Modern Mining November 2017

November 2017 Vol 13 No 11 www.crown.co.za M ODERN MINING

IN THIS ISSUE…  Gamsberg zinc project on track

 Positive Feasibility Study on Kalongwe  SA company develops mining dredge  Viability of Bagassi South confirmed

MODERN M I N I N G

CONTENTS

NOVEMBER 2017

ARTICLES

MINING NEWS 4 Gamsberg project on track for mid-2018 start-up 6 Optimisation study reduces anticipated Etango capex 7 Yanfolila diesel power plant commissioned 8 Kibali underground mine in final commissioning stage 10 Wescoal has 8 Mt/a of production in sight 12 Shaft 1 of Platreef project reaches a depth of 500 m 13 Concor Opencast Mining secures two new contracts 14 Botswana Diamonds ‘re-discovers’eight kimberlites 15 Houndé completed under budget and ahead of schedule 16 Liqhobong plant operating at nameplate capacity 17 Caledonia to extend Central Shaft at Blanket PRODUCT NEWS 47 BME breaks into US market with successful test blasts 48 Pilot Crushtec launches new products at Open Day 49 Zimbabwe’s largest electric motor refurbished 50 Concord Cranes diversifies into new markets 51 Maptek optimises grade control 52 Cavex® hydrocyclones boost recoveries at Tharisa 53 Multotec builds local capacity in Mozambique 54 Becker relays detect cable theft 55 BLT supplies trommels and feeders into Africa 56 Parnis completes skid-mounted substations for Panama FEATURE – CONSULTANTS/PROJECT HOUSES 34 SENET – an African specialist with world-beating skills 40 Fluor completes modular tailings plant at Letlhakane GOLD 42 Bagassi South deposit heads towards development COMPANIES 44 Brelko 30 years in business REGULARS COVER 18 ‘Centre of Excellence’ status boosts WorleyParsons RSA COPPER 22 Kalongwe study indicates low capex and strong returns DIAMONDS 26 PEA confirms viability of an underground mine at Karowe 30 Mining dredge developed for DRC diamond project

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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Cover De Beers’ Venetia diamond mine in Limpopo Province showing the headgears of the Venetia Unde rground Pro j ec t ( VUP ) . WorleyParsons RSA – whose activi- ties are covered on page 18 of this issue – is the EPCM contractor for the VUP.

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Average circulation (July–September 2017) 4270

November 2017  MODERN MINING  1

COMMENT

Endeavour Mining sets the pace inWest Africa

A company which is fast-emerging as one of the ‘superstars’ of the African gold mining scene is TSX-listed Endeavour Mining Corporation, which is rapidly expanding its portfolio of West African mines. As we report on page 15 of this issue, its latest achievement has been to bring its new Houndé mine in Burkina Faso on stream well ahead of schedule, at the same time shav- ing off US$15 million from the initial capital budget of US$328 million. Moreover, the con- struction of the mine was completed without a single LTI being recorded – a remarkable record given that more than 7 million man- hours were worked. Houndé – which will have an average annual production of 190 000 ounces over a mine life of 10 years – achieved commercial produc- tion at its nameplate capacity on 1 November, after pouring its first gold on 18 October. This must be some sort of record – according to Endeavour, mines typically take an average of 10 quarters to reach full design capacity. Not content to sit on its laurels, Endeavour is now transitioning the Houndé construction team to the Ity CIL project in Côte d’Ivoire. This will replace the current Ity heap-leach opera- tion and is involving a very substantial capex of just over US$400 million. Construction started in September and the build time is roughly 20 months. The project will, along with Houndé, rank as a flagship asset, with a mine life of 14 years and an average annual production of 235 koz at a very low AISC of US$494/oz over the first five years. Looking beyond Houndé and Ity, Endeavour has launched the Kalana project optimisation study. Located in Mali, Kalana has come into the Endeavour stable as a result of its recent acquisition of Avnel Gold Mining and has the potential to be a substantial long-life pro- ducer. Avnel completed a feasibility study on the project which outlined an open-pit mining operation allied to a 1,2 Mt/a CIL plant pro- ducing an average of 101 000 ounces of gold a year over an 18-year life. Endeavour is revising and optimising this study to allow an increase in the average annual production to around 150 koz, albeit over a shortened mine life. Endeavour is expecting to produce between 630 000 and 675 000 ounces of gold in 2017 and believes it is well positioned to meet its 2019 objective of achieving more than 800 koz of production at an AISC of below

US$800/oz. The group’s current operating mines are Agbaou and Ity in Côte d’Ivoire, Houndé and Karma in Burkina Faso and Tabakoto in Mali. As I write this, it also owns the Nzema mine in Ghana although this has been sold to BCM International, with comple- tion of the transaction awaiting the approval of the Ghanaian authorities. Some of Endeavour’s senior executives, including CEO Sebastien de Montessus, are based in London but the group believes in a hands-on management model with key per- sonnel based close to operations. It maintains an office in Abidjan in Côte d’Ivoire which is staffed by 40 employees, including its COO, Jeremy Langford. All mine sites have dedicated airstrips, allowing them to be accessed from Abidjan within three hours or less. Like Randgold, which it in some ways resembles, Endeavour believes in the value of exploration – both on a near-mine and regional basis – and its 2017 budget for this function is in the region of US$45 million, a huge amount for a mid-tier miner. Its medium-term explora- tion target is to discover 10 to 15 Moz by 2021, which represents more than twice the reserve depletion at its mines over this period. Endeavour’s exploration is guided by a screening and ranking methodology similar, apparently, to that used in the oil and gas industry and it is aiming for an exploration discovery cost of less than US$20/oz versus the average for West Africa of US$75/oz. The human resources it devotes to exploration are impressive and it employs around 20 senior geologists, 40 junior geologists and 130 techni- cians and support staff. The group has had particular success with its exploration at Ity, where 1,5 Moz have been added to the inventory of the CIL project over the past 12 months. It has also just reported fresh discoveries at both Houndé and Karma. Interestingly, it has recently agreed an explora- tion joint venture with Randgold covering the adjacent Sissedougou and Mankono properties located in northern Côte d’Ivoire. Randgold will hold a 70 % interest and will act as the JV operator. Summing up, Endeavour has worked won- ders with its present portfolio and is clearly a company to watch. It has an impressive pipe- line of projects and – based on its present form – could eventually challenge Randgold for the title of Africa’s most dynamic gold producer. Arthur Tassell

