valuable as the resources that are mined. And, as the demands for greener methods of removal race ahead along with research and development into responsible mining the technology that is developed is increasingly being used in other industries. Facets of this sector can be found circulating in as many other fields as you can think of and as industry cross-pollination continues to increase this will only become more and more relevant.

Littlegate Publishing Ltd does not accept responsibility for omissions or errors. The points of view expressed in articles by attributing writers and/or in advertisements included in this magazine do not necessarily represent those of the publisher. Any resemblance to real persons, living or dead is purely coincidental. Whilst every effort is made to ensure the accuracy of the information contained within this magazine, no legal responsibility will be accepted by the publishers for loss arising from use of information published. All rights reserved. No part of this publication may be reproduced or stored in a retrievable system or transmitted in any form or by any means without the prior written consent of the publisher. Copyright © Littlegate Publishing Ltd 2012

Our quarterly issue of Endeavour Mining Magazine and Exploration highlights the movements and hurdles in the industry, focussing on not only the methods and the research but on the employees, the minds and the people behind the greatest achievements. Kindest, Ian Charles-Romero

Endeavour Magazine • September 2012 •

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Lesego Platinum: Unearthing Value AUMS: Going To The Source Continental Coal: Digging Deep To Get Ahead Bridgestone: Bouncing Back

6 8 20 22


Assmang: A Mine Is A Mine

36 Layne Drilling: 38 Drilling For Gold Endeavour Mining: 44 Growing At Pace


UNEARTHING VALUE Lesego Platinum www.umbono.co.za +27 11 484 5005 Written by Chris Farnell Endeavour Magazine • September 2012 • 7


Lesego Platinum

Perhaps the defining characteristic of the Lesego Platinum Project is their quest to find value where other people have missed it. This can be seen in everything they do, starting with the very selection of the mining site. The Lesego Platinum Project will be exploiting a 40 million ounce deposit, or 204 million tons of platinum group metals at a grade of 5.95 grams per ton. Once the project goes into full operation CEO Dorian Wrigley expects the site to turn over 250,000 to 300,000 tons a month. That’s 250,000 to 300,000 tons a month of ore containing

a metal rarer than gold and, many would argue, more useful, with platinum being used extensively in the electronics, chemical, pharmaceutical, automobile and petroleum refining industries. Yet initially the mining site was seen as not worth the effort. The Lesego Platinum Project and its backers, such as niche investment group Umbono Capital and Village Main Reef, were able to initiate the project due to the government’s introduction of “use it or lose it” legislation, that required mining companies to begin actually exploiting the resources on land they held if they wanted to maintain the mining rights. “We were in the right place at the right time to take


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“We were in the right place at the right time to take advantage.” CEO Dorian Wrigley advantage,” Wrigley admits. “Back then we thought the site had high grade ore but it was deep. Estimates suggested the platinum was at around 2,000 metres below surface, and even today that’s considered a long way down.” However, further research revealed that the site was a much better prospect than previously thought. “We spent $5 million running seismic tests and drilling holes and realised that this was actually a 1,200 metre project, so it started looking a lot more attractive,” Wrigley explains. “Then on the back of that we started a full feasibility study in 2008.” Of course these days saying “We began our enterprise in 2008” will cause anyone listening to physically wince, as it was perfectly timed to see the global economy take a severe

beating. But the Lesego Project didn’t back down. “Back then people weren’t funding existing platinum producers, let alone new projects,” Wrigley remembers. “So we pitched the project to the Industrial Development Corporation of Southern Africa (“IDC”). In exchange for 150 million Rand the IDC earned a 22% stake in the project to fund the feasibility study. We’re at the tail end of that feasibility period now and we’ve been able to prove the resource starts at a very shallow 350 metres!” For those who are counting – that’s almost 6 times shallower than the original estimates of the project’s depth. And while starting out in 2008 might seem like the worst possible luck, in actual fact the project’s timing seems to have helped it dodge a bullet. Endeavour Magazine • September 2012 • 9


Lesego Platinum

Playing the Long Game “Because we’re not a producer yet we haven’t gone through the turmoil and ups and downs that our colleagues have been going through in the market,” Wrigley says. “We plan to go into production at a time when electricity supplies aren’t a problem and Pt prices have recovered. So we haven’t suffered any of the market force conditions our peers have suffered.” The biggest challenge the project is likely to face is timing on raising the capital to bring it into production. “Our dilemma is whether to look for funders now who are prepared to invest a billion dollars into a very exciting Pt mine, that will be producing when the world needs platinum, or to wait until the demand for platinum increases before doing so. We don’t need the whole billion in equity, but that’s the level of financing we need to bring the project into production.” The long term nature of the project brings new challenges with it, but also new opportunities. This brings us back to the main characteristic of the Lesego Platinum Project: Its ability to see value where others haven’t. “A large part of what motivated us to get into this business was to see if we could do mining differently in South Africa. The heritage of the mining industry here isn’t one we’re proud of,” Wrigley admits. “Migrant labour, led to the destruction of family units as fathers were taken from their homes. Working that way doesn’t create a healthy community.” It’s not a problem that’s unique to South Africa. Across the world mines have been set up to take whatever value possible from the land, then abandoned the local community once the resources run out. “We saw this and thought, ‘There must be a way of doing this differently.’ So when we started out we made it our aim to build the community around the mine, not just have this big operation on their doorstep without them seeing any benefits from it,” Wrigley says. With it still being some time before the Lesego Project goes into production, the company has a unique opportunity. Skill shortages are a problem for much of the mining industry, in South Africa as much as anywhere else. Often this problem is solved by bringing in migrant workers from elsewhere in the country or further afield, but Lesego has a unique opportunity to help build a skill base, beyond its own requirements, of potential employees from school level onwards. “Right now we’re working with schools in the local community,” Wrigley tells us. “We have an incredible opportunity to encourage the students. We’re directing them towards the right kind of skills, engineering, geology, as well as practical hands-on artisan training. We have an opportunity to help the community develop the very skills that will be needed to build the workforce we’ll be using for the next 50 years.” Doing It Differently It’s an approach that means that the most cost-effective, best practice decision also happens to be the ethical one. “If you arrange it so that local labour is also the most skilled, then it makes sense to use them. So we’re giving youth a vision that will help them over the next 45 years,” Wrigley points out.


