Modern Mining November 2016

November 2016 Vol 12 No 11 www.crown.co.za M ODERN MINING IN THIS ISSUE…

 Black Rock Project progressing well  Bulk sampling plant recovers rubies  Cullinan’s C-Cut now in production

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MODERN M I N I N G

CONTENTS

NOVEMBER 2016

ARTICLES

REGULARS MINING NEWS 4 Gold Fields to spend US$1,4 billion at Damang 5 Galane identifies potential extension of Tau orebody 6 Metallon lifts its gold production by 18 % 8 Bulk sampling plant at Montepuez commissioned 10 Orca Gold announces Block 14 drilling results 11 Deep drilling at Syama delivers high-grade results 12 Phase 2A expansion of Asanko Gold Mine approved 13 Development starts at Magambazi 16 Balama on course for Q2 2017 commissioning 17 R533 million Shondoni mine contract completed 18 In-pit mining at Lerala temporarily suspended 19 Waterberg PFS envisages a multi-decline mechanised mine PRODUCT NEWS 44 SA company repairs condenser for DRC facility 44 Energy efficient solution for Yanfolila mill 45 SEW supplies gear units for coal terminal expansion 46 Improved belt tracking system uses ribbed lagging 47 FLSmidth commissions wedge wire machine 48 Multotec makes wear plate inspection easier 49 Core logging solution demonstrated in Cape Town 50 Oxford XRF analysers available from United Scientific 51 CDE Global establishes SA office COVER 20 Safety comes first on Black Rock Project GOLD 24 Randgold looking for three new mines over five years 28 CIL project could transform Ity into a flagship operation DIAMONDS 30 Cullinan’s C-Cut starts its ramp up FEATURE – CONSULTANTS/PROJECT HOUSES 34 Sound Mining weathers the storm 39 Bakubung to deliver its first ore by the end of 2017 42 SRK seminar highlights mining’s challenges and opportunities

Editor Arthur Tassell Advertising Manager Bennie Venter e-mail: benniev@crown.co.za Design & Layout

Darryl James Circulation Karen Smith Publisher Karen Grant

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Deputy Publisher Wilhelm du Plessis 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, Bedfordview, 2008

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Tel: (+27 11) 622-4770 Fax: (+27 11) 615-6108 e-mail: mining@crown.co.za www.modernminingmagazine.co.za

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Cover The 11 m high graben tie-in struc- ture at the Nchwaning mine at Assmang’s Black Rock Mine Operations (BRMO) in the Northern Cape. The structure forms part of the ongoing Black Rock Project (BRP) in which WorleyParsons is deeply involved, as our cover story on page 20 explains (photo: Charles Corbett on behalf of Assmang).

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Average circulation (April–June 2016) 4306

November 2016  MODERN MINING  1

COMMENT

Simandou – the saga continues

R io Tinto must be ruing the day it ever got involved with Siman- dou, the huge – more than 2 bil- lion tonne – West African iron ore project that is a geological marvel but a nightmare in just about every other way. As many readers will doubtless know by now, the latest development relating to the project is that Rio has terminated the contract of its Energy & Minerals Chief Executive, Alan Davies, while it investigates payments totalling US$10,5 million to a consultant who provided advisory services on the project. It says it was alerted to these payments by e-mails generated in 2011 but which only came to its attention in August this year. Davies, who has apparently spent much of his professional career working on Simandou (and who was the Rio executive holding accountabil- ity for the project in 2011), has been replaced by Bold Bataar, who has been with Rio since 2013. Rio, as it happens, is exiting Simandou, a project it acquired nearly 20 years ago. When the group’s current Chief Executive, Jean-Sébastien Jacques, took over from his predecessor, Sam Walsh, in July this year, a two-year BFS on Simandou South had just been completed. However, Jacques made it clear from the outset of his tenure that Rio would not be pursuing the project and in late October the group announced that it would be selling its 46,6 % stake to Chinalco, one of its partners in the project. Rio’s decision to sell mainly reflects the current state of the iron ore market. Although the price of the commodity has risen sharply this year (it was almost US$80 a tonne at the time of writing, compared to just under US$40 a tonne in January 2016), it is still well short of the high of nearly US$192 a tonne achieved in early 2011. There seems little chance of the price regaining the 2011 level – or anything near to it – in the short to medium-term and even the long-term prospects are not good – in fact, the consensus seems to be that there will be an over-supply of iron ore in the market for another decade. Quite apart from the iron ore price, Simandou was never going to be an easy project to develop given its huge infrastructural needs (a 650 km rail line with over 30 bridges, as well as a deep-water port, are required) and some observers have estimated its overall cost at a staggering US$20 billion. Moreover the project, located in Guinea (a country not known for good governance), has

