EX-96.1 25 exhibit961.htm EX-96.1
MINERAL INDUSTRY ADVISORY
Sound Mining International Limited
Directorate:
Vaughn Glenn Duke,
Jonathan Karsten
Sound Mining House, 2A Fifth Avenue, Rivonia
2128, South Africa
|
Tel:
+23 (0) 11 234 7152
|
Reg no:
2007/020184/07
TECHNICAL REPORT SUMMARY
FAR
WEST GOLD RECOVERIES
(PROPRIETARY)
LIMITED
Prepared for:
Far West Gold Recoveries
(Proprietary) Limited
Cycad House, Building 17
Constantia Office Park
Cnr 14
th
Avenue and
Hendrik Potgieter Road
Weltevredenpark, 1709
Document No.: PR/SMI/1203/22
Effective date:
30 June 2022
Document date: 28 October 2022
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TABLE OF CONTENTS
1.
Executive Summary ................................................................................................
.................................................................................8
1.1.
Introduction ..............................................................................................................................................................................8
1.2.
History................................................................................................................................
.....................................................11
1.3.
Geological Setting ...................................................................................................................................................................12
1.4.
Exploration
................................................................................................................................................................
..............16
1.5.
Metallurgical Testing
..............................................................................................................................................................17
1.6.
Mineral Resource Estimation ..................................................................................................................................................17
1.7.
Mineral Reserve Estimates ................................................................
.....................................................................................18
1.8.
Mine Design and Mine Plan ....................................................................................................................................................18
1.9.
Process and Recovery Methods ..............................................................................................................................................20
1.10.
Infrastructure
................................................................................................................................................................
..........20
1.11.
Market Studies
................................................................................................................................................................
........23
1.12.
Environmental Permitting and Liability ................................
..................................................................................................23
1.13.
Capital Expenditure and Operating Costs ...............................................................................................................................23
1.14.
Economic Assessment
.............................................................................................................................................................25
1.15.
Concluding Comments
............................................................................................................................................................29
2.
Introduction
................................................................................................................................................................
...........................30
2.1.
Corporate Structure and Compliance .....................................................................................................................................30
2.2.
Purpose and Terms of Reference
(ToR) ................................................................................................
..................................31
2.3.
Qualified Persons Declaration and Qualifications ...................................................................................................................31
2.4.
Units, Currencies and Survey Coordinate System ...................................................................................................................32
2.5.
Political and Economic Climate ...............................................................................................................................................32
2.6.
Minerals Industry
................................................................................................................................................................
....33
3.
Property Description
................................................................................................................................................................
..............34
3.1.
Property Location ................................................................................................................................
...................................34
3.2.
Legal Tenure and Permitting ...................................................................................................................................................35
3.3.
Material Agreements, Access and Surface Rights ...................................................................................................................35
3.3.1.
Exchange Agreement
.............................................................................................................................................35
3.3.2.
Use and Access Agreement ...................................................................................................................................36
3.3.3.
Leeudoorn Agreement ................................................................................................................................
..........36
3.4.
Permitting ...............................................................................................................................................................................36
3.4.1.
Driefontein Operational Area ................................................................................................................................37
3.4.2.
Kloof Operational Area ..........................................................................................................................................37
3.5.
Driefontein Environmental Authorization
Transfer ................................................................
................................................38
3.6.
Water Use Licenses .................................................................................................................................................................38
3.7.
Other Permitting Requirements ................................................................
.............................................................................38
3.8.
Royalties ................................................................................................
.................................................................................38
3.9.
Liabilities .................................................................................................................................................................................39
3.10.
Concluding Comments
............................................................................................................................................................39
4.
Accessibility, Climate, Local Resources,
Infrastructure and Physiography
............................................................................................40
5.
History ................................................................................................................................
...................................................................44
6.
Geological Setting, Mineralization and Deposit .....................................................................................................................................46
6.1.
Regional Setting, Mineralization and Deposit .........................................................................................................................46
6.2.
Local Geological Setting, Deposit and Mineralization .............................................................................................................48
6.3.
Property Geology, Deposit and Mineralization .......................................................................................................................50
7.
Exploration................................................................................................
.............................................................................................52
7.1.
Methods and Databases .........................................................................................................................................................52
7.2.
Geophysical Characterization ................................................................
.................................................................................52
7.3.
Geo-hydrological Characterization ................................
.........................................................................................................52
7.4.
Geotechnical Characterization ................................................................................................................................................52
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7.5.
LIDAR and Surveying ...............................................................................................................................................................52
7.6.
Drilling
................................................................................................................................................................
.....................53
7.7.
Exploration Budget ................................................................................................................................
.................................53
8.
Sample Preparation, Analysis and Security
............................................................................................................................................54
8.1.
Sampling Method................................................................................................................................................................
....54
8.2.
Sample Security ................................................................................................................................................................
......54
8.3.
Analytical Laboratories ................................................................................................................................
...........................54
8.4.
Analytical Procedures ................................................................................................................................
.............................54
8.5.
Bulk Density ............................................................................................................................................................................55
8.6.
Concluding Comments
............................................................................................................................................................55
9.
Data Verification ....................................................................................................................................................................................56
9.1.
Quality Assurance and Quality Control (QA/QC) ................................................................................................
....................56
9.2.
Independent Verification ........................................................................................................................................................56
10.
Mineral Processing and Metallurgical Testing ................................
.......................................................................................................57
10.1.
Metallurgical Test
Work
..........................................................................................................................................................57
10.2.
Concluding Comments
............................................................................................................................................................58
11.
Mineral Resource Estimates ................................................................................................
..................................................................59
11.1.
Geological Models and Interpretation ....................................................................................................................................59
11.2.
Estimation Methodology ................................................................................................................................
........................59
11.3.
Mineral Resource Classification ..............................................................................................................................................60
11.4.
Mineral Resource Verification ................................
................................................................................................................61
11.5.
Cross-sections and Grade Distribution ................................................................
...................................................................61
11.6.
Reasonable and Realistic Prospects for Economic
Extraction
.................................................................................................68
11.7.
Mineral Resource Estimation ..................................................................................................................................................68
11.8.
Additional Mineral Resources .................................................................................................................................................69
11.9.
Concluding Comments
............................................................................................................................................................69
12.
Mineral Reserve Estimates ................................................................................................
....................................................................70
12.1.
Risk to the Mineral Reserve Estimate ................................................................................................................................
.....70
13.
Mining Method
................................................................................................................................................................
......................72
13.1.
Mining Plan and Layout ................................................................................................................................
..........................74
13.2.
Modifying Factors and Mining Schedule
.................................................................................................................................75
13.3.