Their efforts go further than simply teaching local people the skills needed to work in a platinum mine however. The project is working closely with three of the closest local communities, partnering with schools and putting in place sustainable measures that hopefully will keep the area growing long after the last ounce of platinum has been taken out of the mine. “Our social and labour plan focuses on business development and enterprise development in a way that is not focused on the mine,” Wrigley explains. “Because eventually the mine will shut down we want to create an environment and an economy that will last a lot longer than that.” This is an approach that goes back to the very beginning of the Lesego Platinum Project. Umbono opened the project up with two Broad Based Empowerment trusts - a leadership development trust and an educational trust. Ultimately, the project will help find a resource far more valuable even than platinum. “Our trusts focus on taking kids out of the most obscure township schools. We’re looking for the really brilliant ones who will flourish if they get a world class education. We’re looking for the Einsteins in small rural schools. Schools that are trying their best but are unable to provide the degree of stimulation to truly stretch some of these brilliant kids.” Wrigley says. “We mentor them and we’ve seen them go into top universities like Harvard as well as many of the local universities in South Africa. So that’s the ethos with which we started this whole thing and we’d like to see it continue within the communities we’ve been influencing.”

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African Underground Mining Services www.aumsgh.com +23 33 02 61 1333 Written by Don Campbell


GOING TO THE SOURCE

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African Underground Mining Services

African Underground Mining Services is a 50/50 joint venture between Ausdrill Limited and Barminco Limited; established in 2007 its main aim is to provide underground mining contract services to the mining industry in West Africa.

Speaking with Glenn Heard the general manager of AUMS, I was impressed to find that mining is literally in his blood. His father was a coal miner in Australia and Glenn studied mining engineering at university, although his tastes differ slightly, having initially followed his father into coal mining. It was hard rock mining that Glenn was most interested in and he made the move to Western Australia to hone the tools of his trade; the rest is history, so they say. As he explains, “Coal follows a seam whereas hard rock is three dimensional and to me far more exciting and challenging, add West Africa

into that mix and you have a recipe for never being bored.� WHAT THEY DO It seems that the worth of a company today is measured by their expertise in as many fields as possible and mining companies/projects are expected to be able to offer as much as possible. AUMS has taken this on board from inception and is in the position to offer a client a one stop shop for all their needs and requirements and, apart from their core business of Underground Hard Rock contracting, they offer


clients unmatched expertise in the following fields: • Mine Management • Mine Design • Conceptual/Feasibility Studies • Surveying By taking a proactive approach and providing the best solutions for optimum productivity in the demanding underground mining environment AUMS has carved out a sterling reputation in an industry filled with far older companies. Proving their worth has been a simple matter of ensuring the highest levels of service and expertise. The teams who are mobilized are carefully assembled with the very best personnel possessing the right amounts of understanding and expertise in their respective fields. This approach has been vindicated with AUMS being awarded Newmont Africa Supplier of the Year in 2011. Altogether AUMS offer their clients a full suite of underground mining services. “The last 2 years have been an exciting time for AUMS. We mobilised 4 new operations in 2010 and consolidated in 2011 with the Newmont Africa Supplier of the Year award and establishing a new benchmark for mechanised development mining at our Mali operations where our team set, what we believe to be, a world record for monthly advance with a single jumbo.” The training of their workforce is of vital concern to AUMS, especially that of their national workforce. Due to the involvement of their parent companies, Ausdrill and Barminco, they are introducing the high Australian standards and technology to their projects and making use of expats

who can lend foundational support and experience to the jobs. Quality and efficiency are of the highest priority so everyone who is learning the job learns on the job and from the best available. “Different countries in Africa have different maturity levels of underground operations, in Ghana for example there has been an underground culture present for over 100 hundred years, but it is labour intense. What we do differently is make use of modern technology, equipment and methods providing a better efficiency and hence smarter solutions to our clients” - Glenn Heard. This use of the best equipment and tools allows AUMS to further educate and train staff, helping them gain valuable practical and career-enhancing knowledge in the use of the latest specific machinery. Importantly, this helps lay the building blocks for African Employee development by imparting expertise and experience something that is shared freely within this company. Experience needs to be matched with the right tools and AUMS benefits from one of the most modern mechanised fleets of self-maintained underground mining equipment in Africa. Recognizing that by investing in continuous development of fleet and personnel, smarter solutions and faster response time can be garnered to meet their client’s needs. Ausdrill Limited has been operating in Africa since 1991 though it is 100% owned subsidiary of African Mining Services (AMS). They give access to over 17 years of operational and logistical experience in Africa, providing African Underground Mining Services with an established