been plagued by controversy since at least 2008 when Rio was stripped of its rights to the northern half of the Simandou concession after it was accused by the Guinean government of moving too slowly on implementation. The rights to Simandou North were later given to BSG Resources (BSGR), a mining com- pany controlled by Beny Steinmetz. BSGR, which literally acquired the project for noth- ing (although it did invest US$160 million in various works, including a feasibility study) subsequently sold a half share to Brazilian iron ore giant Vale for US$2,5 billion (although only a portion of this was ever paid). Recounting all the Byzantine twists and turns of the Simandou story would be tedious and take up more space than I have here but, suffice it to say, that the case ended up in a US court when in 2014 Rio sued both Vale and BSGR (which by then had also fallen out with each other), accusing them of racketeering and claiming that they had conspired to steal its rights to the project. The case was dismissed in November last year, reportedly on a technicality. Predictably, Beny Steinmetz has taken delight in the latest turn of events, with reports in the media quoting him as saying that he feels “vindicated” and that he and BSGR – which had its rights to Simandou North removed in 2014 by the Guinean government – have been “fighting very powerful forces”. For those interested in all the minutiae of the Simandou saga, there are masses of mate- rial available on the Internet including a detailed account of the history of the project by Eric Reguly in Toronto’s ‘Globe and Mail’ published in October last year. Also worth reading, although by now slightly dated, is an article in ‘The Economist’ entitled ‘Crying Foul in Guinea’ which was published in late 2014. I gather Simandou also features in ‘The Looting Machine’, a recent (2015) book – which I’ve not yet had time to read myself – by journalist Tom Burgis which is said to be a hard-hitting exposé of corruption in Africa’s resources sector. Virtually no one – either individuals or companies – emerges from the affair with any credit and the project is an object lesson on just how difficult developing new mines in the less transparent African mining jurisdictions can be. Certainly our continent offers unique oppor- tunities due to its prolific mineral resources but there are also huge obstacles to overcome, as Rio Tinto has found to its cost at Simandou. Arthur Tassell

Simandou was never going to be an easy project to develop given its huge infrastructural

needs and some observers have

estimated its overall cost at a staggering US$20 billion.

November 2016  MODERN MINING  3

MINING News

Night view of the Damang processing plant. Gold Fields is investing US$1,4 billion at the mine to extend its life by eight years from 2017 to 2024 (photo: Gold Fields). Gold Fields to spend US$1,4 billion at Damang

Gold Fields Limited has announced the Reinvestment Plan for the Damang gold mine in Ghana which will extend the life of mine (LOM) by eight years from 2017 to 2024. The Plan entails Gold Fields invest- ing US$1,4 billion (operating and capital expenditure) over the LOM. It will enhance the Group’s presence in one of its key operating regions and will result in signifi- cant social benefits for Ghana, including the creation and preservation of 1 850 direct jobs. Over the LOM, a total of 165 Mt will be mined, with 32 Mt processed at a grade of 1,65 g/t, resulting in total gold production of 1,56 Moz. Mining and processing costs are estimated to average US$3,60/t and US$16,25/t, respectively while all-in costs (AIC) are forecast to average US$950/ oz. The benefits of the Development Agreement (signed between Gold Fields and the Government of Ghana in March 2016) have been key inputs into the

Plan and enhance the economics of the project. Since operations at Damang com- menced in 1997, the mine has produced in excess of 4,0 Moz, sourced from multiple open pits. Production from the Damang Pit Cutback (DPCB) came to an end in 2013, and since then mining has focused on the margins of the Damang pit (the Huni, Juno and Saddle areas), as well as lower grade satellite deposits. The decline in produc- tion since 2013 has been exacerbated by variations in grade in the northern and southern extremities of the DPCB and the satellite pits where grades have been lower than expected. Consequently, a strategic review of Damang commenced in 2015 which iden- tified that Gold Fields should return to mining the higher grade core of the main Damang orebody. The Reinvestment Plan entails a major cut back to both the eastern and western successful 20-year career across Australia and for the past 10 years in francophone West Africa where he has held a variety of project development and operational roles. Most recently, he guided the Sissingué project in Côte d’Ivoire (owned by Perseus Mining) to construction commencement. Regal has released the results of a Scoping Study for Kalongwe. The study outcomes are highly positive and indicate the strong eco- nomic viability for developing a standalone, low capex, open-pit mining operation. 

walls of the DPCB. The cut back will have a total depth of 341 m, comprising a 265 m pre-strip to access the base of the existing pit. This will be followed by a deepening of the pit by a further 76 m which will ulti- mately provide access to the full Damang orebody including the high grade Tarkwa Phyllite lithology. To provide short term ore supply while the Damang pre-strip is in progress, min- ing will continue at the Amoanda and paleaoplacer satellite pits (Lima South, Kwesi Gap and Tomento East). In addition, the plant feed will be supplemented by low grade surface stockpiles. Mining will be undertaken by two mining contractors, with negotiations cur- rently at an advanced stage. At this stage, the contractors are expected to be mobil- ised early in 2017. Apart from the waste strip, the only other significant capital required is for the construction of the Far East Tailings Storage Facility (FETSF) as the existing tail- ings storage facility (TSF) is approaching full capacity. An interim 2,5 m raise has commenced on the TSF, which will provide for an additional 3,6 Mt tailings capacity and is due for completion by the end of November 2016. Stage 1 of the new FETSF is planned for completion by the end of 2017 and will provide 20 Mt capacity. Further lifts of the FETSF will cater for all tailings for the new LOM. Only minor capital work will be required on the Damang processing plant, mostly due to replacement of the SAG mill shell in 2018. 

