Modern Mining November 2015

November 2015 Vol 11 No 11 www.crown.co.za M ODERN MINING IN THIS ISSUE…

 Vanggatfontein coal mine performing well  Randgold quarterly production at record level  Design of Platreef headframe completed  Feature: Consultants/project houses

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MODERN M I N I N G

CONTENTS

NOVEMBER 2015

ARTICLES

REGULARS MINING NEWS 4 Platinummine to deliver first concentrate in January 2016 5 Weatherly to investigate increasing Tschudi’s capacity 6 Masimong Group to acquire majority stake in Liviero 7 New Liberty back on track after crusher outage 8 Pilot plant for rare earth project operational 10 True Gold on track for gold production at Karma 11 Potential for diamond-bearing alluvial deposits at Lerala 12 Mustang reports“robust”diamond recoveries at Save River 13 ‘Preferred Contractors’appointed for Ethiopian gold project 14 Kumba’s production increases quarter on quarter 15 Black Rock Mining acquires Bagamoyo graphite project 16 Tongon gold mine passes major milestone PRODUCT NEWS 52 Latest generation Cat backhoe loader released 53 Osborn secures order to supply Kibali gold mine 54 SEW-EURODRIVE enhances its service offering 55 Joest Kwatani expands to Botswana 56 Lock-out systems minimise risk 57 Komatsu and RentWorks launch KomRent 58 Aury Africa introduces mini vibrating screens 59 Machine launches feature at Powerscreen open day 60 Faster, safer tyre change-outs with Cat wheel rims COVER 18 Advisian – redefining the advisory and consulting services industry COAL 22 Keaton Energy’s flagship mine“running like a dream” GOLD 28 Record-breaking quarterly performance by Randgold Resources PLATINUM 35 Design of high-tonnage headframe completed FEATURE – CONSULTANTS/PROJECT HOUSES 36 Bara Consulting thrives despite the mining downturn 42 Broad range of specialised skills give VBKom the edge 47 SRK turns EIA challenge into an opportunity 48 Fluor puts down roots in Botswana 50 BBE celebrates 25 years in business

Editor Arthur Tassell

Advertising Manager Bennie Venter e-mail: benniev@crown.co.za

Design & Layout Darryl James

Circulation Karen Pearson Publisher Karen Grant

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Printed by: Shumani Mills Communications

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

Published monthly by: Crown Publications cc P O Box 140,

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Bedfordview, 2008 Tel: (011) 622-4770 Fax: (011) 615-6108 e-mail: mining@crown.co.za www.modernminingmagazine.co.za

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Cover Main shaft headgear at Wesizwe’s Bakubung platinum mine. Worley­ Parsons is the EPCM contractor on the project. See page 18 for an article on Advisian, the new advi­ sory and consulting services arm of WorleyParsons.

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Average circulation (April–June 2015) 4 370

November 2015  MODERN MINING  1

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COMMENT

A ‘must-have’ guide to South Africa’s top geosites

G reat to see that my old friend Gavin Whitfield, co-author with Nick Norman of the very success- ful Geological Journeys: A Trav- eller’s Guide to South Africa’s Rocks and Landforms , has once again put pen to paper to produce another indispensable book for anyone interested in South Africa’s geology. His latest work, which was launched recently at a well-attended function at the ‘War Museum’ in Johannesburg, is entitled 50 Must- see Geological Sites in South Africa . Lavishly illustrated with nearly a thousand high-qual- ity photos (and superb maps and diagrams), it ‘unpacks’ South Africa’s premier geosites, giving information on each site’s history and geological significance. As Gavin himself says, any list of this type is bound to be somewhat subjective but I think few would disagree to any significant extent with his selection, which covers South Africa’s unique geological record from nearly 3,6 billion years ago to ‘recent’ times. Some of the sites featured are – or were – mines, for example Kimberley’s Big Hole, the Cullinan diamond mine and the old Eersteling gold mine. Others – the Sudwala Caves, the Tswaing Meteorite Crater, the Knysna Heads and Table Mountain, to name just a few – have no connection whatsoever to mining. All, how- ever, are of compelling geological interest and all are accessible to the public. This, incidentally, is not a book aimed at geologists (though they would, I’m sure, find it of huge interest). The target market is rather the interested lay person and Gavin points out that he has kept geological jargon to a minimum. Having said this, there is an exceptionally good section at the beginning of the book which is a quick guide – it’s almost a miracle of com- pression – to the field of geology, as well as a glossary of all the geological terms used in the text. Gavin, of course, is the ideal person to write a guide of this type. He has an MSc in Geology from Rhodes University, is a retired Fellow of the Geological Society of South Africa, and – earlier in his career – carried out mineral exploration in the field in many countries for a number of mining companies. In recent years

he has focused on the emerging geotourism sector – he is a qualified national tourist guide – and can fairly claim to be one of the pioneers in this field. To put together 50 Must-see Geological Sites in South Africa , he visited every single site himself over a period of three to four years, so readers can be assured that the text is fresh and not simply a distillation of previously pub- lished material. The book was introduced at the launch by Professor Richard Viljoen, who (along with his twin brother, Professor Morris Viljoen) is one of South Africa’s best-known geologists. He said its publication was very timely, given

that South Africa would be hosting the 35th International Geological Conference in Cape Town next year. This is an event which is expected to attract sev- eral thousand delegates, many of whom will be participating in pre- and post-congress tours. Getting back to the book, it’s not the type of publication that one necessarily reads cover to cover in one go. Having said this, I’ve already devoured most of the entries on mining sites and particularly enjoyed those on the Cullinan mine, which has produced a staggering 120 million carats of diamonds over its life, and

the old Koperberg copper mine near Springbok in Namaqualand. Koperberg (‘copper moun- tain’) can reasonably claim to be South Africa’s oldest mine, since it was first investigated for its mineral potential in 1685, when at least three prospect shafts were put into the moun- tain. This is the only mining site in the guide that I haven’t personally visited so it will be top of my list of things to see when I next visit that part of the world. Readers interested in getting a copy of 50 Must-see Geological Sites in South Africa shouldn’t have to look too hard. It is published by Struik Nature at a price of R300 and is cur- rently available in most bookshops. It is a superb piece of work and I hope it receives the success it so richly deserves. Arthur Tassell

