Modern Mining April 2017

April 2017 Vol 13 No 4 www.crown.co.za M ODERN MINING

IN THIS ISSUE…  Kamoa-Kakula keeps on growing  Mowana copper mine revived  Mutamba project powers ahead  New drill rig impresses in field trials

MODERN M I N I N G

CONTENTS

APRIL 2017

ARTICLES

REGULARS MINING NEWS 4 New Bouly gold mine delivers ahead of expectation 5 Shanta Gold revises New Luika Mine Plan 6 Kamoa-Kakula copper project keeps on growing 8 Randgold sustains quality of reserves and resources 9 Ivanhoe approves early works for Platreef Shaft 2 11 Record production for Otjikoto in 2016 12 Tharisa to transition to owner mining model 13 Ngualla project receives Environmental Certificate 14 Balama project on course for Q2 commissioning 15 Maiden JORC classified resource for Mothae 17 Consultants appointed for Kalongwe Feasibility Study PRODUCT NEWS 40 New pump proves itself at ferrochrome plant 41 Drive packs ordered by Limpopo platinummine 42 Complete ventilation solution offered 43 Correct pump selection the key to effective dewatering 44 Rockwell Automation equipment powers borehole pumps 45 AfroxPac 35i delivers life-saving oxygen for African miners 46 Automated tensioner for conveyor belt cleaners 47 Custom chute systems supplied to diamond mine 48 Essakane gold mine to get solar power plant COVER 18 New electronic initiation system from DetNet® is a ‘game-changer’ COPPER 22 Mowana comes back to life MINERAL SANDS 26 Savannah ups the pace at Mutamba EDUCATION 30 School of Mining Engineering celebrates 120 years of service TECHNOLOGY 33 Prototype drill rig proves its worth in field trials FEATURE – MODULAR PLANTS 34 Fluor brings its modular skills to African mining 37 ADP to partner on graphite project 38 Modular REFLUX Classifier boosts fines recovery

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 Johannesburg-based DetNet® has introduced its CE4 Commander™ electronic initiation blasting system which is designed to take blasting to the next level. See our story on page 18 for full details.

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Average circulation (October–December 2016) 4258

April 2017  MODERN MINING  1

COMMENT

Is the exploration industry on the brink of a rebound?

A report by S&P Global Market In- telligence (S&P) prepared for the recent PDAC International Con- vention held in Toronto in early March suggests that the explora- tion industry could be on the mend after suf- fering a meltdown over the past several years. The report – Worldwide Mining Exploration Trends – points out that in 2016 the mining industry “slashed its budget on the search for metals to barely one-third of the record high of US$21,5 billion allocated in 2012.” It notes that exploration spend has now dropped for four consecutive years and that the average 2016 exploration budget among surveyed companies was US$4,4 million, the lowest since 2009, and the median budget was US$800 000, the small- est in more than a decade. S&P nevertheless sees grounds for opti- mism, noting that since around March last year “exploration companies have increasingly been able to raise funds, which represents a marked improvement over recent years.” It goes on to say that it is “cautiously optimistic for the near term, and expects corporate exploration this year to be flat”, with a small predicted uptick in the majors’ budgets in 2017 being offset by a slightly lower level of spending by juniors. I should point out that this S&P report pre- pared for PDAC essentially summarises S&P’s latest Corporate Exploration Strategies (CES) report for 2016, which is based on an analysis of the non-ferrous exploration budgets of 1 580 companies. Interestingly, at the individual company level, Freeport-McMoRan had the largest bud- get decrease in 2016, down 49 % from the US$102 million actually spent – as opposed to budgeted – in 2015, and was closely followed by Brazilian major Vale, with an exploration allocation in 2016 that was US$46 million less than its exploration spending in 2015. At the other end of the scale, South African- headquartered Gold Fields recorded the largest budget increase in 2016, up 22 % from the US$102,7 million budgeted in 2015. Most of Gold Fields’ spend was for near-mine explo- ration, with most of it going to the group’s Australian operations. Although all regions of the world showed lower allocations in 2016, Latin America’s share remained at 28 % of the global total while Canada was the most popular national target, attracting 14 % of all exploration dollars.

Regrettably, Africa recorded the second largest percentage decline, with the continent account- ing for only 13 % of total expenditure, with just over half of this being dedicated to exploration for gold. The most significant African explora- tion destinations were the DRC, South Africa, Burkina Faso, Mali and Tanzania. I personally would be curious to know which companies active in Southern Africa were the big exploration spenders in 2016 but the PDAC report does not go to this level of detail. Certainly, Ivanhoe would be near the top of the list, as its Kamoa/Kakula copper project in the DRC has at least 14 rigs on site. Other Southern African projects that have had an intense focus on exploration over the past couple of years are Cupric Canyon’s Khoemacau copper project in Botswana, which had as many as 27 diamond drilling rigs active in 2015, and Platinum Group Metals’ Waterberg project in South Africa. A useful complement, incidentally, to S&P’s report is one by Richard Schodde, the highly regarded MD of Australia’s MinEx Consulting, who presented at this year’s PDAC on Recent Trends and the Outlook for Global Exploration . I was not myself at PDAC but his presentation and a written summary are on the MinEx web- site and make for interesting reading. He says that exploration spending peaked in 2012 at US$33 billion – a figure which differs some- what from S&P’s estimate – and that it dropped to US$10,2 billion in 2016. Among the interesting observations that Schodde makes is that historically around 70 to 80 moderate sized – or larger – discoveries were made each year in the world. This figure peaked at 149 discoveries in 2007 and has fallen dramatically since then. Schodde also highlights the importance of juniors in the exploration cycle. He estimates that they now account for approximately 70 % of the total number of deposits found and 50 % of the value created. What of the future for exploration? Schodde is very positive on the outlook and predicts that global exploration spend could rise by up to 60 % over the next four years. Let’s hope that he’s correct in his forecast. It’s a cliché but nev- ertheless true that exploration is the lifeblood of mining. The sooner we get back to ‘normal’ levels of expenditure, the better for our indus- try and indeed the global economy. Arthur Tassell