Cut-off Grade ................................................................................................................................................................
..........76
13.4.
Mining Contractor
................................................................................................................................................................
...77
13.5.
Concluding Comments
............................................................................................................................................................77
14.
Process and Recovery Methods
.............................................................................................................................................................78
14.1.
Existing DP2 Processing Facility ................................................................................................
..............................................78
14.2.
Planned Expansion of DP2 ......................................................................................................................................................79
14.3.
Concluding Comments
............................................................................................................................................................81
15.
Infrastructure
................................................................................................................................................................
.........................82
15.1.
Leeudoorn Facility
................................................................................................................................................................
...82
15.1.1.
Geotechnical, Hydrological and Geohydrological Considerations .........................................................................84
15.1.2.
Leeudoorn Design
..................................................................................................................................................86
15.1.3.
Conclusions............................................................................................................................................................88
15.2.
Regional Tailings Storage
Facility ............................................................................................................................................88
15.2.1.
Geotechnical, Hydrological and Geohydrological Considerations .........................................................................90
15.2.2.
The RTSF Design ................................................................................................................................
....................92
15.2.3.
Concluding Comments ................................................................................................................................
..........95
15.2.4.
Technical Studies - Water ................................................................................................................................
......97
15.2.5.
Technical Studies - Power ......................................................................................................................................99
15.2.6.
Technical Studies - Pipelines and Pumping
..........................................................................................................100
16.
Gold Market
................................................................................................................................................................
.........................102
16.1.
Gold Price Trends ..................................................................................................................................................................102
16.2.
Exchange Rate Forecast ................................................................................................................................
........................102
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16.3.
Global Demand .....................................................................................................................................................................104
16.4.
Global Supply ........................................................................................................................................................................104
16.5.
Concluding Comments
..........................................................................................................................................................105
17.
Environmental Studies, Permitting, or Agreements with Local Individuals or Groups ........................................................................106
17.1.
Permitting Status ................................................................................................................................
..................................106
17.1.1.
The National Environmental Management Act (NEMA)
......................................................................................106
17.1.2.
National Environmental Waste Management
Act (NEM:WA) .............................................................................107
17.1.3.
National Water Act (NWA) ................................................................
..................................................................108
17.2.
Environmental Considerations
..............................................................................................................................................108
17.3.
Social and Political Considerations ................................................................
.......................................................................109
17.3.1.
Discussions with Local Individuals or Groups ......................................................................................................109
17.4.
Environmental Closure Liability Estimate ................................................................
.............................................................110
17.4.1.
Basis of the Closure Liability Estimate .................................................................................................................110
17.4.2.
Quantum of the Closure Liability
.........................................................................................................................110
17.5.
Concluding Comments
..........................................................................................................................................................112
18.
Capital and Operating Costs ................................................................................................
................................................................113
18.1.
Capital Expenditure................................................................................................................................
...............................113
18.2.
Operating Costs ................................................................................................
....................................................................114
18.2.1.
Concluding Comments ................................................................................................................................
........115
19.
Economic Assessment................................................................................................................................
..........................................116
19.1.
Revenue Forecast ................................
.................................................................................................................................116
19.2.
Cashflows
................................................................................................................................................................
..............117
19.3.
Sensitivities ...........................................................................................................................................................................118
19.4.
Concluding Comments
..........................................................................................................................................................119
20.
Adjacent Properties .............................................................................................................................................................................119
21.
Other Relevant Data and Information ................................................................................................
.................................................120
21.1.
South African Minerals Policy and Legislative Framework ................................
...................................................................120
21.2.
South African Legislative Framework
....................................................................................................................................121
22.
Interpretations and Conclusions
..........................................................................................................................................................124
23.
Recommendations
................................................................................................................................................................
...............125
24.
References ...........................................................................................................................................................................................126
25.
Reliance on Information Provided by the Registrant ...........................................................................................................................136
26.
Qualified Persons Disclosure Consent ................................................................................................
.................................................137
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List of Figures
Figure 1: DRDGOLD Corporate Structure .........................................................................................................................................................30
Figure 2: Location of the FWGR Operations ................................................................................................
....................................................34
Figure 3: FWGR Operations ................................................................................................................................
.............................................35
Figure 4: Sibanye Gold Mining Rights ................................................................................................................................
..............................37
Figure 5: Topography
of Southern Africa
.........................................................................................................................................................40
Figure 6: Topography
Map of FWGR................................................................................................................................
................................41
Figure 7: Climate and Rainfall of South Africa ................................................................................................
.................................................42
Figure 8: Vegetation of South Africa ................................................................................................................................................................43
Figure 9: Regional Geological Setting of the Witwatersran
d
Supergroup .......................................................................................................47
Figure 10: Geology of the Witwatersrand Basin ..............................................................................................................................................48
Figure 11: Witwatersrand Supergroup Stratigraphic
Section ..........................................................................................................................49
Figure 12: Property Geology ............................................................................................................................................................................51
Figure 13: Cross-sections and Grade Distribution - Driefontein 5 TSF .............................................................................................................62
Figure 14: Cross-sections and Grade Distribution - Driefontein 3 TSF .............................................................................................................63
Figure 15: Cross-sections and Grade Distribution - Kloof 1 TSF .......................................................................................................................64
Figure 16: Cross-sections and Grade Distribution - Libanon TSF ................................................................................................
.....................65
Figure 17: Cross-sections and Grade Distribution - Venterspost
North TSF ....................................................................................................66
Figure 18: Cross-sections and Grade Distributions - Venterspost
South TSF
...................................................................................................67
Figure 19: Mining Methodology ................................................................................................................................................................
......73
Figure 20: Mining Widths ................................................................................................
................................................................................73
Figure 21: Mining Sequencing ................................................................................................................................
.........................................75
Figure 22: DP2 Revised Block Plan ...................................................................................................................................................................79
Figure 23: Driefontein 4 TSF Location and Infrastructure ................................................................................................................................82
Figure 24: Leeudoorn TSF Layout................................................................................................
.....................................................................83
Figure 25: Final Layout of Airspace Model
.......................................................................................................................................................86
Figure 26: Position of the Elevated Drain Filter ................................................................................................
...............................................87
Figure 27: Cyclone Layout
................................................................................................................................................................
................87
Figure 28: Geo-hydrological Regime at the RTSF Site ......................................................................................................................................91
Figure 29: Geo-hydrological Effects
of Scavenger Wells beneath the RTSF .....................................................................................................92
Figure 30: RTSF Layout
................................................................................................................................................................
.....................95
Figure 31: TSF Location, Make-up Water
Shafts, Processing Plants and Pipeline Layouts ................................................................