November 2015  MODERN MINING  3

MINING News

Primary crusher and conveyor system at Project 1 (photo: Platinum Group Metals).

Platinum Group Metals, listed on the TSX and NYSE, reports that it has deliv­ ered notice to Sprott Resource Lending Partnership for the drawdown of a US$40 million working capital facility executed Platinummine to deliver first concentrate in January 2016 US$40 million loan facility, subject to regulatory and disinterested shareholder approval and Waterberg project partner approval. in February 2015. The company has also entered into agreements with its larg­ est shareholder, Liberty Metals & Mining Holdings, LLC, a subsidiary of Liberty Mutual Insurance (LMM), for a further

These financings are planned to allow PlatinumGroup to complete its ramp-up at the WBJV Project 1 platinum mine (Project 1) in the Western Bushveld of South Africa and for general working capital. Cold com­ missioning of the plant is in progress and platinum and palladium concentrate pro­ duction is set to commence in the weeks ahead. First concentrate delivery to Anglo Platinum’s Waterval smelter at Rustenburg is planned for January 2016. Underground development is ongoing. PlatinumGroup says it has delivered the construction and development of Project 1 within the updated budget and schedule. At planned steady state production in 2018, Project 1 is expected to be one of the lower cost conventional PGM mines in South Africa with an expected cash cost of approximately US$625 per 4E ounce. The company continues to work on growth at the large Waterberg project, funded by the Japan Oil, Gas and Metals National Corporation, with continued drilling, resource modelling, mine design, metallurgy and infrastructure planning all underway. Exploration to expand and further delineate Waterberg is ongoing. Waterberg is dominantly a palladium deposit with associated platinum, gold, copper and nickel. 

Lwazi Capital acquires 30 % of DigbyWells Graham Trusler, CEO of Digby Wells Environmental, a multinational environ­ mental and social advisory consultancy, recently announced the 30 % acquisition of its issued share capital by Lwazi Capital, a majority black women owned and man­ aged company. This transaction makes Digby Wells compliant with the require­ ments of the South African Mining Charter

and new DTI Codes of good practice with respect to ownership. DigbyWells provides environmental and social services to the mining, resources, energy and agricultural sectors across Africa. Over the past five years, the com­ pany’s expansion plans have advanced, with offices being opened in the UK, Jersey (Channel Islands), Mali and the DRC. “This transaction has taken a long time to come to fruition, as we wanted to get it right and ensure that we have a suitable partner who shares in the company vision and who we are happy to work with in advancing the company’s growth plans,” said Trusler. “Lwazi Capital was established with a clear purpose in mind: to work in partner­ ship with company management and other shareholders to grow and add value to the companies we are invested in. Digby Wells Environmental has a solid track record; management has experience and passion for the business. The environmental and social sectors are attractive us, as business and legislation deal with these as sustain­ able business principles,” said Nombini Mehlomakulu, MD of Lwazi Capital. 

Shaking hands on the transaction are Nombini Mehlomakulu, MD of Lwazi Capital, and Graham Trusler, CEO of Digby Wells.

4  MODERN MINING  November 2015

MINING News

Weatherly to investigate increasing Tschudi’s capacity

Weatherly International, which owns copper mines in Namibia and is listed on London’s AIM, increased its production for the quarter ending 30 September 2015, being the first quarter of the finan­ cial year ending 30 June 2016. It also reports it is considering increasing the capacity of its new Tschudi project in northern Namibia. In September, the company, which – apart from Tschudi – owns the Otjihase and Matchless mines in the Windhoek area, increased its quarterly production guidance by 15 % from an average of 1 000 tonnes per month to an average of 1 150 tonnes per month of copper cathode. This revised guidance level was exceeded by a further 3 %, with produc­ tion averaging 1 185 tonnes per month. Production for CY2015 is now expected to reach approximately 10 400 tonnes of copper cathode, a 4 % increase above the previously advised level of 10 000 tonnes. Having operated at in excess of 80 % of design capacity for a full quarter, Weatherly has now confirmed that Commercial Production status has been achieved at Tschudi and says that from 1 October onwards revenue and operating costs at Tschudi will no longer be capitalised. Weatherly is currently updating resource and reserve estimations for Tschudi as of 30 June 2015. These esti­ mates, it says, will be combined with all mining and processing experience gained to date in order to produce updated min­ ing and processing schedules.

The Tschudi heap leach, SX/EW copper project in northern Namibia.

