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THE KNOWLEDGE YOU NEED
Highly commended 2011 PICA Cover of the Year - B2B Publishing
ining
MEDIA
FROM THE INDUSTRY EXPERTS
HOT SEAT
SRK chairman, Roger Dixon, is proud to sell a global brand
PRECIOUS METALS
Pan African announces strong results
GOLD
Village Main spots under-valued assets
MineRP goes global in mining technical solutions ISSN 1999-8872 • R35.00 (incl. VAT) • Vol. 5 • No. 10 • October 2012
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CONTENTS
T H E K N O W L E D G E YO U N E E D
ining
October 2012
FROM THE INDUSTRY EXPERTS
Highly commended 2011 PICA Cover of the Year - B2B Publishing
www.miningne.ws
MEDIA
10
THE KNOWLEDGE YOU NEED
LQLQJ
ON THE COVER
MineRP
MineRP has announced the long-anticipated transaction that will see the company position itself as the premier provider of integrated mining technical solutions to the global mining industry
in mining technical solutions
P6
FROM THE INDUSTRY EXPERTS
HOT SEAT
SRK chairman, Roger Dixon, is proud to sell a global brand
Background image: Petmin
PRECIOUS METALS Pan African announces strong results
GOLD Village Main spots under-valued assets
ISSN 1999-8872 • R35.00 (incl. VAT) • Vol. 5 • No. 10 • October 2012
EDITOR’S COMMENT
3
12
“Boom and doom” in mining?
MINING NEWS
4
The top mining stories headlining this month
HOT SEAT
10
SRK – selling a global brand known for its integrity and quality
PGMS AND GOLD
14 Lesego Platinum – a world-class asset in the making 16 Blyvoor’s turnaround – a terrific start 20 Pan African Resources announces excellent results 23 Implats’ sustainable keys 25 Tharisa defies the economic climate EXPLORATION
25
28 Botswana – the Tsodilo Phase 1 exploration drill programme
DEEP LEVEL MINING
30 TWP – the challenges of deep-level mining INFORMATION AND COMMUNICATION TECHNOLOGY
35 Improving safety, productivity and efficiency in underground mining
37 NSSLGlobal – Satellite communication, from exploration to full production
PANEL DISCUSSION
30
38 Adroit introduces bulk material handling system 39 DataSaint – Gilbert McCaul – projects manager MINERALS PROCESSING
40 Multotech – mobile spiral plant attracts growing interest
PRODUCT NEWS
42 Afrox – offering all-round products and services to mining
CETERUM CENSEO
44 A much bigger jinx Inside Mining 10/2012
1
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Editor’s comment Publisher Elizabeth Shorten Associate publisher Ferdie Pieterse Editor Hans Alink Head of design Frédérick Danton Senior designer Hayley Mendelow Chief sub-editor Claire Nozaic Sub-editor Patience Gumbo Marketing & online manager Martin Hiller Production manager Antois-Leigh Botma Production coordinator Jacqueline Modise Financial manager Andrew Lobban Administration Tonya Hebenton Distribution manager Nomsa Masina Distribution coordinator Asha Pursotham Printers United Litho Johannesburg Tel: +27 (0)11 402 0571
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South Africa: R350.00 (incl VAT & postage) SADC countries: US$80 Foreign: US$100 E-mail: subs@3smedia.co.za ISSN 1999-8872 Inside Mining Copyright 2012. All rights reserved. ___________________________________ All material in Inside Mining is copyright protected and may not be reproduced either in whole or in part without the prior written permission of the publisher. The views of contributors do not necessarily reflect those of the the publishers.
“BOOM AND DOOM” IN MINING?