..............98
List of Tables
Table 1: Personal Inspection ............................................................................................................................................................................32
Table 2: Historical Development
of FWGR................................................................................................................................
.......................45
Table 3: Dry Densities used by Other Re-treatment
Companies for the Witwatersrand Operations ..............................................................55
Table 4: Full Diagnostic Leach Results on Un-milled Feed
Samples
.................................................................................................................57
Table 5: Driefontein
5 TSF Feed Sample Assay by Size ................................................................
....................................................................57
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Table 6: Driefontein 3 TSF
Feed Sample Assay by Size ................................................................
....................................................................58
Table 7: Summary of Process Recovery
Potential
............................................................................................................................................58
Table 8: Data Interrogated
per TSF
................................................................................................................................................................
..61
Table 9: Variogram
Parameters ................................................................................................................................................................
.......61
Table 10: Mineral Resource
Estimate for FWGR as at 30 June 2022 ................................................................................................
...............68
Table 11: S-K 1300 Compliant Mineral Reserve
Estimate as at 30 June 2022 ................................................................
.................................70
Table 12: Scheduled RoM Production ..............................................................................................................................................................75
Table 13: Calculated Cut-off
Grades ................................................................................................................................................................77
Table 14: Mining Equipment Planned for each TSF ................................................................
.........................................................................77
Table 15: Design Criteria and Assumptions ................................................................
.....................................................................................84
Table 16: Changes in Parameters
................................................................................................................................................................
....89
Table 17: Environmental
Elements under Consideration for RTSF Design and Disposal Method ................................
...................................89
Table 18: Engineering Elements under Consideration for
RTSF Design and Disposal Method ........................................................................90
Table 19: RTSF Design Criteria ................................................................................................
.........................................................................90
Table 20: Underground Water
Sources ...........................................................................................................................................................98
Table 21: Power
Requirements for FWGR Operations ................................
....................................................................................................99
Table 22: Eskom
Points of Delivery
................................................................................................................................................................100
Table 23: Existing Pipeline and Pumping Infrastructure ................................................................
................................................................101
Table 24: Phase 2 Pipeline and Pumping Infrastructure ................................................................................................................................101
Table 25: Above Ground Gold Stocks
in 2021
................................................................................................................................................102
Table 26: Long Term
Consensus Forecasts in Nominal Terms ................................................................................................
.......................103
Table 27: Global Gold Production ..................................................................................................................................................................105
Table 28: Required Environmental
Legislation and the Status for the Driefontein Mining Area ...................................................................107
Table 29: Activities for Phase 2 Requiring a Waste
Management License (WML)
.........................................................................................107
Table 30: Current Closure Cost
Estimates for FWGR ................................................................................................................................
.....111
Table 31: Closure Cost Estimates
from Kloof EIA and Guaranteed through Guardrisk ..................................................................................111
Table 32: Summary of Capital Expenditure
...................................................................................................................................................113
Table 33: Average
DP2 Operating Cost over LoM ..........................................................................................................................................114
Table 34: Inputs to the DCF Model ................................................................................................................................................................116
Table 35: Sensitivity of Post
-tax NPV .............................................................................................................................................................118
Table 36: Sensitivity of Gold Price ................................................................
.................................................................................................118
Table 37: Sensitivity of the Discount Rate ................................................................
.....................................................................................118
Table 38: TRS Data and Information
Sources.................................................................................................................................................126
Table 39: Glossary and Abbreviations................................
............................................................................................................................129
Table 40: QP Area of Responsibility and Disclosure Consent
........................................................................................................................137
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List of Graphs
Graph 1: LoM Production Forecast ..................................................................................................................................................................76
Graph 2: Potential LoM Production Forecast
..................................................................................................................................................76
Graph 3: Actual Production Capacity of DP2 for FY2020, FY2021 and FY2022 ................................................................................................78
Graph 4: Actual Plant Recovery for DP2 versus Forecast
Recovery for FY2020, FY2021 and FY2022..............................................................79
Graph 7: Gold Price Historical Trendline ........................................................................................................................................................102
Graph 8: Exchange Rate Historical Trendline .................................................................................................................................................103
Graph 6: Global Gold Demand from 2012 to 2021 ........................................................................................................................................104
Graph 5: Global Gold Supply from 2012 to 2021 ...........................................................................................................................................104
Graph 9: Capital Expenditure Forecast ................................................................................................................................
..........................114
Graph 10: Operating Cost Forecast................................
................................................................................................................................115
Graph 11: Gold Sales Forecast .......................................................................................................................................................................117
Graph 12: Post-tax Discounted Cashflows .....................................................................................................................................................117
Graph 13: Sensitivity to Expected Revenue and Costs
...................................................................................................................................118
Graph 14: Post-tax Discounted Cashflows
(including liner)
...........................................................................................................................119
List of Photographs
Photograph 1: Monitor Gun ................................................................................................
............................................................................72
Photograph 2: Monitor Gun in Operation ................................................................................................
.......................................................74
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1.
EXECUTIVE SUMMARY
1.1.
Introduction
DRDGOLD Limited (DRDGOLD), which has a primary listing on the Johannesburg Stock Exchange
(JSE) and a secondary listing on the New York
Stock
Exchange (NYSE), is
an established gold
tailings retreatment company
located near Johannesburg,
South Africa.
The company’s business
is to profitably
reclaim tailings from
surface Tailings
Storage Facilities
(TSFs). DRDGOLD has
arranged its operations
into two
wholly owned entities
covering their
East
Rand (east
of Johannesburg)
and
far
West
Rand
(far
west
of
Johannesburg) businesses.
The
East
Rand
operations
are
run by
Ergo
Mining
(Proprietary) Limited (Ergo) and the
West rand operations
by Far West
Gold Recoveries (Proprietary) Limited
(FWGR). FWGR currently own six
TSFs
on the West Rand between Roodepoort and Carletonville, approximately
70km South West of Johannesburg (Figure A). There are
an additional three
TSFs which are
to be transferred
from Sibanye Gold
Limited (Sibanye Gold)
to FWGR once
no longer required
by the existing
operations (Available
TSFs).
Numerous other TSFs are potentially available in the area for future reclamation (Target TSFs).
Figure A: Location of the FWGR Operations
Source:
Sound Mining,
2022
This Technical
Report Summary
(TRS) was
prepared by
Sound Mining
International SA
(Proprietary) Limited
(Sound Mining)
for DRDGOLD
as the
registrant. It
was compiled by
qualified persons (QPs)
in line with
the Securities Exchange
Commission (SEC) requirements,
Regulation S-K
1300. It
presents the Mineral Resources and Mineral Reserves of FWGR as at 30 June 2022, and as a maiden submission to the SEC.