As announced in May, recruitment efforts have been ongoing for a General Manager for Tschudi, and Weatherly reports it has now appointed Peter Christians to the position, commencing work in December. Christians is a Namibian mining engi­ neer with over 30 years of international mining experience. His most recent role was Country Manager and MD for Reptile Uranium Namibia, a subsidiary of ASX- listed Deep Yellow Limited. He has held senior management positions across the globe in Namibia, Tanzania, Russia, Mali, Ghana, Australia and the USA with com­ panies including Rio Tinto, AngloGold Ashanti, Bannerman Resources, Uranium One, ARMZ and Gold Fields. On the subject of Tschudi, Weatherly channels that are characteristic of chemi­ cal weathering. Three of the pyrope have weathering textures that overprint primary surfaces formed in the kimberlite magma, suggesting little to no transport. Four pyrope in sample MTI83 have primary surfaces that are overprinted by weathering textures, including fragile features that would not survive during transport. Secondary material on the MTI83 pyrope includes Mg-bearing clays that may derive from altered kimberlite. Many of the features are identical to features on pyrope from weathering profiles over kimberlites elsewhere in Botswana. Pangolin’s President and CEO, Dr Leon

says that during the operational ramp-up, it has had the opportunity to stress test various parts of the heap leach, SX-EW plant and to gather large quantities of per­ formance data on the heap leach and plant performance. Based on this data, it has determined that the infrastructure could be upgraded from a capacity of 17 000 tonnes to 20 000 tonnes of copper cath­ ode per annum (an approximately 18 % increase in production rates) via a capital expenditure of US$1,2 million. The company says that once it has completed the reserve update exercise mentioned above, mining and process­ ing schedule options will be evaluated to quantify the potential incremental finan­ cial benefits of a production expansion to 20 000 tonnes per annum.  Daniels, comments, “We are excited to receive these important results for the Malatswae project. Previous sampling on the project has produced many indicators with proximal to source features including diamond. These new results are excep­ tional in having features that are identical to pyrope garnets directly from weathered kimberlite, with no evidence of transport. Some of the fragile textures are directly related to interaction between the kimber­ lite magma and the garnets. The samples were collected directly over a geophysical aeromagnetic anomaly which is a signifi­ cant association. Additional surveys are underway to define the best areas for drill­ ing, which is scheduled to occur during the current Q4.” 

Pangolin recovers pyrope garnets at Malatswae Pangolin Diamonds Corp, listed on the TSX-V, has recovered pyrope garnets with near-source surface features from its wholly-owned Malatswae diamond proj­ ect, located 90 km south-east of the Orapa kimberlite field in Botswana. Four samples produced over 14 pyrope garnets, with five grains in two samples. The samples are spaced from 200-400 m apart and posi­ tioned directly over a magnetic anomaly of similar dimensions.

Samples MTI64 and MTI83 each pro­ duced five pyrope garnets ranging from 0,4-0,8 mm inmaximumdimension. In sam­ ple MTI64, all of the grains exhibit irregular to well-formed trichitic pits and sinuous

November 2015  MODERN MINING  5

MINING News

Masimong Group to acquire majority stake in Liviero

Next Graphite, Inc, a graphite exploration/ development stage company operating in Namibia, says it has prepared a 1 000 kg sample from one of the lower adits on its Aukam property in the south of the country. This most recent round of test­ ing and grading has been funded by the company’s joint venture with Caribou King Resources. The test samples were taken as part of a 25 Mt bulk sampling programme from the lower adit at the Aukam project. According studies with a view to establishing the costs of developing a rock phosphate mine and fertiliser operation. Ovation is also committed to funding other phosphate opportunities identified by Montero in the region.” The Opportunity Study Report to be undertaken by Outotec will examine inte­ grated Sulphuric acid, Phosphoric acid and Di-Ammonium Phosphate (DAP)/Mono Ammonium Phosphate (MAP) fertiliser plants, inclusive of associated utilities, infra­ structure and off-sites. Further to this, the possibility of producing second phase Lime Ammonium Nitrate (LAN), urea and other downstream products will be assessed depending on market study results and nat­ ural gas feed possibilities. Outotec will work with the leading French fertiliser consulting company, Sofreco, on the study.  engineering and contract mining business, for an undisclosed sum. Teke, who is Chairman of the Masimong Group, says the deal remains conditional on the receipt of Competition Commission approval only. Commenting on Masi­ mong’s rationale for this transaction, he states: “Our acquisition of a controlling share in Liviero gives us direct exposure to a well-established business that has the size and scale to play a key role in critical growth sectors of the South African econ­ omy. It also supports our strategic goal to become a major black industrial player in South Africa.” Liviero Group CEO Neil Cloete says the agreement represents the beginning of an

Transaction agreements have been signed for the black-owned Masimong Group – which is led by SA Chamber of Mines President Mike Teke – to acquire a 51 % interest in the Liviero Group, South Africa’s largest privately owned construction, civil

exciting new era for the 31-year-old Liviero Group. “With Masimong’s acquisition of a majority stake in Liviero, the company will become the country’s largest black-con­ trolled multi-disciplinary contractor,” he states. “Masimong brings varied expertise, energy, opportunities and a compelling shared vision to take the Liviero Group to the next level. Along with enhanced opportunities to contribute to crucial infrastructure development projects, and the achievement of South Africa’s eco­ nomic and social development goals, we will enjoy a stronger and more sustainable position in the market, for the benefit of all of our stakeholders, including our employ­ ees, clients, suppliers and unions.”  to Next Graphite, these samples are believed to be representative of the prod­ uct found throughout the underground adit. Samples will be delivered to Lilhof Enterprises, formerly Gecko Laboratories of Swakopmund, Namibia, for testing and grading. The specific methods used by Lilhof to test the samples include: crushing and grinding to 218 microns; dual flotation; and drying and particle size analysis. The lab will prepare 80 kg of processed graphite which Next Graphite and Caribou King Resources will distribute to cus­ tomers for their testing of the graphitic product and validation for use in their manufacturing applications. Results from this customer review process are expected to provide details of additional processing required, if any, specific to their manufac­ turing requirements. Additional tests will also be conducted on 84 subsamples to provide an accurate assessment of the purity and grade of graphite from the lower adit, one of three existing adits on Next Graphite’s Aukam property. The property’s adits were mined periodically between 1940 and 1974 and produced a recorded total of 26 740 tonnes of lump graphite. The high-quality, vein-type graphite (also known as lump graphite) is hosted within a shear zone in which underground mine workings show well mineralised structures that are believed to continue down-dip. 

