Name of the Project
Elikhulu tailings project.

Location
The project is located in Mpumalanga, South Africa.

Client
Pan African Resources.

Project Description
A definitive feasibility study (DFS) completed on the Elikhulu tailings project has shown the project to have excellent recovered grades and gold production, attractive financial returns and a low execution risk, with the DFS results surpassing expectations of previous technical and financial assessments.

The project entails establishing facilities and infrastructure at Evander Gold Mining to re-treat gold plant tailings at a rate of one-million tonnes a month.

This is in addition to the existing production from the Evander Tailings Retreatment Plant (ETRP), which will continue to operate independently of the project for the next 13 years.

Three existing tailings storage facilities will be reclaimed in the following order: Kinross, Leslie and Winkelhaak.

After processing, these will be consolidated into a single enlarged Kinross tailings facility, contributing to reducing Evander’s environmental footprint and associated environmental impact.

The project is expected to yield an estimated 56 000 oz/y of gold for the initial eight years of production while treating the Kinross and Leslie tailings storage facilities, and about 45 000 oz/y for the project’s remaining five years from processing the Winkelhaak tailings storage facility.

These production figures exclude an inferred resource of 244 398 oz of gold delineated in the soil material beneath the existing tailings dumps.

The average gold recovery over the life of the project is forecast at 47.77%. Using modelled recoveries, the gold dissolution value estimated for Kinross is 51.38%, Leslie 48.29% and Winkelhaak 53.77%. Current arisings and inferred gold resources could extend the project’s life beyond the DFS estimated life-of-mine of 13 years.

The project has mineral reserves estimated at 187.1-million tonnes and comprises the Kinross (47-million tonnes), Leslie (70.1-million tonnes) and Winkelhaak (70-million tonnes) tailings storage facilities at Evander.

The mineral reserves will provide feed material for the existing ETRP at 200 000 t/m, and to the project process plant at a rate of one-million tonnes a month of which 40 000 t/m will be from run-of-mine tailings.

The combined mineral reserve contains an estimated 1.73-million ounces of gold, of which an estimated 688 700 oz will be recovered over the life of the project.

This estimate excludes the inferred resource of 244 398 oz of gold leached into the soil beneath the existing tailing dumps, which could potentially increase the life of the project.

The mineral reserve estimate assumes a nonselective mining method whereby the whole of the mineral deposit is mined in a predetermined sequence.

The mining method allows for a 100% extraction of the target mineral deposit. Hydraulic mining has been selected as the preferred mining method as it is proven technology, cost effective and operationally well understood.

Jobs to Be Created
Between 400 and 700 temporary jobs will be created during construction, and between 180 and 250 permanent employment opportunities will be created during operation.

Net Present Value/Internal Rate of Return
Not stated.

Value
Phase 1 of the project is estimated at R1.74-billion.

This capital relates to the initial capital required to build the plant and associated infrastructure, and includes a contingency of R191.2-million to account for potential cost overruns and additional plant design requirements.

Phase 2 and 3 capital of R313.1-million and R113-million respectively is required to establish the hydraulic mining infrastructure at the Leslie and Winkelhaak tailings dumps. This will be funded from project-generated cash flows.

Duration
Phase 1 of the hydraulic mining at the Kinross tailings storage facility is scheduled to start in the fourth calendar quarter of 2018, with full commercial production scheduled for December of that year.

Phase 2 at the Leslie tailings storage facility is scheduled for the end of the third quarter of 2021 and Phase 3 at Winkelhaak in the third quarter of 2026.

Latest Developments
Pan African Resources will redeploy about 500 of its employees to the Elikhulu tailings retreatment project during its construction phase, group mineral resource manager Barry Naicker has said.

Speaking on the sidelines of the Geological Society of South Africa’s Gold Day on March 31, he told Mining Weekly that following commissioning, this number would drop to 50 permanent employees.

To reduce job losses, the miner has said it will seek to re-engage a number of retrenched employees from its Evander mine when site activities for the Elikhulu tailings project start.

Evander aims to reduce its underground operation’s fixed cost base once mining restarts, with 30%, or 976, of the mine’s 2 400 employees having been retrenched at an estimated cost of R54-million.

Mining activities were suspended in February to complete infrastructure-critical refurbishment and maintenance on shafts 7 and 8.

Pan African explained that the retrenched personnel were designated as redundant in terms of meeting production targets, following a productivity and human capital assessment. A retrenchment agreement was reached with the National Union of Mineworkers on March 10.

Meanwhile, the company is pursuing construction of Elikhulu, following a positive independent definitive feasibility study for facilities and infrastructure at the Evander mine to retreat gold plant tailings at a rate of one-million tonnes a month.

Naicker said the company hoped to break first ground in the third quarter of this year, reaching commercial production by the third quarter of 2018.

Key Contracts and Suppliers
DRA Projects (EPC contractor).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Pan African Resources project lead Jonathan Irons, tel +27 11 243 2900 or fax +27 11 880 1240.
Aprio Strategic Communications Public and Investor Relations on behalf of Pan African Resources, Julian Gwillim,
tel +27 11 880 0037.