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African Underground Mining Services

network and country experience. Barminco, as Australia’s largest Underground Hard Rock Mining Contractor with numerous operating contracts throughout Australia, brings the “equipment and knowhow” to the AUMS joint venture. The careful balance of these two joint venture partners provides AUMS with the hands-on African experience they need while allowing a dedicated focus on the best practice initiatives by bringing expertise in Australian Underground Mechanised Mining standards and productivities to the African Continent. SAFETY AUMS is very proud of its safety management system and rightly so. Initially developed by Barminco Limited and incorporating extensive, workable safety procedures that have been implemented successfully in our West African Operations, the AUMS motto is “Attitude is the key to Safety”. With an impeccable safety record no one can argue that it is indeed the attitude of the employees that is the key to safety. Studies at major sites across the globe have found that major accidents occur due to an accumulation of relatively small incidents that can be easily overlooked. The only way to safeguard against these is through managing the attitude of employees on an individual basis and training them to pay attention to the small details. Largely, prevention of accidents can be attributed to good management and leadership on all levels. “Our safety record has consistently been on par with

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or better than our Australian compatriates and when you consider the environment we operate in, it is a testament to our systems and the beliefs of our management. Generally speaking when we start an operation there is a lack of inherent safety culture in the local workforce we employ. Therefore, it is essential for the success of our business that we provide the safety culture, we instil that attitude. You know you are starting to win when the employees take that culture home with them at the end of the shift.” As a large organisation with extensive experience AUMS have had the resources to develop a sophisticated safety management system infrastructure which automatically includes appropriate checks and balances to ensure their primary goal of SAFE production is met and that they are able to provide all operations with the highest level of support in the areas of environment, health and safety. In a pro-active move to develop and improve policies with health, safety and environmental policies, employees are continually assessed on all training requirements, and procedures are reviewed on a regular basis to ensure all personnel receive the necessary training to complete their job safely. With this in mind AUMS have entered into a partnership with Registered Training Organisations and are working toward training all personnel to the Australian National Standards. In conclusion, AUMS’ offering is one of assured quality, safety and reliability. A fantastic multi-faceted partner relying and benefitting from skills, top-end knowledge, experience and understanding, complete preparing and planning, and strong, dynamic leadership.


UNDERGROUND MINING PROFESSIONALS Established in 2007, AUMS with our “can do” attitude has gained a reputation for excellence, offering clients the complete suite of services from feasibility all the way through to production. Applying proven methods, knowledge and expertise and backed by unsurpassed safety performance, AUMS is focused on being the “contractor of choice” on the African Continent, by Providing excellence in project delivery to our clients. Our core competencies include: · Jumbo Development · Production Mining · Diamond Drilling

· Shotcreting · Vertical development · Engineering Consulting and Design

3 North Airport Road Airport Residential Area Accra, Ghana TEL +233 (0) 302 763 875 FAX +233 (0) 302 763 274 info@aumsgh.com

www.aumsgh.com


Continental Coal www.conticoal.com +27 11 881 1420 Written by Don Campbell


DIGGING DEEP TO GET AHEAD Endeavour Magazine • September 2012 •

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Continental Coal

Coal has a long history in South Africa. It has provided fuel for homes, warmth for families and energy for businesses. The mining of coal provides jobs for thousands of South Africans and produces the country billions in revenue every year. As technology has changed the competition in this industry has increased exponentially and companies have had to expand and diversify to ensure their place in the future. Continental Coal Limited is a South African thermal coal producer with a portfolio of producing and advanced coal projects located in the area’s major coal fields. Currently operating two mines, Vlakvarkfontein and Ferreira and producing thermal coal for the export and domestic markets, the Penumbra Coal Project their latest endeavour and is what Daemon Sands is having a look at. There is a list of activities that enhance Continental Coal’s offering and increases the gap between them and other companies in this industry such as a high quality portfolio of advanced development/pre-production mines and a fantastic location in one of the world’s largest and most developed coal mining regions. Also, the surface infrastructure in their region is well established with solid rail, road, port and power availability to support their conventional open cast and underground mines. Fundamental principles in this industry are a rare thing especially in South Africa’s bullish coal market but operating with a strong financial platform and robust operating margins, maintaining a close relationship with EDF Trading to review future opportunities has given them an exceptionally good outlook for the future where there are consolidation opportunities in SA, growth potential in Mozambique and other Southern African Countries.