The group has had particular success with its exploration at Ity, where 1,5 Moz have been added to the inventory of the CIL project over the past 12 months.

November 2017  MODERN MINING  3

MINING News

View of the Gamsberg site. Note the access road up to the mining area (photo: Vedanta Zinc International).

Gamsberg project on track for mid-2018 start-up

In its interim results for the six months ended 30 September, London-listed Vedanta Resources says that its Gamsberg zinc project in South Africa – being under- taken by Vedanta Zinc International – is on track to commence production in mid-2018. According to Vedanta, pre-stripping as

part of open-pit mine development is pro- gressing to plan. Says the company: “We achieved the full ramp-up to pre-stripping mining volumes of 3,5 million tonnes per month in Q1 and have continued at that rate since. To date, we have excavated over 50 % of waste rock of the total pre-strip- ping requirement. Construction works for

the concentrator and other infrastructure are progressing well with all contractors fully mobilised to site.” Bulk civil works related to mills and crusher foundations are on track. Water and power infrastructure installation is also progressing on schedule with more than 50 % of the work completed. Manufacturing and supply of all equip- ment is on schedule with mills expected to be at site this month (November). The first phase of the project is expected to have a mine life of 13 years, replacing the production lost by the clo- sure of the Lisheen mine in Northern Ireland. Once commissioned, it is expected that the mine will take 9-12 months to ramp up to full production capacity of 250 000 t/a of zinc-in-concentrate. Cost of production is estimated at US$1 000 to US$1 150 per tonne. Gamsberg forms part of the Black Mountain Mining (BMM) operations and is located about 30 km from the BMM base at Aggeneys in Northern Cape Province. Discovered more than 40 years ago and held undeveloped in the asset portfo- lios of various mining companies, it was acquired from Anglo American by the

Concentrator civil works in progress (photo: Vedanta Zinc International).

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MINING News

Golden Star records 64 % increase in its quarterly gold production

try experience in both operational and corporate leadership positions, primarily in Africa. Prior to joining Acacia, he held senior roles at AngloGold Ashanti (25 years) and Barrick Gold Corporation. He joined Acacia inMay 2012 asVice President, Organisational Effectiveness. Since then, he has been a key member of the Executive Team of Acacia and an integral part of the company’s turn- around. During his time with Acacia, he has also served as General Manager of the Bulyanhulu mine and helped lead the suc- cessful restructuring of the business. Maritz (42) has been with Acacia and its predecessor companies since 2001 in a range of increasingly senior finance roles covering all aspects of the finance function. He was initially employed by Placer Dome, which was acquired by Barrick in 2006, and was part of Acacia at its inception.  ing cost per ounce was US$671 in the third quarter of 2017, a 30 %decrease compared to Q3 2016, due to the 38 % decrease in the cash operating cost per ounce at Prestea and the 23 % decrease at Wassa. The con- solidated AISC per ounce was US$848, a 26 % decrease compared to Q3 2016, and the consolidated cost of sales per ounce was US$855, a 26 % decrease compared to the same period in 2016. From a development perspective, GSR made robust progress during the third quarter of 2017. The successful blasting of the initial ore from the first stope in the West Reef orebody at Prestea Underground took place in late September 2017. During the third quarter of 2017, the mine deliv- ered 3 204 ounces of gold and production is expected to continue to ramp up as the mine moves towards commercial produc- tion.  This is anticipated to be achieved during the fourth quarter of 2017. At Wassa, GSR has decided to delay the next pushback of Wassa Main Pit, Cut 3, until a time when the gold price is higher and the open pit will deliver higher margin ore. From early 2018 Wassa will become solely an underground operation as GSR focuses on producing higher grade, higher margin ounces that will generate the strongest cash flow. 

Golden Star Resources (GSR), listed on NYSE American and the TSX, has reported a 64 % increase in gold production to 73 827 ounces in the third quarter of 2017 compared to the third quarter of 2016. GSR operates the Prestea andWassa goldmines in Ghana. This “compelling result” – as GSR describes it – was achieved as a result of the fifth consecutive quarter of record gold production from the Prestea Open Pits (38 899 ounces), including the Mampon deposit, which represents a 71 % increase compared to Q3 2016. It was also due to the continued out- performance by the mining team at Wassa Underground in achieving significantly higher daily mining rates during the third quarter of 2017 than targeted for the year (1 400 tonnes per day (tpd)). The average mining rate during the period was over 2 200 tpd, which also represents a 40 % increase compared to the second quarter of 2017. The third quarter of 2017 was also a notable quarter from a cost perspective, as it delivered the lowest cash operating cost per ounce in seven years and the lowest AISC per ounce since GSR began reporting this metric four years ago. Golden Star’s consolidated cash operat-

