Name and Location
West Rand tailings retreatment project (WRTRP), Gauteng, South Africa.

Client
Sibanye Gold.

Project Description
The WRTRP consists of about 800-million tons of surface tailings storage facilities (TSFs) resources, containing an estimated 6.5-million ounces of gold and about 100-million pounds of uranium, located on surface at Sibanye’s West Rand operations.

An internal technical and financial review of the feasibility of the WRTRP completed during the June quarter has confirmed the robust economic viability of the project.

The review has concluded that, to enhance value, the uranium module envisaged in the prefeasibility study as part of Phase 2 of the project, be included as part of the initial execution phase.

In terms of the revised project plan and as part of the first phase, relatively high-grade gold TSFs at Driefontein will be simultaneously processed with Cooke’s relatively high-grade uranium TSFs.

These “anchor” resources represent about 30% of the total Sibanye TSF resource base by volume, and contain about 35% of the gold and 53% of the uranium contained in the total resource base.

Phase 1 of the project currently envisages processing about 1.5-million tons a month of anchor resource, yielding and estimated 1.2-million ounces of gold and 35-million pounds of uranium over the project’s 16-year mine life, at an average steady-state production of 100 000 oz/y of gold and 2.2-million pounds of uranium a year.

Net Present Value/Internal Rate of Return
Phase 1 of the project has an estimated net present value (NPV) of R3.2-billion and an internal rate of return (IRR) of 15%, with a payback of nine years.

Significant value engineering opportunities identified during the feasibility study are being reviewed as part of a design integration phase, which has the potential to add a further R400-million to the Phase 1 NPV and increase the IRR to 16%.

This project valuation ignores the potential benefits of the longer-term “annuity” cash flow derived from processing the remaining Sibanye TSF resource, potential by-product sulphuric acid sales and taxation benefits associated with capital expenditure offsets at Driefontein and Kloof, which, on a combined basis, could conservatively add an additional R2.5-billion in value to the project, resulting in a total combined NPV of R5.5-billion to R6-billion.

Value
Not stated.

Duration
Not stated.

Latest Developments
The permitting process for the WRTRP has been initiated. During the estimated 300-day regulatory period required for permitting, further value engineering opportunities to reduce capital and operating costs associated with the integrated uranium and gold processing plant design will be assessed.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Sibanye Gold senior VP: investor relations James Wellsted, tel +27 11 278 9600 or email james.wellsted@sibanyegold.co.za.