MODERN MINING - Crown Publications · 2014. 12. 12. · 1 Mt of kimberlite over a two-year period and, according to an independent report, is expected to lead to the recovery of over

December2014

Vol 10 No 12www.crown.co.za

MODERN MININGIN THIS ISSUE… Lemphane to get modern processing plant Underground mine at North Mara approved Work on Platreef platinum project resumes Lucapa granted 35-year licence to mine at Lulo

http://www.aelminingservices.com/http://www.crown.co.za/

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December 2014MODERN MINING1

COVERAEL’s revolutionary new CE4 tagger being used on bench. See page 18 for an article on some of the latest developments in blasting technology from AEL Mining Services.

EditorArthur Tassell

Advertising ManagerBennie Ventere-mail: [email protected]

Design & LayoutDarryl James

CirculationKaren Pearson

PublisherKaren Grant

Printed by:Shumani Printers

The views expressed in this publication are not necessarily those of the editor or the publisher.

Published monthly by:Crown Publications ccP O Box 140, Bedfordview, 2008Tel: (011) 622-4770Fax: (011) 615-6108e-mail: [email protected]

Average circulation(April–June 2014)

4 378

MODERNM I N I N G

CONTENTS

MINING NEWS4 Lemphane to get modern processing plant5 Vedanta approves US$782 million zinc project6 Positive scoping study on Nicanda Hill

completed

8 Strong quarterly performance by Bokoni9 Tsodilo completes surveys on BK11 kimberlite10 Robust Q3 results from Randgold point to

a record year

12 “Significant progress” on Boikarabelo coal mine13 Etango demo plant construction on track14 Shanta studies LOM extension options

for New Luika

6 18

22

ARTICLES

PRODUCT NEWS36 Caterpillar adds new shovel to its line-up36 Control system will reduce refrigeration costs37 String of African successes for Joest 38 Technology lowers lifetime costs of Condra cranes38 Cullinan winder motors refurbished 39 Screens manufactured for iron ore project 40 FLSmidth poised to deliver coal plant40 Metso launches secondary gyratory crusher

REGULARS

26

COVER18 AEL’s blasting solutions based on plus

100-year track record

GOLD22 Acacia’s North Mara mine to add

underground operation

PLATINUM26 Mining right activation clears the way for

Platreef restart

DIAMONDS30 Lucapa ready to ramp up its activities at

Lulo in Angola

FEATURE – PUMPS and PUMPING 32 Pump supplier solves dewatering

problem at gold mine

35 Transparent slurry loop on display by KSB Pumps

30

15 Acacia Mining spreads its footprint to Burkina Faso16 Metallurgical study delivers “outstanding” results17 Otjikoto gold project all but complete

mailto:[email protected]:[email protected]

http://www.mdm-engineering.com/


COMMENT

As I write this (early December), the end of the year is fast ap-proaching – leading me to reflect on what a dismal 12 months it’s been for mining in Africa. The

first half of the year – at least in South Africa – was marred by the strike in the platinum min-ing sector while from roughly April onwards Ebola has impacted the viability of mining op-erations in West Africa. As if all this weren’t enough, there has been an ongoing slump in commodity prices which has put the squeeze on just about every mining company in the world.

While the fall in prices has affected most mines, whether they mine coal, metals or industrial minerals, the iron ore sector – which accounts for a major part of the global mining industry’s output, both in terms of value and volume – has taken a particular beating. Indeed, the disaster that has befallen iron ore mining is arguably the standout mining story of 2014.

The scale of the problem can be gauged from the fact that the iron ore price has halved in 12 months – from around US$140/tonne in December last year to around US$70/tonne currently (a price last seen in 2009). This is a catastrophic drop and, in response, many iron ore miners have been shedding employees, closing operations and cutting back on explora-tion and investment in new projects. Brazilian giant Vale, whose fortunes have been founded on iron ore, has said that a significant part of global iron ore production (over 200 million tonnes) will become unviable if the prices being seen at the moment continue into 2015.

The response of BHP Billiton and Rio Tinto (who, along with Vale, constitute the ‘big three’ of iron ore mining) has been to maintain and even expand production – leading to accusa-tions, not really denied, that they are intent on driving higher cost rivals out of the market. Andrew Harding, who heads Rio’s iron ore business, was quoted recently – my source is Bloomberg – as saying that if Rio were not to increase production, then “higher-cost produc-ers will do it and our shareholders miss out. Someone else fills the void.”

The interesting question is what effect the slump in the iron ore price is going to have on Africa’s emerging iron ore mining industry – widely seen as the global future of iron ore – in countries such as the Republic of Congo and Cameroon and, further north, Sierra Leone, Liberia, Guinea and Mauritania. Already some of the new mines opened within the last two

or three years have been forced to close and I’m thinking here, in particular, of Tonkolili in Sierra Leone, a showpiece mine which shipped its first ore in late 2011 and which is currently winding down operations, and Marampa, also in Sierra Leone and also commissioned in 2011.

Of course, the ‘great white hope’ of Africa’s iron ore mining sector is Simandou in south-east Guinea, said to be the world’s biggest unexploited iron ore resource, but what effect the price slump is going to have on it is unclear at this point. Rio (and its Chinese partner, Chinalco), who hold the rights to part of the deposit, are on record as saying that pro-duction could start in 2018 but this is highly ambitious. Simandou is one of those projects with a huge infrastructural requirement (a 650 km rail line with over 30 bridges, as well as a deepwater port, are required) and some observers have put its overall cost at a mind-blowing US$20 billion.

In addition, the project has had a chequered history with The Economist, in a recent article (entitled ‘Crying foul in Guinea’), describing it as having been mired “in allegations of corrup-tion, expropriation and corporate espionage.” The Economist piece, incidentally, makes for entertaining reading and gives a good account of the interaction of the various protagonists involved in the project including the gov-ernment of Guinea, Beny Steinmetz and his development company, BSG Resources, Vale and, of course, Rio Tinto.

The big players further south in Cameroon and Congo (Brazzaville) are South Africa’s Exxaro (which recently took a big write-down on its Mayoko project) and Australian com-panies Equatorial Resources and Sundance Resources. All seem intent on developing their assets despite the poor price environment and Equatorial has just released a pre-feasibility on its Mayoko-Moussondji project which indi-cates that it could have operating costs of under US$40 a tonne.

Modern Mining will be taking an in-depth look at Africa’s iron ore projects in a spe-cial feature in August next year and it will be interesting to see how they are all faring at that point. My guess, several months in advance, is not too well. On the other hand, the majority of the deposits are too good to be left untouched for too long and I don’t see any delays in implementation as being more than a temporary pause on the way to their inevitable development.Arthur Tassell

Plunge in the iron ore price threatens African projects

Simandou is one of those projects with a huge infrastructural requirement (a 650 km rail line with over 30 bridges, as well as a deepwater port, are required) and some observers have put its overall cost at a mind-blowing US$20 billion.

4MODERN MININGDecember 2014

MINING News

Paragon Diamonds, the AIM-quoted dia-mond development company, says it has finalised the design and order plans for what it describes as a state-of-the-art pro-cessing plant for its Lemphane kimberlite mine in Lesotho. Lemphane is located among a cluster of kimberlites known for producing large, high value diamonds.

Lemphane is owned by Paragon through its subsidiary in Lesotho, Meso Diamonds, in which it has an 80 % stake with the Government of Lesotho holding the balance.

According to Paragon, the plant’s modular design and use of the latest X-ray Transmission (XRT) diamond recovery technology will reduce both capital and operating costs at Lemphane, improve diamond recovery and, as a result, signifi-cantly enhance the project’s economics.

Paragon’s objective is to commence Stage I production at Lemphane in Q1

2015, which will involve the extraction of 1 Mt of kimberlite over a two-year period and, according to an independent report, is expected to lead to the recovery of over 100 diamonds larger than 9 carats, includ-ing stones over 100 carats in size.

Finalisation of design and order plans for the US$6 million processing plant fol-lows a comprehensive analysis of various plant options and evaluation of technolo-gies successfully used by other key industry players.

Capital costs of Stage II production are expected to be significantly reduced from the initial scoping study as a result of the new technology when applied to a full-scale 3 Mt/a plant. It is expected that the overall size and footprint of the plant will reduce along with the associated operat-ing costs.

Paragon says that an upgraded pre-feasibility study, based on the revised

48 Mt of kimberlite amenable to open-pit mining and incorporating the latest improvements in both operating and capi-tal costs, including the planned national grid electrification of the region due mid-2015, will be undertaken in due course to verify management’s assertions.

Titanium Capital Investments, a private equity investment company managed by Paragon’s Chairman, Philip Falzon Sant Manduca, is acting as assuror (for nil con-sideration) for the pre-ordering costs of the plant.

“The construction of this ‘state of the art’ processing plant is a major milestone for Paragon as we home in on our Q1 2015 target for the commencement of Stage I production,” says Sant Manduca. “As Lemphane is the last, known undeveloped large diamondiferous kimberlite pipe in Lesotho, Paragon benefits from last mover advantage, whereby we get to see in prac-

The Lemphane diamond project in Lesotho. Paragon is to install a new processing plant with a nameplate capacity of 75 t/h at the site (photo: Paragon Diamonds).

