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Diversified Miners
Mining Projects in Progress 2011
Africa rich with mineral resources, projects prosper
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4th November 2011
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Africa is a source of various mineral resources, most of which have yet to be exploited. As a result, the con- tinent has attracted the attention of inter- national mining companies that seek to take advantage of this abundant wealth.

Mbalam iron-ore project, between Cameroon and the Republic of Congo

A definitive feasibility study (DFS) on Sundance Resources’ Mbalam iron-ore project has confirmed the economic viability of the project. The Mbalam project boasts a high-grade hematite resource of 521.7- million tons, grading 60.7% iron and a further 2.3-billion tons of itabirite hematite resource at 38% iron. Based on an average production rate of 35-million tons a year of direct shipping ore (DSO) averaging 63.6% iron, a capital expenditure of $4.6-billion will be required to start up the DSO operation, with capital payback projected to be achieved in three years.
Sundance has also released a prefeasibility study for the Stage 2 development, based on a continued production rate of 35-million tons of itabirite hematite concentrate product at 66% iron. A DFS on this part of the project will take place during 2012, leading to the mining of the wider itabirite hematite resource.
Project cost: $4.6-billion. This is an increase from the previous development cost estimate of $3.36-billion outlined in the prefeasibility study, released in September 2009.

Kalukundi copper/cobalt project, Katanga province, Democratic Republic of Congo
TSX-listed Africo Resources’ Kalukundi project is located 60 km to the east of the mining centre of Kolwezi, within the Copper-belt of the Democratic Republic of Congo. The project is also situated only 23 km to the west of the major Tenke-Fungurume complex, which is currently in production for Freeport McMoRan Copper & Gold. The economics of the deposit are based on a production rate of 800 000 t/y for nominal production of 16 400 t/y of copper and 3 800 t/y of cobalt and will involve a conventional openpit selective-mining-exploitation method using a mining contractor.
In June 2011, Africo announced that it had restarted drilling at the property. The initial programme of borehole drilling will focus on the Principal and Anticline fragments of the property, where the highest grades of copper and cobalt were encountered during its last exploration activities conducted in 2008 and 2009. An initial programme of 4 000 m of drilling is planned as infill drilling to confirm continuity and grade of the currently defined geology and mineralisation and to search for extensions of the known mineralisation.
Project cost: $200-million.

Kinsevere mine Stage 2 development, Democratic Republic of Congo
TSX- and ASX-listed Anvil Mining produced its first copper cathodes at the Kinsevere mine Stage 2 development project, which involved the construction of a 60 000 t/y solvent extraction and electrowinning plant, in May. The focus is currently on the ramp-up to reach a production rate of 5 000 t/m of copper cathode. The commissioning, together with the ramp-up, is an ongoing process and is expected to take several more months to complete.
Project cost: $400-million.

Kibali gold project, Democratic Republic of Congo
With probable mineral reserves of about ten-million ounces, Randgold Resources’ (45%), AngloGold Ashanti’s (45%) and State-owned mining company l’Office des Mines d’Or de Kilo-Moto’s (10%) Kibali project will rank as one of Africa’s largest gold mines. The project envisions 37-million tons of total openpit ore mined, containing 3.2-million ounces of gold at a strip ratio of 3:8:1 to give a total of 141-million tons mined and 37-million tons of underground ore mined, containing 6.8-million ounces of gold. The project continues in line with the development schedule, which is focused on the establishment of extensive construction, maintenance and manufacturing facilities.
Project cost: The life-of-mine capital cost, including 2010 expenditure, is estimated at $1.4-billion, including site construction, plant, hydropower installations, preproduction and ongoing capital.

