Modern Mining August 2015

RUBIES

construction of a new, permanent 250 t/h (oper- ating at 200 t/h) process plant incorporating washing, screening and DMS/optical sorting to recover the rubies. The new plant will produce a significant quantity of fine tailings and will therefore incorporate a fines thickening circuit. The concept for tailings slurry handling includes a number of concrete ponds into which the thickened slurry will be deposited to allow further settling and water removal. The ponds will be used in continuous rotation. The intent is that the settled muds will be excavated and transferred to the old worked-out pits for final disposal with the coarser waste material. The projected LoM of Montepuez is 21 years producing a total of 432 million carats. Projected real cash flow (no discount rate applied) over the LoM is estimated at US$2,76 billion. The independent technical economic model pre- pared by SRK shows a post-tax NPV of US$996 million based on a 10 % base case discount rate and an IRR of 311,7 %. Required capex is esti- mated at US$64 million over the first two years and US$305 million over the LoM. Regarding exploration, Gemfields has a substantial programme planned for the next few years in its 336 km 2 concession area. Exploration to date – a total of 1 090 drill holes, over 15 000 m in total, as well as 823 small-scale exploration pits – has only covered around 36 km 2 of the concession. Two core drills and one contracted auger drill are cur- rently on site. Apart from the Montepuez mine, Gemfields – which is based in London – also has a 75 % interest in the Kagem emerald mine near Kitwe in Zambia (covered at length in our April issue this year) and a 50 % interest in the Kariba ame- thyst mine, also in Zambia. It is also the 100 % owner of the Fabergé luxury goods brand. Photos courtesy of Gemfields

total rock handling amounted to 3,16 Mt, with the ore mined amounting to 675 000 tonnes. The stripping ratio is estimated at 3,4:1. Ruby production to date is just over 16 million carats at an average ore grade of 38,1 ct/t. Although Mozambican rubies reportedly sell for about half the price of comparable Burmese (Myanmar) rubies, Gemfields says market rec- ognition of Mozambique’s rubies has steadily risen in recent years and the value has tripled. Over 4 million carats have been sold in the four auctions held so far by Gemfields, gener- ating US$122,2 million with the average price achieved for high quality sales being US$688/ ct and for low quality sales US$4/ct. Montepuez has produced some exceptional rubies, notably the 40-carat ‘Rhino Ruby’, whose recovery was announced in November last year. It was successfully sold at auction in December 2014 although the price achieved remains undisclosed (given the principles on which Gemfields’ auctions are conducted). More recently (in June this year), Gemfields announced the discovery of a rare pair of match- ing rubies with a combined weight of 45 carats, which it described as an “extraordinary find”. In terms of its Life of Mine (LoM) plan, Montepuez is progressing from the bulk sam- pling phase to full scale production. The principal targets are achieving an annualised processing rate of 1,3 Mt/a of ore by July 2016 and increasing the total mining capacity to 5,6 Mt/a by July 2017, objectives which SRK in the CPR considers to be achievable and appro- priate for the orebody as currently defined. It is envisaged that a contract miner will be brought in to provide sufficient waste strip- ping capacity for 3 Mt/a with the balance of waste movement being handled by Gemfields’ owner-operated fleet. The planned expansion will also require upgrading the existing plant to 150 t/h capacity (operating at 120 t/h) plus the

Haulage operations underway at Montepuez. The Gemfields-operated mining fleet consists of six excavators, 17 ADTs and 18 tipper trucks.

Montepuez has produced some exceptional rubies, notably

the 40-carat ‘Rhino Ruby’,

whose recovery was announced in November last year.

August 2015  MODERN MINING  27