PENUMBRA Penumbra is the next big development for Continental Coal, an underground mine development it has taken the mobilisation of all key contractors to the development site and the commencement of civil works. The shaft portal excavation, terracing and pollution control measures commenced on 7 September 2011. Activities at the Penumbra Coal Project site have increased significantly since 2011 as excavation of the boxcut, major civil works and environmental and pollution control measures proceed. The level of production from the Penumbra Coal Project is forecast to achieve a targeted rate of 750,000tpa run-of-mine a mere six months after first coal in the third quarter of 2012. The Penumbra Coal Project has been developed at a capital cost of ZAR320m (approx. A$40m). The major of the capital expenditure will be incurred on development and infrastructure of the underground mine. There is no major additional capital expenditure associated with the coal wash plant, as the run-of-mine coal produced at the Penumbra Coal Project will be beneficiated through the existing processing operations which are currently processing production from the Ferreira Coal Mine. In September, the box-cut, which serves as the first step in the excavation of most mining areas consisting of a single rectangular cut made in the surface of the earth, forming a box shape. In basic surface mining, workers start by using the drill and blast methodology to create a box cut at the shaft site. The earth and rocks removed from this cut were used to create the terrace on the site for the surface infrastructure. This was promptly followed by the sinking off the two decline shafts, which have been positioned in order to access good quality coal with as little on-seam development as possible. “Excavation of the box-cut into un-weathered and competent bedrock and mining of twin declines at a 1:7 inclination from the high-wall will proceed down to the C-Lower coal seam. The declines will be approximately 390m long, one equipped with a conveyor and the second serving as a trackless equipment travelling route. The declines will also serve as the primary ventilation intakes of the mine. Two mechanised


coal production sections are planned, each with a continuous miner, both sections equipped with two shuttle cars each.” – Detail from conticoal.com Companies with reputations as strong and as respected as Continental Coal always provide the benchmark standards for their industries and credit can be passed down-the-chain to the businesses involved in the providing the services, materials and equipment to various projects. Especially today, the mining industry is a highly competitive industry and new opportunities need to be capitalized and worked upon as soon as possible to ensure the longevity and strength of a corporation. This has a knock on effect throughout the business, affecting not only the company but the employees. As mines age they require fewer staff so expansive projects such as Penumbra become essential. Continental Coal’s community involvement and social responsibility commitment is aimed at encouraging economic development in the areas in which it operates. This approach allows and encourages local people to work together to achieve sustainable economic growth and development. Continental Coal is thus promoting economic benefits and improved quality of life for all residents in the municipalities where it’s operations are situated. Continental Coal aim to assist local government and community structures to implement their own development priorities and realise new economic opportunities through the profit gained at our mining operations.

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Bridgestone Tyres SA www.bridgestone.co.za +27 119 237 572 Written by Chris Farnell


BOUNCING BACK

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Bridgestone Tyres SA

Back in October we took a closer look at the South African branch of the world’s largest tyre and rubber manufacturer. It’s been an eventful few months since then, so we decided to it was time to check in with Bridgestone South Africa. It’s been a while since we checked in on Bridgestone South Africa. Back in October the tyre manufacturers were enjoying the benefits a dramatic jump in demand for extralarge off-the-road tyres thanks to a boost to the mining industry. To respond to the increase in demand the company had opened its first new factory in over 35 years at their Japan HQ in Kitakyushi. What’s more, after some tough years for everyone it looked like the global financial crisis was finally starting to cool down. Of course a lot’s happened since then. Most notably, the economies of half of Europe seem to be going down the

plughole and taking the rest of planet’s economy with it. Jordan San, Bridgestone/Firestone’s National Operations Manager for South Africa tells us, “The biggest change is we’ve hit the tail end of the recession. What’s happening in Europe has already been affecting Africa. It’s hit us hard in the construction area, but we’ve been making a lot of progress, particularly in the mining sector.” Rising Demand Indeed, the growing demand for mining equipment that San was telling us about last time we talked to him has continued to build. In October it was getting to the point where San said there was actually a risk of a shortage of tyres for the mining industry. Since then, the shortage has continued. “That situation hasn’t improved as much as we’d have liked,” San admits. “We’re maintaining the stock that we have and we’re getting a bit extra from the new factory, so for most part we manage to meet the demand from the mining companies. But I think the shortage will continue. Speaking to people across the industry, the way growth is going, this shortage will be in place for the next two or three years.” San still cites the company’s race to meet client’s demands as the biggest challenge they’ve faced since we last spoke to them. The orders Bridgestone have been getting are acting as an excellent barometer of the status of the mining industry. “We’re getting orders from a lot of mines who aren’t getting rid of their existing equipment,” San explains. “They’re not replacing their existing equipment, they’re just growing their equipment list.” The brand new factory that had only recently been opened

H&R South Africa is a sales and marketing company dedicated to the supply of speciality products originating from Lubricant Refineries. Our expertise is focused on blending of these speciality raw materials to fulfil the needs of the various Industries which we service globally. The brand is synonymous with quality and consistency and a drive to build lasting customers partnerships. The H&R Group is proud to have an association with Bridgestone and has fostered similar relationships with other major players in the international Tire and Rubber Industry through the development, engineering and consistent supply of the full range of label-free process oils.