Lemphane to get state-of-the-art processing plant


MINING News

tice the advantages and disadvantages of the various techniques and technologies employed on other kimberlites to date, as well as enjoying access to the latest equip-ment. We have therefore cherry-picked the best-in-class X-ray technology for our

Vedanta ‘green lights’ US$782 million zinc projectVedanta Resources plc, the London-listed diversified mining company, has approved a US$782 million investment over a three-year period to develop an open-pit zinc mine in Gamsberg, South Africa, as well as the conversion of the Skorpion zinc refinery in neighbouring Namibia.

The majority of the investment, approxi-mately US$630 million, will go towards developing an open-pit zinc mine, concen-trator plant and associated infrastructure at Gamsberg, one of world’s largest unde-veloped zinc deposits. The balance of the investment will be used to convert the refin-ery at Skorpion Zinc in Rosh Pinah, Namibia, thereby enabling it to refine zinc sulphide concentrates from the Gamsberg mine into special high-grade zinc metal.

“The Gamsberg-Skorpion integrated zinc project is central to Vedanta’s long term aspirations for Southern Africa,” said Tom Albanese, CEO of Vedanta. “It will also allow Vedanta to make a significant contribution to enabling the South African government achieve its goal of using the country’s vast mineral wealth to help fight poverty and uplift communities through the creation of sustainable, long-term employment oppor-tunities. This project provides significant synergies to both our operations and com-plements the needs of the region.”

Vedanta estimates that the Gamsberg project, located near the town of Aggeneys in Northern Cape Province, will create approxi-mately 1 500 jobs during construction and result in approximately 500 permanent jobs. The project will be operated under the aus-pices of Black Mountain Mining (BMM) which is 74 %-owned by Sesa Sterlite Ltd, a listed subsidiary of Vedanta Resources plc. The remaining 26 % interest in BMM is held by Exxaro Resources.

“The output from Gamsberg, coupled with extending the life of the world-class refinery at Skorpion Zinc in Namibia, will make the Southern African region one of the most important suppliers of refined zinc globally,” said Albanese. “That will also result in these operations forming one of the cor-nerstones of our operations in Africa and will partially offset the loss of volume resulting from the end of life of mine at Lisheen in Ireland.”

The first phase of the Gamsberg open-pit mine is expected to have a total lifespan of approximately 13 years with the first ore likely to be produced in 2017/18.

plant, which not only lowers our forecast operating costs but also maximises the recovery rates of large high value stones at Lemphane, reduces the potential for breakages, and enhances on-site security.”

The processing plant will have a name-plate capacity of 75 t/h. At a planned utilisation (90 %) and availability (92,5 %) of approximately 20 hours per day, an annual throughput of 0,5 Mt/a is expected. The pri-mary head-feed size will be +50-85 mm. A 50 mm x 25 mm x 20 mm diamond would typically weigh at least 300 carats, thus the potential for diamond breakage during primary crushing operations is reduced.

Tomra® XRT technology will be used to recover all +15 mm diamonds, correspond-ing to circa 7,5 ct for an oblate shape, typical of type IIa diamonds. Furthermore, all XRT feed will be sorted to recover diamonds prior to any subsequent crushing, and secondary crushing will be at a maximum closed-size setting of 35 mm, correspond-ing to circa 100 ct for an oblate shape.

After coarse diamond recovery, all material will be progressively reduced to -15 mm before further processing by traditional DMS and fluorescent X-ray FlowSort® recovery to extract the smaller (


MINING News

Emerging gold producer Auroch Minerals, listed on the ASX, has announced a sig-nificant shift in focus which it believes will unlock the value of its Mozambique gold assets near the town of Manica.

In early 2014 Auroch committed resources to a comprehensive review of the Fair Bride deposit, which is the largest ore-body within the Manica project area. The new work included a new Mineral Resource Estimate (MRE) for Fair Bride completed by CSA Global (UK) and a comprehensive set of metallurgical tests on the fresh ore. Both results have recently been released to the market and form the basis of a Scoping Study on Fair Bride as a standalone development.

“The new direction reflects a simpli-fied and focused strategy for Auroch; importantly, it is a fast-track towards devel-opment which focuses on a single deposit – Fair Bride – within the Manica project. The change in strategy was driven by met-allurgical results that highlighted positive recoveries in the sulphide part of the ore-body and the increased grade of over 3 g/t in the new resource estimate. This new data will now be used to form the backbone of a Scoping Study for the development of the Fair Bride deposit,” says Auroch’s Chairman, Glenn Whiddon.

The recent mineral resource update has brought the estimate into line with the 2012

ASX-listed Triton Minerals has announced the results of the independent Scoping Study for the Nicanda Hill graphite resource at its Balama North project in Mozambique. The project is located approximately 230 km west of Pemba, in the north of the country.

The company says the receipt of posi-tive Scoping Study results now justifies the commencement of feasibility studies that will form the basis for the rapid devel-opment of the Nicanda Hill resource and establish Triton as a low cost, high quality graphite producer.

“The release of the Nicanda Hill inde-

pendent Scoping Study is a significant milestone for our company given that exploration drilling only commenced in April of this year (2014),” says Triton MD and CEO Brad Boyle. “It confirms the quality of the Nicanda Hill resource and demon-strates the potential for Triton to become a leading global producer of high-purity flake graphite. On-going feasibility work is anticipated to improve the project eco-nomics as the higher grades identified by drilling to date will be defined with greater confidence and expanded.

“In addition, it should be noted that the Scoping Study was based on a relatively

Positive scoping study on Nicanda Hill completed

Bulldozer exposing high-grade resource at surface on Nicanda Hill (photo: Triton).

small percentage of the existing global resource in order to test the commercial viability of a conservative base-case pro-duction scenario. More comprehensive metallurgical studies, which will form part of the future feasibility programme, com-bined with additional resource drilling, may identify an alternate and improved development route.”

The Scoping Study was undertaken and prepared by independent geological and mining consultants Optiro of Perth, Western Australia, who also prepared the initial mineral resource estimation for the Nicanda Hill deposit. Optiro were engaged to evaluate the technical and economic potential of the Nicanda Hill deposit and to provide the foundations of future development. The study is based 100 % on indicated resource classification utilising a base-case mining inventory of 51 Mt grad-ing 12,4 % TGC (Total Graphitic Carbon) for a contained 6,3 Mt of graphite.

Vanadium credits were not included in the study but form part of the future project upside. Previous Triton announce-ments have advised that the Nicanda Hill resource contains numerous high grade vanadium mineralisation zones averaging 0,27 % vanadium pentoxide (V

2O

5).

According to Triton, Nicanda Hill con-tains 3,93 Mt V

2O

5 establishing it, in its

own right, as the largest known vanadium resource in the world, being approximately one third larger than the next largest known vanadium resource (2,7 Mt V

2O

5)

Auroch to fast-track development of Fair Bride JORC Code for the reporting of mineral resources and ore reserves. Importantly, the new MRE included a significant re-interpretation of the geological controls on mineralisation. Along with this better understanding came a significant increase in the global grade of the deposit to over 3 g/t. The additional detail has significantly improved the ability to devise and manage a more selective mining strategy.

Recent testwork on the sulphide ore at Fair Bride has shown that a recovery range of between 74 % and 78 % for the fresh ore is achievable. Auroch says the higher resource grade and the high recov-eries in the transitional (>80 %) and oxide (>95 %) ores point to an exciting develop-ment opportunity. The planned circuit will


MINING News

Conceptual open-pit design by Optiro for a 30-year mine life. The pit is approximately 3 km long and averages 200 m in width and 60 m in depth.

and approximately three-and-a-half times larger than the Rhovan vanadium mine in South Africa (1,1 Mt V

2O

5).

The anticipated mining schedule comprises a relatively shallow open-pit operation, focused initially on the MGM graphite zones in the vicin-ity of Nicanda Hill. The open pit will eventually be accessed by three separate ramps. Triton believes that the shallow nature of the open-pit operation – combined with a dilution grade averaging 8 % TGC – represents exceptionally low technical risk.

Average grades for the first five years of opera-tion are anticipated to be in excess of 13 % TGC. During this period the waste to ore strip ratio averages 0,84:1, with the Life of Mine (LOM) strip ratio expected to be approximately 1:1. However, it should be noted that the majority of the waste

material averages approximately 8 % TGC.The Scoping Study anticipates a straight-

forward crushing, milling and flotation process together with screening and drying circuits.

The results are based upon a 30-year con-ceptual LOM (29 years mining plus one year construction) starting in 2017 and a processing operation of 1,8 Mt/a resulting in an average annual production rate of 210 000 tonnes of graphite concentrate. It is envisaged that prod-uct would be exported via the Port of Pemba although Triton is also investigating the use of the Port of Nacala.

According to the study, the estimated capital cost is US$110 million including US$10 million of contingency. Payback would be achieved within less than 12 months of commissioning.

involve crushing followed by an ultra-fine grind and concentrate flotation with standard cyanide leaching of the concentrate.