Sample extracted from graphite mine

Liviero Group Chairman Luca Liviero (left) and Mike Teke, Chairman of the Masimong Group, which is to acquire a controlling interest in multi-disciplinary contractor Liviero.

Funding secured for phosphate project studies Montero Mining and Exploration’s funding partner, Ovation Capital, has committed to expenditures of approximately C$2,7 mil­ lion (before VAT) to acquire a 10 % interest in Montero’s Duyker Eiland phosphate proj­ ect, located 30 km north of Saldanha Bay. On March 2, 2015, Montero – listed on the TSX-V – entered into an agreement whereby Ovation could earn a 10 % interest in the project at asset level by complet­ ing a Pre-Feasibility Study and a further 20 % interest by completing a Bankable Feasibility Study.

Comments Dr Tony Harwood, President and CEO of Montero: “Ovation is providing approximately C$2,7 million in funding to advance Montero’s Duyker Eiland phos­ phate project. DRA, Outotec and the Sebata Group have been retained to complete Pre- feasibility, Opportunity and Environment

6  MODERN MINING  November 2015

MINING News

New Liberty back on track after crusher outage

Aureus Mining Inc, the TSX- and AIM-listed West African gold producer, reports that gold producing operations at the New Liberty Gold Mine (NLGM) have restarted following the repair of the secondary crusher. The crusher suffered a mechanical failure in October, leading to a temporary suspension of processing activities. Ore crushing operations recommenced on 28 October 2015, following the installa­ tion of a temporary mobile crushing unit. The mobile crusher, which was sourced in-country, has a capacity of 200 t/h and is sufficient to supply the New Liberty ball mill, which runs at a designed feed rate of 146 tonnes of run of mine (ROM) ore per hour. This mobile crusher will be retained on site for a period of six months to provide additional operational flexibility during the final testing and commissioning phase of the plant, and also to provide additional crushed rock material for use on haul roads and other associated infrastructure. Specialists fromDRA, the EPCM contrac­ tor, and technicians from the OEM of the secondary crusher successfully completed repairs to remediate the mechanical failure within the secondary crusher. These repairs were completed on 29 October 2015, fol­ lowing which the secondary crusher was tested extensively to ensure all parame­ ters were operating correctly before being recommissioned and ramped back up to its full capacity. During the temporary 19-day stoppage of crushing and processing operations, mining operations continued. Run of mine (ROM) stockpiles currently total 55 283 tonnes at 3,16 g/t and oxide stockpiles total 105 203 tonnes at 2,04 g/t.

The New Liberty Gold Mine in Liberia, which was officially opened in August this year (photo: Aureus Mining).

Commercial productionwill be declared on the first day of the calendar month fol­ lowing the mill having operated at an average of 60 % or more of the designed production capacity, calculated over a 60-day period. Commenting on the restart of process­ ing operations, David Reading, President and CEO of Aureus Mining, said: “I am pleased to announce that gold process­

best for the future. I will again take direct responsibility for the operations given that our number one priority is achieving the planned improvement in performance in the fourth quarter,” comments Gordon. “In this respect, October was fully in line with plan, across all three sites, and we remain on track for the full year. We plan to reassess the situ­ ation as regards any potential replacement COO early in 2016.”  ing operations have recommenced at the New Liberty Gold Mine and we are now looking forward to declaring commercial production in January 2016. The quick remediation of the secondary crusher fail­ ure is testament to the hard work of our employees and the specialist engineers and technicians from DRA and the OEM, who have worked tirelessly to restart pro­ duction as quickly as possible.” 

Acacia’s Chief Operating Officer leaves the company Acacia has announced that its Chief Operating Officer, Michelle Ash, will be leaving the company with immediate effect, with Brad Gordon, CEO, resuming direct responsibility for the operations. Acacia is the biggest gold miner in Tanzania and owns and operates the Bulyanhulu, North Mara and Buzwagi mines. “I would like to express my thanks to Michelle for her contribution to Acacia over the past two years and wish her all the

