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 (TRP), which will continue to operate independently of the project for the next 13 years.

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

After processing, these will be consolidated into one 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 TSFs, and about 45 000 oz/y for the project’s remaining five years from processing the Winkelhaak TSF.

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) TSFs at Evander.

The mineral reserves will provide feed material for the existing Evander TRP at 200 000 t/m, and to the project process plant at 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.

Capital of R313.1-million and R113-million for Phase 2 and Phase 3 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
DRA has been appointed by Pan African Resources to deliver a detailed design and construction supervision service for its proposed Elikhulu gold tailings retreatment plant facility.
  
“This is DRA’s first gold tailings retreatment plant development and it includes all aspects of the construction, including hydraulic mining, processing and tailings deposition,” Paul Howard of DRA has said. 

DRA’s scope of services through all stages of the project includes the reclamation of the Kinross, Leslie and Winkelhaak storage facilities.

The project scope includes water supply to the project as a whole, water supply to each of the reclamation sites, hydraulic mining infrastructure, a new carbon in leach (CIL) gold recovery process plant, pump and piping systems to transfer the hydraulically mined tailings slurry to the new CIL process plant; residue disposal pumps and piping systems to deposit the tailings in a new tailing storage facility (TSF) and the construction of the new TSF.
 
DRA has been involved in the project with Pan African Resources since the definitive feasibility study phase.

The new CIL process plant will be commissioned in fourth quarter 2018 and the final phase of the TSF will be complete in first quarter 2019.

Key Contracts and Suppliers
DRA Projects (feasibility study and detailed design and construction supervision service).

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.