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Bridgestone Tyres SA

in October is already being forced to grow to keep up. San says, “Our manufacturing arm in Japan is looking at increasing factory capacity. Looking further into the future than that, we’ve started building a factory in the United States in Aiken, South Carolina. They will start producing by the start of 2014. That should free up some production for Japan which means its produce can be shared among more local areas.” During our last interview San told us that Bridgestone was aiming to build their OTR output to 30% more than it was two years ago. It seemed like an ambitious target, and we’re curious to see how that went. “We’re on target,” San says proudly. “There are global requirements we’re required to meet that have limited our growth a bit, which makes it harder to put out any kind of surplus. But we’re in line with the goals that we want to reach.”

manages to hook them you can be sure they’re going to cling onto them for all their worth. This makes it increasingly important that smaller companies such as Bridgestone South Africa are able to appeal to the talent on the market. However, San’s approach to recruitment is surprisingly straight forward. “We make sure we build a really strong reputation by word of mouth, promoting the company well within the market,” San says. “We’ve got a lot of positive people in the company and they aren’t shy about telling people why they like working for the company.” The approach creates a sort of virtuous circle, where the good people already in the company inspire more to join. Once the company has hired the talent, it begins investing in it. “We have a full training department who goes through our planning, inductions, all things involved that concern our people for job improvement,” San says.

A Staff That Speaks for the Company Tyres haven’t been the only thing to face a shortage in recent times. Talk to anyone in the mining, manufacturing or engineering industries and you’ll find there’s also a severe shortage of skilled labour. Like many other companies, Bridgestone has felt the bite of this shortage. Those who have the right qualifications and experience are constantly hopping from one position to another, taking advantage of the fact that their skills are so in demand. Companies can get extremely competitive over hiring the best talent that’s available, and if a big company

Bridgestone’s Sustainable Future Bridgestone South Africa isn’t just investing in its staff and facilities. It’s also investing in the future of the planet. The Bridgestone Group as a whole has established an Environmental Mission Statement that sets long term objectives for the company’s branches across the world. In accordance with these goals the group recently highlighted several projects to mark Word Environment Day on June 5, including two great projects by Bridgestone South Africa. First there was Bridgestone South Africa’s Roadkill Research and Mitigation Project. The company has been


working alongside the Endangered Wildlife Trust to find out how roads and vehicle traffic are impacting upon native wildlife. Bridgestone South Africa took part in accident prevention activities to assess potential threats to local animals and report back to researchers at Rhodes University. Similarly, in support of World Biodiversity Day the company supported an Environmental Preservation Program in collaboration with The Cape Leopard Trust. The Trust focuses on protecting a rare species of native mountain

leopard, as well as helping to educate children about wildlife and conservation. With plenty of projects like these in the works, Bridgestone has established itself not just as a trusted manufacturer of tyres for the mining and construction industries, but also as an integral part of the community it serves. And what of Bridgestone South Africa’s future? San is optimistic: “We’re growing with the market and keeping up with the times.”

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Assmang www.assmang.co.za +27 53 311 6301 Written by Daemon Sands


A MINE IS A MINE

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Assmang

Assmang’s story is one of flexibility and strong belief. The perfect example of how strong vassals of both are essential to be the best. In 1934 Bob Hersov and Slip Menell established Anglovaal (Anglo Transvaal Consolidated Investment Company Limited). Working alongside Guido Sacco, who owned Gloucester Manganese, Anglovaal and its partner enterprise African Mining and Trust registered a new company in November 1935 to mine manganese deposits. They named it the Associated Manganese Mines of South Africa Limited, AMMOSAL, now called Assmang Limited. Assmang is jointly controlled by African Rainbow Minerals and Assore Ltd in a 50/50% joint venture. They are a learning company, huge spend on training of local people, “we do bring in people from outside the locale but we find that they don’t always stay while local people do,” Mr. Grobbelaar says, “The industry standard

on spend per employee training is about 4%, Assmang maintains 8% spend on their employees, over twice that of our competitors.” Employees make up companies, staff are the foundation of business and historically the focus a company places on their people is proportionate to their success. It directly relates to how their clients are looked after. A great deal has been written regarding the reasons why there is still a skill shortage in South Africa and it is a testament to the philosophy of Assmang that they are not interested in the reasons but are only interested in solutions. They focus on where people are going and not where they


have been, “For whatever reason there is a skill shortage in South Africa,” Mr. Grobbelaar explains, “As a company we ensure that employee renumeration makes us a company to work for, a company where people do not have jobs to perform but careers to develop”. Assmang is also leader in housing, with a personal endeavour to ensure every employee has their own house, “We subsidize housing for our employees, allowing them to purchase their own properties for themselves and their families. This contributes well to the success of each of the mines because we build houses for employees in the nearest towns to the mines.” When asked about employment and looking for new staff, Mr. Grobelaar had this to say, “Yes, we do look further afield for specific staffing positions, however we much prefer to look internally. We’ve found the benefits of internal promotion and development of our own staff far out weight

those of merely headhunting,” this is something he feels very strongly about, “We take people from school level, offering bursaries and training people up. Develop your staff and you’re company will grow.” Assmang are leading providers of key products, a one stop shop of iron ore, manganese and chrome. They aim to continuously improve efficiency and productivity and approach both with a scientific plan involving long term planning and day-to-day execution. Having spoken with Willem Grobbelaar regarding Assmang there is a clear sense of loyalty and pride felt for the company. It is not just a business but a legacy that has outlived competitors for many years. To cover all the aspects of Assmang we have touched on three different mines to represent their major sectors of iron, manganese and chrome mining. Endeavour Magazine • September 2012 •

