JOHANNESBURG (miningweekly.com) – The Ventersburg gold project in the Free State goldfields, the resource of which had just won compliance under both Canadian and South African codes, could be a "second Beatrix" and already had an indicated resource larger than Modder East's reserve, Aflease Gold CEO Neal Froneman said on Monday.
Announcing indicated-level compliance under both Canadian National Instrument 43-101 (CI 43-101) and South Africa's Samrec codes for the reporting of mineral resources and mineral reserves for Aflease's Ventersburg One project, Froneman said: "Ventersburg could certainly be a completely new stand-alone mine, and something similar to Beatrix, for sure."
Beatrix is the Gold Fields' mine that produces 400 000 oz/y to 500 000 oz/y of gold at a cash cost of $459/oz.
"We now have an indicated resource that's larger than Modder East's reserve," Froneman said of the promising Ventersburg One, located 25 km south-east of Welkom.
"We have obtained Canadian compliance while having to constrain our funding, which is being directed at Modder East, but, as we resolve our capital and funding, we will accelerate the Ventersburg project, because it's certainly looking like a project that warrants further capital raising and funding.
"I have always held the view that Ventersburg's going to be a large mine. I don't want to describe it as a mega mine until we've done all the engineering work, but it's looking like a very nice project in the pipeline," Froneman said.
The company's latest announcement was to declare a Samrec- and CI 43-101-compliant indicated resource of 8,73-million tons at a grade of 5,12g/t for an indicated resource of 1,437-million ounces, using a cutoff of 400 cmg/t.
Free State University of the Free State, with which the company had had a long-standing relationship in both uranium and gold, was assisting at Ventersburg.
"It's a very beneficial relationship, and we're going to work hard to see that the Free State gets a new mine there," Froneman said.
Aflease vice-president geology and exploration Piet van Straaten was equally convinced of Ventersburg's potential.
"I have been working on it since 1983," Van Straaten told Mining Weekly Online, adding that independent mining and exploration consultancy Minxcon had signed off 1,43-million indicated gold ounces.
"We had 4,64-million ounces inferred, but with a lot of additional infill drilling, we've moved the level of confidence to indicated, plus 1,8-million inferred," Van Straaten explained.
He said that a considerable volume of research work had been done and that the sinking of more boreholes this year could increase the indicated level to 1,7-million.
Aflease had a "very senior" ore-resource manager on the project, who was, with academics, carrying out considerable geochemical work, in order to facilitate proper targeting in 2010.
"I'm very confident that we're going to up the ounces above three-million indicated," said Van Straaten, who believed that the company could be in a position to begin shaftsinking three years after the commencement of a feasibility study.
The Ventersburg One prospecting permit, which covered an area of some 9 760 ha, was located 18 km from Harmony gold mine's No 2 shaft and 25 km from President Steyn's No 2 shaft, which were currently mining the A reef.
During 2009, the company will focus on further upgrading the inferred resource to indicated.
The JSE-listed Aflease is best known for its Modder East gold project, on track to pour its first gold in the fourth quarter of this year, as well as the Sub Nigel, New Kleinfontein, Turnbridge and Holfontein gold projects, all on the East Rand; the Etendeka gold project in Namibia and the Tulo concession in Mozambique.
"While our primary focus is on the successful completion of our flagship
Modder East project we are also continuing to develop other growth opportunities in our portfolio. In addition, we are only a few weeks away from achieving our other major strategic objective, which is the externalisation of the business through the creation of Gold One International," Froneman said.
Aflease Gold shareholders had unanimously approved the transaction in terms of which the Australian company BMA Gold would, after its inward listing on the JSE, acquire all the shares in Aflease Gold through a scheme of arrangement.
The combined business would be known as Gold One International and would have a dual primary listing on the ASX and the JSE.
One of the last material conditions outstanding for the transaction was Aflease's bondholder approval, which would be sought at a meeting to be convened "in due course".
Froneman also said the company was planning to raise the remaining R82-million by the middle of 2009 to fully fund its current projects. It has already raised R38-million at a premium to its current share price, through the first tranche of a share acquisition arrangement with Trinity Asset Management.
At Modder East, a significant milestone had been achieved with the successful completion of the development of all three ends of the main access through the water bearing dolomites.
During the last week of December 2008, all three ends intersected the quartzite layer at the expected elevation, which had led to a significant reduction in the time required to probe the rock ahead of the face for the presence of water. All three main access ends were now fully into the quartzite layer.
Since January 2008, 5 700 m of cover drilling had been done in the main decline, 4 484 m in the return airway and 3 800 m in the decline west.
A total of 458 water intersections were encountered, three of which were more than 70 000 litres an hour.
During this period, 1 800 t of cement and 207 t of chemical grout were injected to seal these intersections, at a cost of R13,9-million.
As a result of the water intersections, 314 full production days were lost in the main decline, and 248 days were lost in the return airway, while 165 days were lost in the decline west.
Mine start-up had been largely unaffected, however. The rate of production build-up had, however, been slowed and annual production during 2009 would be 20 000 oz and 140 000 oz in 2010 with steady state production of 180 000 oz being achieved by 2011.