“The most significant African exploration destinations were

the DRC, South Africa, Burkina Faso, Mali and Tanzania.”

April 2017  MODERN MINING  3

MINING News

New Bouly gold mine delivers ahead of expectation

The Bouly gold mine of Nordgold in Burkina Faso is reportedly operating very successfully. The heap leach opera- tion, which represents an expansion of Nordgold’s existing Bissa mine, was com- pleted on schedule and under budget in the second half of last year. After com- ing on line in September, it reached its full capacity in November. It produced 31,4 koz in 2016, ahead of 2016 production guidance of 20 koz. In Nordgold’s financial and operating results for Q4 and FY2016, Chief Executive Nikolai Zelenski says that a highlight of the year was the successful launch of Bouly, which “once again demonstrates our strong track record in developing outstanding mining assets from the ground up, following the success of our flagship Bissa mine in 2013.” He adds that Bouly has “delivered well ahead of our expectations”. Built in 13 months, Bouly represents an investment of US$140 million by Nordgold and – according to the feasibility study – will produce approximately 110 000

ounces of gold a year over a life of mine of 10 years at an AISC of US$730 per ounce. It is located 100 km north of Ouagadougou, the capital of Burkina Faso. The combined Bissa-Bouly operations produced 213,9 koz in 2016 and 78,5 koz in Q4 2016. The standalone Bissa mine pro- duced 185,8 koz in 2016, down 21 % year on year due to lower ore mined volumes and head grade mainly related to higher waste stripping activities performed in order to facilitate pits cutbacks for higher grade ore supply in 2017. The mine increased gold production in Q4 2016 by 14 % quarter on quarter to 53,0 koz, with this increase being driven by higher throughput and grade. According to Nordgold, in 2017 Bissa will benefit from 2016 investments in the pit cutback programme which will enable ore supply from pits to match annual plant capacity. Ore will be mined from the South West, IO, Zone 51, Zone 52 and Gougre pits with a planned average stripping ratio of 8,0 t/t. The average head grade is expected to be 1,7 g/t, while increasing hardness of

ores from the deepening of pits will result in slightly lower total throughput of 3,9 Mt over the year. The seventh leach tank com- missioned in October 2016 will increase residence time and help to maintain recov- eries at approximately 87 % in 2017 while processing lower recovery harder ores. The mine will be focused on mining efficiency and productivity in 2017 as pits increase in depth and more fresh rock is mined. In 2016, Bissa continued near mine exploration with a focus on resources conversion, reserve replacement and extensions of current pits, and defini- tion of satellite pits. Exploration teams completed drilling programmes at satel- lite deposits Yimiougou and Noungou, encountering additional mineralisa- tion that will be included in the annual resource update. Mining licence applications for the Bissa satellite pits Ronguen and Zinigma are pro- gressing through the regulatory process. Contracts were awarded for feasibility and environmental studies for the Yimiougou

The new Bouly mine in Burkina Faso produced 31,4 koz in 2016, after being commissioned in September (photo: Nordgold).

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MINING News

A striking night view of Bouly. The mine is a heap leach operation (photo: Nordgold). and Noungou satellite pits. Once these are complete, mining licence applications will be submitted in mid-2017.

the African mines are Taparko in Burkina Faso and Lefa in Guinea. Taparko pro- duced 111,2 koz of gold in 2016, a 39 % increase year-on-year, while Lefa produced 194,7 koz, a decrease of 9 % on the 2015 figure, caused mainly by flooding in the higher grade Karta pit. 

ing geological mapping, geochemical sampling and drilling will continue on per- mits near Bissa with particular emphasis on the Baola II permit. Listed on the LSE, Nordgold operates mines in Africa, Russia, and Kazakhstan. Apart from the Bissa-Bouly operation,

Nordgold is also seeking to obtain access to three additional exploration areas in Burkina Faso near Bissa. In parallel, aggressive brownfield exploration includ-

Shanta Gold revises New Luika Mine Plan Shanta Gold, whose shares are quoted on AIM, has announced a Revised Mine Plan (RMP) from January 2017 to December 2023 and an updated reserves statement for its New Luika Gold Mine (NLGM) near Mbeya in south-west Tanzania.