Auroch will now concentrate its efforts into completing the required technical studies and bringing Fair Bride into production in the short-est time possible.

The company is in the final stages of comple-tion of a Scoping Study for the development of the Fair Bride deposit as an opencut opera-tion that will progress towards an underground development by declining from the highwall of the open pit. The results of the Scoping Study will be released to the market in Q1 2015.

Auroch also reports that it is in advanced dis-cussions with a number of potential partners for the development of mining operations on the substantial area of auriferous alluvial gravels

that lie within its Manica project. At this stage, discussions centre on the potential partners providing for both the capital and operating cost of a small gravity gold concentration plant and sharing the profit from mining on Auroch’ s licences with the company.

The preparation for mining at Fair Bride, within the area of the open pit, involves the stripping of overburden. This overburden mate-rial is made up of the gravels and boulder beds containing alluvial gold. It is expected that such an operation could be conducting a bulk sam-pling programme within Q1 2015 and be in production on Auroch’s 100 %-owned ML3990C during Q2 2015, providing almost immediate cash flow during the period that the Definitive Feasibility Study for the main Fair Bride project is completed.

http://www.bellequipment.com/


MINING News

Atlatsa Resources Corporation has announced its operating and finan-cial results for the three months ended September 30, 2014. The company reports that revenue from its Bokoni platinum mine – located on the northern end of the Eastern Limb of the Bushveld Complex – increased 30,0 % to US$70,4 million and on-mine EBITDA increased 8,5 % to US$11,3 million. Cash generated by opera-tions improved 31,2 % to US$9,7 million.

“Atlatsa has achieved a record quar-terly performance, its best since 2006, driven by the increased tonnes milled and PGM ounces produced,” comments Harold Motaung, CEO of the company. “This operational achievement was further supported by the 14 % increase in average Rand PGM basket price realised and the 8 % depreciation of the South African Rand against the US dollar during the quarter.

“The company was able to generate cash from its operations, increase EBITDA and significantly reduce the group’s net loss after tax, whilst still maintaining the Bokoni mine’s ramp-up profile at its two key underground development shafts. Stakeholder engagement, capital disci-pline, cost management and efficiency improvements remain key focus areas for Atlatsa.”

The Bokoni mine increased quar-terly tonnes milled by 10 % to 479 378 tonnes, resulting in an increased produc-tion of 56 025 PGM ounces compared to 47 611 PGM ounces during the third quar-ter of 2013. This increase – says Atlatsa – is attributable to an improved underground mining performance, better operating effi-ciencies, improved mining flexibility and improved grade control.

Primary development decreased by

Atlatsa’s Bokoni mine achieved its best quarterly production volume since 2006 during the September quarter, producing just over 56 000 PGM ounces during the reporting period (photo: Atlatsa Resources).

Strong quarterly performance from Atlatsa’s Bokoni mine22 % quarter-on-quarter to 2 654 m as planned, following a strategic decision to reduce development to a level sufficient to meet the mine’s short-term stoping flexibility requirements. More emphasis is being placed on secondary develop-ment to improve face length available for mining.

Recoveries at the concentrator plant decreased by 2 % to 89 % and 0,6 % to 86 % for the Merensky and UG2 concen-trate, respectively, as a result of an increase in throughput and processing of lower grade ore from the opencast operation.

During the quarter, Bokoni achieved better than budgeted production volumes from underground mining operations, with the result that a significant ore stock-pile of approximately 100 000 tonnes of Merensky ore, comprising mostly opencast material, was generated ahead of the con-centrator plant by quarter end.

The Brakfonte in M erensk y and Middelpunt Hill UG2 development shafts remain in their ramp-up phase as per the mine plan and are on target to achieve steady state production levels of 100 000 tonnes per month (tpm) and 60 000 tpm, respectively, by 2018. The mill gap between installed processing capacity (160 000 tpm) and current underground ore production (140 000 tpm) will con-tinue to be filled by ore generated from the opencast operation, which will be man-aged on a flexible volume basis to produce sufficient material for this purpose.

Aurecon to undertake PFS on Rukwa power plantKibo Mining, listed on AIM and the AltX, has announced that it has appointed Aurecon to conduct a Pre-Feasibility Study (PFS) on the Rukwa Coal to Power Project (RCPP) 300 MW power plant in Tanzania.

The company says commencement of the PFS is a very important milestone in the RCPP as it marks the stage where feasibility work has progressed sufficiently to allow the integrated feasibility study, i.e. mining and power, to henceforth continue concurrently.

The PFS will cover the conventional pre-

feasibility elements associated with a power plant feasibility study, as well as assessing certain key parameters required for plan-ning of the definitive power feasibility study on the Rukwa power plant.

Kibo Mining holds a thermal coal deposit at Rukwa, which has a significant JORC-compliant defined resource, and is developing a 250-350 MW mouth-of-mine thermal power station with an established management team that includes Standard Bank as financial advisor.


MINING News

SRK Consulting expert calls for ‘Coal School’Lesley Jeffrey, principal coal geologist at SRK Consulting (SA), argues that it may be time to reinstate a ‘Coal School’, with obligatory participation of all levels in the workforce. Jeffrey says smaller companies are vital to the future of the sector, but warns that many suffer from a lack of technical exper-tise because of their size and their inability to attract sufficient capital.

Principal coal mining engineer Noddy McGeorge emphasises the need to improve productivity through higher skill levels and multi-skilling. McGeorge says smaller players need to prove they can access the funding required for sustainable operation

and the right business model with Eskom. SRK provides expert technical support

for small and large coal miners alike, with an experienced team of specialists including (see below) senior mining engineer Xolani Gumede (far left), senior geologist Sello Nzama (second left), Lesley Jeffrey (centre), coal geologist Mbali Xulu (second right) and Noddy McGeorge (right).

With almost 90 years of experience between its members, the SRK Coal Group has provided services all over Africa and abroad, from geological assessments and orebody modelling to resource-reserve estimations, feasibility studies and operational audits.

Tsodilo Resources, listed on the TSX, reports that ground magnetic and gravity surveys on kimberlite BK16 in Botswana have been completed. This initial grant to Tsodilo subsidiary Bosoto (Pty) Ltd of prospecting licence PL 369/2014 became effective on 1 October 2014 and is valid for three years.

Some 51 line kilometres of high inten-sity magnetics were completed during the work programme and 441 survey stations for the detailed gravity survey were read. Geophysical surveys indicate a size for the BK16 kimberlite pipe of between 4,8 and 5 hectare (ha), an increase from the 3,5 ha historical reported size. Moreover, gravity survey suggests a possible south-easterly extension of 2,5 ha. Modelling of ground geophysical data has highlighted the inter-nal structure of the kimberlite.

BK16 is part of the Orapa Kimberlite Field (OKF) in Botswana. The OKF lies on the northern edge of the Central Kalahari Karoo Basin along which the Karoo suc-cession dips very gently to the SSW and off-laps against the Precambrian rocks which occur at shallow depth within the Makgadikgadi Depression.

The OKF includes at least 83 kimberlite bodies, varying in size from insignificant dykes to the 110 ha AK1 kimberlite which is Debswana’s Orapa mine. All kimberlite intrusions are of post-Karoo age. Of the 83 known kimberlite bodies, nine – AK1 (Orapa, Debswana); AK6 (Karowe, Lucara Diamond Corporation); BK1, BK9, BK12 and BK15 (Damtshaa, Debswana); DK1 and DK2 (Letlhakane, Debswana); and BK11 (Firestone Diamonds) – are currently or have been mined.

The magnetic and gravity data will be further analysed, adding the details of the historical holes to construct a first pass model. Bosoto then plans to initiate a core drilling programme over the next six months, using its own diamond drill rigs, before utilising LDD (large diameter drill)

Tsodilo Resources completes surveys on BK11 kimberliteholes for evaluation purposes.

“We are very determined to move the evaluation along at an accelerated pace. In 2013, the OKF area produced 12 926 500 carats and we are keen to be a part of the area’s production,” comments Dr Mike de Wit, Tsodilo’s President and COO.

http://www.alliedcranehire.co.za/


MINING News

Ongoing ramp-up of the Kibali mine in the north-eastern DRC led a strong overall per-formance by all of Randgold’s operations in a quarter in which production reached a new record level and costs were well contained.

Results for the three months to September show production of 299 320 ounces, up 8 % on the previous quarter. Production for the first nine months of the year was up 37 % on the comparable period in 2013, reflecting Kibali’s contri-bution and the impact of expansion and upgrade projects at the other operations. Total cash cost per ounce of US$692/oz was well contained, down 1 % on the pre-vious quarter.

Earnings per share increased by 11 %

Hatch Goba Chairman receives awardThe prestigious Lifetime Achievement Award for Excellence in Engineering was officially presented to Hatch Goba’s Chairman, Trueman Goba, at the inaugural South African Professional Services Awards (SAPSA) ceremony held in Johannesburg on 30 October 2014.

Goba was deemed winner in a category with numerous high-profile nominees by a panel of judges who reviewed media reports, technical awards, client surveys and organisation profiles before reaching their final decision.