Global mining industry is readjusting itself There has been
a lot of “boom and doom” talk in the mining industry lately. If what international mining commentators say is true, then growth among the large players in the international mining arena seems to have slowed down somewhat and it looks as if the sector is busy adjusting itself to the new market conditions. However, junior miners in the international market seem to be making use of new opportunities with some showing exceptional growth. While the mining industry is not totally unaffected by the global financial crisis and talk of another “recession”, there is still a healthy demand for natural resources from strong growing economies like China and India. Being a continent blessed with an abundance of these much sought after natural resources, Africa is, in the view of various mining commentators, fast becoming a global growth point with big international mining companies operating in most parts of the African continent. In the case of South Africa, however, strikes of all types – unprotected, protected, wildcat, trucking, automotive… you name it – have been dominating the news since the preamble to Marikana and have affected the economy and us all to a greater or lesser extent. Whether or not there are good reasons
behind them, most become violent with disastrous effects in terms of loss of life, injury, damage to private and public property, hardship for mine workers and their families who do not receive any income, intimidation of workers who are prepared to work in order to put food on the table and care for their families, labour unions at each other’s throats, mine management and their representatives failing to respond effectively, and bureaucrats and politicians pointing fingers at each other. Strikes have become viral and contagious, spreading from one industry to the next and making headlines in the local and international media. The bottom line is: strikes are hurting brand South Africa. They are hurting our economy, our country’s financial and social reputation and, in the end, each and every one of us. Ostrich politics does not work. Mine workers, mine management, labour unions and government must reach an agreement – sooner rather than later – before the labour unrest becomes an all-devouring monster that can no longer be contained. Electra Mining 2012 has come and gone. More than 800 mining supply companies big and small, from all parts of the world, were there to showcase their new products, services and technologies in an exhibition space of about 36 000 m2. Exhibitors entertained visitors to the show with new product launches, live demonstrations, interactive product displays and the latest in supplies, machinery and equipment. As a first time mining visitor commented after the show: “It is abundantly clear that technology can be integrated into virtually all aspects of the mining industry. I was amazed by all the hi-tech solutions on offer.” According to the organisers, Specialised Exhibitions, the number of visitors at 38 296 over the five days of the show was significantly up from the 34 836 figure of 2010. Now we can all start planning for the next show, which will be held at Nasrec from 15 to 19 September in two years’ time. Hans Alink
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Inside Mining 10/2012
3
Mining news www.miningne.ws
The top mining stories making the news in the past month ASIA
Newmont cuts Indonesia copper, gold mine output forecast
compiled by Ameerah Griffin
| SOUTH AFRICA | Wescoal announces new CEO Source: www.miningne.ws Dutch Botes has been named as the new CEO of Wescoal Mining. The appointment comes as the company aligns its strategy to expand its mining capabilities. Botes is a qualified mining‚ electrical and mechanical engineer who has over 34 years of experience in the mining sector. He previously held the position of CEO at Umcebo Mining‚ a junior coal mining house, where he successfully brought a total of six new coal mines into production, including an underground operation at Klippan Colliery. Before his tenure at Umcebo Mining‚ Botes was general manager at various BHP Billiton Energy Coal South Africa operations, including Middelburg mines‚ Khutala Colliery‚ Optimum Colliery‚ Koornfontein Mines and Delmas Colliery.
| AFRICA | Kaboko Mining secures strategic Zambian licence Source: www.miningne.ws Kaboko Mining has secured a joint venture (JV) agreement for an initial 51% interest in the Rockstone Manganese Project. The JV is a large-scale prospecting licence 120 km north of the company’s Peco Manganese Project in Zambia. The acquisition is a strategically important and significant addition to Kaboko’s existing Zambian manganese projects,
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given recent technical results and a broader geological understanding at the Peco Project, which is forecast to become a primary production and processing location. The company has also secured a AUD$1 million [Australian dollars] (R8.66 million) debt facility with Perth-based investment group Celtic Capital, to fund further exploration and complete reverse circulation drilling at its Emmanuel and Peco Projects.