Vedanta group in 2011. The project’s cur- rent reserve and resource is 214 Mt, with a grade of between 6 and 6,5 %. From the first blast for Phase 1 in July 2015, pre-start mining advanced accord- ing to schedule. Completion in April 2017 of an access ramp – essential for waste pre- stripping to access the orebody for bulk mining – was a significant milestone. The contractor for the bulk mining is Aveng Moolmans. The EPCM contractor for the processing facility (and related infrastructure includ- ing the power and water plants) is ELB Engineering, who will be using – for the first time in a zinc application – the new staged flotation reactor (SFR) technology of Canada’s Woodgrove Technologies in the plant. Benefits of the technology over conventional mechanical cells reportedly include a much more compact footprint, reduced power and air requirements, less instrumentation and reduced wear and maintenance costs due to lower impeller tip speeds. The Gamsberg team was able to robustly review the capital cost of Phase 1 and reduce it from US$600 mil- lion to US$400 million. These measures enhanced Gamsberg’s viability consid- erably during the period when the zinc price weakened. 

Brad Gordon steps down at Acacia Mining Acacia, which operates three gold mines in Tanzania has advised the market that Brad Gordon, Chief Executive Officer, and Andrew Wray, Chief Financial Officer, have separately notified the company of their intention to resign from their positions. Both will remain with Acacia until the end of the year to ensure a smooth transition. Gordon will be returning to Australia for family reasons, while Wray is pursuing an opportunity elsewhere.

Concurrently, Acacia has announced the appointment of Peter Geleta, cur- rently Acacia’s Head of Organisational Effectiveness, as Interim Chief Executive Officer. Jaco Maritz, currently Acacia’s General Manager, Finance, will be appointed Chief Financial Officer. Both appointments will be effective from 1 January 2018. Geleta (54) has 35 years of mining indus-

November 2017  MODERN MINING  5

MINING News

Optimisation Study reduces anticipated Etango capex

improvement target of US$3+/lb U 3 O 8 , compared with the operating costs pub- lished in the 2015 Optimisation Study. The most significant estimated oper- ating cost savings resulted from the following:  Testwork confirmed a 40 % reduction in the binder required for the agglomera- tion process. The testwork concluded that a binder dosage of 150 g/t of ore (as compared to the 250 g/t in the DFS) is sufficient for the target heap height and irrigation flow. This reduction in binder reduces the forecast operating cost by approximately US$0,75/lb.  The Heap Leach Demonstration Plant testwork over two years has consistently shown a final recovery of approximately 93 % against the DFS projection for a scaled-up heap of 86,9 %. The testwork results, which included 280 tonnes of ore, were used by AMEC Foster Wheeler to project a scaled-up processing recov- ery of 87,8 %. This improved recovery reduces the forecast operating cost by approximately US$0,40/lb.  The testwork also consistently showed acid consumption averaging 14,4 kg/ tonne compared to the DFS projection of 17,6 kg/tonne. The scaled-up acid consumption was reduced to a level of 16,8 kg/tonne. Further detailed engi- neering work will be done in the DFS Update to accurately reflect the oper- ating savings achieved with this lower acid consumption and other oppor- tunities to reduce acid costs such as membrane acid recovery. The Processing OS identified an oppor- tunity to incorporate nano-filtration technology in the processing circuit. A desktop review of the Bannerman Heap Leach analytical data was undertaken, which evaluated the technical suitabil- ity of nano-filtration technology in the processing flowsheet as a first step to understanding the economic applicabil- ity of the technology. As a result, a variety of nano-filtration membranes will be tested using a membrane pilot test rig in November 2017. The testwork will be undertaken at modest additional cost, as the programme utilises uranium-bearing solutions gener- ated by the Etango Demonstration Plant and internal expertise. 

The Etango Demonstration Plant generated pregnant leach solution for IX testwork (photo: Bannerman).

Bannerman Resources, listed on the ASX and in Namibia, has announced the successful completion of the Etango Processing Optimisation Study (Processing OS) by its independent technical consul- tants, AMEC Foster Wheeler. According to Bannerman, the Processing OS is the first completed stage of the Etango DFS Update and, together with extensive confirmatory test-work, maintains Etango’s position at the forefront of the global uranium devel- opment pipeline. Highlights of the study include a reduc- tion of US$73 million in Etango’s estimated capex as well as a reduction in operating costs. Bannerman’s 95 %-owned Etango project is one of the largest and most advanced uranium projects globally and is located within the Erongo uranium prov- ince of Namibia. Exploration at the Etango project commenced in 2006 followed by com- pletion of a Scoping Study in 2007, a Pre-Feasibility Study (PFS) in 2009, a PFS Update in 2010, a Definitive Feasibility Study (DFS) in 2012 and an Optimisation Study (mining) in 2015. The Etango Heap Leach Demonstration Plant was constructed in 2014, follow- ing which the company ran a six-phase pilot programme that concluded in January 2017. Bannerman commenced the Processing OS in the March 2017 quarter with the

objective of incorporating the favourable results obtained in the Demonstration Plant programme and evaluating the appli- cation of recent processing technological advances since the 2012 DFS was com- pleted. The results and recommendations from the Processing OS will be incorpo- rated into the DFS Update, in conjunction with definitive level procurement aimed at capturing the deflation that has occurred in the resources sector since 2012. In addition to substantially reduc- ing estimated pre-production capital by US$73 million without an operating cost trade-off, the Processing OS identified further capital and operating cost reduc- tion opportunities that can be evaluated during definitive level engineering and procurement to be completed under the DFS Update. A significant estimated capital cost saving has resulted from simplifying the crushing, stockpiling and screening circuit. Other drivers of capital cost savings are confirmation that Ion Exchange (IX) is pref- erable to Solvent Exchange (SX) for both economic and operational reasons; remov- ing pinned bed clarifiers after the Heap Leach Demonstration Plant programme confirmed the low suspended solids con- tent of the PLS in the Etango solution; and the use of a single agglomeration unit. The Processing OS identifies significant potential operating cost savings and has led Bannerman to formulate a DFS Update