Kipoi copper project Stage 1, Democratic Republic of Congo
The Kipoi project covers an area of 55 km2 and is located 75 km north-north-west of the city of Lubumbashi, in Katanga. The project proposes a staged development. During Stage 1 of the development, the high-grade zone of mineral- isation at Kipoi Central will be exploited, processing 900 000 t/y at a grade of 7% copper through a heavy-media separation (HMS) plant with a recovery rate of 60%, to produce the equivalent of around 35 000 t/y of copper. The existing infrastructure at Kipoi for the Stage 1 HMS facility will act as a capital springboard for the development of the Stage 2 solvent extraction/electro- winning, for which a scoping study was completed in October. The immediate area of Tiger Resources (60%) and La Générale des Carrière et des Mines (40%), which are develop- ing the project, is to further improve the Kipoi economics by expanding the resource, completing the feasibility study and moving Stage 2 into development – thus, further up the value curve.
Project cost: Stage 1 will cost an estimated $30-million. A capital investment of around $151.4- million will be required for the Stage 2 development, with life-of-mine costs expected at $422.4-million. The combined Kipoi Stage 1 and 2 projects are fully funded on the basis of current average copper price projections.

Twangiza gold project Phase 1, South Kivu province, Demo-cratic Republic of Congo
Banro Corporation’s Twangiza project, located in the 210-km-long Twangiza/Namoya gold belt in the South Kivu and Maniema provinces of the Democratic Republic of Congo (DRC), has total proven and probable reserves of 4.54-million ounces of gold and consists of six exploitation permits totalling 1 156 m2. The project envisages a conventional openpit shovel-and-truck operation to mine sufficient ore to supply five-million tons a year of oxide ore throughput and, subsequently, 3.75-million tons a year for transitional and fresh ore throughput. The feasibility study indicates full production at the Twangiza project to be over 300 000 oz/y of gold over the first three years, at average operating cash costs of $261/oz, based on current resources. The project remains on track to become the first new commercial gold mine in the DRC in more than five decades, with first production set for the last quarter of this year.
Project cost: $377.43-million.

Dallol potash project, Ethiopia

The proposed Dallol potash project area is located in Ethiopia’s north-eastern desert area of the Danakil Depression, covering 160 km2, about 100 km from the Eritrean Red Sea coast and 600 km by road from the deep-water port of Djibouti. Developer Allana Potash has reported that it will decide in mid-2012 on whether to proceed with the project. The company plans to finalise the National Instrument 43-101 update in the coming weeks and, parallel to that, will proceed to the bankable feasi- bility study phase, which will take between 9 and 12 months.
Project cost: Allana Potash plans to spend around C$22-million on exploration of the project over the next two years.

Tulu Kapi gold project, Ethiopia
Aim- and ASX-listed Nyota Minerals’ Tulu Kapi exploration licence comprises an area of about 20 km2, centred on the old Tulu Kapi gold mine, in western Ethiopia. The project, which has entered the prefeasibility stage, has a total inferred Joint Ore Reserves Committee-compliant resource of 1.38-million ounces of gold, defined at a cutoff grade of 0.50 g/t. Nyota has applied to the government of Ethiopia to convert the exploration licence for its flagship Tulu Kapi project into a mining licence.
Project cost: The project has an estimated provisional capital cost of $199.8-million and operating costs of $14.50/t for openpit mining and processing, and $35.83/t for underground mining and processing.

Kilimapesa gold mining project, Trans Mara district, Kenya
Kilimapesa is located in the potentially gold-rich Migori Archaean greenstone belt, in Kenya. The project currently has a Joint Ore Reserves Committee- compliant (Jorc) resource of 1.65-million tons, grading at 2.44 g/t gold for 129 000 oz of gold at a cutoff grade of 1 g/t gold for all categories; however, Goldplat is looking to increase this through further exploration. The plan is to develop a small profitable gold mine, with an initial target of producing about 5 000 oz/y of gold within 12 months of being granted a mining licence. The Kenya government granted Goldplat, through its subsidiary, Kilimapesa Gold, permission for operations at the mine to start in March this year. Meanwhile, Phase 1 of a two-phased drilling programme has started, focusing on the project’s prospective Vim/Rutha and RedRay target areas, 2 km south of Kilimapesa Hill. The aim is to increase the Jorc-compliant resource base at Kilimapesa Gold to 500 000 oz of gold.
Project cost: The value of the project has not been confirmed.