| AUSTRALIA | Anglo American cuts coking coal output Source: www.miningne.ws Anglo American has announced plans to reduce its coking coal output in the coming months, the miner’s coking coal chief executive, Seamus French said, warning that industry-wide cuts would continue. Coal producers have raised concerns over the profitability of the sector in recent months as prices have slumped, particularly in Australia, where the country’s resources minister, Martin Ferguson, said the nation risked missing out on billions of dollars of new projects due to high costs. French said: “We are going through a planning process where we will adjust to the market conditions and, in the short term, we will cut back. “It’s times like these that really are the right opportunity to re-evaluate things,” French stated, adding that the market had become over-supplied after strong prices at the start of last
Source: www.miningne.ws Newmont Mining has revised down 2012 target production figures for its Indonesian mine to 71 000 ozunces of gold from 114 000 ounces previously. Annual copper output from the Batu Hijau mine on Sumbawa Island is now expected to be 170.6 million pounds, from an earlier forecast of 192 million, said spokesman Rubi Purnomo. The lower forecasts come as Newmont processes lower grade ore from stockpiles in preparation for a new phase of mining at the vast opencast in the mountains of Sumbawa. Production in the first six months of this year has been about 90 million pounds of copper and 40 000 ounces of gold, said Ian McGaffin, the mine’s general manager. Newmont has already flagged that its 2012 attributable Indonesian output is expected to be significantly lower, a factor that led the Colorado-based firm to post a 30% drop in second quarter profit.
year encouraged miners to ramp up production. French said cuts would be made on a case-by-case basis in its operations, concluding that any decisions were likely to come in the next few months.
| EUROPE | Lundin Mining cancels acquisition of Spanish copper mine Source: www.miningne.ws Lundin Mining has announced that the company will not exercise its option to buy a stake in the Touro copper mine in northern Spain. The reason for this decision is that the company believes that
it will not receive returns from the project. President and CEO, Paul Conibear said: “Despite the diligent efforts of our team and the cooperation of the authorities, the local community and the owners of the project, we unfortunately are not able to progress with the Touro project.” Lundin Mining announced in April it had signed a deal with two Spanish companies for an option to buy an 80% stake for €60 million (R658.5 million). Lundin Mining has operations in Portugal, Sweden, Spain and Ireland, and an equity stake in the Tenke Fungurume copper and cobalt mine in the Democratic Republic of the Congo. The
Mining news
company produces copper, zinc, lead and nickel.
| SOUTH AMERICA | Pan Pacific Copper to acquire 40% of South America copper mine Source: www.miningne.ws Pan Pacific Copper has announced that the company will purchase 40% of a large South American mine. The Japaneseowned Pan Pacific, which has Japan’s largest smelter, will purchase the mine from the Japanese government. The massive mine is located across Argentina and Chile in a region called Frontera that spans across 60 000 acres. The mine is expected to have an estimated output of 150 000 t (165 347 tons) a year. Once the acquisition is finalised, it is expected to be one of the largest copper mine stakes held by a Japanese company.
NORTH AMERICA
Strike Energy will begin fracking in the US
Source: www.miningne.ws Strike Energy says it will begin a 21-stage fracture stimulation programme in Texas, United States. The Eagle Landing joint venture (JV) with Strike Energy, which holds a 27.5% stake in the JV, is a 151.3 km2 project located
within the northern Lavaca and southern Fayette counties in Texas. The JV began in September at the Eagle Ford shale project. Four Texas-based companies hold the remaining interests in the venture. The fracking programme is scheduled to start at the project’s first production test well, Bigham 1H. Upon completion of the fracking operations, the partners plan to carry out cement plug drill-out and flow-back operations. Production testing is
expected to start once the well has cleaned up. The Bigham 1H well was drilled about 5 400 m deep, with a 157 m horizontal section drilled and cased in the Upper Eagle Ford formation. The
Eagle Landing JV has identified more than 300 potential drilling sites within the Eagle Ford gas-condensate fairway and has estimated a potential resource equivalent to 135 million to 165 million barrels of oil.
Cover story
MINING TECHNICAL SOFTWARE AND CONSULTING
MineRP Goes Global MineRP has announced the long-anticipated transaction that will allow it to realise its position as the premier provider of integrated mining technical solutions globally. MineRP president, Pieter Nel, speaks to Hans Alink about the takeover, the parties forming the consortium that acquired MineRP, the company’s future strategy and new products to be launched.
