South African gold and uranium metal asset company Simmer & Jack Mines (Simmers) will be participating in the Mining Indaba for the fifth consecutive year in 2009.

Simmers’ communications 
officer Gail Strauss says that the Mining Indaba provides the opportunity of networking with other industry players, as well as analysts, the media and 
investors. The Indaba also allows companies and mines to showcase their growth potential and to provide a yardstick in terms of their achievements over the past 12 months.

Strauss says that currently the resource industry is particularly 
vulnerable to a volatile share market. 
She adds that two of the greatest challenges facing developmental mining companies are access to capital for expansion projects and controlling costs.

Simmers foresees that access to capital for development and growth projects may be a challenge across the industry, as well as cost pressures, safety issues, and market sentiment cooling towards junior and midcapital miners in favour of exchange-traded funds.

Strauss says that, in the future, mining industry challenges may include keeping costs under control, as well as meeting production targets. 
Retaining skilled individuals 
and ensuring liquidity during ramp-up and development phases 
are also challenges that may be faced.

Production
Over the next five years, Simmers’ attributable gold production is expected to increase by 187%. Strauss adds that the mining company’s uranium production is also expected to increase by 141%, from 750 000 lb in 2010, to 1,8-million pounds by 2012.

The company’s gold operations are situated in the North West and Mpumalanga provinces, in South Africa. 
The company is engaged in an intensive growth and development strategy to increase production at all its operations and convert its substantial resource base into mineable reserves.

Simmers announced in November 2008 that it had 
increased its revenues by 17% for the second quarter of the 2009 
financial year, from R260-million in the first quarter to R304-million in the second quarter, and narrowed its net loss after taxation by 10%, to R85-million.

Company CE Gordon Miller said in a presentation that the company was on track to achieving its long-term objective of being a low-cost producer of gold and uranium.

“First Uranium is now producing gold at both its properties, with uranium to follow in six months. 
“Its wholly owned gold properties are also beginning to turn the corner in terms of costs, which will become apparent as the company ramps up production from new sources of low-cost gold production at Buffelsfontein Gold Mine (BGM) and at Transvaal Gold Mining Estates (TGME),” said Miller.

He added that the challenge going forward would be to manage costs and ensure healthy margins. BGM has embarked on a rationalisation process to review those shafts that do not contribute to profit. 
These measures, combined with the prospects of high-grade 
virgin mining offered by BGM’s Five shaft, are expected to achieve the necessary margins at BGM. At TGME, cash costs are set to decline significantly with the commissioning of the first heap-leach pad at Elandsdrift 
in October 2008.

Elandsdrift is expected to produce over 5 700 oz of gold over the next 13 months. Three other heap-leach targets are planned to come on stream 
before 2012. These targets, includ-
ing Elandsdrift, are expected to yield 80 700 oz at a total cost of $291/oz.

Additionally, a solution to the refractory nature of the underground ore at Frankfort mine had now been found, allowing underground production from the mine to ramp up accordingly. 
This would also contribute to the turnaround at TGME, said Miller.

He added that all operations had significant growth opportunities beyond their current life-
of- mine and that the focus would be on retaining option value at each operation.