Kwale mineral sands project, Kenya
Base Resources’ Kwale project is located about 50 km south of Mombasa and 10 km inland from the Indian Ocean. The company has completed an enhanced definitive feasibility study (EDFS) for the project, which indicates that it could operate for 13 years, mining 140.6-million tons of ore to produce 4.7-million tons of the final product for sale. The EDFS is based on an updated Joint Ore Reserves Committee- compliant resource estimate, which showed an increase of 7.17-million tons in the measured and indicated resources at the central and south dunes, for a combined total of 146- million tons at 4.89% total heavy minerals. Ore mining and production are scheduled to start in July 2013. The project continues to enjoy a high level of government and community support. Significantly, the government of Kenya deems the project to be one of national significance and, as such, is committed to seeing its development.
Project cost: The project has an estimated capital cost of $256- million, including a $20-million contingency.
Dutwa nickel laterite project, Tanzania
The Dutwa project, being developed by Aim- and ASX-listed African Eagle Resources, comprises two nickel laterite deposits, namely Wamangola and Ngasamo Hills, located about 7 km apart. The project has a current Joint Ore Reserves Committee- (Jorc-) compliant mineral resource of 98.6-million tons, grading 0.93% nickel and 0.02% cobalt, representing a contained 948 000 t nickel equivalent resource. A prefeasibility study on the project is expected to be completed at the end of this year, slightly later than expected, with the deposit expected to start production of about three- million tons a year from 2015.
Project cost: Should an atmospheric tank-leach plant be considered, the project would require an estimated capital expenditure of $600-million. Alternatively, a heap-leaching plant will cost an estimated $550-million to develop. The company will start talking to bankers from the middle of next year and is seeking to raise the whole amount in one go.

Ngaka thermal coal project, Tanzania
The Ngaka deposit is made up of the Mbalawala subbasin, the Ngaka central basin and the Mbuyura/Mkapa subbasin. Work in the Mbalawala basin is the most advanced and hosts a Jorc-compliant resource estimate of 251-million tons of thermal coal. The mine is being developed in three stages.
Project cost: The value of the project has not been disclosed.

Hassaï gold mine volcanogenic massive sulphide project, Sudan

The Hassaï openpit gold mine, Sudan’s first and only producing gold mine, is located in the Red Sea Hills Desert of north-eastern Sudan, some 450 km from Khartoum. Canada-based La Mancha owns 40% of the mine through a subsidiary, while the government of Sudan holds the remaining 60%. The current plan to expand the mine will involve developing these deposits in two separate phases.
Phase 1 entails an upgrade of the current heap-leach operation, with a three-million-ton-a-year carbon-in-leach (CIL) plant to process the remaining open- pit resource and accumulated tailings on the property.
Phase 2 involves the addition of a flotation unit to process some five-million tons of volcano- genic massive sulphide ore a year, with average production estimated at some 59 355 oz of gold and 51 516 t of copper, over and above the production from the CIL operations, as of 2015.
Project cost: $191.2-million, which includes estimates of $187-million for the CIL plant and its associated infrastructure, and $4.2-million for the replacement of the existing mining equipment.

AK6 diamond project, Botswana

The AK6 kimberlite is an advanced, high-value diamond development project, situated in the Orapa/Letlhakane kimberlite district of Botswana. It consists of three lobes, namely South, Centre and North, of which the South lobe makes up about 75% of the kimberlite’s resource potential. An updated feasibility study on the project proposes a process plant designed at an initial throughput rate of 2.5- million tons a year, increasing to four-million tons a year after four years. This phased production approach, combined with contract mining, will reduce the upfront capital requirement. The revised mining plan further calls for a smaller number of carats being produced at a higher diamond value. The development of the AK6 diamond mine is progressing well. The mine will ramp up to full production in early 2012 to deliver over 400 000 ct of high-quality diamonds in its first year of operation.
Project cost: The first phase requires a capital expenditure of $120-million, which includes the process plant, all mine sites and off-site infrastructure as well as a 13% contingency.