“F
urther to the cautionary announcements published to the general public earlier this year, South African ICT firm Gijima’s shareholders were advised at the end of September that MineRP has entered into agreements with a consortium led by RMB Corvest, Shalamuka Capital, Hasso Plattner Ventures Africa and a representative management committee from the MineRP business, in terms of which the consortium will purchase the MineRP business from Gijima. The conclusion of the transaction is subject to certain conditions, which have been set out on the websites of both Gijima and MineRP. The entire transaction should be finalised and signed by November,” says Nel.
Reason for the transaction The MineRP businesses have historically attained a position among the top mining technical systems providers worldwide. This market has seen significant growth over the past years as opportunities for market consolidation were identified by large corporates and companies were able to invest in various expansion initiatives. In the recent past, it has become evident that MineRP requires similar levels of investment to achieve its various global growth objectives. As the business of MineRP is essentially non-core to Gijima, the required investment was not sanctioned, and for this reason, Gijima has taken a view that in order to set MineRP on its own growth trajectory, it should be sold to investors that would adequately invest in its strategy. “MineRP is not 100% fit for Gijima as we only make out 10% of the company’s business,” explains Nel. “Our business requires investment, especially if we want to see international growth. The consortium of new
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owners believe in our strategy and want to support us to grow the business and support the mining industry on a higher level than what we have been doing up to now. “Also, unlike MineRP, Gijima focuses more on the South African market, while the mining industry is global. Although the local mining industry remains highly important to us, we need to grow our business internationally, for which a lot of investment is needed. We are busy opening offices in Accra, Ghana, and in Tanzania, East Africa, to have a greater presence in sub-Saharan Africa, and are also establishing a presence in Lima, Peru, and in Brazil and Indonesia. “Furthermore, MineRP needs capital to invest in the continued R&D of its products.
company and a member of the First Rand Group. The company participates predominantly in management buyouts and buy-ins, leveraged buyouts and BEE transactions involving businesses with a value of between R50 million and R1 billion. The company also invests in established, well-managed, medium-sized businesses with a proven track record of solid performance. Its mission is to be a guiding force and strategic partner in the financing of selective transactions, always
“A greater selection of software solutions that have been tried and tested in the international market is now being used , and a dependable integration partner is required to make this new world work.” Pieter Nel, MineRP president The mining industry will benefit from this, both locally and internationally. The South African mining environment is changing. A greater selection of software solutions that have been tried and tested in the international market is now being used, and a dependable integration partner is required to make this new world work.”
The consortium The parties to the consortium acquiring MineRP have been carefully selected and will individually and collectively contribute significantly to the future success of the business. RMB Corvest is a South African private equity
seeking to yield maximum returns for each party involved. To the initiated in the technology industry, the name Hasso Plattner is very meaningful. Hasso Plattner Ventures Africa, based in Cape Town, South Africa, is the largest technology-focused venture capital fund in Africa, with most of its capital committed by SAP co-founder and chairman, Prof Dr Hasso Plattner. Hasso Plattner Ventures Africa turns local technologies into global assets by investing in software, telecommunications, internet and clean energy companies in emerging markets with the potential to grow internationally. As a partner in the MineRP
Cover story RIGHT The MineRP Strategy for delivering integrated enterprise solutions
consortium, Hasso Plattner Ventures Africa’s expertise and global network will allow MineRP to broaden its offering and thrive in the global marketplace. Shalamuka Capital is the private equity company for the Shalamuka Foundation. Shalamuka offers investment partners a key advantage through its status as a broadbased BEE private equity company, which uses its own funds for investment rather than third party funds. The funding received by the Shalamuka Foundation from Shalamuka Capital is used to facilitate the growth of the Penreach programme and ultimately improve the lives of the children and educators of South Africa. Penreach is an awardwinning non-profit, in-service educational development-training programme that was developed to improve the teaching skills of qualified and unqualified educators, as well as their schools in and around Mpumalanga. Through the efforts of Shalamuka Capital and its involvement in Penreach, more than 2 000 teachers, 900 schools and in excess of 350 000 learners a year are reached and benefit from the programme.