Regal Resources appoints Chief Operating Officer Australia’s Regal Resources has announced that Adam Smits has been appointed Chief Operating Officer and Executive Director. Smits will provide technical input to the board whilst leading the development of the company’s flagship Kalongwe Cu-Co project in Katanga in the DRC. Kalongwe hosts a near surface oxide resource of 302 000 tonnes contained Cu at an average grade of 2,72 % Cu that also includes 42 000 tonnes contained Co. Smits is a mechanical engineer with a

4  MODERN MINING  November 2016

MINING News

Galane identifies potential extension of Tau orebody

Galane Gold, listed on the TSX-V, has announced that prospect drives at its Tau underground mine, part of its Mupane operation near Francistown in Botswana, have led to the discovery of the potential extension of the Tau orebody at depth. As part of the company’s recent review of historical exploration data, anomalous mineral intersections were observed as they were structurally displaced from the main Tau orebody and sub-outcropping beyond the interpreted Western dyke limit of the orebody. A prospect drive was mined at the 820RL level (170 m below surface) to investigate the anomalous min- eral intersection, and a mineralised zone (C Reef) was intersected. Since the first intersection of the C Reef, a total 265 m of on-reef development has been completed on three consecutive lev- els to determine the strike extent of the reef. At 820RL, the strike extent was found to be 60 m; at 800RL, the strike extent increased significantly to 135m; and, at 780RL, Galane is currently mining along strike and a total of 70 m of strike has been exposed. On the 820 and 800 levels, the C Reef widths varied along strike from a minimum of approximately 2 m up to a maximum of 7 m; from the development channel sam- pling, the intersected grade on the 820 level was 4,78 g/t and on the 800RL level 2,51 g/t. At 780RL, the intersected grade is 3,66 g/t for the 70 m of exposed strike length. Further to this, at 780RL the C Reef has also widened significantly to a width of approximately 15 m.

Galane has discovered a potential extension of the Tau orebody at depth.

Galane Gold CEO Nick Brodie com- mented: “ This could prove to be a significant discovery and of potential importance for the long term future of Mupane once more studies and economic analysis can occur and be reported on. We had planned to start looking for the poten- tial extension of Tau at depth in 2017 and so this was a positive surprise to intersect the potential extension so early and there- fore be in a position to incorporate it into our current mining plan. “If through further exploration and analysis we confirm that this is the exten- sion of the Tau orebody at depth, it will be a further vindication of management’s decision over two years ago to commence the underground operation.”  Peak’s Managing Director, Darren Townsend, commented that the company was pleased to have completed this final milestone before completion of the proj- ect Bankable Feasibility Study, which is expected in early 2017. “The completion of the leach recovery pilot plant unequivocally demonstrates Peak’s enviable advantage of having favour- able mineralogy at Ngualla which is capable of delivering a product suite that is aligned to the high demand and value magnet metal market,” he said. “We are confident that – with our pro- cessing flowsheet confirmed as both technically feasible and deliverable at low operating and capital costs compared to our industry peers – the Ngualla project is on track for near-term development.” 

To date, a total of 19 380 tonnes of ore has been extracted from the C Reef hori- zon at an average mined grade of 3,44 g/t. The ore mineralisation characteristics of the C Reef are similar to those of the main Tau orebody, being a ‘disseminated style’ of mineralisation in well-bedded, silici- fied quartz-rich parts of the graphitic iron formation. An exploration programme is being planned to start in 2017 to investigate if there is a down dip and the possible extent of the C Reef strike beyond the current mined area within the active underground working areas. There has yet to be sufficient exploration on the C Reef to extrapolate that the C Reef extends beyond the current mined area. developed by Peak’s metallurgical team specifically for the low carbonate and low phosphate bastnaesite mineralisation pres- ent at Ngualla, was completed at ANSTO Minerals’dedicated piloting facility at Lucas Heights, New South Wales, Australia. The pilot plant delivered high recoveries (greater than 90 %) of the target magnet metals neodymium and praseodymium. The validation of the leach recovery process follows the earlier validation of the beneficiation and separation processes (both of which were operated to pilot plant phase) and allows Peak to demonstrate a clear and viable processing pathway from Run-of-Mine ore to the production of sale- able rare earth products.

Final stage of Ngualla project flowsheet confirmed Australia’s Peak Resources Limited has announced the successful completion of the leach recovery pilot plant, a key mile- stone in enabling its Ngualla project to become a low operating and capital cost mine, capable of producing high value, high demand rare earths for use in the magnet metal market.

Ngualla is located in southern Tanzania, 147 km from the city of Mbeya on the edge of the East African Rift Valley. The project is centered on the Ngualla Carbonatite. Peak announced a maiden mineral resource for Ngualla in February 2012, which ranked it as the fifth largest rare earth deposit in the western world. Testing of the leach recovery process,

November 2016  MODERN MINING  5

MINING News

Metallon lifts its gold production by 18 %

Metallon Corporation, which oper- ates several underground gold mines in Zimbabwe, produced 26 622 ounces of gold in Q3 2016, an 18 % improvement on the previous quarter. The company – whose production for the year to date is 69 680 ounces – attributes the increase to improvements in performance at its How, Mazowe and Redwing mines. The group’s C1 costs were US$737 per ounce and the all-in-sustaining cost (AISC) US$960 per ounce for Q3 2016. This is an improvement of 4 % and 1 % respec- tively when compared to Q2 2016 (C1 cost US$764 and US$971). C1 costs improved due to increased production and cost effi- ciencies as a result of new equipment and

increased capacity. The AISC was impacted by major repair and renewal work at Shamva mine as well as expenditure on expansion projects, which will significantly increase future gold production. In Q3 2016 development metres drilled totalled 4 494, a 14 % increase on the 3 871 m drilled in Q2 2016. Group production forecast for 2016 is expected to be approximately 102 000 ounces due to delays in the construction of the new processing plant at Mazowe mine and the ramp up at Redwing mine. Commenting on the expansion proj- ects, Metallon says that work relating to the deepening of the 16N7 Shaft at How mine has commenced. The shaft deepen-