“Considerable depth has been added to an already robust business case due to our delivery over the past 18 months and we will look to extend the planning hori- zon for the New Luika operation again in future. “We will continue to explore on-mine to bring existing indicated and inferred resources into the future mine plan and also in surrounding prospecting tene- ments to define new resources. Since the Base Case Mine Plan was published in September 2015, the Elizabeth Hill and Ilunga reserves have been successfully proven and incorporated into the Revised Mine Plan. We will take the same approach following positive results recently announced at the Nkuluwisi prospect, and with the highly prospective ground we hold in the Lupa Goldfield.” 

majority of plant feed – 2,4 Mt at 5,8 g/t for 444 500 oz contained – over the life of the mine. A separate tailings recovery project scheduled from 2019 will produce a fur- ther 14 600 oz with a standalone project NPV of US$2,8 million at an 8 % discount rate and a pre-tax Internal Rate of Return (IRR) of 39 %. Potential remains to further optimise the mine schedule, with optional- ity through the addition of the high grade Ilunga underground reserve. Toby Bradbury, Chief Executive Officer, commented: “The Revised Mine Plan high- lights the true prospectivity and future long life of the New Luika Gold Mine. The plan provides for a longer mine life, increased production and most importantly, greater returns for all Shanta stakeholders.

The RMP provides for underground min- ing, surface mining and a tailings recovery project and now incorporates the addi- tional open-pit reserves at Elizabeth Hill and additional underground reserves at Ilunga. It provides for processing from underground and surface mining of 4 Mt of ore at an average grade of 4,2 g/t for the production of 500 000 oz from January 2017 to 2023. Underground operations accessing high grade orebodies will provide the

April 2017  MODERN MINING  5

MINING News

Kamoa-Kakula copper project keeps on growing

Reporting on its Kamoa-Kakula copper project in Katanga in the DRC in its financial results for the year ended December 31, 2016, TSX-listed Ivanhoe Mines notes that in March this year it announced that a new discovery hole had intersected a shallow, 3,8 km extension of the Kakula copper discovery. This latest extension has been named Kakula West. Up to five rigs are being mobilised to Kakula West to acceler- ate delineation of the new discovery. Kamoa-Kakula is located approximately 25 km west of the mining town of Kolwezi and is said to be the largest copper discov- ery in Zambia and the DRC, making it the largest copper discovery ever made on the African continent. The new discovery hole, DD1124, essen- tially doubles the presently-defined length of the copper-rich mineralised system at Kakula to more than 10 km. The hole is 3,8 km west of the current limit of Kakula drilling and 4,1 km west of the last drill hole with returned assays – DD1093 – that was announced in January 2017. DD1124 has extended the length of the Kakula min- eralised trend by a further 6 km. The initial Kakula resource estimate in October 2016

was based on a 4,1 km strike length. As detailed in this resource estimate, Kakula’s indicated resources total 192 Mt at a grade of 3,45 % copper, containing 14,6 billion pounds of copper. Inferred resources total 101 Mt at a grade of 2,74 % copper, containing an additional 6,1 billion pounds of copper. Both estimates are at a 1,0 % copper cut-off. The combined Kamoa-Kakula indicated mineral resources now total 944 Mt grad- ing 2,83 % copper, containing 58,9 billion pounds of copper at a 1,0 % copper cut- off grade and a minimum thickness of 3 m. Kamoa-Kakula also has inferred mineral resources of 286 Mt grading 2,31 % cop- per and containing 14,6 billion pounds of copper, also at a 1,0 % copper cut-off grade and a minimum thickness of 3 m. The Kakula discovery remains open for significant expansion along trend to the west and the south-east, while the remainder of the Kakula exploration area remains virtually untested. Fourteen rigs are now drilling in the Kakula exploration area. More than 63 000 mhave been drilled since the Kakula drilling campaign began in May 2016. Ivanhoe expects to issue an

updated mineral resource estimate for the Kakula discovery early in Q2 2017. Kamoa Copper has retained OreWin of Australia to prepare a follow-up economic assessment (PEA) for the development of the Kakula and Kamoa deposits. The new PEA will assess the economic parameters of an 8 Mt/a, stand-alone Kakula mine, plus expanded, combined mining scenarios of up to 16 Mt/a from mines at both Kakula and the adjacent Kansoko Sud deposit. Underground mine development at Kamoa’s Kansoko mine has made good progress and is expected to reach the high-grade copper mineralisation at the Kansoko Sud deposit shortly. The ser- vice and conveyor declines have each advancedmore than 670 m. The contractor for the decline development is Byrnecut Underground Congo SARL. Specialist engineering firm DRA Global is finalising the design of the Kakula boxcut. Construction of the boxcut is expected to begin in Q2 2017 and take approximately six months to complete. Engineering and design work of the planned twin declines at Kakula is also well advanced. In October 2016, the Kamoa-Kakula

Ongoing construction of access declines for the Kamoa-Kakula copper project’s high-grade Kansoko mine (photo: Ivanhoe).

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MINING News

HOISTING SOLUTIONS Winder Controls is a leader in the mechanical, electrical and hydraulic design, manufacture and installa- tion of mine winders and related equipment. Our designs comply with the latest international safety and reliability standards including SIL assessments where applicable. Our services include relocations, refur- bishment and upgrades, as well as full aftersales and maintenance support. In addition we offer a range of special products including steel wire rope handling equipment, Three Chamber Energy recovery systems and Nuclear Waste Disposal Technology.