Boseto copper project, Botswana
The Boseto project is located on one of 14 prospecting licences, covering an area of over 10 100 km2 within the Kalahari Copperbelt – a previously poorly explored extension of the Zambian Copperbelt.
The mine consists of three main prospects, namely Zeta, Plutus and Petra. A bankable feasibility study has indicated that the resources and reserves can support a three-million-ton-a-year copper/silver operation over a five-year life-of-mine. The project remains on track for commissioning and initial production in the first half of next year.
Project cost: $175-million. Discovery Metals has received approval for the $180-million debt facility for the project.

Cut 8 project, Jwaneng diamond mine, Botswana
The project involves a major extension at the Jwaneng mine. The project, also known as Cut 8, will ensure profitable and continuous production at the mine until at least 2025.
The development will require the removal of 658-million tons of overburden to allow diamond miners to access 91-million tons of ore that will yield around 102-million carats of diamonds. The fact that the waste profile is so large will move Jwaneng towards the status of being one of the world’s super pits.
Project cost: Debswana will invest $500-million. Taking into account all project stages, including feasibility, design, implementation and mining operations, as well as the cost of plant and equipment, the estimated total project investment is likely to be $3-billion over the next 15 years.

Ghaghoo diamond mine, (formerly the Gope deposit), Botswana
Originally scoped as a six-million- ton opencast mine, Gem Diamonds’ Ghaghoo project will be built as an underground mine in a phased manner to take advantage of an estimated resource of 20-million carats, with an average in situ value of $3.3- billion, and may produce up to one-million carats a year. The construction work for the first phase will begin this year, with production expected to begin in 2013 at an initial rate of 100 000 ct/y, which will be stepped up over time to peak at 780 000 ct/y.
Project cost: The cost of the first phase of development is pegged at $85-million, of which $22-million has been earmarked for this year, $47-million for next year and $12-million for 2013.

Mmamantswe coal project, Botswana
Aviva Corporation’s and Mwana Minerals’ Mmamantswe project has a large coal resource of 1.3-billion tons, including a probable run-of-mine reserve of 895-million tons that contains some 200-million tons of export coal and 150-million tons of domestic coal. Studies have suggested that the project could support a ten-million-ton-a-year run-of-mine operation. Aviva is currently awaiting the Botswana government’s review of its coal roadmap.
Project cost: A scoping study completed by mining consultant SRK Consulting in 2010 pegged total capital costs over a five-year development period at an estimated R2.9-billion, which includes R834-million for the cost of the mine and R1.25-billion for the processing plant.

Moiyabana coal project, Botswana
Jaguar Ventures 100%-owned Moiyabana project has an estimated coal exploration target of between 1.4-billion tons and 1.65-billion tons of in situ coal, which could be defined over a 140 km2 area, of which an estimated 660-million tons has the potential for opencast mining. Resource definition drilling has started at the project and the results of an independent geo-logical and technical review were received as part of the due diligence process.
Project cost: Not stated.

Letšeng diamond mine expansion project, Lesotho
The Letšeng diamond mine, owned by Letšeng Diamonds – a partnership between Gem Diamonds and the government of Lesotho – is located in the Maluti Mountains. The mine currently has the capacity to treat some seven-million tons of ore a year to produce about 100 000 ct. The expansion project, known as Project Kholo, proposes to increase throughput to at least 8.5-million tons a year, increase revenue through a reduction in diamond damage and improve recovery, as well as a reduction in real operating costs of $2/t. A prefeasibility study on the potential of an underground operation for the satellite pipe at Letšeng has started and is expected to be completed by the end of the second quarter of 2012 with the aim of defining the most appropriate and cost-effective mining method from a number of available options.
Project cost: Original estimates put capital expenditure for the project at $245-million. A final capital estimate on the project is expected to be presented to the Gem Diamonds board later this year.

Manica gold project, Mozambique
Pan African Resources plans to build an 87 000 oz/y heap-leach surface mine, with the option of underground mining, which could become the first major commercial gold mine in Mozambique’s history. The company will only review how to progress the project on completion of an ongoing prefeasibility study.
Project cost: The project has an estimated capital cost of £48.58-million.