The QP has relied
on information provided
by FWGR with respect
to legal matters
(Item 3), the gold
price (Item 16.1), environmental
or social and
labor planning aspects (Item 17) and economic assumptions (Item 19).
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The qualified persons Mrs Diana van Buren (Mineral Resources), Mr Vaughn
Duke (Mineral Reserves) and Mr Keith Raine (Environmental, Social and
Governance) have reviewed the exploration data base; the geological block models; the processing plant design and costing; mine plans, production
scheduling, infrastructure;
legal
tenure, permitting,
environmental
and social
compliance status
and the
latest assessment
of the
environmental
rehabilitation liabilities required for eventual closure of the operation.
The information
was
used to
substantiate
the confidence
in the
Mineral
Resource and
Mineral
Reserve estimates
and then
incorporated
into
a
Discounted Cashflow (DCF) Model for an economic assessment of the viability of the Mineral Reserves.
The assets held by FWGR were acquired from Sibanye
Gold Limited (Sibanye Gold), a subsidiary of Sibanye-Stillwater Limited (Sibanye-Stillwater),
in
a transaction which was concluded in
July 2018 in which common law
ownership was established over various TSFs containing the Mineral Resources
and Mineral Reserves.
FWGR conducts its activities inter alia
in accordance with Environmental
Approvals and the provisions of
the Mine Health and Safety
regulations. A
Use and
Access Agreement
with Sibanye
Gold articulates
the various
rights, permits
and licenses
held by
Sibanye
Gold in
terms of
which FWGR
operates, pending the transfer to FWGR of those that are transferable. The FWGR operations are comprised of a variety of assets (Table A), including
a processing plant and land for the development of a Regional Tailings Storage Facility (RTSF) for long-term sustainability.
Table A: FWGR Assets
Asset Type
Asset
Location
TSFs
Driefontein 3
Driefontein Mining Right area
Driefontein 5
Kloof 1
Kloof Mining Right area
Libanon
Venterspost North
Venterspost South
Depositional TSF
Driefontein 4
North-east of Driefontein Mining Right area
Operating Surface
Gold Processing
Plants
DP2
Located on:
Farm Blyvooruitzicht 116IQ Portion (Ptn) 6; and
Farm Driefontein 113IQ Remainder (Re) of Ptn 1
Pilot plant
Located at:
Driefontein 1 processing plant
Land for
Phase 2
Land for the RTSF
Located on:
Farm Cardoville 647IQ;
Re Ptn 6 Farm Cardoville 364 IQ;
Ptn 8 of Ptn 6 of Farm Cardoville 364IQ;
Ptn 13 of Ptn1 of Farm Cardoville IQ;
Ptn 50 Farm Kalbasfontein 365IQ;
Re Ptn 3 Farm Cardoville 364;
Re Ptn 5 of Ptn 3 Farm Cardoville 364IQ; and
Ptn 11 Farm Cardoville 364IQ
Land for a Central Processing Plant (CPP) which provides strategic
optionality
Located after subdivision of:
Farm Rietfontein 347IQ Ptn 35 and Ptn 73
Access Rights
Access to water from the Driefontein 10 shaft and Kloof 10 shaft, for the
purposes of hydro-mining
Located within the Driefontein and Kloof Mining Right
areas
Installation, supply, distribution and maintenance of power supply
Driefontein 1 gold plant
Located at Driefontein 1 processing plant
Source:
FWGR, 2022
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A review
of the
environmental permitting
concluded that
the necessary
permitting requirements
are in
place or
are being
proactively addressed.
Sufficient provision is included to address the rehabilitation liabilities
associated with the above assets. The QPs are satisfied that FWGR has
the legal
right to reclaim and
process the TSFs forming part
of the operation. These
are classified as
moveable assets and so
there is no immediate
requirement
to transfer any part of the mining rights from Sibanye Gold Limited (Sibanye Gold). The operations are not subject to royalty payments.
The initial phase
of FWGR’s long-term growth strategy
is now complete.
It included upgrading
the Driefontein Plant 2
(DP2) to process
tailings material
through the hydro-mining of
Driefontein 5 TSF
at approximately 500ktpm.
Phase 2 will begin with the
expansion of DP2 to a
processing capacity of
1.2Mtpm. New arisings (i.e., retreated
tailings) from DP2 are being
deposited onto the Driefontein 4
TSF (0.5Mtpm), which is due to
reach capacity
towards the end of calendar year
2025 whereafter the depositional rate
would have to decrease materially.
Sibanye Gold has in principle approved
the deposition of new
arisings onto their
Leeudoorn TSF until
the planned new RTSF
is operational in
2030. Upon the
conclusion of written
terms,
FWGR will be able to deposit 500ktpm on the Leeudoorn TSF until 2029. Supporting pipelines will link this infrastructure to additional TSFs that have
been identified as potentially available for reclamation to extend the life of the operation beyond the current Mineral Reserves.
The construction of a significantly larger
CPP has been considered as a strategic option
to facilitate growth beyond the throughput of 1.2Mtpm called
for in the
Life-of-Mine (LoM)
plan. A large
RTSF has been
designed to accommodate
such strategic growth
over the longer
term and the
LoM plan
anticipates that this
facility will be
commissioned in 2030.
The Leeudoorn
TSF will enable
the expansion to
750ktpm planned by
FWGR over the
shorter
term, until 2030.
The operation’s infrastructure and current TSFs lie across two mining rights which stretch from Westonaria
to Carletonville (Figure B).
Figure B: FWGR Operations
Source:
Sound Mining,
2022
The
TSFs
are
located
at
elevations
between
1,570mamsl
and
1,720mamsl
in
an
area
that
is
typical
of
a
mature
landscape
with
gentle
rolling
undulations and shallow sided river valleys. The
area enjoys warm to hot, moist summers and cool dry
winters with an average ambient temperature
of 20°C. The operation experiences some 571mm of rain
each year, with
most of it occurring during summer in the form of
thunderstorms. Most of
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the area comprises disturbed grazing land and
minor crop production. The area is well serviced
with schools, medical facilities, a rail network, power,
water and other supporting
infrastructure. Both tarred and gravel roads
are used to commute between
farms and mines, as
well as to and
from urban
centers.
1.2.