Commenting on the award, Goba says: “Pursuing a professional career entails important responsibilities. It is therefore wonderful to be honoured alongside achievers from the legal, accounting and finance professions. Young people aspiring to become engineers should also note this.”

Goba was born in Durban and stud-ied in Pietersburg to become a survey technician. He then gra duated with a BSc Eng at the University of Natal, and subsequently with an MEng (Civil) at Cornell University, in the USA. In 2001, Goba’s company GMA merged with Keeve Steyn to form GOBA, which merged into the Hatch Group in 2013.

He was also President of the SA Institution of Civil Engineers (SAICE) in 2002 and President of the Engineering Council (ECSA) from 2007 to 2009. In 2010, he was appointed by South Africa’s President to the first National Planning Commission and was awarded a Gold Medal by SAICE in 2013.

Robust Q3 results for Randgold point to a record yearto US$0,63 quarter on quarter but profit was affected by foreign exchange adjust-ments and, at US$66,0 million, was just marginally ahead of the previous quarter. Profit from mining of US$172,6 million was up 6 % quarter on quarter. By the end of the quarter, Randgold had returned to its debt-free status, having repaid its revolv-ing credit facility.

Commenting on the results, Randgold’s Chief Executive, Mark Bristow, said Kibali was nearing operational stability as it con-tinued to ramp up mining and production and was well on its way to achieving its goal of delivering an average of 650 000 ounces per year over the next 10 years. The mine produced 145 152 ounces in Q3, substantially up on Q2’s 91 137 ounces.

Production at the group’s flagship Loulo-Gounkoto complex in Mali was 8 % down at 160 286 ounces but Bristow said it was still on track to exceed its 2014 guidance of 640 000 ounces.

The Tongon mine in Côte d’lvoire increased quarter on quarter production by 22 % to 63 832 ounces on the back of improved mill feed grade, gold recovery and mill tonnage throughput, and total cash cost per ounce was reduced by 15 % to US$799. Bristow said the improved per-formance was attributable to the upgrade and expansion measures taken by Tongon and an intensified focus on efficiencies. Preliminary drilling has identified an addi-tional 450 000 ounces of resources at the mine.

“With production standing at 860 366 ounces at the end of September, we’re well on our way to passing the million-ounce landmark before the end of this year. It’s been another challenging quarter but our operations have done well and it’s particu-larly gratifying to note that – despite the growth of the scale and complexity of our operations – our safety record continues to improve,” Bristow said.

“It’s also a good feeling to be back in the black after repaying our revolving credit facility. We’re still growing our existing businesses and our recently restructured and reinforced exploration team is out in the field hunting for additional ounces and new opportunities.”

Bristow said that while the Ebola out-break in West Africa had not directly affected Randgold’s mines, the group had mounted an extensive campaign to pro-tect its employees and host communities against the disease.

The processing plant at Tongon in Côte d’lvoire. Tongon produced 63 832 ounces of gold during the September quarter (photo: Randgold Resources).


MINING News

Barloworld celebrates 50 years in BotswanaO n 3 0 O c to b e r 2 0 1 4 , Bar loworld Equip ment Botswana officially cele-brated its 50th anniversary as the country’s Cat earth-moving dealer.

“It’s been an amazing journey so far and one that reflects our commitment to Botswana’s socio-economic growth through the supply of world-class equipment and services, supported by our investment in the human resources needed to support these machines in the field across the multi-faceted industries that we serve,” says Sean Walsh, MD of Barloworld Equipment Botswana.

The first registered Barloworld Equipment entity in Botswana was known as Construction Equipment Supplier Company and was estab-lished on 12 September 1964. Then, in 1971, the name changed to Botswana Earthmoving Machinery Co (Bemco). The existing head office in Francistown was expanded to support major mining activity at Selebi-Phikwe and Orapa, which today remain key copper/nickel and diamond centres, respectively.

Then in 1981, the head office relocated to Gaborone to provide sup-port for Debswana’s newly established Jwaneng mine, which became fully operational in August 1982. Bemco subsequently became Barlows Equipment, finally transitioning to become Barloworld Equipment. The current staff complement is around 450.

Mining remains the major contributor to Botswana’s Gross Domestic Product (GDP), and from inception Cat machines have played their part in unlocking the value of existing and greenfield projects. The same is true for infrastructure programmes, with a large portion of Botswana’s original national road network post independence in 1966 built by a succession of contractors using Cat equipment.

In terms of mining machine milestones, Botswana was the first coun-try in Africa to receive delivery of the Cat 7495 electric rope shovel, which has an operating weight of approximately 1 388 tonnes and a payload capacity of 109 tonnes, making it a three-pass loading match for ultra sized off-highway mining trucks.

Three Cat 7495 units were commissioned at Jwaneng during 2012 for Debswana’s Cut 8 expansion project. Debswana was also one of the first companies in the Southern African region to take delivery of a range of latest generation Cat hydraulic mining shovels for deployment at its Orapa and Jwaneng operations. These comprise Cat 6030 and 6060 FS units (the last two digits of each model indicating their approximate payload capacity). Other hydraulic shovel customers include Majwe Mining JV, one of the contractors working on the Cut 8 project, which acquired a Cat 6040 to carry out high production waste loading.

Training to support these and other Cat units is a core focus at Barloworld Equipment to keep pace with the growing machine pop-ulation and the company places between 15 and 30 learners on its earthmoving mechanic apprenticeship programme annually. Training takes place at the Gaborone branch. This is combined with practical and theoretical components at Barloworld Equipment’s Technical Training Centre in Isando, Johannesburg.

Barloworld Equipment’s CEO Southern Africa, Dominic Sewela (left), and Barloworld Equipment Botswana MD Sean Walsh celebrate 50 years in Botswana.

http://www.draglobal.com/


MINING News

Work at the Boikarabelo coal mine site in the Waterberg started in February 2013 and significant progress has been made over the past 20 months, says ASX-listed Resource Generation in the latest (October 2014) issue of its newsletter Boikarabelo News.

By the end of September, the accom-modation facilities at the construction camp were completed and the new power and water services were turned on. This camp will ultimately accommodate over 1 300 people when full scale construction is underway. Work has been completed on the construction office complex with the terrace and initial units installed.

Two water projects have been started at the mine site. First, completion of two main

“Significant progress” reported on Boikarabelo coal mine

road underpasses had to be undertaken and, after tendering, the appointment of a contractor for the construction of a 13 km section of the Marapong to Boikarabelo Effluent Transfer (MBET) pipeline. This proj-ect will be part of the larger 58 km MBET project which will take waste water from the Marapong Waste Water Treatment Works to the Boikarabelo mine.

While major earthworks on the new 40 km rail line have temporarily stopped (following the liquidation of the contrac-tor responsible for this portion of the work, Protech Khutele), earthworks for the inter-section rail link to the main line have been undertaken.

Work on three of what will be seven bridges that cross the new rail line also con-

Trenching underway for the MBET pipeline (photo: Resource Generation).

tinues. The railway line stretches from the Transnet railway line between Lephalale and Thabazimbi to the Boikarabelo mine. Protech Khuthele appointed Sandstorm Construction JV, a civil engineering and construction company, to be its sub-con-tractor responsible for the construction of six railway bridges along the line. By June this year, the first three bridges between the network stabilising facility and the road crossing at Steenbokpan had been started and were at various stages of con-struction. In the wake of Protech Khutele’s liquidation and to ensure that the con-struction of the bridges was undertaken by one company, Sandstorm was asked to tender on the completion of the three bridges before the end of 2014.

Ledjadja Coal – 74-% owned by Resource Generation – accepted the ten-der and the contract was awarded to Sandstorm, with RSV ENCO Consultants being appointed as the EPCM consul-tant to manage the contract on behalf of Ledjadja Coal.

Construction has also started on the permanent power supply system with new overhead lines, electrical switch room and transformer yard. In order to supply the mine site with power from the Eskom national power grid, 21,2 km of overhead power lines, a 132 kV substation and asso-ciated switchyard are needed.

At the beginning of September, Wilson Bayly Holmes-Ovcon Ltd started on site. WBHO has been appointed to complete earthworks for the rail network stabilisa-tion facility and mine earthworks for the power supply and construction offices.

Australian junior plans re-opening of PrestwoodASX-listed Prospect Resources has reported that it has entered into a conditional sub-scription agreement with South Africa’s NEF Trust to raise A$310 000. It intends apply-ing the funds to the redevelopment of the historic Prestwood gold mine in Zimbabwe. Prestwood – a very small operation histori-cally with recorded production of around 16 000 ounces at 33,1 g/t – lies within an almost contiguous block of claims covering 25 km2 of the gold-bearing Gwanda green-stone belt. The operational Farvic mine is located 4 km to the east.

Prospect Resources is in the process of

connecting mains power to the Prestwood site and a refurbished mine winder has been ordered. Once power is connected and the headframe completed, the com-pany intends rehabilitating the existing Prestwood shaft and continuing under-ground exploration and mine planning. Once this is completed, it is expected that limited scale mining will commence in parallel with continued exploration and resource definition.