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MINING News

Aggreko commissions Yanfolila diesel power plant

less delivery of power. Aggreko is offering a complete turnkey solution on a seven- year contract. Yanfolila – which has a capex of US$79,4 million – will recover 770 koz of gold from five pits over an initial eight-year mine life, with the average annual production being 107 000 oz a year. Production in year 1 will be 132 000 oz. Assuming a gold price of US$1 250/oz, all-in sustaining costs are estimated at US$695/oz. The gravity/CIL plant, which is being built by South Africa’s SENET, has a 1,24 Mt/a capacity. Pre-production mining by mining con- tractor AMS began in August this year. AMS is deploying a fleet which includes four Liebherr 9150 excavators, one Liebherr 9250 excavator and 18 Cat 777F dump trucks. 

AIM-listed Hummingbird Resources has reported that Aggreko has fully commis- sioned the 7,4 MW diesel power facility on site to provide power to the process plant at the company’s Yanfolila gold mine in Mali. “Working with Aggreko to deliver our power remains in line with our strategy of working with world class partners as we progress Yanfolila towards imminent gold production,” comments Dan Betts, CEO of Hummingbird. “Aggreko offers the best quality power solution in the market at competitive pricing with a full team on site to run and maintain its operations. “Furthermore, we continue to evalu- ate potential renewable solutions such as solar PV, as we strive to be a responsible miner operating for the benefit of all our stakeholders.

“We expect the next upcoming mile- stone to be the commissioning of the water supply and testing the now fully installed mill.” Adds James Shepherd, Managing Director, Africa of Aggreko: “Our people in Yanfolila and the wider Aggreko team are dedicated to supporting Hummingbird towards the success of this project. “Getting reliable, efficient and cost- effective power supply is critical when it comes to mining operations. Aggreko’s technologies provide a scalable and effi- cient power that can accommodate any change of needs and resources available.” The installed power at Yanfolila is pro- vided through a series of 1 MW units. A full SCADA and PLC automation system links directly into the process plant for seam-

The 7,4 MW diesel power facility at Yanfolila (photo: Hummingbird).

November 2017  MODERN MINING  7

MINING News

Kibali underground mine in final commissioning stage

sustain its profitability throughout the ups and downs of the gold price cycle. To date, over US$2 billion has been spent on acquiring and developing Kibali, of which the majority had been paid out in the form of taxes, permits, infrastructure and payments to local contractors and suppliers. “With capital expenditure tapering off, Kibali should now be preparing to pay back the loans taken to fund its develop- ment. We are concerned, however, that its ability to do so will be impeded by the increasing amount of debt – currently standing at over US$200 million – owed to the mine by the government. TVA refunds, excess taxes and royalties in violation of the country’s mining code make up the bulk of this amount,” Bristow stated. Another troubling development was the recent re-introduction to parliament by the Ministry of Mines of a proposed new mining code which is exactly the same as the one the government with- drew in 2015 after it was comprehensively demonstrated that it would seriously damage or even destroy the Congolese mining industry. “Randgold has proven and contin- ues to prove that it is committed to the DRC and to the development of a gold mining industry capable of making a sub- stantial and lasting contribution to the country’s economy. Despite all the chal- lenges, including the volatile political climate and a deteriorating economy, we continue to invest here,” Bristow said. “Our exploration teams are searching intermittently from the 1950s to 1990s. The Zn mineral is predominantly willemite (zinc silicate) hosted in mainly limestone and dolostone (dolomitic rock). An independently verified non-JORC compliant hard rock resource has been estimated at 275 166 tonnes at 20,2 % Zn with a cut-off grade of 14 % Zn based on historical diamond drill holes. At a cut-off grade of 12 % Zn, non-JORC resource ton- nage increases (18 %) to 325 941 tonnes at 19,1 % Zn (an 11 % increase in Zn metal). The Star Zinc project is located approxi- mately 18 km NNW of Lusaka and is accessible via the tarred ‘Great North Road’ and a good all-weather graded road. 

Underground operations at Kibali (photo: Randgold).

The Kibali gold mine in the DRC remains on track to achieve its production target of 610 000 ounces this year as its under- ground operations and the integration and automation of the vertical shaft enter the final commissioning and automation stage, says Randgold Resources Chief Executive Mark Bristow. The mine is anticipating a significant increase in production once the final shaft commissioning, which remains on a tight schedule, has been completed. At a briefing for local media in Kinshasa recently, Bristow said that in spite of the high level of activity at the mine, there had been a significant improvement in

the safety statistics, with its total injury frequency rate continuing to decrease and the lost time injury frequency rate down to 0,31 per million hours worked in the September quarter. Following the anticipated completion of the underground mine in the fourth quarter, the only major capital project still in the works would be Kibali’s third new hydropower station, currently being con- structed by an all-Congolese contracting team. Bristow said the availability of self- generated hydropower and themine’s high degree of mechanisation and automation were important factors in Kibali’s ability to pliant resource in order to upgrade it to JORC code (2012) compliance, followed by new drilling to test the potential to extend the high-grade resource east and west and in new ground to the south. The occurrence of high grade (>50 % Zn) float (pieces of rock that have been removed and transported from their original out- crop) 200 m south of the current open pit presents a prospective new target for map- ping and exploration. Galileo recently acquired a 51 % interest in the Star Zinc project, a historical, high- grade zinc (Zn) open-pit mine operated

Galileo to fast track exploration at Star Zinc Galileo Resources, whose shares are quoted on AIM, has appointed Africa Technical Consultants Limited (ATC) to assist with and provide services for a fast- track exploration programme for its Star Zinc project in Zambia.