November 2015  MODERN MINING  7

MINING News

Pilot plant for Ngualla rare earth project operational

greater than 95 % of the barite whilst losing only around 10 % of the rare earth- bearing bastnasite. The barite-depleted concentrate is then screened, thickened and sent to a regrind mill where the particle size is reduced to less than 45 microns. This provides libera­ tion of the bastnasite from iron-bearing gangue minerals. A second stage of stan­ dard flotation is then undertaken at a temperature of 50°C using dispersants, gangue depressants and a hydroxamic acid as a rare earth collector. The selected flowsheet is the result of continuous, incremental improvements achieved in the beneficiation process, with test work delivering concentrate grades of between 30 and 50 % rare earth oxide (REO). These grades represent a two to three fold improvement over the 16,3 % REO concentrate attained in the Preliminary Feasibility Study (PFS). According to Peak, the ability to pro­ duce a high grade/low mass mineral concentrate is expected to have a profound impact on the overall project economics by reducing both operating and capital costs compared to the PFS. This is because of decreased transportation costs of the lower mass concentrate; a reduction in acid consuming gangue mineral content; and a significant reduction in the size of the downstream leach recovery plant. The 66-tonne sample of weathered bastnasite mineralisation was collected from eight trenches excavated at Ngualla earlier in the year and transported to Perth, Western Australia. This material has been selected to be representative of the first five years of mill feed. Three metallurgical laboratories were requested to provide proposals for the construction and operation of a pilot plant using the two-stage flowsheet. ALS in Perth was selected based on its piloting experience, available equipment and tech­ nical expertise in rare earth flotation. Milling of the bulk sample and opera­ tion of the first stage barite flotation has now commenced. The overall operation of the plant will continue until the end of the calendar year, producing in excess of 2 tonnes of high grade concentrate to be used for the downstream leach recovery pilot plant scheduled to commence in the first quarter of 2016. 

Commissioning of the barite prefloat circuit of the pilot plant (photo: Peak Resources).

ASX-listed Peak Resources reports that piloting of the beneficiation flowsheet has commenced on a 66-tonne bulk sample of typical weathered bastnasite mineralisa­ tion collected from the Ngualla rare earth project in Tanzania. The selection and piloting of the beneficiation flowsheet is an integral part of the Bankable Feasibility Study (BFS) and – says Peak – demonstrates its commitment to move towards the com­ mercialisation of the Ngualla project. Located 147 km from the city of Mbeya on the edge of the East African Rift Valley in southern Tanzania, the project is centered on the Ngualla carbonatite. Peak’s Managing Director, Darren Townsend, commented: “ The com­ mencement of the beneficiation pilot plant is another key milestone in the development of the Ngualla project. My congratulations go to the Peak technical team and their consultants for the com­

mencement of this key work programme.” Peak is developing Ngualla in conjunc­ tion with its partners Appian and IFC. Ngualla is a large high-grade rare earth deposit that is particularly rich in the high growth magnet metals neodymium and praseodymium. After extensive evaluation of two alter­ native beneficiation flowsheets developed specifically for Ngualla’ s unique minerali­ sation, a two-stage flotation process with an intermediate regrind step has been selected on the basis of operational advan­ tages and lower operating costs. The flowsheet takes advantage of a significant proportion of the gangue (waste) mineralisation being in the form of relatively large barite particles. An initial coarse grind (-75 microns) is employed to liberate the barite and allow its selective removal using standard flotation tech­ niques. Typically, this process stage rejects Kamwendo has been CEO of ZCI Limited since November 2011 and is a member of the board of the Copperbelt Development Foundation, African Copper’s ultimate par­ ent company. He has been CEO of several engineering companies including his own multi-disciplinary consulting firm. He has previously chaired the boards of the Engineering Institution of Zambia, the Environmental Council of Zambia, the National Savings and Credit Bank, the Copperbelt University and ZCI Limited. He also served on a Presidential Commission of Enquiry into university education in Zambia. 

Senior appointments at African Copper African Copper has appointed Boikobo Paya, currently a Non-executive Director of African Copper, as Non-executive Chairman of the company in succession to Roy Corrans who retired from the Board with effect from 30 September 2015. It has also announced the appointment of Thomas Kamwendo as Chief Executive Officer with immediate effect. Paya, a Botswana national, was the Per­ manent Secretary in the Botswana Ministry of Minerals, Energy andWater Resources from October 2010 to August 2014. He was also the Deputy Permanent Secretary in the same ministry, responsible for thewater and energy sectors, a post he held from October 2008.

8  MODERN MINING  November 2015

MINING News

UP participates in Joburg Indaba

participated in ‘The Future Generation’ session and enjoyed the opportunity to interact with current mining industry pro­ fessionals, who were able to give them valuable insight into the world they will be entering in 2016. 

Improving skills is one of the biggest needs and challenges of the mining industry. This topic, together with other pertinent issues such as modernisation, was just one of the topics to be covered at the 2015 Joburg Indaba, which was held at the Inanda Club recently. The University of Pretoria (UP) was one of the sponsors of the event. Professor Cheryl de la Rey, Vice- Chancellor and Principal of the University of Pretoria, participated in a panel discussion at the Indaba exploring the strategic direc­ tion that is currently shaping the industry. “Our primary responsibility as an aca­ demic institution is that we produce quality students who are prepared to engage with the changing environments in which they will work,” she said. “Our recently launched Virtual Reality Centre for Mine Design, together with the Mining Resilience Research Institute in the Faculty of Engineering Built Environment and IT (EBIT), both provide vital cogs in the wheel that will assist the industry with

its re-positioning and actively contribute towards solutions for the complex chal­ lenges it faces.” UP final year mining students also

Final year Mining Engineering students visiting the Joburg Indaba held at the Inanda Club recently. Seen here (from left) are Busi Manana, Zelly Moropana, Tshwarelo Phago, Surprise Mahlangu, Itumeleng Sikosana and Otshepeng Manne.