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Assmang

Manganese at Black Rock In 1940, Assmang acquired a manganese ore outcrop on a small hillock known as Black Rock in the Northern Cape province of South Africa where several large properties underlain by ore were subsequently found and acquired. “Black Rock is considered to be the largest and richest manganese deposit in the world,” Mr. Grobbelaar says “Manganese ore operations have been extended and today include the Gloria and Nchwaning underground mines. Manganese ore is supplied locally to Assmang-owned smelters, but is mainly exported through Port Elizabeth to Far Eastern and European customers.” The manganese ores of the Kalahari Manganese field are contained within sediments of the Hotazel Formation of the Griqualand West Sequence, a subdivision of the Proterozoic Transvaal Supergroup. At Black Rock, Belgravia and Nchwaning, the Hotazel, Mapedi and Lucknow Formations have been duplicated by thrusting. The thrusted ore bodies comprising Black Rock (Koppie), Belgravia 1 and Belgravia

2 are collectively known as Black Rock the ore bodies. The average thickness of the Hotazel Formation is approximately 90 metres. The geological uniqueness of this area is a source of the success of the area and plays a prominent role in the industry. With such a rich abundance of kutnohorite and braunite and high-grade hausmannite ore. Intermediate areas exhibit a complex mineralogy of bixbyite, braunite and jacobsite amongst a host of other manganese-bearing minerals. Two manganese seams are present. The No 1 seam is up to 6 metres in thickness, of which 3,5 – 4,5 metres are mined, using a manganese marker zone for control. There is, therefore, minimum dilution. No mining is presently undertaken on No 2 seam at Nchwaning or Gloria, however it is due to commence on Nchwaning shortly. Iron Ore at Khumani Mine Khumani, meaning named after the San people of the region literally means, “The people of the Southern Kalahari


” and specularite associated with the iron ore deposits in the area was actually used by the people as a cosmetic thousands of years ago. They would mix the specularite (a kind of iron ore) and mix it with fat in order to make a glittery makeup. The rest of the world didn’t even know that the birth of the cosmetic industry could have happened there. Khumani Mine, replaced the older Beeshoek Iron Ore Mine as the main iron ore producer for Assmang Limited and has been designed to produce 10 million tons of export quality iron ore each year. “This figure will eventually rise to 16 million tons upon completion of phase 2 of the Khumani Expansion Project” said Mr. Grobbelaar. The Phase 2 expansion includes development of the mining platform on the King property, chrushers, material handling systems, stockpiles, stackers & reclaimers, a local railway siding, an additional rapid load-out station, a paste disposal facility, haul roads and other supporting facilities. The iron ore deposits are contained within a sequence of early Proterozoic sediments of the Transvaal Supergroup deposited between 2 500 and 2 200 million years ago. In general, two ore types are present, namely laminated hematite ore forming part of the Manganore iron formation and conglomerate ore belonging to the Doornfontein Conglomerate Member at the base of the Gamagara Formation. Due to the larger stratiform bodies and prominent hanging wall outcrops at the Khumani mine, the erosion there is less than some of its counterparts. The down-dip portions

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Endeavour Magazine • September 2012 •

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Assmang

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are well preserved and developed while in the outcrop the deposits are thin and isolated. A prominent north-south strike of the ore is visible. Hematite is the predominant ore mineral, but limonite and specularite also occur. Chrome From Dwarsrivier Mine Chromite production from Dwarsrivier Mine is sourced from underground. Chromite used to be obtained from the open-cast mining areas at a rate of approximately 0.9 million tons per year; however these reserves were exhausted in 2005. Underground mining commenced in 2005 at a rate of 1.2 million tons Run of Mine (ROM) per year. Current underground design capacity is 120,000 tons per month ROM. The Dwarsrivier Mine is specifically geared to deliver high quality metallurgical grade chromite to the Machadodorp Works, but lately the focus shifted to the export market. In addition the plant has been designed to produce chemical grade products but due to market dynamics the smelters are converted to the production of ferromanganese. Chromite operations at the Dwarsrivier Mine form part of the Chrome Ores & Alloys operations of Assmang Limited. The mine is situated on the farm Dwarsrivier, in the Mpumalanga province in South Africa. Assmang purchased the farm from Gold Fields Limited, together with all surface and mineral rights in October 1998. The Dwarsrivier Mine is situated in the eastern limb of the Bushveld Complex, which comprises persistent layers of mafic and ultramafic rocks, containing the world’s largest known resources of platinum group metals, chromium and vanadium.

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Assmang

The mafic rocks termed the Rustenburg Layered Suite, are approximately 8 kilometres thick in the Eastern Lobe, and are divided formally into five zones. The rocks of the Marginal Zone at the base of the succession consist mainly of pyroxenites with some dunites and harzburgites. Above the Marginal Zone, the Lower Zone comprises mainly pyroxenites, harzburgites and dunite, and is present only in the northern part of the Eastern Lobe, and only as far south as Steelpoort. The appearance of chromitite layers marks the start of the Critical Zone, economically the most important zone. The layers are grouped into three

sets termed the Lower, Middle and Upper groups. The sixth chromitite seam in the Lower Group (LG6), is an important source of chromite ore and is the orebody being mined at the Dwarsrivier Mine. In the Eastern Lobe, in the vicinity of Dwarsrivier, the strike is nearly north-south, with a dip of approximately 10 degrees towards the west. Average thickness of the LG6 seam is about 1,86 metres in the Dwarsrivier area. Pipe-like dunite intrusions are evident in the area, as well as dolerite dykes that on average strike northeast-southwest. No significant grade variation is evident, especially not vertically in the ore seam. Small, insignificant regional variations do,

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however, exist. Assmang bears little resemblance to the fledgling company that started work on the Northern Cape’s manganese fields in 1935. Today, they benefit from the modern mining infrastructure and technologies. Their “we do it better” philosophy has helped to ensure low operating costs and high employee buy-in. With flexibility, developed over decades of hardship in difficult operating conditions they are entering a new phase in its challenging but distinguished history with confidence, even in the face of tough global market conditions and challenges.