Kakula exploration teammember seen with one of the drilling rigs now in operation (photo: Ivanhoe). project began drawing clean, hydroelec- tric power from the DRC national grid for development and construction activities. In September 2016, ongoing upgrad- ing work financed by Ivanhoe at the Mwadingusha hydropower plant allowed the facility to begin supplying an initial 11 MW of electricity to the national grid. Bench-scale metallurgical flotation test work at XPS Consulting and Testwork Services laboratories in Falconbridge, Canada, achieved copper recoveries of 87,8 % and produced a concentrate with an extremely high grade of 56 % copper using the flowsheet developed during the Kamoa pre-feasibility study. The material tested was a composite of chalcocite-rich Kakula drill core, assaying 8,1 % copper. 

Tantalite mine in Namibia upgraded Kennedy Ventures, the AIM-quoted investment company which, through its stake in African Tantalum (Pty) Limited (Aftan), has an interest in the Tantalite Valley Mine (TVM) in Namibia, reports that the mine recently hosted a suc- cessful visit by a customer, a leading manufacturer of tantalum capacitors, as well as Namibian government officials. During the visit Aftan provided demon- strations of tantalum recovery both at the plant and the product room.

transfer dam, reducing diesel usage and ensuring the plant water storage systems are always available via the transfer dam feed. A thickener has been mounted and is currently being com- missioned and is expected to reduce the silt to the main dam, as well as add- ing water storage and distribution to the circuit. Three more James tables have also been added. The crusher jaws have been refurbished and are being com- missioned to allow proper sizing during operations to bring more consistent feed to the circuit. Larry Johnson, CEO of Kennedy Ven­ tures, commented: “Aftan has made considerable progress in the year to date and is now in a position of strength both at the operational level and with onward sales. Aftan is confident that its product will meet the customer’s qual- ity and specification tests and its work this calendar year means Aftan is now firmly positioned within a world-class supply chain.” 

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Onemetric tonne of product has been sold by Aftan to the customer, who has requested a further six tonnes for deliv- ery during the quarter to June as part of a quality sampling programme to make certain the product suits its facilities and requirements. Ultimately, subject to the product meeting the required specifica- tions, Aftan hopes to agree a permanent offtake agreement with the customer. Aftan’s plant has undergone a num- ber of upgrades. A solar-powered pump has been installed to pre-fill the main

April 2017  MODERN MINING  7

MINING News

Randgold sustains quality of reserves and resources

Randgold Resources’ annual resource and reserve declaration, recently published as part of its annual report for 2016, shows attributable proved and probable reserves down by 1 % after another record produc- tion year. Total attributable resources of 25,5 million ounces (Moz) were down 8 %, reflecting mining depletion and changes to the method of reporting underground resources at the Kibali mine in the DRC. The group’s reserve grade, however, increased from 3,6 g/t to 3,7 g/t and Chief Executive Mark Bristow said this showed that Randgold has been able to replen- ish ounces at grades above or equal to its reserve base despite the high depletion rate from mining. “This means our current reserves have secured our business plan for at least 10 years of profitable production. In the meantime, our exploration teams continue to hunt for additional ounces to replenish these reserves as well as for our next big discovery,” Bristow said. Group General Manager Evaluation Rod Quick noted that Randgold continued to base its reserve calculations on a gold price of US$1 000/oz which, coupled with its emphasis on quality over quantity, gave it a robust reserve profile which would enable the company to continue manag- ing the cyclical nature of the gold market. In Mali, Loulo’s total ore reserves after depletion increased by 12 % to 5,3 Moz at 4,5 g/t as further drilling and design work

has been aligned with industry best prac- tice using stope optimiser software to report underground resources. In Côte d’Ivoire, Tongon’s resources and reserves decreased as a result of depletion and geological changes to the Northern Zone orebody following reinterpretation of the granodiorite contact boundary at depth after additional surface drilling. Drilling continues to probe for potential gains within and immediately below the current pit designs. The first of a number of satellite pits, Sekala, was brought into the resource statement which added 43 000 ounces of indicated resource. Further sat- ellites will continue to be tested in the coming year. In Senegal, the key development proj- ect, Massawa, saw an increase of total reserves at a 40 % higher grade. The increase in reserve ounces follows the incorporation into the project of 475 000 ounces from the Sofia Main deposit, while the increase in grade was driven princi- pally by the geological remodelling of the Central Zone ore lodes. Total reserves now stand at 2,6 Moz at 4,3 g/t, up significantly from the last year’s 2,0 Moz at 3,1 g/t. Drilling continues on the Massawa and Sofia deposits to increase ounces. Total mineral resource ounces are down 400 000 ounces year on year, principally due to the geological remod- elling and higher cost profile of Sofia and Massawa, leading to the reduction of low grade ounces. 

resulted in an increase of 520 000 ounces to the Gara ore reserves with the incor- poration of Gara Far South. Infill grade control gains at Yalea resulted in a partial replacement of depletion ounces. Total mineral resources increased by 1 %, net of depletion, driven by an increase of 461 000 ounces in Gara underground’s inferred resources. At neighbouring Gounkoto, total ore reserves net of depletion remained above 3 Moz year on year. This was largely due to the completion of the Gounkoto super pit feasibility study, leading to a significant gain in the open-pit ore reserves and the associated reduction of the underground reserve. At Kibali in the DRC, total reserves decreased to 9,2 million ounces at 4,0 g/t from 10,6 Moz at 4,1 g/t in 2015 follow- ing mining depletion and changes to the KCD underground geological model. The changes resulted from the reinterpreta- tion of the controls to mineralisation of the high grade lodes following a significant increase in mapping and grade control data. Although the remodel has resulted in geological model changes of a portion of the 5103 and 9105 lodes, it has also high- lighted the upside potential of the up and down plunge extension of the 3000 lodes as an underground target. Mineral resources are also down due to mining depletion, geological model changes and a change in the method of underground resource reporting which

The core yard at the Massawa project in Senegal. Massawa lies 700 km south-east of the capital city of Dakar and 90 km to the west of Randgold’s Loulo and Gounkoto mines across the border in Mali (photo: Randgold).