Above: The new processing plant at Mazowe, pictured here at an advanced stage of construc- tion, will increase capacity to 70 000 tonnes per month (photo: Metallon). ing from 28L to 34L is to access ore below 28 Level which will increase future pro- duction. Commissioning of the deepened shaft is expected in Q1 2019. Located 30 km south-east of Bulawayo, How is Metallon’s flagship operation. It has been in operation since 1942 and has pro- duced over a million ounces of gold over its life. At Shamva mine, located 90 km north- east of the capital city of Harare and some 29 km east of Bindura, the new Tailings Storage Facility (TSF) is to be commissioned in Q4 2016. Following the appointment of contract miners at Shamva will seek to mitigate the effects of the con- tinued drought conditions through the use of increased water recycling and other measures such that the targeted produc- tion can be maintained. BlueRock will continue to progress the identified remedial work to the processing plant in November and December. During this time the plant will be tested with stock- piles prior to the recommencement of the drill-and-blast programme in mid-January 2017, following which it is expected that a steady stream of Run of Mine material will be available. 

Surface infrastructure at Howmine near Bulawayo, Metallon’s flagship asset (photo: Metallon).

BlueRock raises funds for Kareevlei operation BlueRock Diamonds, the AIM-listed dia- mond mining company which owns and operates the Kareevlei diamond mine, reports it has raised an aggregate of £750 000 (before expenses) via a share placement and an extension to the existing convertible loan note (CLN) amounting to £75 000. Kareevlei is located 100 km north-west of Kimberley in the Northern Cape.

team’s plans to target production levels of 30 000 tonnes per month at a reduced cost as well as continuing to refine the com- pany’s plant in order to improve achieved grades. In particular, BlueRock is looking to acquire primary crushing equipment which is expected to be more cost effective than using external contractors. The primary crushing circuit is expected be installed and commissioned during the first quarter of 2017. The company says it

The proceeds of the fund raising will be used to progress the new management

6  MODERN MINING  November 2016

MINING News

Acacia Coal to acquire interest in Riversdale

ASX-listed Acacia Coal has entered a bind- ing agreement with vendors of Coalvent Limited to acquire a 74 % interest in the Riversdale Anthracite Colliery (RAC), an anthracite project in South Africa, together with a capital raising to raise approximately $2 million. According to Acacia Coal, drilling and feasibility studies completed previously have demonstrated the RAC as a high grade, low impurity anthracite asset that is ideally positioned to service a South African anthracite market facing significant shortages in low impurity product, as well as product into the seaborne market for export. Acacia will prioritise efforts to refresh and update the bankable feasibility study completed in 2010 and work to update the RAC’s 2004 JORC resource so that develop- ment may proceed. The RAC is currently held by Riversdale Holdings Proprietary Limited (a mem- ber of the Rio Tinto group of companies). Coalvent has agreed to acquire the proj- ect from Rio Tinto and then vend it into Acacia. Coalvent has also been successful in bringing together significant intellectual property associated with the RAC, which will greatly assist Acacia’s efforts to prog- ress development. Under the agreement, Coalvent’s expe- riencedmanagement team, which includes mining executives Hugh Callaghan, Robert Scott, Peet Snyders and Filippo Faralla – all of whom have extensive experience in South Africa and the RAC project, together with a track record in the development and sale of mineral resources – will join Acacia, with Callaghan and Scott to join Acacia’s board as Managing Director and Finance Director respectively. 

continues to improve production fol- lowing the resumption of operations in November 2015. Increased production to over 22 000 tonnes per month is now scheduled for Q1 2017. Future expansion plans, which will increase production to 50 000 tonnes per month, will commence in the second half of 2017. Ken Mekani, Chief Executive Officer, Metallon Corporation, commented: “Metallon delivered an impressive perfor- mance in Q3 2016 with gold production increasing 18 % and C1 costs reducing 4 % compared to the previous quarter. These exceptional results are due to improved production across our mines and the result of increased investment in our operations over the last year. This achievement dem- onstrates the future potential of our assets in Zimbabwe.” 

in Q2 2016, major repair and renewal work on surface plant and equipment is tak- ing place. This work will improve surface equipment availability and utilisation in order to maximise gold recoveries fol- lowing increased ore production from underground. This work was due to be completed by the end of October 2016. Future plans are underway to refurbish the processing plant at Shamva to 70 000 tonnes per month capacity. Construction of the new plant and TSF at Mazowe, 50 km north of Harare, is almost complete and commissioning is scheduled for Q4 2016. The new process- ing facility at Mazowe will significantly increase capacity at the mine to 70 000 tonnes per month. Redwing, located about 20 km north- east of Mutare in the east of Zimbabwe,

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November 2016  MODERN MINING  7