This is the first step in Galileo’s objective (announced in October 2017) to initiate a fast-track drilling programme in order to upgrade the project’s current non-com- pliant resource and to test the potential to increase the resource size. This programme envisages, initially, twin-hole drilling in the current non-com-

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MINING News

for our next big discovery in the green- stone belt of the north-eastern DRC. In line with our local supply strategy, Kibali spent approximatelyUS$40 million with Congolese contractors in the past three months alone. We are developing sub- stantial agribusiness and other community projects. And perhaps most important, we invest in the training and empowering of Congolese nationals, who already make up most of the Kibali management team, thus making a contribution of incalculable value to the expansion of the country’s skills base. “The DRC has all the materials for build- ing a sustainable mining industry but that will require a fully committed partnership between the government on the one hand and the mining companies on the other,” he continued. “Despite recent indications to the contrary, we remain confident that such a partnership is within reach, and that the government will see the criti- cal importance of maintaining a stable, investor-friendly fiscal and regulatory envi- ronment for the country’s mining sector.” 

Orca Gold expands water resource at Block 14 Orca Gold Inc, listed on the TSX-V, has reported the successful expansion of the Area 5 aquifer at its Block 14 gold project in Sudan.

on the throughput, enabling Orca to approve the design of a processing facility at GSS of 6,0 Mt/a. The completion of the Feasibility Study incorporating this design scope is expected in early Q2 2018. Drilling is ongoing at GSS to continue converting inferred to indicated resources and to extend the overall resource below the pit shells that formed the basis of the Revised PEA. Results from the first eight holes of a 25 000-m drill programme were recently released showing a strong poten- tial for increased resources both within and outside the existing pit shells, which supports the decision to design a 6,0 Mt/a process plant at GSS. “With the expansion at Area 5, GSS can now be developed to its full design potential. The decision by our Board to proceed with a 6,0 Mt/a operation is a game changer for the project, almost dou- bling the production throughput from the Revised PEA,” Richard Clark, Orca’s Chief Executive Officer, commented. 

The Area 5 aquifer, located 85 km from the main Galat Sufar South deposit (GSS), was initially discovered in May 2017 through a specialised airborne geophysical survey, which identified an aquifer target size of 562 km 2 . A water resource area covering 100 km 2 was proven with twelve boreholes, which sup- ported the 3,4 Mt/a throughput scenario outlined in Orca’s Revised Preliminary Economic Assessment, whose results were announced earlier this year. Recognising the potential and quality of this fresh water aquifer, Orca has recently completed a second programme of six boreholes, expanding the resource area to 135 km 2 and increasing the estimated volume capacity of the aquifer to 100 mil- lion m 3 . This important development has removed water availability as a constraint

November 2017  MODERN MINING  9

MINING News

Wescoal’s processing plant complex in Mpumalanga (photo: Wescoal).

Wescoal has 8 Mt/a of production in sight

The announcement of a R12-million divi- dend and the securing of more efficient, long-term debt funding highlight JSE- listed Wescoal’s continued progress in the junior coal mining space as it consolidates the recent Keaton acquisition. This is the view of CEO Waheed Sulaiman, who says the Group is on track to become a leader in its field with the short to medium term objective of 8 Mt/a in sight. “We will continue to return capi- tal to shareholders through dividends or share buy-backs with the company gener- ating good cash flows.” He says the Keaton integration costs are in line with expectations from rationalising human resources to optimising mining operations and projects. “Immediate cost savings or low hanging fruit have been identified in Keaton and we have acted on these to realise cost savings during the current financial year,” he says. “Strong cash flows are allowing us to repay expensive short-termdebt and enter into more efficient long-term debt struc- tures while paying dividends. Long-term debt funding from banks is evidence that traditionally conservative financial institu- tions see and buy into the Wescoal value proposition.” Sulaiman highlights the importance of the recently acquired Keaton assets.

“Vanggatfontein colliery, located near the town of Demas in Mpumalanga, produces coal for supply to Eskom and domestic industrial consumers. Production from the mine and other Keaton assets is in line with budget and the operations are stable as they are integrated into our operation. “In addition, project development work at Moabsvelden is progressing as a short- termpriority and we hope to complete this in Q3 of FY17.” He points to transformation at the cen- tre of the company’s employment and ownership principles. “In keeping with the company’s 51 % minimum black own- ership, its enlarged shareholder base is now well above this figure. In addition, a broad-based ownership scheme involving employees is planned for implementation which is likely to further enhance BEE ownership.” Wescoal’s total spend on local eco- nomic development (LED) initiatives is approximately R5,33 million for the past year. Corporate Social Investment (CSI) spend has also been a key focus of the company’s social responsibility pro- gramme of around R1,43 million with a total community upliftment investment of R6,76 million.“It is the company’s intent to maintain or improve the percentage