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MINING News

Ivanhoe approves early works for Platreef Shaft 2 Platreef’s full potential and we believe that the time is right to pru- dently move forward with the development of this world-scale project.” Shaft 1, with an

Robert Friedland, Executive Chairman of TSX-listed Ivanhoe Mines, and Lars- Eric Johansson, Chief Executive Officer, have announced that the company has approved the start of early-works con- struction for Shaft 2, which will be the main production shaft at the Platreef platinum group metals, nickel, copper and gold mine now being developed near Mokopane. Ivanplats, Ivanhoe Mines’ 64 %-owned subsidiary, is expected to begin the two- part, early-works programme for Shaft 2 in Q2 2017. The programme will consist of: excavation of a surface boxcut to a depth of approximately 29 m below surface; and construction of the concrete hitch (founda- tion) for the 103-m-tall concrete headgear (headframe) that will house the shaft’s per- manent hoisting facilities and support the shaft collar. The early-works construction is expected to take approximately 12 months and cost in the region of R70 million. Shaft 2 will be located approximately 100 m north-east of Shaft 1, where per- manent sinking has been underway for eight months. With an internal diameter of 10 m, it will be lined with concrete and sunk to a planned final depth of more than 1 100 m below surface. It will be equipped with two 40-t rock-hoisting skips capable of hoisting a total of 6 Mt/a of ore – which will be the single largest hoisting capacity at any mine in Africa. The headgear for the permanent hoisting facility was designed by South Africa-based Murray & Roberts Cementation. “This is another key milestone in the building of a new, state-of-the-art underground mine in South Africa,” said Friedland. “Shaft 2 is the key to unlocking

internal diameter of 7,25 m and also con- crete lined, is in its main sinking phase and has reached a depth of approximately 305 m below surface. Sinking rates in Q1 2017 have been between 45 and 50 m per month. Shaft 1 is expected to reach its projected final depth of 980 m below surface in 2018. It will be used for underground develop- ment of the Flatreef deposit and ultimately will become the pri-

Sinking platform in operation at Shaft 1 (photo: Ivanhoe).

mary ventilation intake shaft during the project’s 4 Mt/a initial production case. Shaft stations to provide access to horizon- tal mine workings for personnel, materials and services will be developed at depths of 750, 850 and 950 m below surface. The selected Flatreef mining areas occur at depths ranging from approximately 700 to 1 200 m below the surface. The planned mining of the Flatreef deposit will incorporate low-cost, mechanised mining methods, including long-hole stoping and drift-and-fill mining. Mined-out areas are to be backfilled with a mixture of tailings from the processing plant and cement. The

ore will be hauled from the mining stopes to a series of ore passes that will connect to a main haulage level leading to a primary rock crusher near Shaft 2, fromwhere it will be hoisted to the surface for processing. The definitive feasibility study for Platreef’s first-phase production scenario is expected to be completed and released in Q2 2017. The study, which began in August 2015, is being prepared by principal consultant DRA Global. Specialised sub- consultants include Stantec Consulting, Murray & Roberts Cementation, SRK Consulting, Golder Associates and Digby Wells Environmental. 

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April 2017  MODERN MINING  9

MINING News

Record production for Otjikoto in 2016 operating costs were an annual record low of US$368 per ounce, at the low end of its reduced cost guidance range (of between US$365 and US$405 per ounce) and signifi- cantly beating initial guidance (of between US$400 and US$440 per ounce).

addition, fuel prices are also projected to be higher than 2016. The average strip ratios at Otjikoto are anticipated to be lower in 2018 and 2019. AISC is expected to be between US$855 and US$885 per ounce in 2017, reflecting higher expected cash operating costs per ounce and capital expenditures. Life-of-mine production plans for the Otjikoto mine, incorporating prelimi- nary projections for the Wolfshag open pit and underground mines, have been completed for various options and will be further refined as the detailed geotechni- cal, hydrogeological, and design studies are completed in 2017. Ongoing studies are leading the company to re-evaluate the open pit and underground interface. The total exploration budget for Namibia in 2017 is US$5,1 million mainly for 5 000 m of diamond drilling on the Otjikoto licence area, and 12 000 m of dia- mond drilling and 5 000 m of RAB drilling on the Ondundu joint venture project. 