MineRP’s future strategy In business since 1997, MineRP started life as Graphic Mining Solutions International (GMSI), an in-house service provider to the Anglo American Gold division, developing its mining technical software portfolio. In the past 15 years, the company has seen remarkable growth and is now one of the top four
providers of mining technical solutions in the world in terms of revenue. “For a newcomer in this industry, where all the other players have been around for 25 years or more, we made a significant impact on this market. This is mainly due to the South African mining industry and the knowledge that we gained from underground mining in this country. However, over the past decade we also spent a lot of time building our capability and technology to support surface mining, where opencast has become important for us,” comments Nel. With its dual focus on both software engineering and professional mining consulting, MineRP is uncontested as the world’s biggest supplier of enterprise-level integrated
mining solutions. This has been achieved through a combination of the development of natively integrated expert solutions within the MineRP stable, as well as the establishment of the MineRP Foundation Blocks. These Foundation Blocks are a set of innovative enterprise technologies that allow for the horizontal as well as vertical integration of not only systems provided by MineRP, but also those of any other mining technical solution willing to share data in an open standards-based spatial format. MineRP has seen significant growth in both local and international business, doubling its BELOW Mine2-4D 2012 will be launched globally in November 2012
Inside Mining 10/2012
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Cover story
ABOVE Utilising MineRP SpatialAnalyzer to visualise Stope and Block Model intersections
revenue twice over the past six years and has established offices on each significant mining continent. According to Nel there is almost no mining company in South Africa that is not a client of the company. Also internationally, its client list boasts most of the top 50 mining houses in the world.
World ranking “Internationally there are only three companies bigger than us in our market. These companies offer expert applications, i.e. stand-alone applications for different mining disciplines, which typically integrate to some degree with other solutions developed within the same company. “Where the solutions offered by other players in our market only allow integration of their own expert applications, we set ourselves apart in that our enterprise system (MineRP) has the complete flexibility to integrate expert applications from different vendors to obtain an integrated view. It also has the flexibility to link up with any commercial enterprise application like SAP, Oracle, and other ERP solutions to link all mining data with commercial data in order to get an enterprise wide view of the entire operation. To top it all, our system is totally web-enabled, which means you can run your application on the mobile device of your choice and view
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intricate mining graphics over the web. The flexibility of our system and its ability to provide a full enterprise view of the business is strategically important in our plans for international expansion,” explains Nel.
New products On the expert product side, MineRP will launch Mine2-4D 2012 in November, which will be ready for the market in January 2013. New releases of MineRP Foundation Blocks will also be published in November 2012. These products will be launched at a series of international open days over a five-week period, starting in South Africa in the last week of October, followed by
mine planning tool will be as well received as previous versions. Mine2-4D has always been one of the best underground planning tools, but it is also excellent for opencast mining. This product has been rated as the top planning tool for underground environments in the Australian market, an endorsement that is a good benchmark for us,” says Nel. In South Africa, where mining is more conventional, the generally used planning tool is CADSMine. As part of its future road map, MineRP plans to merge Mine2-4D and CADSMine into one product. The company is also busy upgrading all the foundation blocks for MineRP, including Spatial Dash, MineORC, Mine Forms and Spatial Analyser, which will allow customers to integrate any collection of expert applications and thereby achieve total flexibility. From a MineRP perspective, it is currently business as usual. According to Nel, the market can expect MineRP to redouble its efforts to support its global client base, as well as maintain the impressive investment in research and development, which has made it the force to be reckoned with that it is today. “With the new consortium in place, we are confident that we will soon achieve our stated objective of being the number one global provider of enterprise, integrated mining technical solutions and consulting,” concludes Nel.
MineRP has the complete flexibility to integrate expert applications from different vendors launches in Australia, Latin America, the US, Canada and Europe. “All the information on our new products and the presentations for the launches will be available on our website. We are also going to send free versions of the new software for a trial period to all our customers. Mine2-4D 2012, our new mine planning tool, is a real winner and excellent feedback from our Beta testing programs predict that the latest version of this thoroughbred
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Hot seat
SRK
Selling a global brand known for its integrity and quality SRK Consulting (South Africa) has been appointed technical consultant to the government of Cameroon for a US$5-billion (R41.2 billion) mining and infrastructure project to span over a period of at least five years. SRK (SA) chairman, Roger Dixon, speaks to Hans Alink about the products, services and expertise of his group and their most recent African projects.