MINING News

ASX-listed Mustang Resources says in its latest quarterly report (for the period ended 30 September 2016) that the bulk sampling plant at its Montepuez ruby project was fully commissioned during the quarter, in the process recovering approxi- mately 460 carats of high quality rubies. The project is located within the Montepuez Complex in the Cabo Delgado Bulk sampling plant at Montepuez commissioned Province of Northern Mozambique. Mustang’s licences lie along the estab- lished NW-SE ruby mineralisation trend which also transects licences of AIM-listed Gemfields. The two 16-ft rotary pans of the plant processed 2 683 tonnes during the com- missioning phase up to 24 October 2016. Mustang says it should be noted that the

sample processed to date is not yet rep- resentative of the entire deposit and that current grade estimations are therefore only indicative of the overall deposit’s grade. It adds that further mining optimisation is ongoing (thereby increasing the grade) given the high percentage of dilutive sand and gangue material that was fed to the plant during this initial commissioning phase. Work is continuing to process the maxi- mum volume of gravel from the Alpha deposit stockpile by the end of Q4 2016 with the plant ramping up to treat up to 350 m 3 per day (approximately 525 tonnes per day at a specific gravity (SG) of 1,5). The Alpha deposit, discovered through initial reconnaissance sampling in July 2016, is the current focus of bulk sample mining operations with 8 385 m 3 (approxi- mately 12 997 tonnes) of gravels already mined and transported to the plant for stockpiling. The first phase of the pit has reached bedrock at 9,2 m with an average gravel package of 1,8 m. The pit is currently being extended to the south-west. The company is currently planning a full auger drilling campaign, starting from the Alpha deposit and extending outwards. The purpose of this drilling campaign will be to map the extension of the Alpha deposit and thereafter to also map all the gravel beds within all three of EPC group has confirmed this grade of fuel product as being suitable for power gen- eration utilising recognised Circulating Fluidised Bed (CFB) technology. Edenville says that while it is continu- ing to focus on completing the Phase One feasibility requirements for a 120 MW project, it can now move forward with the knowledge that the project has suffi- cient mineable coal resources to support a potential phased expansion for an increase in size of the power plant up to 300 MW. As mining progresses along the strike of the deposit, there is also the possibility of selectively targeting coal through high- wall or auger methods to extract tonnages without the need to mine overburden. The company says it will look at the potential of this in more detail as part of an overall life of mine plan. 

The Montepuez plant is equipped with two 16 ft rotary pans (photo: Mustang).

Rukwa resource can support a 300 MW power plant Edenville Energy, the company develop- ing an integrated coal to power project in western Tanzania, has announced the results of a technical assessment car- ried out by Sound Mining Solution (SMS) of Johannesburg. This follows on from the updated project financial model announced in September 2016.

from any washing of the raw coal. The results indicate that the Mkomolo and Namwele deposits can provide a mineable resource of approximately 90 Mt based on an overall strip ratio of 4:1. This resource could provide enough fuel to sup- ply a 300 MW power plant for a period of approximately 30 years. The company is looking at suitable min- ing options to maximise the recoverable tonnage from the deposit with the aim of keeping coal extraction and processing costs below US$30 per tonne. Washing the coal to a moderate degree could provide a product with an energy value of approximately 14,5 MJ/kg, the raw coal yielding a high recovery of approximately 74 %. Recent independent feasibility work on the project by a major

The analysis by SMS confirms there are sufficient resources at Edenville’s Rukwa coal to power project for a power plant size of 300 MW, an increase from the previously modelled 120 MW power plant. Edenville, in conjunction with SMS, has looked at several different scenarios for the project with the focus being on the provision of fuel of suitable energy value; the targeting of near surface coal to keep mining costs low; andmaximising the yield

8  MODERN MINING  November 2016

MINING News

The bulk sampling plant at Montepuez has been fully commissioned (photo: Mustang).

very important distinguishing factor of the Alpha deposit.” Mustang also holds interests in the Save

the Mustang concession boundaries. “The September quarter was a highly productive period for Mustang at both a corporate and operational level, high- lighted by the commencement of our bulk sampling at the Montepuez ruby project in Mozambique,” comments Mustang’s MD, Christiaan Jordaan.“As reported post quar- ter end, the company was very pleased to recover 460,43 carats of high quality rubies from our bulk sampling start-up phase, with recoveries anticipated to increase in the comingmonths as production is scaled up to circa 350 m 3 per day. “During a site visit in July 2016, Mr Vincent Pardieu, an independent gemolo- gist with the GIA (Gemological Institute of America), confirmed Mustang’s rubies are high-quality and equivalent to other sec- ondary deposits mined in the region – a

River diamond and Balama graphite proj- ects, also in Mozambique, but Montepuez ranks at its flagship. 

Birimian concludes agreement with Morila ASX-listed Birimian Limited says it has entered into an agreement with Société des Mines de Morila (Morila) that could lead to the commercialisation of several of its gold deposits within its Massigui gold project in Southern Mali.

to acquire an ‘Area of Interest’ within the project. The Massigui gold project surrounds the Morila mine lease on three sides and covers strike extensions of the highly prospective geological sequence that hosts the 7 Moz Morila gold deposit. Birimian has made significant gold dis- coveries at three prospects, namely Ntiola, Viper and Koting. These prospects are situated in close proximity to the under- utilised 4 Mt/a Morila treatment plant. Over 35 000 m of drilling has been completed on the project to date. 

According to Birimian, this agreement provides a potential low risk, low cost pro- cessing solution for these deposits, whilst the company retains the significant upside potential for further gold discoveries in the broader project area. Under the terms of the agreement, Morila has been granted a six-month option

November 2016  MODERN MINING  9

MINING News

Orca Gold announces Block 14 drilling results The camp serving the Block 14 gold project in northern Sudan (photo: Orca Gold).