November 2015  MODERN MINING  9

MINING News

True Gold on track for gold production at Karma

and is funded through construction to production. The mine fleet has been deployed to GGII after completing significant exca­ vation of bulk earthworks at the mine’s processing and storage ponds. Operators of the mining equipment are experienced from the excavation of the processing and storage ponds, and are now trained and ready for production work. Excavation of Cells 1, 2 and 3 of the heap leach pad is substantially complete. Civil construction is ahead of schedule. The raw water and pregnant leach ponds are in place and the 4 km pipeline from the bar­ rage to the site is now being used to pump water to these ponds, ensuring the process­ ing plant start-up requirements are met. At the plant site, construction of the cya­ nide mixing area is complete with all civils and tanks in place. The hard rock crusher has been commissioned and is producing aggregate for the drainage layer of the heap leach pads. The ADR building struc­ tural steel is 100 % complete. Installation of siding and roofing is progressing quickly, as well as piping and electrical. 

A recent view of the Karma project, which will produce approximately 120 000 ounces a year of gold in its first five years of operation (photo: True Gold).

True Gold Mining Inc, listed on the TSX-V, reports that mining has commenced at the Goulagou II (GGII) deposit at the Karma goldmine in Burkina Faso. The GGII deposit is the first of six deposits that will be mined over an 11,5-year period. The company remains on track for gold production at the end of Q1, 2016. The GGII deposit has reserves of 273 000 leachable ounces of gold (contained in 7,6 Mt at 1,12 g/t gold) and will be mined during the first two years of production. “As we transition into gold production over the next few months, our team is increasingly focused on operational readi­ ness,” states Christian Milau, President and CEO of True Gold. “Karma will produce approximately 120 000 ounces of gold per

year during our first five years at the lowest quartile of cash costs, laying the founda­ tion for True Gold to become a mid-tier producer.” Karma mine construction is rapidly progressing with nearly 1 000 employees and contractors active on site. Overall, the project is approximately 73 % complete

Australia’s Resolute Mining has executed an agreement to divest the company’s residual interests and assets in Tanzania. The divestment decision follows the clo­ sure of Resolute’s Golden Pride mine in late 2013 and the subsequent completion of Resolute Mining wraps up in Tanzania the decommissioning and rehabilitation of all elements of the company’s operations. As agreed with the Government of Tanzania, the mine site and all remaining infrastructure was formally handed over to the Madini Institute at a ceremony on 12 December 2014 to enable the establish­ ment of a mining institute of learning.

Kalongwe copper project granted mining licence ASX-listed Regal Resources says that it has been informed by KalongweMining SA (KM) – in which it has a 30 % interest – that the DRC Minister of Mines, Martin Kabwelulu, has signed an‘Arrêté Ministériel’granting an exploitation (mining) licence in accordance with the DRC Mining Code.

Resolute began construction of the Golden Pride mine, the first modern gold mine in Tanzania, in 1997 and operated the mine for 15 years, successfully producing more than 2,2 million ounces of gold. MD and CEO John Welborn says the compa­ ny’s exit from Tanzania has closed a proud chapter in Resolute’s history. “Golden Pride was a strong driver of value for Resolute and demonstrates the company’s ability to profit from our expe­ rience in Africa. Resolute is a responsible and experienced owner and operator of quality gold mines and we are increasingly recognised, particularly in Africa, as a part­ ner of choice for governments and local communities,” he says. 

tion of the efforts by the three JV partners GICC, Regal and Traxys. The licence pro­ vides an additional level of confidence that a mining operation will be developed at Kalongwe and further de-risks the project. A DFS has commenced and recent metal­ lurgical testwork results are expected to have a positive impact on the financial parameters for the study.” The Kalongwe project is located 45 km from Kolwezi (and 15 km from Ivanhoe’s Kamoa discovery) in Katanga and hosts a near-surface oxide JORC resource of 302 000 t contained copper and 42 000 t contained cobalt, with an average copper grade of 2,71 % Cu. 

The licence granted to KM covers the entire KM permit, an area of approximately 8 km 2 . It is valid for an initial term of 30 years and can be renewed for additional periods of 15 years. Comments David Young, Regal’s MD: “The granting of a mining licence repre­ sents a major milestone for the Kalongwe Mining Joint Venture and is the culmina­

10  MODERN MINING  November 2015

MINING News

Potential for diamond-bearing alluvial deposits at Lerala lag containing occasional sub-rounded pebbles and boulders was identified on top of the gneissic bedrock and below 1,5 m of soil on the eastern to north-east­ ern wall of the K3 pit.

has been designed and has already com­ menced in the high priority target areas to gain information that will increase under­ standing of the extent of the suspected paleochannel deposit in strategic areas. The results of this programme and the potential impact on the project will be evaluated and a decision made on how best to proceed. Possible options include a decision to abandon these potential resources, or, alternatively, to mine and stockpile these deposits prior to construc­ tion of the tailings dam, or, potentially, to relocate the tailings dam. Accordingly, the scheduled develop­ ment of the new tailings dam, which is situated on two of the higher priority target areas has been delayed while the investigation is undertaken. KDL says while the delay to the con­ struction of the tailings dam will impact the timeline for re-commissioning of the Lerala mine, the delay is unlikely to exceed three months. 