OCTÉA’s Koidu Diamond Mine in Sierra Leone where SRK has been involved since 2002
“W
e are proud to sell a global brand that is known for its integrity and a quality product that our clients can use when they go into the market,” says Dixon. “When people raise money for projects, after the financial meltdown of 2008, they want to know that the projects in which they are investing their capital are the real deal. There have been many cases where investors have been misled. They don’t want that to happen again. In countries like Canada and Australia, regulators have introduced checks and balances to ensure that what is contained in project plans and valuations is actually going to come to fruition.” Major mining houses and junior resource companies regularly approach SRK for reviews, audits and independent assessments of their projects. Resource estimations, using the most appropriate methods
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“We provide technical advice and do not get involved in downstream activities, which sets us aside from others that may have an interest in downstream activities.” Roger Dixon, chairman and partner of SRK Consulting (SA), part of the global consulting group
based on rigorous data analysis and sound geological assessment of ore bodies, provide clients with a clear understanding of reliability and risk at all stages of reserve development projects. “We provide technical advice and do not get involved in downstream activities,which sets us aside from others that may have an interest in downstream activities. This makes us truly independent. Our independent engineer reports, comprehensive competent persons reports and due diligence reports and programmes carry the weight
of our global reputation in the stock markets and banks of the world. “We offer a wide range of specialist consulting services for natural resources from greenfield explorations through to mine
Hot seat closure. This encompasses a broad spectrum of disciplines that are involved throughout, which we are proud to have in-house.” SRK staff includes world-recognised experts in structural geology, seismic interpretation, alteration geochemistry, and design and management of exploration projects. The group’s customers – large and small – are as widespread as their projects are varied. They include mining companies, financial institutions, national and local governments, government departments, regulatory authorities, property developers, water authorities, power utilities, contractors and consulting engineers. “Our current strategy is to focus on large companies, because one tends to diffuse a lot of one’s energy trying to help everybody. We don’t want to spread ourselves too thinly,” explains Dixon. “We currently have one major client, the government of Cameroon, which is an enormous project. We are advising it not only on mining circumstances, but also on its national infrastructure, including 510 km of railway line and port facilities. On the mining side, we are involved in the areas of geotechnical, tailings, water and waste management.” SRK SA recently secured the role of project management consultant and engineer for Brazilian mining company Vale for the Nacala Rail Corridor Project Section 3. This new section of rail infrastructure runs from the Mozambican-Malawi border, close to Tete, to the existing rail line at Nkaya Junction in the heart of Malawi. This is the most challenging section of the rail line and is 162 km of the total 940 km being built. SRK SA has a team of 150 people working full time on this project. Apart from doing geotechnical and hydrogeology work for oil companies like Chevron, Shell and BP, and for power utility Eskom in South Africa, SRK has in recent years been very active in West and Central Africa. In West Africa, the company has done feasibility work in Sierra Leone on the Koidu Diamond Mine, for diamond company OCTEA Holdings, and in Ghana it designed tailing facilities for Idiapruim, an AngloGold Ashanti project. In Central Africa, in the Democratic Republic of the Congo (DRC), SRK was commissioned to complete a big, multidiscipline project involving geotechnical engineering work, water management and
ABOVE Mongbwalu community forum meeting – SRK was the independent environmental practitioner that led the environmental and social studies for the Mongbwalu project in the DRC RIGHT SRK Consulting’s team on-site in the Cameroon jungle
hydrogeology work, environmental impact assessments, environmental and social impact and management work, and community development work for the Tenke Fungurumi project, one of the world’s largest copper-cobalt operations. In the eastern DRC, SRK is doing geotechnical work at AngloGold Ashanti’s Mongbwalu project, and was the independent environmental practitioner to lead the environmental and social studies for the project. In neighbouring Congo, the company has been involved in a large iron ore project. In Angola, SRK has done at least three geotechnical projects and environmental work for oil companies through its joint venture with ARC, while in Namibia it was involved in a gold project for a number of years and carried out studies for various companies. The company completed geotechnical work for coal and diamond companies in Botswana. The group is also active in Zambia and Zimbabwe. In Zambia, it has a long-standing relationship with Konkola Copper Mines, owned by international
company Vedanta for which it is doing technical studies and work. Speaking about the technology that is relevant and required for the company’s areas of expertise, Dixon states: “Computer technology has made our life much easier. For instance, we use satellite technology for mapping and I don’t think we realise how this technology has improved. We also use specialised software for the optimisation and scheduling of opencast and underground mining. Nowadays everyone wants to be scheduled by a computer, the software is available and we are applying this on our projects. We are using it specifically on the coal side of the mining business, which is on the move in South Africa and Mozambique.”