in relation to our profitability or revenue growth in time. “In addition some R1,9 million has been allocated to enterprise development where we intend translating entrepreneur- ial potential into sustainable businesses capable of fitting into the Wescoal supply chain or be positioned to operate indepen- dently in a sustainable manner,” Sulaiman continues. “We continue to progress on realising our employment equity and diversification plans and have been successful in recruit- ing two senior managers from designated groups as well as appointing a black Chief Executive Officer for the Mining busi- ness. Our internal talent management programmes and strengthening of the senior management and executive team have allowed us to fill the vacant CFO post with an internally chosen candidate – an approach that positions us well to take advantage of growth opportunities,” Sulaiman says. “In going forward we intend playing a significant role in consolidation in the coal mining space, but only in a value add- ing, sustainable way. Our broader asset base augurs well for the future and this is getting recognition in the marketplace regarding share value from, among others, share analyst companies.” 

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MINING News

Banro provides update on Twangiza and Namoya

Banro Corporation, listed on the TSX and NYSE American, has reported that its Twangiza and Namoya gold mines in the DRC produced 30 297 ounces of gold and 18 533 ounces of gold, respectively, in Q3 2017. Year-to-date combined total production for the two mines is 133 783 ounces of gold. Twangiza’s gold production in Q3 2017 increased by 55 % com- pared to Q2 2017, due to having access to enough oxide feed material to blend with the upper transition (soft non-oxide) material in the pit. As a result of adopting the recommendations from a process review, all lower transition and fresh ores were stockpiled to be treated after the installation of the appropriate size reduction processing route. The process recoveries at Twangiza improved by 11 % over Q2 2017 due to better blend proportions of oxide and upper transition ores being received by the plant. Process engineering studies are currently in progress to design the appropriate Semi-Autogenous Grinding (SAG) mill to efficiently treat both the lower transition and fresh ores, whose hardness is beyond the capabilities of the current mills. The benefits of the injection of new and matching fleet at Twangiza during the first half of 2017 into the production line has demonstrated Twangiza’s ability to expose more ore faces for the efficient supply of the proportions of feed required for blending, says Banro. Following the installation of additional primary fleet at Namoya during the latter part of Q2 2017, Namoya was able to move more material out of the pits in the middle of Q3 2017. Namoya experienced a production shortfall in Q3 2017. This relates to the temporary shutdown and evacuation of staff during the first week of July (as a result of security issues) and a shortage of major supplies while the company concluded its latest financing. As well, the ongoing closure of road access to Namoya (again, as a result of secu- rity concerns) continues to impact Namoya with mining operations still being suspended. Spraying at the heap leach section of the mine is continuing, to recover gold from the processed ore stacked before mining operations were suspended.  Drilling contractor appointed Australia’s AVZ Minerals says it has entered into an agreement with Equity Drilling Limited for the completion of an initial drill- ing programme at the Manono lithium project in the DRC. The contract covers the initial 20 000 m phase of a planned 40 000 m drill programme to test, define and report mineral resources at the Kitotolo and Manono sectors of the project. The 20 000 m programme – using one multipurpose and three diamond drill rigs – should take an estimated three months to complete. Drilling is planned to commence in December. Equity Drilling was formed in 2016 by Mike Warren and Marc Olyott. Previously Warren founded Geosearch. This was a 147-rig operation that operated in most African countries, south of the Sahara. Geosearch was sold in 2006. Equity currently has 16 rigs and its aim is to increase this to a maximum of 20 rigs in order to provide critical mass, but at the same time still be able to provide a personalised service to those clients operating in remote or dif- ficult environs. 

November 2017  MODERN MINING  11

MINING News

Shaft 1 of Platreef project reaches a depth of 500 m

recount to our grandchildren. Building a major, new platinum group metals mine in the current market takes long-term vision, unwavering resolve and a clear focus.” The sinking of Shaft 1 is continuing to advance at a rate of 40 to 50 m per month. Approximately 40 % of Platreef’s shaft- sinking team now comprises employees drawn from local communities who had no previous mining experience. New employ- ees received intensive, on site training for underground mining and complete a workplace-safety induction programme. “We pride ourselves on having a highly- skilled, safety-focused workforce, and we have been impressed by the willingness of our senior staff to help pass on these skills to the next generation of miners,” said Dr Makhesha. Ivanhoe also reports that early-works surface construction for the project’s second shaft, Shaft 2 – which will be the mine’s production shaft – is expected to be completed in the third quarter of next year. The early-works programme began in May this year with initial curtain grout- ing around the boxcut. Further work includes the excavation of a surface box- cut to a depth of approximately 29 m and construction of the concrete hitch for the 103-m-tall concrete headgear (headframe) that will house the shaft’s permanent hoisting facilities and support the shaft collar. Shaft 2 will have an internal diameter of 10 m and the capacity to hoist 6 Mt/a. The headgear design for the permanent hoisting facility has already been com- pleted by South Africa-based Murray & Roberts Cementation.  The 16 grab samples were collected along approximately 2,4 km of strike of the known pegmatite intrusions. The samples vary in Li 2 O content from 0,07 % Li 2 O to 5,32 % Li 2 O. The samples retrieved also con- tain anomalous tin and tantalum values. The samples are selective and not necessar- ily representative – says Montero – of the mineralisation hosted in the pegmatites on the property. Further confirmatory work including mineralogical investigations, geological mapping, channel sampling and lithium analysis on RC chips from a previous drill programme is planned as part of the due diligence programme. 

Platreef’s Shaft 1 sinking headgear and related surface infrastructure (photo: Ivanhoe).