Zambeze coal project, near Tete, Mozambique
The project proposes the develop- ment of Rio Tinto’s (previously Riversdale Mining’s) second major coal project in the Moatize basin, adjacent to the company’s Benga coal project. The wholly owned project has an estimated coal resource of nine-billion tons. The total coal resource includes about 2.3-billion tons in the indicated category. Based on washability analyses of potential coal products that could be produced after beneficiation, the project includes an export hard coking coal and a secondary thermal coal product consisting of high-energy export thermal coal for the Indian and African markets.
Project cost: Not stated.

Langer Heinrich uranium Stage 2, 3 and 4 expansion projects, Namibia
The expansion projects at Paladin Energy’s 2.6-million-pound-a-year Langer Heinrich mine are ultimately expected to bring the mine’s capacity to ten-million pounds of uranium oxide (U3O8) a year by mid-2014. The Stage 2 expansion will increase capacity to 3.7-million pounds of U3O8 a year, Stage 3 will increase production to 5.2-million pounds of U3O8 a year and Stage 4 will increase capacity to ten-million pounds of U3O8 a year. Stage 2 is complete and Stage 3 is nearing completion, while the Stage 4 feasibility study is proceeding as scheduled.
Project cost: The Stage 2 production expansion cost an estimated $50-million. Stage 3 will cost $71-million.

Trident copper/nickel project, North West province, Zambia
The Trident project, for which a ground-breaking ceremony was held in April, lies about 140 km west of the town of Solwezi and 150 km from the Kansanshi copper mine, in northern Zambia. It comprises three distinct areas of mineral- isation, namely Sentinel, Enterprise and Intrepid. Geo-logical drilling and evaluation continue at each of these targets and it is planned that Sentinel will be developed first, followed by Enterprise and then Intrepid. Each area is individually seen as a significant mine develop- ment, which will likely extend over a period of 22 years. Owner of the project, First Quantum Minerals, is proceeding with the design of an operation that could initially produce 150 000 t/y of copper, increasing to 300 000 t/y. Once the resource drilling is complete, the production target may be increased further. Subject to final permits, results of the ongoing resource and mine studies and approval by the company’s board of directors, it is expected that the initial design and construction phases could begin during this year, with commercial production expected in early 2014.
Project cost: The capital cost to develop the project, including the necessary infrastructure, is expected to be in the range of $1-billion.

Husab uranium project, near Swakopmund, Namibia
Extract Resources’ Husab uranium project, located in the Erongo region of central-west Namibia, currently ranks as the fifth-largest global uranium- only deposit. A recently completed definitive feasibility study (DFS) prepared on the basis of a low-risk conventional openpit mine, over Zones 1 and 2, has indicated that some 15- million tons of ore a year could be delivered to a conventional agitated acid-leach plant to produce about 15-million pounds of uranium oxide equivalent a year. This rate of production will position the Husab mine as one of the three-largest uranium mines in the world. The DFS was supported by a maiden reserve estimate of 205-million tons, grading at 497 parts per million, for 225-million pounds of contained uranium. Extract Resources has reported that the development decision on the Husab project will only be taken once financing for the project has been locked in.
The development decision will also be dependent on the granting of a mining licence.
Project cost: Capital costs for the project are estimated at $1.48-million, including the initial mine fleet, process plant and supporting infrastructure. Inclusive of prestrip and other preproduction operating costs of $179-million, the overall project cost is estimated at $1.66-million. Unki platinum mine and concentrator plant, Zimbabwe

The Unki mine is Anglo American Platinum’s first platinum mine in Zimbabwe, at the Unki deposit located south-east of Shurugwi. The mine is expected to produce about 69 000 oz/y of platinum at steady state. The mine and concentrator are currently in the ramp-up phase and are expected to reach full production in the fourth quarter of this year.
Project cost: The project cost an estimated R3.4-billion to develop.