Reporting on its operational and finan- cial results for the fourth quarter and the year ending December 31, 2016, Canada’s B2Gold Corp says that its Otjikoto mine in Namibia enjoyed a record year in 2016, producing 166 285 ounces of gold, above the mid-point of its production guidance range (of between 160 000 and 170 000 ounces) and 14 % (or 20 562 ounces) higher than 2015. Otjikoto’s 2016 production benefit- ted from higher throughput due to the successful completion of its mill expan- sion project in September 2015 (which increased plant capacity from 2,5 Mt/a to 3,0 Mt/a) and also due to overall process optimisations. In the fourth quarter of 2016, the mine produced 46 846 ounces of gold, slightly above budget and 19 % (or 7 472 ounces) higher than the fourth quar- ter of 2015. For the full-year 2016, Otjikoto’s cash

Otjikoto’s AISC for the year was US$604 per ounce compared to budget of US$629 per ounce and US$550 per ounce in 2015 (following commercial production on February 28, 2015). In the fourth quarter of 2016, Otjikoto’s AISC was US$587 per ounce (Q4 2015 – US$509 per ounce). Otjikoto is forecast to produce between 165 000 and 175 000 ounces of gold in 2017, compared to the 166 285 ounces produced in 2016. Cash operating costs are expected to be between US$510 and US$550 per ounce. The expected cost increase over 2016 is mainly due to higher projected strip ratios at the new Otjikoto Phase 2 pit and Wolfshag Phase 1 pit. In

Aerial view of the plant area at Namibia’s Otjikoto gold mine (photo: B2Gold Namibia).

April 2017  MODERN MINING  11

MINING News

Tharisa, a profitable low-cost producer of PGMs and chrome, owns a large scale open-pit operation – the Tharisa mine – with an open-pit life of 18 years and a further 40 years of underground mine extension. With the long life of the open pit, Tharisa has been evaluating the ben- efits of transitioning from contract mining to an owner mining model at the mine, which is located on the south-western limb of the Bushveld Complex, approximately Tharisa to transition to owner mining model Open-pit operations at the Tharisa mine (photo: Tharisa). 95 km north-west of Johannesburg and 35 km east of Rustenburg. Tharisa currently contracts its mining operations to MCC Contracts (MCC). MCC’s parent company, eXtract, has announced a strategic decision to align its capital allocations with the current mining envi- ronment and to review its business model. As a result, Tharisa has the opportunity to purchase MCC’s existing on-site plant and equipment, as well as employ skilled

employees currently in service at the Tharisa mine. Tharisa says it has accordingly engaged with MCC in an orderly manner to pur- chase a requisite portion of the existing mining fleet as a going concern. Tharisa, in the normal course of managing its min- ing operations, has developed engineering and geological skills that are integral to in-house mining, and the successful con- clusion of this process will ensure that the mine transitions to an owner mining model without interruption. The company believes that with the long life of the open pit, the transition to an owner mining model is a logical pro- gression in its development. The change in the operating model is expected to have both cost and operational benefits as well as providing financial flexibility, thereby cementing Tharisa’s low-cost, high-margin position. “Tharisa has spent the last two years building up its mining expertise and we are now happy that we have the necessary skills to make a smooth transition. We are excited to have the opportunity to directly control our own mining,”said Tharisa’s CEO, Phoevos Pouroulis. 

Sese coal/power project granted mining licence African Energy Resources, listed on the ASX, has advised the market that Botswana’s Ministry of Mineral Resources, Green Technology and Energy Security has granted a mining licence to the Sese Joint Venture (a JV between African Energy and First QuantumMinerals). The Sese project is located south-west of Francistown.

for the currently contemplated 450 MW power project at Sese plus multiple expansions. In conjunction with the previously approved Land Rights and Environmental Approval, the ML gives the owner the right to erect all buildings and infrastructure required to implement the project. African Energy says the granting of the ML is an important step towards finalising the permits for the Sese integrated coal and power project, with the generation and export licence being the only major out- standing permit required before the project can commence. 

The mining licence (ML) covers an area of 51,47 km 2 and contains 650 Mt of raw coal in measured and indicated resources, which is entirely within the global resource of 2 517 Mt of coal at Sese. The approved ML contains more than enough coal in the higher quality SS seam

12  MODERN MINING  April 2017

MINING News

Ngualla project receives Environmental Certificate holder consultation, as well as a site visit and a review board meeting with NEMC. Strong support for the development of the Ngualla rare earth project was received at a local village, district, regional and national level during the stakeholder meetings. The project area has no human

habitation, farming, grazing or reserves. The BFS remains on track for com- pletion within the coming weeks. The Environmental Certificate and a Feasibility Study are key documents required for an application for a mining licence, which the company aims to finalise during Q2 2017. 

ASX-listed Peak Resources has received the Environmental Certificate for the Ngualla rare earth project located north of Mbeya in Tanzania. The grant of the Environmental Certi­ ficate by the Minister of State of the Vice President’s Office represents the comple- tion of a major step in the permitting of the project. The Environmental Certificate is a pre-requisite for the granting of a min- ing licence. The Environmental Certificate marks the successful completion of the Environmental Impact Statement (EIS) report. Environ­ men t a l r egu l a t o r s , t he Na t i ona l Environment Management Council (NEMC), set the guidelines and requirements of the study that is behind the EIS report, which was led by Tanzanian environmental con- sulting specialists Align Environment and Risk and Paulsam Geoengineering Co Ltd. The study included multi-disciplined wet and dry season environmental and social baseline studies and extensive stake-

Orion Gold completes acquisition of Agama ASX-listed Orion Gold reports it has now completed the acquisition of Agama Exploration & Mining (Pty) Ltd, which holds one of the world’s largest historical VMS zinc-copper deposits in South Africa’s Northern Cape Province.

discovery located 60 km from PC. The purchase consideration paid on settlement of the acquisition was R53 mil- lion, of which R31,5 million was paid in cash and R21,5 million was paid by issue of Orion shares. In addition, Orion provided finance for Agama to enable it to settle all historical shareholder loans to an aggregate amount of approximately R33,3 million. With the acquisition now completed, Orion says it has embarked on an intensive growth and development strategy aimed at establishing the company as a significant newplayer in the global basemetal sector. 