Robert Friedland and Lars-Eric Johansson, respectively Executive Chairman and CEO of TSX-listed Ivanhoe Mines, and Dr Patricia Makhesha, Managing Director of Ivanhoe’s subsidiar y, Ivanplats, have jointly announced that Shaft 1 at the Platreef plat- inum, palladium, rhodium, gold, nickel and copper mine near Mokopane in Limpopo Province has reached a depth of 500 m below surface. This is more than half way to the planned final depth of 980 m. Ivanhoe indirectly owns 64 % of the Platreef project through Ivanplats and is directing all mine development work. The planned initial average annual production of the mine will be 476 000 ounces of plat- inum, palladium, rhodium and gold, plus 21 million pounds of nickel and 13 million pounds of copper. The 7,25-m-diameter Shaft 1, which is expected to reach the Flatreef mineralisa- tion at a depth of approximately 783 m in the third quarter of next year, will be used

for initial access to the Flatreef deposit and early underground development. The first shaft station, completed in September at a depth of 450 m, will be used as an intermediate location for water pumping and shaft-cable termination. As shaft sinking advances, an additional three shaft stations will be developed at mine working depths of 750m, 850mand 950m. “Our focus is to keep advancing the Platreef project along its critical path,” said Friedland. “Our continued development of shafts 1 and 2 will provide access to the Flatreef deposit and help to ensure that the project is able to meet the scheduled, first phase start-up of the underground mine and concentrator by 2022.” He added: “Our team is dedicated to building a state-of-the-art mine that will produce metals that are essential to our urbanising planet. It is a mine that matters to all of our stakeholders and an achieve- ment that we will be able to proudly earns an 80 % interest in the property by committing to spending C$1 million and completing a feasibility study in three years. Nico Scholtz, an expert on pegmatite geology, carried out the sampling pro- gramme for Montero. A total of 16 grab samples was submitted for full chemical analysis and three mineralogical samples for investigation at SGS Laboratories in Johannesburg. The chemical assay results have been reported to Montero while the three mineralogical samples remain outstanding.

Montero completes grab sampling programme Montero Mining and Exploration, listed on the TSX-V, has completed an initial grab sampling programme on the Soris lithium project in central Namibia.

On Oc tober 24, 2017, Montero announced it had entered into a Letter of Intent (LOI) with Frovio Investment, a Namibian company, to acquire up to an 80 % interest in the project, which is located in the De Rust pegmatite field in Namibia. Montero is currently in a three-month legal and technical due diligence period. Under the terms of the LOI, Montero immediately

12  MODERN MINING  November 2017

MINING News

Concor Opencast Mining secures two new contracts

Concor Opencast Mining has announced that the company recently secured two new contracts as well as an extension to an existing project. The company is part of Concor Con­ struction which was acquired recently by a consortium led by Southern Palace Group and MD EricWisse says that, as a proudly Level 1 B-BBEE contributor, Concor Opencast Mining is well positioned to secure further projects in the mining sector.

Eric Wisse, MD of Concor Opencast Mining.

Wisse says that a substantial contract, worth R619 million, was confirmed with Anglo American Platinum ending the year on a posi- tive note. Concor Opencast Mining teams will provide load and haul services at the Zwartfontein pit of the Mogalakwena mine. This is a 36-month contract. “Significantly, the company will also continue its work at the Blinkwater tailings dam facility at Mogalakwena for another two years, as an extension to an existing contract,” he says. Concor Opencast Mining has also secured a contract at Mafube Colliery’s Lifex project. Mafube is a joint venture between Anglo Coal and Exxaro. The scope of work on this contract comprises the develop- ment of the boxcut that will enable roll-over mining operations upon completion of the project. Another recently awarded contract is the 36-month drill and blast contract at the Vlakfontein mine near Ogies in Mpumalanga. Wisse says that there has been an increase in enquiries over the past few months. “I believe this is directly linked to an increased opti- mism in the mining industry due to improving commodity prices, despite the other challenges this industry faces.” 

Concor Opencast Mining is well positioned as a Level 1 B-BBEE contributor.

November 2017  MODERN MINING  13

MINING News

Botswana Diamonds ‘re-discovers’ eight kimberlites

Diamonds, anecdotal evidence indicates that very little, if any, modern exploration technology has been applied to this highly prospective area and this is supported by the landowners, whose families have been in occupation of the properties for a num- ber of generations. More detailed ground work has involved further field observations and the collection of samples from the relevant sites which have been subject to whole rock geochemistry tests by the Council for Geosciences. The results of these tests and obser- vations confirm the existence of eight Group 1 kimberlites. Extensive historical workings suggests that these kimberlites are diamondiferous. A detailed ground geophysical survey is currently taking place to assess the size of these kimberlites. “The best place to find a mine is where there is or was a mine,” comments John Teeling, Chairman of Botswana Diamonds. “The Free State area was the centre of world diamond mining over 100 years ago but has been neglected. New technology and new ideas offers opportu- nities. This approach is paying off for BOD with the re-discovery of eight kimberlites. Now we have to see what opportunities exist for BOD.”  measured resource was declared totalling 12,7 Mt and the overall indicated resource increased from 61,7 Mt to 73,2 Mt, a 19 % increase. “The exploration programme vindicates our decision to focus on a reduced area of the overall prospecting area with a view to a long-term project supplying the regional market and ultimately the seaborne ther- mal coal market,” he said. While average raw coal qualities for the project remained similar, inherent moisture was notably lower and the A Seam in the underground areas showed considerably improved qualities. Minergy says it will be the second pro- ducer of coal in Botswana, and is committed to being at the forefront of developing a vibrant coal industry in the country. “All our timelines for the project have now been met and we are confident of being in production in the third quarter of 2018,” concluded Bojé. 