History
Gold and uranium mining
operations commenced in the
late 1800s in
the Witwatersrand Basin
goldfields of South Africa,
and have resulted
in the
accumulation of substantial amounts of surface tailings and other mine residues. The possible re-treatment of TSFs in the West Rand area has a long
and
complex
history
with
Gold
Fields
Limited
(Gold
Fields),
Rand
Uranium
Limited
(Rand
Uranium),
Harmony
Gold
Mining
Company
Limited
(Harmony),
Gold
One
International
Limited
(Gold
One)
and
Sibanye
Gold
completing
a
number
of
parallel,
independent studies
relating
to
the
retreatment of these TSFs. There is an approximate fifteen-year history of metallurgical test work and process design which has been undertaken for
a variety of combinations of assets and
products recovered. Whilst these historical
studies were for specific combinations
of assets, they are not all
relevant to FWGR in its current form.
Prior to 2009,
Gold Fields
embarked on a
project known as
the West Wits
Project (WWP) aimed
at retreating several TSFs
on its four
mining complexes:
Kloof, Driefontein, Venterspost
and South Deep to recover gold, uranium and sulfur and storing the tailings on a new Central Tailings Storage Facility
(CTSF). Similarly, Rand Uranium had embarked on the Cooke Uranium Project (CUP), which endeavored to treat the Cooke TSF for gold, uranium and
sulfur. The two independent projects had similar operational and environmental mandates, within a 25km radius of each other.
In 2009, Gold Fields
and Rand Uranium
evaluated the potential
synergy of an
integrated retreatment
plan for TSFs
located within the South
Deep,
Cooke, Kloof, Driefontein and Venterspost
mining complexes.
In 2012, Gold One acquired Rand Uranium
and in the same year acquired
the Ezulwini Mining Company (Proprietary) Limited
(Ezulwini). During the
same year Gold
One, revived the tailings
retreatment project and
Gold Fields entered
into a joint
venture (JV) partnership with
Gold One to
investigate
the economic viability of concurrently reprocessing
current arisings and historical tailings
from a number of sites
situated in the greater
West Rand
area. A scoping study was concluded in 2012.
In early 2013, Gold Fields unbundled its Kloof and Driefontein Complex and Beatrix gold mines in the Free State
Province to create a separate entity
in Sibanye Gold
and listed Sibanye
Gold as a
fully independent company
on both the
JSE and the
NYSE stock
exchanges. Subsequently,
in October
2013,
Sibanye
Gold
Limited
purchased
the
interest
held
by
Gold
One
in
Rand
Uranium
and
Ezulwini.
The
Gold One assets
which became part
of Sibanye Gold
included the Cooke
operations (underground mining
and surface
reclamation operations)
for
gold and uranium
production. This transaction
gave Sibanye
Gold control
of a substantial
portion of the
surface mineral resources
in the region.
A
Preliminary Feasibility
Study (PFS)
was completed
in 2013
and confirmed
that there
is a
significant opportunity
to extract
value from
the surface
Mineral Resources. Subsequently,
a number of
Definitive Feasibility Studies
(DFSs) have been
completed on various
combinations of TSFs.
Sibanye
Gold’s TSF reclamation assets were housed in a special purpose vehicle (SPV) called West Rand Tailings Retreatment Project (WRTRP).
In 2018, Sibanye
Gold traded its SPV
for an equity share
in DRDGOLD, which as
a consequence then wholly owned
the tailings retreatment project
which was subsequently renamed FWGR. In mid-2018, FWGR initiated Phase 1 of a phased approach to its growing reclamation operations.
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1.3.
Geological Setting
The assets
of FWGR
are derived
from
the West
Rand Goldfield
of the
gold-bearing, late
Archaean (2.7Ga
to
3.2Ga), Witwatersrand
Supergroup
(Witwatersrand Basin). The Witwatersrand Basin is a roughly oval-shaped sedimentary basin, filled with approximately
14,000m of sedimentary and
subordinate volcanic units, of which only small portions outcrop to the south and west of Johannesburg (Figure C).
Figure C: Regional Geological Setting of the Witwatersrand Supergroup
Source:
Sound Mining,
2022
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The basin hosts
vast auriferous
and uraniferous
deposits which have
been grouped
into geographically
distinct sub-basins or
goldfields, which are
separated by stratigraphy where no economic mineralization has been discovered (Figure D).
Figure D: Local Geological Setting
Source:
Sound Mining, 2022
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Recent studies consider the deposition in
the Witwatersrand sediments to have taken place along the interface between a fluvial system and a
major
body of still water or an inland sea. Specifically, this body of water is considered to be a retro-arc-foreland basin which formed in response to crustal
thickening on the northern edge of the Kaapvaal Craton, during a collision with the Zimbabwe Craton to the north.
The
varying
stratigraphic
position
of
the
narrow,
0.1m
to
2.0m
thick
quartz-pebble
conglomerate
reefs
are
interpreted
to
represent
major,
diachronous, entry points
of coarse-grained sediment into
the basin. Complex
patterns of syn-depositional
faulting and folding
have caused significant
variations in sediment thickness and
sub-vertical to over-folded
reef structures are
characteristic of the basin
margins. Later faulting
and folding of
the sequence determined which parts of the Witwatersrand Basin remained buried, as well as the depth extent of mineable horizons, relative to the
present-day surface.
The FWGR assets (Figure E) are derived from the Driefontein, Kloof,
Libanon and Venterspost mining operations located in the West
Rand Goldfield,
on the north-western rim of the Witwatersrand Basin.
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Figure E: Property Geology
Source:
Sound Mining,
2022
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These operations exploit three primary reefs, namely the Ventersdorp
Contact Reef (VCR) located at
the top of the Central Rand Group,
the Carbon
Leader Reef (CLR)
near the base
of the Central Rand
Group and the Middelvlei
Reef (MR), which stratigraphically occurs
50m to 75m above
the Carbon
Leader. Additional minor reefs including the Kloof, Elsburg, Kimberley and Libanon Reefs are exploited at some operations.
The TSFs to
be reclaimed are located
in the Western
Witwatersrand Basin,
within the West
Rand and Carletonville goldfields.
The TSFs contain
the
processed
waste
from
the
mining
of
auriferous
and
uraniferous
ores
from
Driefontein,
Kloof,
Libanon
and
Venterspost
underground
mining
operations. The mining operations have targeted different reefs and as a result the TSFs
have developed from the following:
●
the Driefontein TSFs comprise primarily processed VCR, CLR and Middelvlei Reef;
●
the Kloof TSFs comprise primarily processed VCR, Middelvlei Reef and to a lesser extent the Kloof Reef;
●
the Venterspost TSFs comprise primarily processed Middelvlei Reef and VCR; and
●
the Libanon TSFs comprises material from the VCR, Libanon Reef, Kloof Reef and Middelvlei Reef.