Following the completion of this trans- action, Orion, through its subsidiary companies, now holds an effective 73,33 % interest in the company holding prospect- ing rights over the historical Prieska copper mine (PC), located at Copperton in the Northern Cape and the Marydale gold/cop- per project, a volcanogenic gold-copper

April 2017  MODERN MINING  13

MINING News

A recent view of the Balama site (photo: Syrah Resources). Balama project on course for Q2 commissioning LTIs or significant incidents in 2017.

is complete and mining of ore is scheduled in May 2017 for commissioning of the pri- mary crusher. A temporary laboratory will be estab- lished in April 2017 to receive grade control and ore characterisation samples from the mine. The mine will be powered by an on-site 15,4 MW power station. All seven genera- tors have now been installed on concrete foundations, the E-Room building has been placed and electrical works includ- ing installation of cable trays and the main transformer are underway. Snowden delivered a full feasibility study (FS) on the project in May 2015, which confirmed Balama as the world’s largest flake graphite project. As detailed in the FS, Balama will have a nameplate capacity of 350 000 tonnes of concentrate per annum at 95 %Total Graphitic Content (TGC), with the reserves being sufficient for over 40 years of operation at full pro- duction. The average head grade will be approximately 19 % TGC during the first 10 years of operations. 

ASX-listed Syrah Resources is continu- ing to make good progress on its Balama graphite project in northern Mozambique and says that commissioning remains on schedule for Q2 2017 and that the capital budget remains unchanged at US$193 mil- lion. The excellent safety record on site has been maintained and the project has now achieved 1,2 million hours with no

According to the company, the overall process plant construction progress was 70 % as at mid-March with all engineer- ing and procurement complete. Mine development is also progressing well, with mining facilities including the warehouse and wash down pads complete. Topsoil removal from the Balama West Stage 1 pit notes it was purchased at a competitive price. Along with a spares inventory, gen- erators for the plant and site, and a crusher optimised for coal, it is being packed for shipment from the UK to Tanzania. In par- allel with the shipping of the plant, further earthworks are being initiated for the plant site and to provide additional access roads for coal trucks. The increase in equipment on site will also allow a Run of Mine coal stockpile to be established in order to provide feed for the wash plant and crusher when installed on site. 

Mining kicks off at Rukwa in Tanzania Mininghas commenced at Edenville Energy’s Rukwa coal project in western Tanzania and the crushing of several hundred tonnes of coal has already been completed.

Most of the coal produced so far has been crushed using a temporary crush- ing facility the company has refurbished alongside its partner, Upendo. The result- ing product has subsequently been sold to a customer with the intention of providing larger scale, long term sales once the main wash plant facility is operational. Edenville, listed on AIM, says the acquisi- tion of the wash plant is now complete and

14  MODERN MINING  April 2017

MINING News

Maiden JORC classified resource for Mothae

million carats of diamonds at an average modelled revenue of US$1 063 per carat (to 300 m below surface, at a 2 mm bot- tom screen). In its report, MSA also highlighted the potential upside to its diamond revenue model, stating: “There is upside potential for the average diamond value based on the model value of large stones.”

Lucapa Diamond Company, listed on the ASX, has announced a maiden JORC clas- sified diamond resource estimate for the advanced Mothae kimberlite diamond project in Lesotho. As was announced in late January this year, Lucapa has been awarded a 70 % interest in Mothae Diamonds (Pty) Ltd (MDL), following a competitive tender process run by the Government of Lesotho, which retains a 30 % interest. MDL holds the recently awarded 10-year mining licence and other assets related to Mothae. As part of the acquisition, Lucapa engaged independent consultants The MSA Group of Johannesburg to update and convert the existing Canadian- standard NI 43-101 resource estimate, dated 28 February 2013, into a classified JORC 2012 estimate. The total indicated and inferred Mothae diamond resource has been estimated by MSA to be 38,96 Mt at a diamond grade of 2,7 carats per 100 tonnes, containing 1,04

While the JORC classified indicated and inferred diamond resource of 38,96 Mt is calculated to a depth of 300 m, MSA has modelled the Mothae kimberlite to a total depth of 500 mbelow surface, correspond- ing to a total estimated 77,4 Mt. Mothae is located within 5 km of Letšeng, the world’s highest US dollar per carat kimberlite diamond mine. 