The company is in the process of nego-tiating access (and possible acquisition on deferred terms) to an existing processing

plant which has an installed capacity of 70 t/d crushing and milling and 180 t/d CIP. There is an additional mill which can be added to the circuit to match the CIP capacity.

Prospect has completed a 1 281 m RC drill programme at Prestwood which has confirmed that the mineralised reef con-tinues below the historic workings. Five of the six holes drilled intersected the intact main reef down dip of the existing work-ings to 195 m below surface. In addition, high-grade intercepts from within the shallower shear zones have confirmed the prospectivity of the general area for open-pit operations.


MINING News

Australia’s Bannerman Resources, which is developing the Etango uranium project near Swakopmund in Namibia, has provided an update on the construction activities at its Heap Leach Demonstration Plant. The purpose of the pilot plant, which is being built on site at Etango, is to confirm the Definitive Feasibility Study (DFS) processing assumptions – in partic-ular the acid heap leach concept – and further de-risk the project.

Owned 80 % by Bannerman, the Etango project has proved and probable reserves total-ling 279,6 Mt at an average grade of 194 ppm for 119,3 Mlb of contained U

3O

8. Other uranium

mines and projects in the same area include the Rössing mine and the Husab project – cur-rently being built – to the north-east and the Langer Heinrich mine to the east. According to Bannerman, Etango ranks as the seventh largest uranium-only project in the world.

Commencement of site activities for the Etango demonstration plant (photo: Bannerman Resources).

Etango demo plant construction on track

Armadale, whose shares are quoted on AIM, reports it has been granted four mining licences covering the Mpokoto gold project in the south-west of the DRC’s Katanga Province. Mpokoto has a current total mineral resource of 678 000 oz gold from 14,58 Mt at 1,45 g/t Au at a cut-off grade of 0,5 g/t.

The company has recently announced the results of an Expanded Scoping Study for Mpokoto which demonstrates a post-tax NPV of US$55,3 million based upon a discount rate of 8 % and a gold price of US$1 250/oz.

Justin Lewis, Director of Armadale, said: “The grant of a full mining licence over the Mpokoto gold project is a critical accomplishment in our ambitious development schedule which targets initial commercial production in H1 2016. The grant of the licences also demonstrates the abil-

ity of our on-ground team at Kisenge to rapidly move the project through the development curve, in addition to the strong governmen-tal support that the company benefits from as Armadale looks to unlock the value of this highly attractive asset.

“In recent weeks we have achieved a number of important milestones relating to develop-ment at Mpokoto, including an updated and increased JORC mineral resource estimate, met-allurgical testwork results and an updated and expanded scoping study which we believe con-tinue to highlight the considerable economic and operational value of the project.

“Momentum continues to build at Mpokoto and we remain confident in our team’s ability to deliver a low capex, low opex gold project in the near term.”

Licences awarded for DRC’s Mpokoto project

Since the award of contracts for the pilot plant on 22 September 2014, activities to date have included establishment of the site infra-structure, preparation of the foundation and commencement of the civil construction of the 6 m high concrete cribs and the reagent mixing area, and blasting and hauling of the waste and ore samples to site.

The company has also begun rehabilitating the areas where the ore and waste rock samples were sourced from and has constructed the evaporation pond.

“The construction of the demonstration plant is on track for completion in early 2015 and it is anticipated that the first test results will be available during the June 2015 quarter,” comments Bannerman’s CEO, Len Jubber. He adds that the timing of the demonstration pro-gramme coincides well with the increase in the uranium price.

http://www.za.becker-mining.com/


MINING News

Eskom and Inyosi Coal sign MoU on New LargoEskom and Anglo American Inyosi Coal have signed a Memorandum of Understanding (MoU) regarding the development of the New Largo project for the supply of coal to the Kusile power station currently under construction near eMalahleni in Mpumalanga Province.

The MoU paves the way for the two companies to negotiate and conclude the commercial and technical aspects of the project. In parallel, they will further engage on the strategic empowerment impera-tives and objectives to achieve the Public Finance Management Act conditions which were part of the approval process from the

Department of Public Enterprises. Comments Themba Mkhwanazi, Chief

Executive of Anglo American’s coal busi-ness in South Africa and Chairman of Anglo American Inyosi Coal: “This MoU is a culmination of months of negotiations and enables the continued implementa-tion of the New Largo project. The purpose of this MoU is to affirm that, while both Anglo American Inyosi Coal and Eskom are broadly aligned regarding Eskom’s empowerment imperatives, we need to establish a framework within which we can co-operate and achieve a mutually benefi-cial outcome.”

Shanta Gold reports it has completed the LOM extension study for its New Luika Gold Mine (NLGM) near Mbeya in south-western Tanzania and that a third party review is being undertaken by AMC Consultants (UK) Limited.

Shanta is considering two possible scenarios: the maintenance of existing throughput capacity of 600 000 t/a with the commencement of a decline in early 2016 with the intention of commencing underground mining alongside open-pit operations during the second half of 2016; and an expansion scenario with the intro-duction of a third mill to increase capacity to 840 000 t/a. Such an expansion could be implemented relatively quickly should the

Shanta completes LOM extension study for New Luika

gold price environment and market condi-tions support it, says Shanta.

The initial report from AMC, while overall supportive of the LOM extension, has highlighted the fact that due to the nature of the orebody and its high-grade pay shoots, it would be prudent to drill a number of additional holes in those resource areas proposed to be mined by an underground operation below the Luika and Bauhinia Creek pits. The objectives of this infill programme would be to both further optimise the Bankable Feasibility Study and decrease the risk profile of the planned life of mine extension.

The additional drilling of approximately 5 000 m will be internally funded and will

be completed by April 2015 with the LOM extension to be announced shortly thereafter. Both Bauhinia Creek and Luika remain open at depth and Shanta is con-fident that the New Luika operation has significant potential to extend its life of mine both through opencast and under-ground operations.

The Bauhinia Creek push back is con-tinuing as scheduled and is expected to be largely completed by the end of 2015 pro-viding considerable operational flexibility for when the underground mining comes on stream in H2 2016.

Production in 2015 and the majority of 2016 will be from opencast operations. Shanta’s guidance for 2015 is for produc-tion of 83 000 to 85 000 ounces at all-in sustaining cash costs of US$830 to US$880 per ounce and back of mine cash costs of US$630 to US$680 per ounce.

Shanta reports it has continued to make positive progress with a number of poten-tial debt financiers on funding for the LOM extension. As at 31 October 2014, the com-pany had hedged 17 500 ounces to March 2015 at an average price of US$1 317 per ounce.

“As stated previously, the board is deter-mined to deliver a LOM plan at New Luika that delivers real value for shareholders while taking into account prevailing mar-ket conditions,” comments Shanta’s CEO, Mike Houston.

“The step to underground mining is fundamental to fully exploiting the resource at New Luika and we have worked through the process in some detail with our independent reviewer. They have advised that in their view with the nature of the orebody that some additional drill-ing would de-risk the project. The board and management are fully in agreement, particularly as the short delay to complete the drilling programme will not materially impact on the current production profile or overall LOM plan.

“Our current operations are progressing as planned with strong cash generation and we remain on target for the top end of our full year production guidance of 80 000 to 83 000 ounces. We have also provided positive guidance for 2015 on a 100 % opencast operation with costs trending down following a number of ini-tiatives implemented by management.”

The New Luika Gold Mine is located in the Lupa goldfield of Tanzania. Shanta is currently looking at two scenarios for extending the life of mine (photo: Bamboo Rock).


MINING News

Acacia Mining spreads its footprint to Burkina Faso LSE-listed Acacia Mining (formerly African Barrick Gold), whose cur-rent gold assets are in Tanzania, has announced that it has entered into an earn-in agreement with Sarama Resources, listed on the TSX-V. In terms of the agreement, Acacia can earn an interest of up to 70 % with the expenditure of up to US$14 million – over a number of staged payments – at Sarama’s highly prospective South Houndé project in Burkina Faso. Acacia may increase its interest in the project to 75 % on satisfaction of certain conditions relating to resource delineation.

The project comprises seven contiguous exploration licences covering a total area of 814 km2. Previous exploration by Sarama has identified a number of high-quality exploration targets which include the 1,5 Moz Au Tankoro resource. The project area is considered to have significant upside both in terms of ability to expand the existing resource and to discover new gold deposits.

Commenting on the transaction, Brad Gordon, CEO of Acacia, said: “Acacia’s entry into this transaction represents an exciting step in our continued efforts to expand our footprint throughout Africa. We are looking forward to working with the Sarama team, who have a proven track record in achieving results at the South Houndé project, and we will continue to assess exploration opportunities throughout the region that support our growth strategy.”

Sarama will act as the project manager under the guidance of a joint Technical Committee.

The project is located in the south-west of Burkina Faso, approxi-mately 300 km south-west of Ouagadougou and 90 km south-east of Bobo-Dioulasso, the country second largest city. Access to the area is via a major sealed bitumen road from Ouagadougou to Bobo-Dioulasso and then via a network of secondary and tertiary roads. The project area is sparsely populated.