Linesh Lutchmansingh, one of Botswana Diamonds’ geologists, at the site of one of the re-discovered kimberlites (photo: Botswana Diamonds).

Botswana Diamonds (BOD), listed on AIM, has reported the re-discovery of eight Group 1 kimberlites at its Free State project, part of its Vutomi project in South Africa. Active exploration has commenced on the Free State project which consists of four prospecting rights covering 50 000 hectares of ground within a kimberlite cluster, which has the iconic diamond mines of Jagersfontein and Koffiefontein at its eastern end and Kimberley and Finsch at its western extreme. The Free State project area was iden- tified by Vutomi using innovative means,

involving identification of anomalies using satellite imagery, and from evi- dence gathered from record archives in Kimberley and Bloemfontein along with ground work follow up. Using the identified anomalies as a base, research indicated that a number of other dia- mond mines existed in this area for some time prior to 1880 but that a significant economic recession at that time resulted in their permanent curtailment. Most records of these operations were destroyed in the course of the Anglo- Boer War in 1900. According to Botswana which listed on the BSE in April 2017 and plans to build an opencast coal mine at Masama with the potential to produce 2,4 Mt/a. The company will focus on deliv- ering high-quality coal to the regional market, including Botswana and South Africa, as well as to the export market. The Masama project, located in the south-western corner of Botswana’s Mmamabula coalfield, is near to exist- ing rail, road and water infrastructure and has significant distance advantages over existing competing suppliers to regional customers. The size of the resource also supports scalable production, presenting an oppor- tunity to provide export coal to traders who supply India, China, and other areas of Asia, as well as Europe, should international coal prices remain stable. Bojé stated that for the first time a

Significant increase in Masama coal reserves Minergy Limited, a coal mining and trading company which is listed on the Botswana Stock Exchange, reports that drilling and exploration conducted at its Masama coal project during 2017 has established a sig- nificant increase in the size of the coal reserves. The recent Competent Persons Report (CPR) further established that the quality of the coal was also better than pre- viously indicated.

“Comparing the 2016 and 2017 esti- mates, the total coal resource for the project area increased from 347,1 Mt to 389,9 Mt, an improvement of 12 %. Of this, the open- cast area has increased from 71,2 Mt to 82,3 Mt, which translates into 25 years of opencast operations,” said Minergy’s CEO, Andre Bojé, adding that management was exceptionally pleased with the revised CPR and especially the improved yields. This is good news for the company,

14  MODERN MINING  November 2017

MINING News

Houndé completed under budget and ahead of schedule Endeavour Mining Corporation, listed on the TSX, has announced that the construction of its Houndé gold project in Burkina Faso has been completed US$15 million below its initial capital budget with com- mercial production being declared more than two months ahead of schedule. Comments Sébastien de Montessus, President and CEO: “We are extremely proud to declare commercial production ahead of sched- ule, below-budget, and most importantly at full nameplate capacity with all key metrics ahead of the assumptions set out in the feasibil- ity study. I would like to acknowledge the hard work and dedication of our integrated project team led by Jeremy Langford, our COO & EVP Projects, which has successfully designed and delivered the proj- ect over the past four years from feasibility through to commercial production. “As demonstrated by its very low All-In-Sustaining Costs of below US$600/oz, Houndé is expected to immediately start contribut- ing to the Group’s free cash flow generation. After unlocking value by successfully bringing the project into production, we now look forward to quickly creating further value through our exploration programme.” The Houndé mine began processing ore ahead of schedule on September 25, 2017, and achieved its first gold pour on 18 October 2017. A seven-day performance trial testing period was recently suc- cessfully completed with all key metrics above targets: a processing rate of 8 600 tonnes per day (or 105 % of nameplate capacity), an over- all plant availability of 96 % (compared to the target of 91 %) and a gold recovery rate of 95 % (compared to 93 % expected over the life of mine). Over the remainder of the year, maintenance and optimisation down-time periods have been scheduled. Mining activities at the MainVindaloo open pit are progressing well with nearly three-months’ worth of feed already stockpiled and posi- tive grade reconciliation against the resource model being achieved. The current stockpile totals 571 000 tonnes at 2,6 g/t containing 47 koz, inclusive of 130 000 tonnes at over 5,0 g/t. Resettlement com- pensation for communities living near the high-grade Bouere and Dohoun satellite deposits has commenced, with mining activities scheduled to begin in late 2018. As mentioned, the Houndé build was completed well within the initial capital budget of US$328 million. As construction was tracking ahead of schedule and below budget, Endeavour decided, in addi- tion to the initial planned works, to spend an additional US$21 million (mainly for the addition of a 26 MW back up power station and fuel farm and to build a second tailings storage facility), bringing the total spend to US$334 million. Houndé will rank as Endeavour’s flagship low-cost mine, ranking among West Africa’s top tier cash generating mines, with an average annual production of 190 000 ounces at an AISC of US$709/oz over an initial 10-year mine life based on reserves. In its first four years of operation, the average annual production is expected to be 235 000 ounces at an AISC of US$610/oz. Endeavour operates five mines across Côte d’Ivoire (Agbaou and Ity), Burkina Faso (Karma), Mali (Tabakoto) and Ghana (Nzema) which are expected to produce 630-675 koz of gold in 2017. Nzema, regarded as non-core, is in the process of being sold to BCM International. 

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