ASX-listed Kimberley Diamonds Ltd (KDL), which is working to re-open Botswana’s Lerala diamond mine near Martin’s Drift, reports that its geological team at the Lerala site has found evidence for buried alluvial channels immediately adjacent to the diamond-bearing kimberlite pipes that host the Lerala diamond resource. If the alluvial channels are confirmed to exist and found to contain significant quantities of diamonds, the life and over­ all value of the project may be increased, says KDL. The on-site team has commenced further investigations using mechanised equipment to dig pits in order to establish the overall extent and significance of the deposits. Explaining the background to the pos­ sible alluvial discovery, KDL says that as part of preparation for re-commencement of mining at Lerala, detailed mapping was undertaken in and around the K3 pit. A continuous layer up to 1,5 m thick of gravel

Similar gravel layers containing sub- rounded pebbles and boulders were also identified at the K5 and K6 pipes. The rounded pebbles of orange quartz and red-brown quartzite and other rock types within the gravel layer are unrelated to the gneissic basement in the vicinity and suggest the layer is alluvial in origin. The interpreted alluvial deposits under­ lie, in part, the area currently allocated to the proposed tailings dam. In order to avoid sterilising or reducing any potential future alluvial diamond resource within the proposed tailings dam footprint, KDL says it considers it prudent to thoroughly investigate the potential for an alluvial dia­ mond deposit prior to the commencement of the construction of the tailings dam. An exploration pitting programme

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November 2015  MODERN MINING  11

MINING News

In its quarterly activities report (to 30 September 2015), ASX-listed Mustang Resources, which holds the Save River diamond project in Mozambique, says “robust” gem-quality diamond recoveries continued during the reporting period. In 2014, Mustang acquired rights to earnmajority interests in the two diamond exploration licences in Mozambique mak­ ing up the Save River project. The project area comprises 24 000 ha and is situated in the Save River Valley, downstream from the well-known Murowa and Marange diamond fields in Zimbabwe. Mustang reports “robust”diamond recoveries at Save River Significantly, many of the known kim­ berlite pipes in Zimbabwe have been weathered away and the diamonds from the diamondiferous pipes have been washed down the river systems through the Save River. To date, Mustang has recov­ ered multiple gem-quality diamonds and considers that the project represents a robust opportunity to establish a large- scale alluvial diamond mining operation. In July and again in October, Mustang recovered 2,5-carat white diamonds from the shallow surface gravels at Save River. These are the largest diamonds to be recovered from the project to date. After the end of the quarter, Mustang announced the completion of the phase 1 exploration and bulk sampling programme at the project. The programme yielded 18 gem-quality diamonds from seven shallow trial pits. As of late October, a total of 47 dia­ monds totalling 30,28 carats had been recovered from bulk sampling activities, which – says Mustang – further reinforces its view that there is significant share­ holder value to be unlocked within the Save River project.

The company will continue to work towards defining a JORC-compliant min­ eral resource at Save River, while awaiting the results of drilling in order to determine the next priority targets for bulk sampling. Mustang is confident that with a new Flow Sort recovery unit now in place, and with the diamond recovery plant upgraded to operate at 1 000 tons per day (compared to 100 t/d previously), the recovery and quantity of diamonds will be significantly increased as the exploration and sampling programme is ramped up in the coming months.  than expected Rand exchange rate. The commissioning of the conveyors will now have a positive impact on reducing devel­ opment costs as trucks will no longer be used in decline development to the block cave level. Lace’s 220 t/h dense media separation plant operated efficiently on a batch basis during the reporting period, processing 5 825 tonnes of K6 and K4 kimberlite bulk samples extracted from the development tunnels. A 3-tonne bulk sample of the Lace kim­ berlites was despatched to Johannesburg for testing using one of the high volume optical/x-ray waste sorters DiamondCorp has been investigating. The test work was very positive, and demonstrated that the majority of the waste can be ejected ahead of the DMS processing plant. This technology, combined with the significant water savings generated from the instal­ lation of the de-grit circuit, means, says DiamondCorp, that there is potential for Lace to be mined at a faster rate than is currently planned. This will have a positive impact on mine economics and the NPV of future cashflows. 

The bulk sampling plant at the Save River diamond project (photo: Mustang Resources).

Lace to soon start its production ramp-up In its latest update on its Lace diamond mine near Kroonstad in the Free State, AIM-listed DiamondCorp says develop­ ment work in the Upper K4 (UK4) block is concentrating in kimberlite on the 310 m production level in preparation for produc­ tion ramp up to commence before the end of the year.

in a delay to the blasting of the slot drive from which the initial tonnage ramp up commences. This delay will result in cashflow pressure on the company’s 74 %-owned operating subsidiary, Lace Diamond Mines (Pty) Ltd, in Q1 2016 when debt repayments are due to commence. As a result, detailed discus­ sions have been held with the company’s primary lenders and BEE partners regarding options to alleviate cashflow pressures. The discussions have been positive and a formal request to continue interest roll-up of the Industrial Development Corporation loan until positive cashflow is achieved has been lodged. Management do not expect any issues with respect to being granted this request. Processing of K6 kimberlite and K4 kim­ berlite recovered from the production level drives and bulk test sites continued with further encouraging results. Development costs to date are averag­ ing R49 993 per metre against a budget of R38 280 per metre as a result of the chal­ lenges encountered, including a weaker

During September tunnelling activities advanced fromheavily diluted low-grade K6 kimberlite on the southern side of the kim­ berlite pipe into a transitional zone and then into higher-grade K4 kimberlite in the cen­ tre of the pipe. As a consequence, ground conditions improved and kimberlite devel­ opment rates exceeded the monthly call in October. Challenging ground conditions reported previously on the 290 m doming level have been overcome with the installation of steel arched sets which provide a safe canopy for employees and equipment from potential falls of ground. The void above the canopy is now being back-filled. However, the time taken to install the sets and make the area safe has resulted

12  MODERN MINING  November 2015

MINING News

‘Preferred Contractors’ appointed for Ethiopian gold project

estimate in the Definitive Feasibility Study (DFS) of a total cost of US$61 million for a 1,2 Mt/a plant. Latest estimates for annual gold pro­ duction at Tulu Kapi are approximately 105 000 oz/a for a 10-year period at an all-in sustaining cost (including operating, sustaining capital and closure) of around US$760/oz (excluding initial investment). Capex is estimated at US$120 million. Tulu Kapi’s ore reserve totals 15,4 Mt at 2,12 g/t gold, containing 1,05 million ounces. 