Bomboré gold project, Burkina Faso

The 105 km2 Bomboré gold property is the largest undeveloped gold deposit in Burkina Faso. Orezone Gold plans to develop an openpit oxide heap-leach operation, as well as a large carbon-in-leach (CIL) operation with a total capacity of over nine-million tons of ore a year. Orezone Gold is targeting to complete the feasibility study for the Bomboré project in the third quarter of next year, with first production from the mine scheduled to begin in 2015.
Project cost: The initial capital cost estimates for the heap-leach and CIL projects are $204.7- million and $499.5-million respectively.

Kalia iron-ore project, Guinea
Bellzone Mining has completed key project activities to finalise the detailed feasibility study and further expand the iron-ore resources at the Kalia project. The company is confident of achieving its study and resource development objectives and starting the construction of the mine before year-end. The project, to be developed in stages, entails the development of a 50-million-ton-a-year iron-ore facility, with supporting rail and port infrastructure for the export of iron-ore. The iron-ore operation will be delivered in two stages, while the project infrastructure is to be developed as a separate vehicle.
Project cost: $4.46-billion.

New Liberty gold project, Liberia
Aureus Mining’s New Liberty gold deposit, which lies within the Bea Mountain mining licence, contains an estimated indicated mineral resource of 751 000 oz of gold, grading 4.17 g/t, and an estimated inferred mineral resource of 762 000 oz of gold, grading 3.40 g/t. A preliminary economic assessment study on the project, released in December last year, supports an openpit mine and gold processing plant, with an average production rate of 850 000 t/y of ore, producing 100 000 oz in the first five years in the project’s eight-and-a-half-year life-of-mine. A definitive feasibility study on the project is expected to be completed by the end of this year.
Project cost: Not stated.

Gara underground gold mine, Loulo mine, Mali
The project involves the develop- ment of the Gara underground gold mine at Randgold Resources’ Loulo mine. The Gara mine will be accessed through a twin decline system situated inside the southern part of the current openpit. The declines will be 5 m wide by 5 m high.
Project cost: Not disclosed.

Syama gold mine expansion project, Mali
The Syama openpit gold project, in which Resolute Mining has an 80% interest, was initially brought into production in 1990 and produced over 1.5-million ounces of gold. In early 2001, the mine was placed on care and maintenance, prior to its acquisition by Resolute. The proposed staged expansion of the mine recommends mining beneath the current openpit design and adding an oxide ore processing circuit, while deferring from an underground oper- ation. A recent strategic study conducted at the Syama pit has indicated increased ore reserves in the expanded pit to 31.7-million tons at 2.9 g/t gold for 2.94-million ounces. Resolute is on track to deliver the feasi-bility study for the expansion of the Syama gold project before the end of March next year.
Project cost: Not stated.

Yalea underground gold mine, Mali
The project involves the development of the Yalea underground gold mine at Randgold Resources’ Loulo mine, which includes the sinking of two declines below the openpit and considerable mechanisation.
Project cost: $100-million.

Reguibat craton uranium project, Mauritania
Aura Energy’s Reguibat project comprises several laterally extensive developments of high-grade calcrete uranium mineralisation in northern Mauritania, positioning the area as a major emerging uranium province.
A maiden resource of 50.2- million pounds of uranium, at an average grade of 330 parts per million (ppm) uranium oxide (U3O8) has been declared at the project, based on a cutoff grade of 100 ppm U3O8. Aura estimates that around 48.9- million pounds of the resource is contained within its permit area.
Project cost: Not stated.

Marampa iron-ore project, Sierra Leone
The Marampa project is a brownfield exploration project, located near the township of Lunsar, in Sierra Leone, which is being evaluated by Cape Lambert Resources for the production of a high-grade hematite iron-ore concentrate. An updated scoping study completed on the project envisages a standalone openpit mining operation, with a wet, high- intensity magnetic separation concentrator and associated infrastructure, initially at a production rate of two-million tons a year of high-grade hematite concentrate (Stage 1), expanding to a ten-million- ton-a-year operation within two years (Stage 2). A definitive feasibility study is expected to be concluded during 2012.
Project cost: The first stage of the project is estimated at $458-million and the second stage $1.05-billion.

Edited by: Creamer Media Reporter


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