bank of the River Nile to the town of Abu Hamad and then via a well-used desert road to the project area. The PQ and HQ sized diamond drill holes were drilled within the pit designs used for the Preliminary Economic Assessment (PEA) completed in July this year in the Main and East Zones at GSS, where the true width of mineralisation is in excess of 65 m. Commenting on the results, Richard Clark, CEO and Director, said, “Whilst the new holes are infill to provide both met- allurgical information and infill assay data for the PFS, they strongly re-iterate and confirm the scale and width of the mineralisation at Galat Sufar South. The distribution of grade within these areas this product will perform similarly to lithium with increased demand and price performance,” comments Duane Parnham, Giyani’s Executive Chairman. “The location of this project has virtu- ally untapped mineral potential within the Kalahari Manganese Field that fits well with our corporate strategy of acquiring raw material to feed the growing battery indus- try. The regional scale project with proven historical production and drill cores con- taining high-grade manganese, all within a favourable mining jurisdiction, make this an exceptional target to add and sustain share- holder value.” 

is remarkably consistent, lending itself to open-pit mining with a waste: ore ratio of 2:1, defined by the PEA. “A geotechnical core drilling pro- gramme has also now been completed (results pending) and two reverse circu- lation rigs are now working on an infill programme to convert inferred resources within the PEA pits to indicated to enable us to define a maiden ore reserve as part of the PFS. We remain very excited by the developing story at GSS and Block 14.” Clark is a former President and CEO of Red Back Mining, which was acquired by Kinross Gold in late 2010. Other key executives in Orca have a background with Red Back. Hugh Stuart, Orca’s President, was VP Exploration at Red Back from 2003 and responsible for the discovery of the Akwaaba Deeps and Paboase underground deposits at Chirano in Ghana and the Greenschist zone at Tasiast in Mauritania, increasing the company’s resources by plus 18 Moz. Orca’s COO is Kevin Ross, who fulfilled the same function at Red Back, where he directed the development of the Akwaaba Deeps underground mine, the Chirano plant expansion, and the Tasiast plant expansion. Orca is contemplating a 1,8 Mt/a CIL operation using contract mining at Block 14 with a gold production of 73 000 oz/a over a mine life of 16 years. According to the PEA, initial capex would be approxi- mately US$123 million. 

Orca Gold Inc, listed on the TSX-V, has announced the results from the first met- allurgical core holes drilled at the Galat Sufar South (GSS) deposit (which has indi- cated resources of 26,3 Mt grading 1,77 g/t and inferred resources of 10,0 Mt grad- ing 1,70 g/t). Intercepts from the drilling include up to 150 m grading 2,20 g/t. The holes form part of the work pro- gramme for the Pre-Feasibility Study (PFS). The PFS is being managed by Lycopodium and is scheduled for completion by the end of Q1 2017. GSS forms part of Orca’s Block 14 gold project in Sudan. It is located close to Sudan’s border with Egypt, 900 km north of the capital Khartoum. Access to the project is by sealed road along the eastern

Giyani plans acquisition of manganese properties Giyani Gold Corp, listed on the TSX-V, has entered into a non-binding Letter of Intent with Arnoldus Brand, director and owner of Matsamo Gold Corp, Menzi Battery Metals and Qakaza Diamond Corp, to acquire an 88-95 % interest in various prospecting licences in Botswana that are highly pro- spective for manganese. The significant 13 283 km 2 land package includes an appli- cation for the Kgwakgwe Hill manganese mine and also surrounds Rio Tinto’s recent iron ore discovery.

“This acquisition positions Giyani with a world class manganese project far ahead of the curve before the global market realises

10  MODERN MINING  November 2016

MINING News

Deep drilling at Syama delivers high grade results

We have started development of the decline for the undergroundmine at Syama which the recently announced Definitive Feasibility Study demonstrated will deliver strongmargins for Resolute over an operat- ing life of more than 12 years. “Under this plan, site production from Syama is expected to reach 250 000 ounces per year. This is based on the cur- rent underground reserve and mine plan, neither of which have been updated with the results reported from the deep drilling programme. Resolute expects the pro- gramme will materially increase the Syama underground resource, substantially increase the already impressive mine life, and may create opportunities to expand future production or adapt to a more effi- cient mine plan.” Syama is one of two operating gold mines that Resolute owns, the other being Ravenswood in Australia. The company’s portfolio also includes the Bibiani gold project in Ghana. 

ambition of confirming a major extension of mineralisation along the Syama Shear to the south of the existing orebody. “The two intersections in SYDD442 are particularly significant as they intersect gold mineralisation at a relatively shallow depth in an area where there has been no previous drilling, 250 m south along strike from the current mining reserve,” com- ments John Welborn, Resolute’s MD and CEO. “The results indicate a potential new mineralisation lens which is separate from the main mineralised zone at Syama. We see enormous potential along strike to the south and down dip, and that potential is being confirmed by these and other drill results returned this year. These results completely open up the southern area at Syama for potential major extensions to resources. “Syama is already a world class orebody and the results we are receiving from the deep drilling programme highlight the exceptional size and quality of the deposit.

Resolute Mining, listed on the ASX, has reported additional high grade results from deep diamond drilling at the Syama gold mine in Mali. The Syama deep drilling programme was commenced in late 2015 with the ambition of substantially expanding the Syama underground resource. Resource expansion was primarily expected to be at depth with the majority of drilling tar- geting mineralisation below the existing underground reserve. Positive results have been previously reported dem- onstrating the potential for substantial future resource growth. These previously reported results also indicated that min- eralisation at Syama remains open to the north and south. Significant intercept results received from the latest drilling include 19 m at 2,57 g/t Au from 273 m; and 18 m at 3,02 g/t Au from 372 m. Further diamond drilling is now planned to follow up this result with the