The project is underlain by Birimian rocks of the Houndé Belt that consist of mafic to intermediate metavolcanic rocks and wide domains of volcaniclastic sedimentary rocks. The gold mineralisation identified to date on the South Houndé project is spatially related to quartz vein-ing within sheared and foliated meta-sedimentary rocks intruded by quartz-feldspar porphyry dykes.

Sarama has announced a maiden inferred resource at Tankoro (MM and MC Zones) of 1,5 Moz at 1,6 g/t Au. Oxide zones total approxi-mately 300 koz Au at 1,4 g/t Au, with potential to extend existing oxide zones and identify new zones. The MM and MC systems are believed to be open along strike and down-dip. It is also interpreted that sig-nificant potential exists to delineate additional ounces amenable to underground mining within high grade shoots.

Metallurgical test work on oxide ore has returned a 93 % recovery using conventional CIL, with the fine nature of the gold provid-ing excellent leach kinetics. Column leach test work on oxide ore indicates recoveries of approximately 85 %, with 80 % of the gold recovered within 10 days. In fresh ore, gold is typically fine (


MINING News

Wescoal makes key mining appointmentBonani Siko has been appointed General Manager at Wescoal Mining, a division of Wescoal Holdings Limited, the junior min-ing and trading group. He heads operations at the Khanyisa and Intibane collieries. In the first quarter of 2015 he will also take over the management of Wescoal Mining’s ‘flagship’ operation, Elandspruit.

He brings a wealth of experience with some 15 years in the mining field to Wescoal. Prior to his appointment, he launched the HCI Mbali coal mine as Mine Manager and

credits much of his experience to over a decade with the BHP Billiton group.

“I aim to play a very significant role in growing of the Wescoal mining business from its current junior miner status to a sustainable business through successful sourcing and integration of longer term mining rights and their operations,” he says.

Siko holds a National Diploma, National Higher Diploma and a BTech in Mining Engineering. He also has a Mine Manager’s Ticket of Competency.

Canada’s Forsys M eta l s Co r p h as announced the completion of a metal-lurgical report by SGS South Africa. This study is a major component of the com-pany’s Norasa uranium project Feasibility Study (FS) being prepared by AMEC Foster Wheeler and slated for completion in Q1 2015. The project is located in Namibia.

Highlights of the metallurgical study compared with the 2013 Engineering Cost Study (ECS) include an overall ura-nium recovery increase to 91,3 % from 85,0 % and a decrease in projected leach acid consumption by 36,8 %. Additionally, the report indicates: a 31,5 % decrease in consumption of leach oxidant, as well as better utilisation as a result of a change to

Norasa metallurgical study delivers “outstanding results”

the use of hydrogen peroxide from man-ganese dioxide; zero iron addition required in leach once steady state operation is achieved due to the iron content of the ore being sufficient; and a 36 % reduction in the filtration area.

Other benefits over the ECS include a three times higher loading of the IX resin resulting in a reduction in the size of the IX circuit and downstream SX circuit, a 22 %

Valencia pit design – isometric view from the NNE with the higher grade resource blocks within the pits. Mining licence boundary shown in red.

reduction in the number of belt filters and a 20 % reduction in the number of NIMCIX parallel trains.

“The completion of the SGS report is an important milestone towards completing the FS and the development of the Norasa project,” said Marcel Hilmer, CEO of Forsys Metals. “We expect that these outstanding results will translate into lower operating costs and reduced plant complexity. Our expectation is that the integration of these metallurgical study outcomes in the FS will result in improved economics for the Norasa uranium project.”

According to Forsys’ NI 43-101 Technical Report on the project, published in 2014, Norasa will be developed as an open-pit mine (the main pit being Valencia) at an estimated capex of US$329 million. A plant throughput of 11,2 Mt/a is projected deliv-ering 5 Mlb/a of product.

The Valencia deposit is situated approx-imately 80 km from the coastal town of Swakopmund. It is 35 km along strike from Rössing uranium mine, which has been in production for over 30 years, and 50 km north of the Langer Heinrich uranium mine. The project is fully permitted includ-ing all environmental approvals. In August 2008, the Namibian government issued a 25-year mining licence for the mine.

The project has reserves of 79 Mlb at a grade of 202 ppm and total M&I resources of 103 Mlb at 197 ppm.

LSE-listed Kenmare Resources, which oper-ates the Moma Titanium Minerals Mine in Mozambique, has appointed Ben Baxter

Kenmare Resources appoints COOas Chief Operations Officer. He will join Kenmare in early January 2015 from Rio Tinto. Jacob Deysel, the current COO, will step down from his position at the end of the year (2014) to pursue other opportuni-ties, though Kenmare says it will retain the benefit of his expertise on a consulting basis.

Baxter has held a broad range of posi-tions at Rio Tinto’s Richards Bay Minerals. He took on the role of General Manager Operations of the Rio Tinto QMM mineral sands mine in Madagascar in 2009, over-seeing a significant increase in production volumes. In 2013, he returned to Richards Bay as General Manager Mining. He holds a BSc in Applied Geology from the University of Leicester and an MSc in Mining Geology from the Camborne School of Mines.


MINING News

According to Canada’s B2Gold Corp, con-struction at its Otjikoto gold project near Otjiwarongo in Namibia remains on time and on budget and is estimated to be 95 % complete. The first gold pour should have taken place by the time this magazine is in print, with the first full-year of production being 2015.

In its report on its third quarter (to 30 September 2014), B2Gold says mining activities have progressed as planned and both high and low grade ore are currently being stockpiled in anticipation of final plant completion.

The power plant was commissioned in October and is now operating. The crushing and milling circuit started com-missioning in mid-November and was due to start processing material in early December (on schedule). The tailings facil-ity is materially complete and all tailings and return water lines to and from the facility have been completed and tested. All tanks have been filled with water and all

Otjikoto gold project all but completeproduction wells are ready for mill start-up.

It is anticipated that the new mine will employ approximately 530 full-time employees during steady state operations. The project has enjoyed an excellent health and safety record with over 2,5 million man hours without a Lost Time Accident having been worked as at the end of the September quarter.

Surface mine development has also progressed well. Ore mining commenced in June and activities have focused on building the ore stockpiles in preparation for feed to the plant. Project-to-date min-ing is in line with budget and stands at 12,7 Mt of total rock mined.

Pre-production expenditures for the nine months ended September 30, 2014 totalled approximately US$140 million (on a cash basis). Total construction and development costs remain in line with the Otjikoto feasibility study released in February 2013, including pre-develop-ment costs of US$244 million and deferred

stripping estimates of US$33 million. The Otjikoto feasibility study also assumed that a further US$60 million in mobile mining fleet and power plant costs would be lease financed.

Otjikoto is expected to ramp up to full production capacity in the first quarter of 2015. For 2015, the mine is expected to produce between 140 000 to 150 000 ounces of gold at a cash operating cost in the US$500 to US$525 per ounce range. Once the planned mill expansion is com-pleted in the third quarter of 2015, B2Gold expects that annual gold production from the main Otjikoto pit will increase signifi-cantly to approximately 200 000 ounces in 2016 and 170 000 ounces in 2017.

Otjikoto’s gold production will also be enhanced by the development of its Wolfshag zone, adjacent to the main Otjikoto pit. B2Gold expects to complete an updated indicated resource study in the first quarter of 2015 along with an updated mine plan by the end of 2015 which will evaluate open-pit and underground min-ing at Wolfshag.

http://www.novatek.co.za/

COVER STORY


AEL, which says it is the largest supplier of explosives technol-ogy and initiating systems in Africa, comprises 16 businesses complemented by production

facilities. Alongside annual sales of more than R6 billion, the company has offices through-out Southern Africa, Africa, and select inter-national regions in South East Asia, South America and Europe.

Using world-class technologies, AEL unearths wealth in the countries in which it operates, providing world-class mining solutions in all key mining, quarrying and construction environments including opencut, opencast and underground massive applica-tions, among many others.

Through a seamless system of organisations, people, technology, information and resources

involved in moving products and services, AEL also provides clients with a competitive advantage by creating and deploying what it describes as “an agile, visible, measurable and integrated Global Supply Chain.”

Product offerings AEL offers the latest generation products and services for blasting operations. These include electronic detonators, centralised blasting sys-tems, shock tube systems, boosters, detonator cords, capped fuse and blasting accessories.

The company produces and supplies ammo-nium nitrate and ammonium nitrate solution from its own manufacturing plants. Its bulk emulsion manufacturing plants also provide the group with the capacity to produce and deliver timeously, even when volume demand increases.

Another innovative product from AEL is the enhancement electronic detonator, the CE4 tagger. This is the next generation of tagging devices which aims to revolutionise blasting in the mining and construction industry through

AEL’s blasting solutions based on plus 100-year track record

Centre: AEL’s Shock Tube Uni-Delay LP Vivid being used in a typical under-ground application.

Below: AEL’s Mobile Manu-facturing Unit (MMU).