Santaka Trading Enterprise trading as SS Tours is a 100% South African owned company which is based at 178 Nyala Street, Burgersfort 1150. It aims to be one of the most professional transport, cleaning, catering, distribution and construction services and all other related services provider in all sectors of interest. It offers long term and suitable working relations with its clients and communities, professionalism, efficiency and effectiveness, and quality service management.

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www.trentyre.co.za +27 11 345-6700 Endeavour Magazine • September 2012 •

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DRILLING FOR GOLD IN THE FAST LAYNE


Layne Drilling www.layne.com +223 2021 21 25 Written by Ben Walker

Endeavour Magazine • September 2012 •

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Layne Drilling

In gold rich/GDP poor Mali they measure the rainfall in feet. Then the drilling has to stop. When it restarts, Africa’s third biggest gold producer resumes production, with Layne Drilling (West Africa) at the frontiers of exploration. General Manager Noel McGinniss talks to Ben Walker. After September’s record high of $1,920 an ounce, the price of gold will rise again predicts a survey from Thomson Reuters, possibly hitting $2,000 this year as investors search for a safe haven from US economic woes and low interest rates in Europe. In a volatile scenario this is encouraging news for Layne Drilling (West Africa) headquartered in Bamako Mali, and

Mali, West Africa’s largest country, reaching across the Tropic of Cancer, and famed for its gold production since the 12th century. But Africa’s third biggest gold producer after South Africa and Ghana is also among the ten poorest nations of the world, with a per capita gross domestic product (GDP) of under US$1,000, and the most promising potential for substantial economic growth for its 12.3 million population lies in the development of its mineral wealth of which gold is a key. Layne Drilling (West Africa) is part of the US-based Layne Christensen’s Mineral Exploration, a global team built on expertise developed by two brothers who pioneered a drilling technology that has served the mineral exploration and mining industry since the late 19th century.

“We have a good safety record, and pride ourselves that our biggest asset is our national employees.” Noel McGinniss drilling for gold clients in Burkina Faso, Guinea, Mali and Mauritania. “So long as the gold price stays where it is and Europe settles down a bit, I see the next two or three years being as good as 2010-2011,” says General Manager Noel McGinniss. “Yes our future looks bright. Most of our machines are booked right up to the start of the rain season in July, others are already committed to 2013 and enquiries are still coming in.” McGinniss currently has seventeen drills operating in

Today, Layne Christensen Mineral Exploration deploys close to 200 machines in the mineral division and 700 machines group wide to provide advanced drilling services to major mining companies seeking copper, gold, iron ore and other minerals. McGinniss, a 56 year old Australian with thirty four years in the drilling industry, has overseen the operation for the past three years assisted by Operations Manager Steve Edmondson, and says Drilling’s contracts are among the best in Mali. Some are with mine operators, some with Greenfield


operations – effectively the first round of exploration - while others are for Brownfields that have passed the first phase and are proving up. “We have customers who have been with us for upwards of seven years. “We drill where a customer directs us and get samples

out of the ground ready for analysis. If this stage is positive we resume drilling, if not the drills move on to another area. We are not privy to results until they are reported on the Stock Exchange.” This is Tough Country and McGinniss and his team are continually bringing in new machines and gear. “It’s very hard to find anything suited to African conditions. At the moment we are using Kaiser vehicles as support trucks, which are pretty well bullet-proof as you will have seen from the Rambo movie. “These older trucks like the Kaiser are suited to the situation, to get new trucks you are looking at Mercedes, Freightliners and so on that are not really suited to African conditions. You can get new gear in certainly, but it wouldn’t take long to destroy it. And supplying those parts in this or any other country in Africa would be a major problem. “However we have dealt with Andrea Shane at Al-Jan for over a decade, for as long as I’ve been here. She’s always very friendly and quick to get parts and gear over to us when we’ve need them and she is always prepared to go out of her way and go the extra mile for us.” – Noel Mcginniss Noel added ”Most of the training is focussed on driver skills. Driving around Africa is not the best any time – in fact this is probably one of the worst places in the world because of the road conditions and the way some people drive.” There are other challenges. Cross border documentation and paperwork can be exacting and difficult, distances between jobs are vast, road conditions often intimidating. But bridge and road construction is taking shape - a new

Proudly sourcing heavy construction equipment and parts for Layne Drilling from Indiana, USA sales@aljanint.com Endeavour Magazine • September 2012 •