November 2016  MODERN MINING  11

MINING News

Phase 2A expansion of Asanko Gold Mine approved

Asanko Gold Inc, listed on the TSX and NYSE MKT, has announced that its board has approved the commencement of the Phase 2A expansion at its Asanko Gold Mine (AGM) in Ghana, with Front End Engineering Design (FEED) to start immediately. The decision follows Asanko Gold’s receipt of the ‘Environmental Invoice’ from the Ghananian Environmental Protection Agency (EPA) for mining operations at the Esaase deposit and the overland conveyor connecting the Esaase pit to the existing processing facility. “Within three quarters of pouring first gold, our Phase 1 project is delivering ahead of feasibility in the key metrics of production and costs,” comments Peter Breese, Asanko Gold’s President and CEO. “The time is right to proceed with the Phase 2A expansion, which will establish mining at our Esaase pit and provide vital infrastructure between Esaase and the existing processing plant for future expan- sion projects.” Phase 2A has two components to its development plan. The first is the devel- opment of an open-pit mine and the construction of mining and crushing infrastructure at Esaase and the construc- tion of a 27 km overland conveyor belt, capable of handling ore for Phases 2A and 2B, to transport ore to the existing processing facility. The second component involves a brownfield modification to the existing CIL process facility to increase the plant’s capacity from 3,6 Mt/a to 5 Mt/a. The upgraded processing facility will process

Layout of the Asanko Gold Mine project in Ghana.

lite deposits, as well as the large Esaase pit. Extensive metallurgical test work, undertaken at ALS laboratories in Perth, Australia, together with operational expe- rience gained from Phase 1 to date, has confirmed that metallurgical recovery from blending the Esaase and Nkran ores will be in line with the PFS recovery esti- mates of 90,9 %. The technical and financial details of the new mine at Esaase, the conveyor belt and the plant modifications will be outlined in the Phase 2 DFS which is expected in Q4 2016. The Phase 2A capital cost is expected to be approximately US$125 million. The second stage of the project, Phase 2B, will further expand the pro- cessing facility at Phase 1 with the construction of an additional 5 Mt/a CIL circuit for a total processing capacity of 10 Mt/a (3 Mt/a from Nkran and associ- ated satellite pits and 7 Mt/a from Esaase) to produce approximately 450 000 ounces of gold per annum. 

a blend of 2 Mt/a of ore from Esaase and 3 Mt/a of ore from the Nkran pit and sur- rounding satellite deposits. With Phase 2A operational, AGM will produce approximately 300 000 ounces of gold in 2018, with the ore being derived from the Nkran pit and the phase 1 satel-

Drilling at Zulu returns “significant” tantalum grades Premier African Minerals Limited, the AIM- quoted mining exploration and production company, reports that significant tantalum grades have been recorded from the cur- rent 2 500 m drilling programme at the company’s Zulu lithium and tantalum proj-

“These interim results are extremely encouraging and support the company’s view that Zulu has the potential to be one of the best hard rock lithium projects today,” comments George Roach, Premier’s CEO. “The tantalum grades are even more significant when compared to the bell- weather Pilgangoora lithium-tantalum deposit, which is currently being developed in Australia by Pilbara Minerals Ltd and has reported generally lower tantalum grades than the current Zulu results received to date in their latest reserve statement in August 2016.” 

ect located in south-central Zimbabwe. Significantly elevated tantalum (Ta 2 O 5 ) grades have been encountered in all holes sampled to date, with grades reported as high as 706 ppm Ta 2 O 5 in borehole ZDD 14. Massive lithium-enriched miner- alised intersections in excess of 40 m were encountered in hole ZDD-05.

12  MODERN MINING  November 2016

MINING News

Development starts at Magambazi

Magambazi in 2009. The first hole proved to be the discovery hole, returning 53 m grading 4,32 g/t gold. In December 2011 Canaco com- missioned an initial mineral resource estimate for the mineralised portion of the Magambazi area. The results of this work were announced on May 15, 2012, reporting an initial mineral resource of 15,2 Mt grading 1,48 g/t gold and containing 721 300 ounces in the indi- cated category, as well as 6,7 Mt grading 1,36 g/t gold and containing 292 400 ounces in the inferred category. 

East Africa Metals Inc, listed on the TSX-V, says its development partner, Tanzanian Goldfields Limited, has initiated development activity at the Magambazi project located in the Handeni region of Tanzania. According to Tanzanian Goldfields, the mobilisation of equipment required to initi- ate test mining and bulk sampling operations as an initial phase of the development plan is in progress. Gravity recovery equipment is currently on site with additional equipment being mobilised to site from Dar es Salaam. Agitated leach tanks and CIL recovery equip- ment are scheduled for construction and installation over the next several months. Additionally, Magambazi Camp upgrades have commenced, with the production site preparation now in place. Tanzanian Goldfields’ management has concluded discussions with community and government representatives for the hand­ over of the Magambazi site and dismantling of artisanal operations to clear the way for the current test mining and bulk sampling programme and future development of a commercial mining operation. Previously completed preliminary met- allurgical test work on the primary gold mineralisation at the Magambazi project has demonstrated significant (72,6 %) gold recoveries from gravity methods alone. The initial phase of test mining and bulk sampling has been planned to confirm these results in the field and allow a definitive approach for the initial ramp up of production to be developed. Tanzanian Goldfields has also announced the appointment of Gareth Taylor as its General Manager. He has extensive experi- ence in deep level, intermediate, shallow underground and opencast mining in a number of African countries including Mali, Namibia, South Africa and Tanzania. For 28 years he was employed by AngloGold Ashanti where he was head of mining and plan- ning for the company’s East and West Africa regions and also MD of the Geita gold mine in Tanzania. In 2006 Taylor joined Barrick Gold, where he was Executive General Manager for Barrick Gold Tanzania and Vice President for Barrick Gold Africa, responsible for all Barrick’s operational interests in Africa. In 2010 he joined Shanta Gold Limited and held posi- tions as COO and CEO whilst bringing the New Luika Gold Mine in the Lupa goldfield of

south-west Tanzania to production. The Magambazi project is located in the emerging Handeni gold district in eastern Tanzania, 180 km north-west of Dar es Salaam and 140 km south-west of the port city of Tanga. Gold was discovered by locals in the Magambazi area in 2003, spurring a gold rush with intense alluvial and hard rock mining. Canaco – the predecessor of East African Metals – acquired the Handeni property in 2007 and began drilling at