AEL Mining Services, a member of the JSE-listed AECI Group in South Africa, is a leading developer, producer and suppli-er of commercial explosives, initiating systems and blasting services for mining, quarrying and construction markets in

Africa and Indonesia. Since its establishment in 1896, the company has become one of the world’s leading suppliers

of explosives and initiating systems.

COVER STORY


AEL’s blasting solutions based on plus 100-year track record

ease-of-use, simplicity, visibility, productivity and robustness.

The CE4 tagger was launched by AEL in part-nership with DetNet early this year (2014) after both companies identified the growing demand from the market. According to Liesel De Villiers, Executive Director of the Technology Group at AEL Mining Services, the CE4 tagger is able to tag devices with enhanced functionality and offers an improved user interface.

Another technological innovation that the company takes pride in is the best-selling DigiShot Plus, which is widely used in lead-ing mining markets in the world. The DigiShot Plus is suitable for large scale blasting opera-tions and offers remote firing capability – up to 3 500 m line of sight – providing blasters the additional protection of distance.

The DigiShot Plus is also capable of initiat-ing up to a maximum 1 800 total detonators per blast and up to 15 detonators per hole.

Research and development AEL has over a century of expertise and

knowledge in developing ground-breaking and innovative blasting solutions and reports that it continuously develops cutting edge technology by investing significantly in research and devel-opment to bring innovative solutions to the evolving mining and quarrying environments.

Not only does it maintain a large team of leading engineers and scientists but it also partners with academic institutions to conduct fundamental research that will ultimately ben-efit industry.

The company embarked on the Initiating Systems Automation Project (ISAP) in 2006 and has designed, built and commissioned a high speed automated assembly line to deliver high volumes of shock tube product within a significantly reduced cycle time relative to existing manual processes. The project entailed various stages of automation starting with the manufacture of detonators right through to the assembly of final products sold to the market.

AEL’s Research and Development depart-ment has pioneered and patented many world firsts, one of them being the world’s first com-mercial pyrotechnic spray-drying plant, which will provide all the delay powders that the company needs for its new multi-million rand automated assembly plant.

The company looks at the development of explosives technology with a view that it also considers the environment around it as well as the reduction of its carbon footprint, whilst also improving production output and ensuring quality performance.

This has been achieved through a number of innovations including the re-use of oils to create explosive energy. This process involves three methods of disposing of waste oil, namely: incineration, purification to original quality and blasting.

Health and safety AEL says it is firmly committed to ensuring that all its activities are conducted safely to mini-mise risk to employees, contractors and the public. With this in mind, it embraces a safety culture throughout the group and strives for exemplary performance in the safety and health fields, including the development, manufac-ture, storage, distribution, testing, destruction and use of explosive initiating systems, bulk explosive and nitrogen-based chemicals.

As a leading explosives company in Southern Africa, and one of the leaders in

The DigiShot Plus is also capable of initiating up to a maximum 1 800 total detonators per blast and up to 15 detonators per hole.

http://www.miningindaba.com/

COVER STORY


the world, it works in close co-operation with external organisations and experts, promot-ing and maintaining open and constructive dialogue with employees, local communities, regulatory agencies, business organisations and any other affected or interested parties.

AEL also utilises expert opinions, including auditing of current safety and health regimes and systems, as well as advising key role play-ers on improving current safety and health programmes. To ensure that users comply with all local regulations when using its products, the company provides product specific training to all of its customers.

Environment According to AEL Mining services, one of its core values is to strive to continually improve the sustainability of its environmental perfor-mance. With myriad businesses in the group, it ensures that its environmental policy, stan-dards, programmes and initiatives are rolled out in sites in South Africa, the rest of Africa, South East Asia and South America.

AEL is also signatory to the Responsible Care initiative under the stewardship of the

Chemical and Allied Industries’ Association in South Africa. The Responsible Care man-agement practice standards form part of the environmental management system and their implementation has been externally verified at the Modderfontein site, the largest of AEL’s manufacturing sites.

DigiShot Plus in use on the bench in an open pit.

http://www.brelko.com/

GOLD


The Definitive Feasibility Study (DFS) for the project, undertaken by independent consultant Min-ing One, confirms an attractive re-turn for Acacia at current reserve

pricing. The project will utilise the on-going exploration decline in the Gokona pit and will require total pre-production capital expendi-ture of US$37 million (including the cost of the exploration decline). Further upside exists beyond the initial life of mine, with potential for lateral extensions as well as the miner-alisation remaining open beneath the 300 m

vertical depth cut off used in the DFS.According to Acacia, the project will also

help reduce the ‘footprint’ of the mine and help “mitigate the continuing impacts of issues regarding land acquisition and concurrent rehabilitation.”

The genesis of the project dates back to October 2013 when Acacia management decided to defer the mining of Gokona Stage 3 via an open pit whilst undertaking a study into the potential to mine the reserve via an under-ground operation. Following the completion of a Scoping Study that showed positive results, Mining One was appointed in H1 2014 to con-duct the DFS into the potential underground operation.

In conjunction with the progression of the DFS, management also advanced the develop-ment of the Gokona underground exploration portal, designed to provide access for fur-ther geotechnical evaluation and allow bulk sampling to be conducted in order to test the

Acacia’s North Mara mine to add underground operation

LSE-listed Acacia Mining (formerly African Barrick Gold) has approved the Gokona underground project at its North Mara mine in northern Tanzania. The project is expected to

produce 450 000 ounces over a five-year life of mine, with all in sustaining costs (AISC) of under US$750 per ounce. First

ore from the underground operation is expected in H1 2015.

GOLD


Plan of Gokona Underground. The mine will have two major declines. One portal will access the eastern material, with a second portal accessing mineralisation at the western end of the Gokona pit.

Acacia Mining has delineated a further substantial inferred resource (estimated at 761 koz) beneath 990RL, to be tested by staged drilling from underground platforms.

The processing plant at North Mara has a nameplate capacity of 2,8 Mt/a.

behaviour of underground material when pro-cessed through the plant. It is not expected that there will be a significant difference from the Gokona open-pit material processed to date.

In the DFS model, pre-production capital predominantly consists of the development costs of the access portals together with the assumption that Acacia purchases new mining equipment for the project.

It should be noted that due to the project utilising existing infrastructure at North Mara, operating costs have been calculated on an incremental cost basis. Therefore it is only the additional costs required to mine and pro-cess the underground material that have been included in the model rather than fully allocat-ing mine site costs across the project.

The DFS shows that the project can deliver a post-tax NPV, using a 5 % discount rate, of US$161 million. This compares to the cur-rent carrying value of the Stage 3 open pit at Gokona of US$95 million. In addition, the proj-ect delivers a short payback period of 1,6 years, calculated from the first spend on the explora-tion decline in July 2014.

Underpinning the underground project are proven and probable reserves of 1 989 kt at a grade of 8,07 g/t (516 000 koz). In the year end 2013 reserve and resource statement, Stage 3 of the Gokona pit amounted to 584 koz at 5,7 g/t. The new underground reserves

GOLD


Open-pit mining at North Mara. The mine has two pits, Gokona and Nyabirama, but Acacia has now announced plans to transition Gokona into an underground mining operation.

effectively replace those Stage 3 ounces, which means that there has been a reduction of approximately 68 koz of reserves at North Mara, although the NPV of the underground reserves is 69 % higher than if the Stage 3 open-pit option was chosen.

In order to optimise productivity and mini-mise the amount of level development, the mine will have two major declines within the mine plan. One portal will access the eastern material, with a second portal accessing min-eralisation at the western end of the pit. The eastern decline is currently being developed as an exploration portal and has been developed to a length of 120 m to date.

Development, and subsequently mining, will initially proceed using a specialist mining con-tractor, Byrnecut, which is already operating at North Mara as the exploration portal develop-ment contractor. Under the DFS, equipment required for the operation will be purchased by Acacia, but management is exploring the opportunity to source equipment from redun-dant Acacia operations and/or hire equipment from Byrnecut.

The mining method utilised in the opera-tion is long hole open stoping with Cemented Aggregate Fill (CAF). This is a well-known method with limited technical complexity. Byrnecut is expected to be in place as the min-ing contractor for at least the initial period of three years, further reducing technical risk.

It is anticipated that the material from the Gokona Underground will be blended with the lower grade ore from the Nyabirama open pit in order to fill the process plant at North Mara, which has a nameplate capacity of 2,8 Mt/a. The high-grade material from the Gokona Underground will be preferentially treated and will not be stockpiled. Recoveries of the underground material are expected to be in the region of 88 %, which – when combined with the lower grade Nyabirama material – will lead to recoveries of between 85-87 % for the mine as a whole.

The DFS solely looked at mineralisa-tion above 990RL (or 300 m vertical depth). Historical drilling shows that mineralisation extends down to 900 m vertical depth and there are estimated to be inferred resources of 761 koz ounces at a grade of 7,66 g/t (using a 4,0 g/t cut-off grade and a gold price of US$1 500 per ounce) beneath 990RL. It is anticipated that as the exploration portal and the underground mine progress there will be increased access to drilling locations to poten-tially upgrade inferred ounces to extend the life of mine beyond five years.