The composition of
a TSF
depends on the
geochemical make-up
of the material
being mined and
the chemicals used
in the mining
and extraction
process. In
addition to
the internal
structure,
the TSF
reflects the
mining strategy
and depositional
methodologies employed
at each
operation.
Variations in
the density of
tailings material is
a critical factor
in the accurate
estimation of quantities
as these factors
can result in
a considerable
variation in gold
content and
distribution throughout a
TSF where
such variation has an
impact on final
recoveries and
projected revenues for
the
operation. In addition, secondary
processes such as metal
re-mobilization, erosion, weathering,
leaching and acid mine
drainage can further
affect
the geochemical characteristics of a TSF.
These processes tend to
progress faster
in a TSF
compared to a
primary ore body as
weathering, erosion and oxidation
are accelerated by
the fine
particle size of the
material. Gold can undergo
mobilization within the TSF
with time and hence may
exhibit areas of re-concentration
and even be
present in the sub-structure soil. Although exceptions occur, the TSFs generally show an increase in grade towards the base of the TSF.
1.4.
Exploration
The extent, morphology and
structure of a
TSF is relatively
simplistic compared to
conventional mineral deposits,
and so the exploration
programs
were also simple, comprising:
●
surveying to determine physical dimensions and volumes;
●
auger drilling programs to permit sampling for gold content and mapping of the gold distribution;
●
metallurgical and flow sheet development test work; and
●
tailings toxicity tests and specific gravity determination.
The QPs have concluded that the drilling programs were suitable
for the type of deposits and that
the drilling and sampling techniques were
of a high
standard, with sample contamination and losses kept
to a minimum. The drilling and sampling programs
were conducted to industry standards and
the results are considered reliable and suitable for incorporation into a Mineral Resource estimate.
The analytical laboratories
used in the
exploration program
are all
ISO certified for
gold analysis
and all
of them
follow best
practice principles of
quality management.
The Quality
Assurance and
Quality Control
(QA/QC) of
the field
and laboratory
verification procedures
were independently
audited and are considered appropriate.
Full length samples were taken and are
considered representative of the disseminated minerali
zation which has no orientation or structural control
other than grade variations due
to deposition variations and secondary
remobilization of the gold. This gold distribution
within the TSFs is adequately
understood from the geological modelling.
The Driefontein TSFs, Venterspost
TSFs and Libanon TSF are located on Malmani Subgroup
dolomites (Figure D) with the remainder located on non-
dolomitic argillaceous
and arenaceous
sediments of
the Timeball
Hill and
Hekpoort Formations.
An independent density
study by Geostrada
concluded
that the basement lithology does not significantly impact the density of the tailings material.
A bulk density of 1.42g/cm
3
is applied to the TSF assets. It
is based on substantial empirical evidence and considered
reliable. The use of a dry density
in the estimation
of an in situ
Mineral Resource is standard best
practice and the dry
density value has been
applied to the Mineral
Resource estimate.
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1.5.
Metallurgical Testing
Test work has been performed on Driefontein
3 TSF,
Driefontein 5 TSF,
Libanon TSF, Kloof 1 TSF and Venterspost
North TSF. Less test
work has been
performed on the Venterspost
South TSF.
The metallurgical data that was
originally available for the Driefontein
5 TSF was subsequently supported
by the results of full-scale
processing at DP2 during Phase
1. Based on the test
work, the QPs are comfortable that the
following processing recoveries
are achievable for the respective TSFs (Table B).
Table B: Summary of Process Recovery Potential
TSF Recovery
Process
(%)
Driefontein 5
49.8%
Driefontein 3
56.6%
Kloof 1
50.5%
Libanon
47.2%
Venterspost North
54.7%
Venterspost South
62.5%
Source:
Sound Mining,
2022; and FWGR, 2020
1.6.
Mineral Resource Estimation
The original
Mineral Resource
estimates of
2009 were
confirmed by
Sound Mining
in 2020.
Sound Mining
independently reviewed
the database,
geological models, estimation methodology and
classification criteria. Sound Mining concluded
that the estimations are based on
a suitable database
of reliable information and that no material issues were found which could affect the overall estimate.
The exploration
database is comprised
of analytical data
from reliable
laboratory assays
of samples obtained
from sampling and
drilling programs
based on industry best
practice. The drillhole grid spacing
is comparatively close for typical TSF
drilling programs and the entire
depth of each TSF was
sampled. The data density is
considered sufficient to assure continuity of mineralization and
structure and provides an adequate basis
for estimation.
The exploration database was imported into DataMineTM Studio 3 software and data
validation was undertaken to ensure the integrity and validity
of the imported
data. The samples
for Driefontein
3 TSF
and Driefontein 5
TSFs represent
3.0m composite samples
and not 1.5m
composites. The
samples from all
of the other
TSFs were
1.5m in length.
The end of
the drillhole sample, where
it contained footwall
material, was
separated into
tailings and footwall material and treated separately by the laboratory.
Ordinary Kriging was undertaken for
the gold grade estimation which allows
for testing of the accuracy
and efficiency of the estimation.
Due to the
construction of the TSFs
and potential gold
remobilization, a spatial
grade distribution was
anticipated and since
Kriging is based
on modelling the
spatial variances within an orebody, it was considered the most reliable and accurate methodology for the task.
The economic assessment provided in this TRS demonstrates positive margins and confirms reasonable prospects for eventual
economic extraction.
The applied Mineral
Resource classification is
a function of
the confidence of
the asset tenure
and the entire
process from drilling,
sampling, geological
understanding and geostatistical relationships. The latest Mineral Resources are all in the Measured category (Table C).
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Table C: Mineral Resource Estimate for FWGR as at 30 June 2022
TSF
Volume
('000m
3
)
Density
(t/m
3
)
Quantity
(Mt)
Grade
(g/t)
Content
(t)
Content
(koz)
Driefontein 5
5,685
1.42
8.07
0.48
3.85
124
Driefontein 3
35,540
1.42
50.47
0.47
23.71
762
Kloof 1
19,931
1.42
28.30
0.33
9.20
296
Libanon
52,351
1.42
74.34
0.27
20.23
650
Venterspost North
38,954
1.42
55.31
0.27
15.16
487
Venterspost South
9,068
1.42
12.88
0.33
4.24
136
Total Mineral Resource Estimate
161,529
1.42
229.37
0.33
76.39
2,456
Source:
Sound Mining,
2022
Notes:
Apparent computational errors
due to rounding
These Mineral Resources are stated
inclusive of Mineral Reserves
Mineral Resources, if stated
exclusive of Mineral Reserves,
would equate to zero
In situ Mineral Resource estimate
reported according to S-K 1300 requirements
No geological losses applied
1.7.