Eastport awarded prospecting licences Eastport Ventures Botswana (Pty) Ltd (EVB) has recently been awarded two prospect- ing licences for precious stones in Botswana. Both licences are to the immediate north of the very rich Jwaneng diamond mine.

some of the drawbacks of other traditional IP survey methods. Eastport will externallymap and internally define the features of the diamond-bearing Kgare kimberlite as a first step in develop- ing a geophysical signature for exploration purposes. Eastport’s exploration team will use the data collected to refine the regional geology in 3D to help overcome the difficulties of kimberlite exploration in terrain where neu- tralised magnetic signatures may occur. 

Exploration is currently underway and shortly EVB will mobilise a 3D IP chargeabil- ity/resistivity ‘Full Waver’ system developed by IRIS Instruments. According to EVB, the Full Waver system offers a unique opportunity to map and explore the subsurface while overcoming

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MINING News

Consultants appointed for Kalongwe Feasibility Study ASX-listed Nzuri Copper (previously Regal Resources) has appointed the principal consultants for the Feasibility Study (FS) and Front-End Engineering Design for the Kalongwe project in the DRC. Kalongwe is a significant high-grade oxide Cu-Co near-surface resource which has potential to be developed into a near-term, low capex/low opex mining operation producing approximately 20 t/a of copper/cobalt in concentrate. The project is located in Katanga Province, approximately 45 km south-west of the historic copper mining and processing centre of Kolwezi and 15 km from Ivanhoe’s Kamoa/Kakula copper discovery The overall FS compilation and FEED will be undertaken by Lycopodium. It will be assisted by Knight Piesold (tailings and water management design), Orelogy (mining, reserve estimation and geo- technical review), CSA (geological and resource estimation) and MSA (site-based geological support). African Drilling has been appointed to carry out geotechnical drilling for the FS. The anticipated total cost of the FS, including site-based drilling activities, is expected to be less than A$2 million, with completion scheduled for early in the third quarter of 2017. “The selection of high quality experienced consulting groups with excellent African credentials, a well understood scope combined with a focus of FEED works will facilitate a potential aggressive build and ramp-up of the project. We look forward to completing the fea- sibility study and demonstrating the robust nature of the Kalongwe project,” comments Adams Smits, COO of Nzuri.  Sabodala drill programme extends mineralisation Teranga Gold Corporation, listed on the TSX and ASX, has announced the second round of results from its ongoing 115-hole drill programme at the Niakafiri deposit, situated within 5 km of the mill at its Sabodala mine in Senegal. Drill results from the first 60 holes at Niakafiri extend the mineralisa- tion along strike and at depth, providing potential for re-optimisation of the life of mine plan. Positive drilling success in the Niakafiri Main zone include an inter- section of 4,18 g/t Au over 23 m (including 6,52 g/t Au over 12 m) in MDD17-279; and 2,99 g/t Au over 33 m (including 4,23 g/t Au over 17 m) in MDD17-277. “The drill results confirm our belief that there is considerable opportunity to extend the mineralisation both along strike and to depth at Niakafiri,” said Paul Chawrun, Chief Operating Officer of Teranga.“These encouraging results could result in the re-sequencing of Niakafiri in the current mine plan, filling in the production gaps at Sabodala to extend the life of open-pit mining and to defer the start of underground mining.” “We are very pleased with our most recent results, which repre- sent some of the widest mineralised intervals encountered within the Niakafiri deposit to date,”stated DavidMallo, Vice President Exploration of Teranga. “Our drill programme at Niakafiri will continue to focus on extending the mineralisation along trend and to depth.” 

April 2017  MODERN MINING  17

COVER STORY

New electronic initiation system from DetNet® is a ‘game-changer’ Preparations for the first CE4 Commander™ trial blast. South Africa’s DetNet®, a global leader in electronic initiation products used in blasting, has launched its CE4 Commander™ system, which it says is a breakthrough technology with the potential to take blasting to the next level. DetNet’s Director of Marketing, Johann Smit, describes the system as a ‘game-changer’ which features advanced microchip (ASIC) design, GPS functionality, wireless acti- vation and seven times faster autonomous programming delivering ease of use, fast deployment, enhanced blast efficiency and uncompromising standards of safety.

T he new system also adds con- siderable value to management information needs through seam- less integration with blast design software and real time data trans- fer enabling optimised blast designs, efficient blasting as per design, accurate reporting and valuable blast analysis. The system comprises three separate prod- ucts – the CE4 Commander™, the 4G detonator and the CE4 Tagger. The CE4 Commander™ is the heart of the system and is a multi- purpose device that can be used as a Base Station (in which role it is known as a Base Commander), as a repeater, or on the bench (Bench Commander). Up to six Commanders can be deployed for a single blast using long- distance RF communication from a blasting point. Each Commander has four channels that

can connect up to 300 detonators, giving a total of 1 200 detonators per Commander – which means that the system can control blasts with a maximum of 7 200 detonators. The 4G detonator forming part of the system is a new generation fully programmable detona- tor featuring a redesigned Application Specific Integrated Circuit (ASIC) with 15 times more memory than its predecessor, the 3G detonator. It also features a new spooled downline wire option which is tougher and able to handle more impact in deep blast hole applications. Down-hole wire length and other critical infor- mation is stored in the expanded, non-volatile memory during detonator assembly. In addi- tion, a delay time and a unique ID are fed directly into the detonator during tagging. The CE4 Tagger, which interfaces with the 4G deto- nator, is also an entirely new design which can

18  MODERN MINING  April 2017