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November 2016  MODERN MINING  13

MINING News

Balama on course for Q2 2017 commissioning

from the Prestea Open Pits and maintain a second ore source from the mine. “I am very pleased that Golden Star has been granted themining lease for Mampon,” comments Sam Coetzer, Golden Star’s President and CEO. “Through mining this high grade surface deposit we will generate strong short-term cash flow and it will assist us in maintaining production from Prestea until Prestea Underground commences pro- duction in the second quarter of 2017. “With exceptionally high grade min- eral reserves at 14,02 g/t, the real prize at Prestea is the underground mine, but the Prestea Open Pits have provided and will continue to provide useful cash flow to us during this transition period and I am very glad that, along with Mampon, they will now continue to produce until at least the second half of 2017.”  During the quarter, Syrah announced the resignation of MD Tolga Kumova as “part of a transition reflecting the evolving strategic direction of the company and the key development activities it is currently undertaking”. Chairman Jim Askew has stepped into an Executive Chairman role for the interim period and, says Syrah, a global search for a new MD has commenced with the objective of making this appointment within the next fewmonths.  tions has beenmobilised including nine Bell B40 articulated dump trucks, two Liebherr excavators, two Caterpillar dozers, two Caterpillar graders and two fuel tankers. The mining contractor, Tayanna Mozambique, has commenced establishment of its min- ing compound and offices. Construction of the run-of-mine (ROM) pad with a capacity of 360 000 tonnes is underway with com- pletion expected in January 2017. The Structural, Mechanical and Piping (SMP) contract has been awarded to Kentz Engineers & Contractors Limitada (Kentz), a member of the global SNC-Lavalin Group. Kentz has mobilised to site and established a 300-person camp. Syrah reports that the Balama project budget has been increased from US$175 million to US$185 million to incorporate changes of scope related to improved product quality. These changes are: intro- duction of attrition cells to the process flow sheet; and additional on-stream analysis to optimise product qualification.

Slabs for the product classification and bagging area at Balama (photo: Syrah).

In its report for the quarter ending 30 September 2016, ASX-listed Syrah Resources says that its Balama graphite project remains on course for commission- ing in Q2 of calendar year 2017. Balama – situated in the Cabo Delgado province of northern Mozambique, some 200 km west of the port town of Pemba – currently hosts what is reported to be the world’s largest reserve of contained graph- ite at Balama East and Balama West, with a combined ore reserve (JORC 2012) of 81,4Mt at 16% total graphitic carbon (TGC), sufficient for over 40 years of mine life. The project is planned as a simple, open- pit mining operation with a low strip ratio. Based on a mining feed rate of 2 Mt/a, at an average head grade of approximately 19 % TGC over the first 10 years of operations, approximately 355 000 tonnes of graphite

mental permit. GSR expects to start mining Mampon in the first half of 2017. Golden Star began mining the Prestea Open Pits in the third quarter of 2015 to bridge the gap between the Bogoso refrac- tory operations ceasing production and the commencement of production from the high grade Prestea Underground Gold Mine, which is expected to occur in the sec- ond quarter of 2017. The company had anticipated that pro- duction from the Prestea Open Pits would be completed by the end of the third quar- ter of 2016 but production is now forecast to continue until the second half of 2017. Golden Star says it will also endeavour to delineate additional mineral reserves in the area in order to further extend production concentrate will be produced per annum. Syrah intends to move product from Balama to Nacala port, located approxi- mately 490 km south-east of the project. Trucking of product will be outsourced to a contractor and, at full production, there will approximately 67 trucks (B-Double trailers), each transporting approximately 36 one-ton bags of product from Balama to Nacala daily. The ramp up of personnel on site has continued with approximately 1 400 direct staff and contractors on site by late October, a figure which is expected to peak at 2 000. Detailed engineering and design of the process plant has been completed and over 70 % of the required concrete for the plant has been poured by the civil contrac- tor, CMC Africa. The mining fleet required for full opera-

Golden Star awarded mining lease for Mampon Golden Star Resources (GSR), listed on the NYSE MKT and TSX, has received a mining lease for the Mampon deposit in Ghana. Mampon is a high grade, oxide deposit containing 45 000 ounces of gold (304 kt at 4,60 g/t), approximately 80 km to the north of GSR’s CIL processing plant at the Bogoso site. There is an existing, good quality road connecting the deposit and the processing plant for the majority of the distance, so lim- ited capital expenditures will be required in order to bring Mampon into production. Higher grade ore from Mampon will be blended with ore from the Prestea Open Pits, which is expected to enhance Golden Star’s cash flow in 2017. Following the receipt of the mining lease, the next step for the company is to obtain an environ-

16  MODERN MINING  November 2016