AIM-listed KEFI Minerals has appointed African Mining Services (AMS), a wholly- owned subsidiary of Ausdrill Limited, as the ‘Preferred Contractor’ for mine estab­ lishment and operation for its Tulu Kapi gold project in Western Ethiopia. The scope covers certain pre-mining earthworks as well as the life-of-open-pit mining operation. The contractual pay­ ment rate is to be based on cubic metres delivered with direct purchases by KEFI of certain key input costs such as explosives and fuel. The next step is for KEFI and AMS to jointly optimise the detailed operating plan for the benefit of the project and to prepare matching detailed contractual documentation. KEFI has also announced the appoint­ ment of Sedgman Limited as ‘Preferred Contractor’ for plant construction and start-up at Tulu Kapi. The scope of work under the pro­ posed contractual arrangements will

cover: detailed equipment specifica­ tion and procurement – with a Front End Engineering Design (FEED) stage to commence this quarter; construction to occur under a fixed-price lump sum contract (Engineering, Procurement and Construction); and start-up management. The estimated cost is approximately US$63 million for a 1,5-1,7 Mt/a facility depending on ore-type from year to year to be refined during the FEED stage. This compares favourably with the previous

The Tulu Kapi project is located 360 kmwest of Addis Ababa in a surprisingly lush landscape. The project area, seen here, has typical greenstone-type geology (photo: KEFI Minerals).

November 2015  MODERN MINING  13

MINING News

Kumba’s Sishen mine in the Northern Cape produced 7,7 Mt in the third quarter of this year (photo: Kumba iron Ore).

In its report on the quarter ended 30 September 2015, Kumba Iron Ore says that total production decreased by 12 % to 11,4 Mt compared to Q3 2014, but was 10 % higher compared to the previous quarter. Total export sales vol­ umes increased to 9,8 Mt, 9 % higher than Q3 2014 but 16 % lower than the previous quarter. Kumba’s Sishen mine near Kathu in the Northern Cape produced 7,7 Mt, a decrease of 17 % due to a temporary lack of sufficient exposed high quality ore for blending purposes and adjustments to the mine plan and schedule as it transitions to the lower cost pit configuration. Kumba’s production increases quarter on quarter Whilst further improvement is antici­ pated in Q4 2015, production is now expected to be approximately 31 Mt (previous guidance 33 Mt). Waste mining activities are currently at approximately 230 Mt/a and are expected to be main­ tained at this rate for FY2015 and FY2016 to ensure adequate levels of exposed ore. This compares to previous guidance of around 200 Mt/a. At Kolomela, located near Postmasburg in the Northern Cape, the revised min­ ing plans, including deferral of mining at one of three pits, were implemented. Efficiencies and throughput at the plant continued to improve, resulting in produc­

2,5 Mt/a to 3,0 Mt/a was completed on time and schedule in September. The plant expansion included the installation of two additional leach tanks and a pebble crusher. For the full-year 2015, Otjikoto is expected to produce between 140 000 and 150 000 ounces of gold (including pre- commercial production) at a cash operating cost in the US$500 to $525 per ounce range. All ore in 2015 and most ore in 2016 is expected to come from the existingOtjikoto pit. Beyond 2016, Otjikoto’s gold produc­ tion is expected to be further enhanced by the development of the Wolfshag zone, adjacent to the main Otjikoto pit.  tion of 3,3 Mt for the quarter. Production for the year has been revised upwards to 12 Mt (previously 11 Mt) and, in order to ensure feed to the plants at this rate going forward, waste mining has been increased to 44-45 Mt from the previous guidance of 35-38 Mt. In accordance with the closure plans for Thabazimbi, located in Limpopo Province, mining ceased at the end of September 2015 but some processing of previously mined material through the plant will con­ tinue until 2016. Export sales of 9,8 Mt were achieved, an increase of 9 %, due to improved rail and port operating performance. 

Otjikoto gold mine running above budget Reporting on the third quarter, Canada’s B2Gold Corp says its new Otjiokoto gold mine in Namibia continued to perform strongly, producing 38 252 ounces of gold in the quarter, approximately 4 % (or 1 361 ounces) above budget. Gold production exceeded budget mainly due to better than expected mill throughput (704 132 tonnes processed versus 602 097 tonnes budgeted) and very high mill recoveries of 99,1 % (versus 95,7 % budgeted). The average gold grade processed was 1,71 g/t compared to budget of 1,78 g/t.

B2Gold continues to work on a new geo­ logic resource model for the Otjikoto pit incorporating 2014 drilling, grade control data and in-pit mapping. The new geologic model and related engineering work are expected to be completed in the fourth quarter of 2015. In the year to date, Otjikoto has pro­ duced 106 349 ounces of gold (including 18 815 ounces of pre-commercial produc­ tion), approximately 5 % (or 5 257 ounces) above budget. Expansion of the Otjikoto mill from

14  MODERN MINING  November 2015