RIGHT AngloGold Ashanti’s Iduapriem open pit where SRK has been providing geotechnical review services for a number of years
Inside Mining 10/2012
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PGMs and Gold
DOING DE BRON
Rapid roll-out
JSE/TSX-listed gold junior Wits Gold is rapidly advancing its shallow De Bron Merriespruit project in the southern Free State goldfield and is due to complete the final feasibility study during the third quarter of 2013.
C
onsulting engineers Turgis Consulting has been appointed to undertake the detailed engineering and mine designs, while mining engineer house MDM Engineering has been appointed to focus on the metallurgical plant and related design aspects. Turgis recently completed the positive pre-feasibility study (PFS) at De Bron Merriespruit (DBM) on time and within budget, and the study confirmed that a mine at DBM was both technically and economically viable. “We are pleased to continue our solid working relationship with Turgis, which developed a thorough knowledge of the DBM orebody since its involvement began at scoping study level. The specialist expertise brought in by MDM Engineering to provide the detailed plant design will result in the fast-tracking of the final feasibility study. It is an exciting stage in the development of the company when its first project is taken to such an advanced stage, and we look forward to commencing with the construction of South Africa’s next shallow gold mine,” says Wits Gold CEO, Philip Kotze.
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The pre-feasibility The PFS delineated a probable gold reserve of 23.5 Mt at a grade of 4.1 g/t (3.1 Moz), which is contained within that portion of the resource at DBM that occurs at depths shallower than 1 000 m and contains an indicated mineral resource of 26.7 Mt at 5.8 g/t Au (4.99 Moz). DBM will be a shallow underground mine comprising a planned twin shaft system to 660 m, with average gold production expected to be 200 000 ozpa over an 18year life of mine. Production is expected to peak at 246 777 ozpa at 5.5 g/t during year nine, and first gold production is expected 47 months after shaft sinking commences. The PFS estimates production cash costs of US$628/oz (R5 279/oz) with peak capital funding of R2.37 billion.
The feasibility The feasibility study will further refine certain aspects identified in the PFS that will aim to improve mining efficiencies by introducing safer, semi-mechanised mining equipment and down-dip mining methodologies. In addition, further upside
exists if the study investigates the inclusion, through additional drilling, of the existing shallow inferred resources of 5.97 Mt at 5.7 g/t (1.1 Moz) that is readily mineable from the current mine design. Mineral resources that are not mineral reserves do not have demonstrated economic viability. On 22 February 2012, the Department of Mineral Resources accepted the company’s application for a mining right for gold, silver and uranium over its advanced prospecting rights areas in the southern Free State goldfield, which includes the DBM, Bloemhoek, Robijn and Hakkies project areas. Wits Gold holds 14 new order prospecting rights over 1 195 km² in the southern Free State, Potchefstroom and Klerksdorp goldfields. The mining right is expected in the second half of 2013, once the company complies with requirements in terms of the Minerals Act, such as obligations in terms of feasibility studies, environmental impact assessment as well as social and labour plan commitments. Once granted, a mining right is valid for a period of 30 years and renewable for a further period as required.