Mineral Reserve Estimates
A LoM plan and mining schedule was developed by FWGR as outlined in Item 13.2. The LoM plan was tested for economic viability in the DCF model
which indicated a positive cashflow through to the end of LoM.
The
Mineral
Reserves
were
prepared
in
accordance
with
the
requirements
of
S-K
1300
(Table
D).
No
mining
losses
or
dilution
are
applied
in
determining the Mineral Reserve
estimates because the TSFs are
re-mined and re-processed in
their entirety. All other modifying
factors are captured
in the mine design together with all of the associated technical aspects that inform the capital and operating cost estimates.
FWGR’s six TSF assets convert to a total Mineral Reserve of 229.37Mt with a gold content of 76.39t.
Table D: S-K 1300 Compliant Mineral Reserve Estimate as at 30 June 2022
TSF
Volume
('000m
3
)
Density
(t/m
3
)
Quantity
(Mt)
Grade
(g/t)
Content
(t)
Content
(koz)
Driefontein 5
5,685
1.42
8.07
0.48
3.85
124
Driefontein 3
35,540
1.42
50.47
0.47
23.71
762
Kloof 1
19,931
1.42
28.30
0.33
9.20
296
Libanon
52,351
1.42
74.34
0.27
20.23
650
Venterspost North
38,954
1.42
55.32
0.27
15.16
487
Total Proved Mineral Reserve
152,461
1.42
216.49
0.33
72.15
2,320
Venterspost South
9,068
1.42
12.88
0.33
4.24
136
Total Probable Mineral Reserve
9,068
1.42
12.88
0.33
4.24
136
Total Mineral Reserve Estimate
161,529
1.42
229.37
0.33
76.39
2,456
Source:
Sound Mining,
2022
Notes:
Apparent computational errors
due to rounding and are not considered
significant
Mineral Reserves are reported using
a dry density of 1.42t/m
3
and at the head grade on delivery to the plant
The Mineral Reserves constitute
the feed to the gold plants
The Mineral Reserves are stated
at a price of ZAR914,294.00/kg
A cut-off grade of 0.15g/t is applicable to the
FWGR LoM plan
Although stated separately,
the Mineral Resources are inclusive
of Mineral Reserves
Venterspost South
TSF is classified as a Probable Mineral Reserve
due to some uncertainty regarding
the processing recovery
Uranium has been excluded in the Mineral
Reserve estimate as it is not being recovered
by FWGR
Grade and quantity measurements are
reported in metric units (Mt) rounded
to two decimal places
The input studies are to a PFS level
of accuracy
The
Mineral
Reserve
estimates
contained
herein
may
be
subject
to
legal,
political,
environmental
or
other
risks
that
could
materially
affect
the
potential
development of such Mineral Reserves
1.8.
Mine Design and Mine Plan
FWGR exploits TSFs
through hydro-mining
using high-pressure jets
of water
to dislodge tailings
material or move
sediment for transportation
as a
slurry to processing plants. The hydro-mining removes the tailings material from the top of a TSF to the natural ground level in 15m layers (Figure F).
Figure F: Mining Methodology
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Source:
Sound Mining,
2022
A safe bench height is dependent
upon the material strength which is influenced by
the phreatic surface within a dump. The
TSFs have been dormant
for a number of years and so the phreatic surface is
expected to be well below the surface of the dumps. The
drilling program to define the Mineral
Resource did not encounter saturated zones or phreatic surfaces and so the risk of slope failure or liquefaction is low.
Horizontal benches of 100m to 200m, inclusive of the face angles (45° to 50°), are created to maintain safe working distances between simultaneous
operations at different bench elevations (Figure G).
Figure G: Mining Widths
Source:
Sound Mining,
2022
Hydro-mining and the re-deposition of
tailings is a specialized activity, and is outsourced
to competent and experienced service providers. The
hydro-
mining performance assumptions
used for the
LoM planning are
based on the
current reclamation operations
where the method
has been successfully
“tried and tested“.
The operating cost and capital
expenditure assumptions are supported by
actual operational figures rather
than being only based on computations
from
“zero
based”
cost
models
or
feasibility
studies.
Similarly,
the
equipment
requirements,
manning
complements
and
necessary
supporting
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0
1,000
2,000
3,000
4,000
5,000
6,000
0
2
4
6
8
10
12
14
16
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
Financial Year
Gold Content (kg)
Production (Mt)
Financial Year
Driefontein No 5 Dump
Driefontein No 3 Dump
Kloof 1
Libanon
Venterspost North
Venterspost South
Gold Content
infrastructure, in terms
of water and power
supply, are
well understood by
FWGR. There have
been no untested
technical assumptions made with
regards to the mining design criteria.
The cost and
maintenance of the
mining equipment, and
employees are paid
for by the
mining contractors.
The pipeline and
pumping design and
associated capital expenditure estimate has been undertaken by independent specialists familiar with the mining operations.
Specific mining schedules were developed for each TSF based on the grade distribution of the Mineral Resource block models.
These schedules were
integrated into a production plan that exhausts FWGR’s current Mineral Reserves (Graph A).
Graph A: LoM Production Forecast
Source:
Sound Mining,
2022
Given the nature of the
hydraulic mining operation, no selective
mining, other than very broad rejection
of sections of the TSFs,
is possible and the
mine scheduling has
shown that this
is unnecessary.
No geotechnical constraints
have been
applied and hydrological
aspects affecting
the surface
deposits are not
significant to
the operation. A
mining contractor
using its own
equipment (i.e., “mining
units”) is responsible
for the
reclamation
activities, and so no provision has been made in the initial capital estimate for mining equipment.
Sound Mining is satisfied that the LoM schedule is reasonable and appropriate for the operation.
1.9.
Process and Recovery Methods
Sound Mining is of
the opinion that there
is sufficient test work
available to support the
metallurgical performance anticipated
for the current
and
future processing facilities. The LoM plan relies on the currently operating DP2 processing plant (~600ktpm) and an expansion thereof to 1,200ktpm.
FWGRs Phase 1 entailed a modification and
refurbishment of the old DP2 plant to
accommodate a nameplate throughput of 600ktpm,
albeit that a
constraint currently exists
with the
prevailing deposition capacity
of 500ktpm for
new arisings
onto the Driefontein
4 TSF. While at
current depositional
rates, the plan
is to exhaust
the storage
capacity of this TSF
by the end
of 2025, however,
it may be
possible for FWGR
to exceed
this capacity for
some years thereafter by continuing to deposit new arisings but at a materially reduced rate.