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Layne Drilling

road from Bamako through to Kayes halving a journey time that once took twelve hours. And then there’s the West African weather. “In Mali they measure the rainfall in feet not inches. Two years ago the rains started in May and it was still raining in the last week in November - six months and very little drilling. Even when rains have stopped it can be impossible to resume until the water tables have subsided and crossings over swollen rivers re-opened. So two months rain might lead to four months inactivity.”

top accounts people here along with stores in every country we work in except Mauritania. We have a good name as West African Drilling Services – we recently changed our name to Layne Drilling - with the expertise, the back-up – and some of the finest drillers in Africa! “We have a good safety record, and pride ourselves that our biggest asset is our national employees. Of the two hundred machines we operate in all these countries, every one is operated by a national. And of the 350 we employ, only about 25 are ex-pats. “One of the joys of working in Mali is that although the people are poor, they are very happy. You find the children are always dressed immaculately.” Noel McGinniss arrived in Mali eleven years ago from Western Australia where he had worked around Kalgoorlie and in the north of WA. “Yes it was a culture shock when I arrived here eleven years ago. At first I wondered whether I would want to stay. But after three or four months it began to grow on me. There are a lot of people who can’t adjust to Africa, but there are many others who just fall in love with the place and want to stay.”

“One of the joys of working in Mali is that although the people are poor, they are very happy. You find the children are always dressed immaculately.” Noel McGinniss Competitors range from the small to the large - the biggest, Boart Longyear, the world’s leading provider of exploration drilling services and products – but McGinniss is assured by Layne’s record, reputation and delivery. “We’ve been in most parts of Mali, -although we do not venture to the north of the country - are pretty well self-sufficient, have some of the

Endeavour Magazine • September 2012 •

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Founded over 100 years VALUE. COMMITMENT. RESULTS. ago Layne Christensen Company’s Mineral Exploration Division has developed into one

of the largest exploration drilling companies of it’s kind. We provide a full range of drilling services for the global mineral exploration industry, through our wholly owned operations and our Latin American Affiliates (The Geotec Group). Our combined fleet exceeds 300 drill rigs and we provide services on 4 continents. We aim to provide the best, most innovative and reliable drilling services, using state-of-the-art equipment and technology.

WWW.LAYNE.COM


Endeavour Mining www.endeavourmining.com +233 30 277 6871 Written by Don Campbell


GROWING AT PACE

Endeavour Magazine • September 2012 •

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Endeavour Mining

Since pre-historic times, mining of stone and metal has provided resources, wealth and jobs to mankind. Modern mining processes involve prospecting for ore bodies, analysis of the profit potential of a proposed mine, extraction of the desired materials and finally reclamation of the land to prepare it for other uses once the mine is closed. Lead by an accomplished, focussed and highly experience management team Endeavour Mining is a West African gold production and exploration company focused heavily on growth and currently producing gold at a rate of 180,000 ounces per year from two operating mines. 2012 is looking to be a spectacularly positive year, with a goal of approximately 250,000 ounces of gold per year by the end of 2013 from existing properties. West Africa is turning

into a proverbial Garden of Eden. Endeavour has a specific and regimented growth strategy focused on West Africa and is targeting the acquisition of significant contributions to the gold production profile by the end of 2013. With this in mind they have established a proven company building a track record with numerous successful transactions completed in 2010 and 2011, one of which is Agbaou Gold.


AGBAOU GOLD PROJECT The Agbaou Gold Project in Côte d’Ivoire is Endeavour Mining’s most advanced project after Youga. The property covers four hundred and sixty nine square kilometres and is a feasibility stage project and one of the largest undeveloped gold resources in Côte d’Ivoire, providing jobs for the local community. The Agbaou Gold Project is situated approximately 200 kilometres northwest of the port city of Abidjan where it is readily accessible by paved highway and is within 10 kilometres of the national power grid. In November 2008 a feasibility study of the Agbaou Project was completed by MDM International Engineering Ltd. and subsequently updated in October 2009 using a US $1,000 per ounce gold price. The Updated Feasibility Study concludes that Agbaou will produce an average of 77,000 ounces per annum over a 9.1 year mine life from a reserve base of 10.9 million tonnes with an average grade of 2.1 grams per tonne. The reserve estimate is 731,000 ounces and was completed by Coffey Mining in accordance with National Instrument 43-101. The study proposes open pit mining of three pits using an owner operated mining fleet with the ore being processed through a conventional gravity-CIL plant

with a design capacity of 1.2 million tonnes per annum. The average gold recovery is 91% and the strip ratio is 7:1. Capital costs are estimated at US $106 million and the Company is reviewing options to further reduce these costs. The Agbaou project team, led by Mark Connelly, COO and Jeremy Langford, SVP Projects, is comprised of experienced mine operators, mine builders, and exploration teams. The work that goes on behind the scenes to manage a mine is easily overlooked, but without it projects like this would not get off the ground let alone produce the results it has already shared with the world. Endeavour strives to maintain strong relationships and provide long-term benefits to the local communities where it operates. With a strong belief that the growth profile is enhanced by the success of its community-based partnerships, and to ensure this, they act with a number of principles including a strong commitment to pragmatic relationships with local communities and regional government, to ensuring operations provide long-term positive benefits to our local communities, environments and conservation. With a strong focus on the future and a hands-on approach to their projects it is no wonder that this company will be at the forefront of their industry.

Endeavour Magazine • September 2012 •

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