Following the approval of the Feasibility Study, Acacia says it will now submit applica-tions for outstanding permits in order to start mining via the underground operation. Whilst the permitting activity is ongoing, it will con-tinue to progress the exploration decline in

GOLD


order to provide a better understanding of the orebody, whilst completing detailed design of the underground mine. It anticipates receiving approvals to commence mining operations in H1 2015.

Acacia is the biggest gold miner in Tanzania and has three producing mines – Bulyanhulu, Buzwagi and North Mara and a portfolio of exploration projects in Tanzania and Kenya. Bulyanhulu is an underground operation with a life of mine in excess of 30 years while Buzwagi is a low-grade bulk deposit with a single large open pit. North Mara will now evolve into a partly underground operation. Buzwagi has a five-year life of mine and North Mara a nine-year life of mine.

Production from the three mines in 2014 is expected to be in excess of 700 koz, rising to above 750 koz in 2015. Acacia – headed by CEO Brad Gordon, who was appointed in August 2013 – is currently performing well at an oper-ational level and has enjoyed eight successive quarters showing a reduction in costs. The company is a major contributor to Tanzania’s economy, accounting – in 2013 – for over 3 % of the country’s GDP.

In its first move beyond the East African area, Acacia has recently announced that it has entered into an earn-in agreement with TSX-V-listed Sarama Resources, which will allow it to earn up to a 70 % interest in Sarama’s South Houndé gold project in south-west

Burkina Faso (see page 15 of this issue). Acacia was established in 2010 as an

independent listed vehicle for Barrick Gold Corporation’s Tanzanian assets. The change of name from African Barrick Gold to Acacia Mining which has just taken place is designed to position Acacia as “a leading independent mining company in Africa” and differentiate it from Barrick Gold (which remains the major-ity shareholder in the company, with a roughly 64 % interest).Photos courtesy of Acacia Mining

Summary of the key parameters of the Gokona Underground DFS

PhysicalsLife of mineTotal tonnesTotal ore tonnesTotal development metresAverage gold gradeCalculated recoveryTonnes processedGold produced

Yearsktkt

kmg/t%kt

koz

52 9811 991

17,78,06

88 %1 991

453Life of Mine Operating Costs and Capex1

Pre-production capitalTotal capitalMining cost per tonne minedMilling cost per tonne of ore processedG&A cost per tonne of ore processedCash cost per ounceAISC per ounce

$m$m$/t$/t$/t

$/oz$/oz

37130

511811

418705

1 The accuracy of this cost model is estimated to be within the required plus or minus 15 % variance.


PLATINUM

Friedland, who founded the original Ivanhoe Mines in 1994 and uses his private holding company, Ivanhoe Capital Corporation, to help pro-vide venture capital and pro ject fi-

nancing for international resources enterprises, said in a statement released recently by Ivan-hoe that he was confident that Platreef would come to symbolise a new era in South Africa’s third century of discovery and mine building.

“For a long time now, the development of our

Platreef project has been a destiny waiting to be fulfilled. It is said that great mines are ‘made’, as much as they are ‘found’. Now, thanks to the support of our partners – including the black economic empowerment beneficiaries repre-senting the residents of 20 eligible Mokopane area communities, our eligible employees and South African entrepreneurs, plus our Japanese investors – Ivanhoe’s Platreef team is ready to begin building another great mine. All of our stakeholders will share in the realisation of the promise of our discovery on the Platreef,” said Friedland.

According to Friedland, the Platreef story began more than 20 years ago when Bill Hayden, the Australia-based international geologist who founded Platreef Resources in 1988, approached Ivanhoe Capital to discuss potential exploration financing. “We first met in 1993, one year after he had lodged his second application in South Africa for prospecting rights to the Turfspruit and Macalacaskop properties north of Mokopane that, as we now know, hold the mother lode

Mining right activation clears the way for Platreef restart

The Platreef site near Mokopane. Operations on site were suspended in May 2014 but – with the mining right activated – are now resuming.

With the mining right for the Platreef project near Moko-pane having recently been finalised, Ivanhoe Mines Execu-

tive Chairman Robert Friedland and Chief Executive Officer Lars-Eric Johansson have confirmed that preparations have begun for a resumption of site work – suspended earlier this

year (2014) – for the construction of the initial production shaft at the site. This forms part of the first phase of devel-

opment of the planned underground mine at the project on the Bushveld’s Northern Limb in Limpopo Province.


PLATINUM

Mining right activation clears the way for Platreef restart

The Shaft #1 winding gear has been fully upgraded.

Earthworks underway at the Platreef site.

for our Platreef project,” said Friedland.“Mr Hayden’s pitch coincided with prepa-

rations by one of Ivanhoe Capital’s affiliated companies, African Minerals Corp, to organise its own reach for opportunities in Southern Africa’s mineral fields. We discovered we shared a keen interest in finding a door to South Africa’s platinum club on the Bushveld.

“We agreed that an Ivanhoe holding com-pany would acquire a 51 per cent stake in Platreef Resources. Mr Hayden, Platreef’s Managing Director, also joined the African Minerals management team in 1993 and later became the company’s president in 1996.”

In January 2000, the Platreef Resources sub-sidiary finally received its prospecting permit for Turfspruit and Macalacaskop, authorising the company’s search for base and precious metals.

“Early years of exploration identified a sig-nificant, shallow resource of platinum-group metals mineralisation. But it was the com-pany’s decision to launch a deep exploration programme in 2007, prompted by deep-drilling

success reported elsewhere on the Platreef, which led to the breakthrough discovery of the Flatreef deposit three years later,” Friedland said.

“Flatreef was a prize right out of a geologist’s dream, in more ways than one. It particularly held special significance for our project man-ager, geologist Sello Kekana, who was born and raised on the very same Turfspruit farm in Limpopo where the discovery was made.

“The tremendous size and remarkable thick-ness of the Flatreef deposit is continuing to be revealed as a game-changing development for the platinum industry in South Africa. It also


PLATINUM

Work on the shaft and related mining plant components will take place within the 20-hectare, fenced construction compound.

is a company-maker for Platreef Resources. Although recently renamed Ivanplats (Pty) Ltd, the company preserves its singular, 26-year quest firstly to discover the mineral trove and now to develop the Platreef project.”

Formal notifications of a return to work have been provided to provincial authorities and landowners, in accordance with estab-lished requirements. In a coordinated ramp-up of preparations, plant and earthmoving equip-ment is being moved back on to the site of Platreef’s first planned shaft.

Work at the site was halted on 26 May 2014 pending the receipt of an executed mining right, or licence, for the development and operation of the mine. While the mining right was granted 30 May, its formal activation by the Department of Mineral Resources was only completed on 4 November following the company’s satisfactory completion of a number of conditions, which included an approved, broad-based black eco-nomic empowerment structure, representing communities, employees and entrepreneurs, which now holds a combined 26 % interest in the project.

Ivanhoe CEO Johansson said that a principal priority continues to be the completion of the excavation at the boxcut to establish access for the construction of the large concrete surface collar for Shaft #1. The collar also will serve as a base that will anchor the headframe structure and house the ventilation opening.

Work on the shaft and related mining plant components will take place within the 20-hect-are, fenced construction compound that has

been designed to enhance worksite safety, minimise impacts on residential areas and con-tribute to the effectiveness of environmental management programmes.

Shaft #1 will have an internal diameter of 7,25 m, with an annual hoisting capacity of 2,5 Mt. It is projected to reach a total depth of 975 m in 2018. In the interim, it is planned to be used in 2017 to collect a mineralised bulk sample for metallurgical testing from the 800-m level of the project’s Flatreef deposit.

Upgrading work on the stage and hoist wind-ers for the sinking phase of Shaft #1 has been completed and steel fabrication for the head-gear has commenced. The sinking contractor for the shaft is Aveng Mining.

Work is also proceeding on primary com-ponents for Shaft #2, the 10-m diameter main production shaft that will be capable of hoist-ing 6 Mt/a and which will be fitted with a 150-person equipment cage. Murray & Roberts Cementation has begun the design and engi-neering of the headgear and early works are expected to begin in the first quarter of 2015.

“The combined operation of shafts one and two is designed to give Platreef its phase two, base-case production capacity of 8 million tonnes per year, which we plan to follow with a third phase of expansion to reach a steady-state production rate of 12 million tonnes per year,” Johansson said.

An independent preliminary economic assessment (PEA) released in March 2014 outlined a phased approach to Platreef’s devel-opment, beginning with a first phase production

“The height of an average ‘long hole’ mining stope at Platreef would be equivalent to a stack of 20 narrow Merensky reefs that are being mined by other companies on the Bushveld.”

Mark Farren, Ivanhoe’s Executive Vice President of Operations


PLATINUM

Flatreef cross section. The highest grades occur at the top of the Platreef.

of 4 Mt/a to establish an operating platform to support future expansions. It predicted an annual production of 785 000 ounces of plati-num, palladium, rhodium and gold estimated for

Documents

MODERN MINING - Crown Publications · 2014. 12. 12. · 1 Mt of kimberlite over a two-year period and, according to an independent report, is expected to lead to the recovery of over