A detailed
design to
expand
DP2 to
accommodate a
throughput of
1.2Mtpm
was
prepared by
external
specialists with
appropriate
capital
cost
estimates. There
is no
change to
the process
flow and
the QP
is satisfied
that the
metallurgical characterization
of the
TSFs has
been sufficiently
catered for in the design. These were reviewed by Sound Mining and are considered to be appropriate and in-line with industry standards.
1.10.
Infrastructure
Sound
Mining
has
inspected
the
existing
infrastructure
which
comprises
DP2,
the
Driefontein
4
TSF,
and
all
associated
pumping
and
piping
installations.
The
QP
is
of
the
opinion
that
this
infrastructure
has
been
correctly
planned,
properly
installed
to
date,
fully
functional
and
well
maintained.
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Electricity is currently
supplied from
Eskom’s
132kV and 44kV
grid to various
Sibanye owned
gold mines in
the vicinity of
FWGR’s
operations. The
power requirement of FWGR
remains within the current
surplus capacity to the Driefontein,
Kloof and Cooke and
mining complexes. Power
supply
remains a material risk to all mining operations in South Africa including FWGRs operations.
A closed water system has been designed to avoid having to treat water or having to discharge into surface water
courses (Figure H).
Figure H: TSF Location, Make-up Water Shafts, Processing Plants and Pipeline Layouts
Source:
Sound Mining,
2022
Water use licenses
are available for the
pumping of water
from underground workings
at Kloof 10
shaft and Driefontein 10
shaft, and the
consumption
planned from these shafts will not exceed the pumping rates approved in the respective WULs. Water will also be reclaimed from the Leeudoorn
TSF
and RTSF in due course and
Sound Mining is satisfied that there is more
than enough water to meet the requirements
of the operation as currently
planned.
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The hydro-mining,
reprocessing and re-deposition
of tailings material
requires a network
of pipes. Slurry
pipelines will be
needed from
the hydro-
mining sites at the TSFs to DP2 and tailings pipelines from DP2
to the respective deposition facilities. High pressure water pipelines are necessary to
supply the mining operations while separate low-pressure
water pipes are needed for
returning water to DP2
from water dams at the various
TSFs.
These have all been adequately designed and included in the LoM planning.
FWGR requires the RTSF to ensure adequate storage facilities for the long-term deposition
of all tailings arising from FWGR operations. It
will be built
on Transvaal
Supergroup lithology (Figure
D), to mitigate
any risk of
dolomite related sink
holes. The design and
cost estimate caters
for a storage
capacity of 800Mt
and a
potential disposal
rate of
up to
2.4Mtpm.
It will
cover an
area of
approximately 1,000ha
with a
final top
surface area
of
around 600ha at a maximum height of 100m. The selected site of approximately 1,500ha is shown in Figure I.
Figure I: RTSF Layout
Source:
Beric Robertson Tailings,
2020
A key design consideration has
been the management of
ground water through the
use of a scavenger
well system that will capture
and recycle future
leachable pollution plumes. In the context of risk, this is believed to be a viable solution to
a previously considered geomembrane barrier approach.
The permitting for
this site has
been approved
based on the
initial design with
the geomembrane
barrier and FWGR
are pursuing
approval of
the
more recent scavenger well design.
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23
Sound Mining is
of the opinion
that the selected
site is appropriate
for the intended
construction and operation
of the RTSF and
endorses the proposed
scavenger well solution for ground water as this can provide a sustainable solution to the RTSF’s future plume management requirements.
FWGR
have
received
in
principle
permission
from
Sibanye
Gold
to
co-deposit
tailings
on
the
Leeudoorn
TSF.
This
will
allow
FWGR
to
increase
production to 750ktpm while also mitigating
against the risk of an interruption
to the planned production in the
event that the approval
sought for
the RTSF is delayed. The depositional requirements for the new
arisings will now be shared between the Driefontein 4 TSF
and Leeudoorn TSF, until
such a time that the RTSF is approved, constructed and ready to receive these new arisings.
In
addition, FWGR
have
commissioned further
study
work
on the
RTSF
design to
investigate
the potential
for
the soil
conditions at
this
site
to
accommodate the compaction
of the associated
clay layer to act as
an alternative or additional
barrier system in support
of the scavenger well
design.
1.11.
Market Studies
Gold is a precious
metal, refined and
sold as bullion on
the international market.
It is traded globally
on financial markets almost
continuously and
traditionally used for jewelry, bartering or storing wealth. Aside from the gold holdings of central banks, current uses of gold include jewelry, private
investment, dentistry, medicine and technology (Table E).
Table E: Above Ground Gold Stocks in 2022
Description
Quantity
(t)
Contribution
(%)
Jewelry
94,464
46.0%
Private Investment
45,456
22.2%
Bank Holdings
34,592
16.9%
Other
30,726
15.0%
Source:
World Gold Council, 2022
DRDGOLD has a long-standing
off take
agreement with the
Rand Refinery who
refine the gold
produced by FWGR.
DRDGOLD uses an agent
to sell
FWGR’s gold to South Africa bullion banks and once sold, Rand Refinery will transfer the gold to the purchasers’ bullion bank depository.
1.12.
Environmental Permitting
and Liability
A
review
of
the
environmental
status
was
undertaken
by
an
independent
environmental
specialist.
The
authorizations
required
for
the
“listed
activities” under NEMA, NEM:WA, NEM:AQA and NWA were reviewed in detail. EIA, EMPrs and environmental authorizations exist for the Kloof and
Driefontein mining areas. Areas
requiring amendments have been cited.
Environmental permitting is underway
and at an appropriate
stage for the
planned expansions.
There is
enough time
for approval
of amendment
applications and
no fatal
flaw exist
from a
compliance perspective.
Some
heritage and culturally significant areas have been identified and these are accommodated in the construction plans.
The activities of FWGR already contribute to the socio-economic environment on the West Rand. The operation will further
enhance the situation by
reducing unemployment and investing capital for an extended LoM which will contribute to the national GDP. The operation also provides long-term
positive impacts in
terms of employment
creation, skills development,
local procurement of goods
and services, as
well as local
and regional economic
development. The
Social Impact Assessment
notes that informal
settlements in close
proximity to the
operation may pose
a risk in
terms of community
stability. The
concerns of local
farmers may
also need to
be addressed. Sound
Mining believes that
these concerns can
be managed,
and that the
positive impacts will benefit the surrounding communities.
The
closure
liability
is
assessed
annually
to
maintain
environmental
compliance.
These
constitute
the
quantum
of
the
financial
obligation
and
guarantees
required by
the Department
of Mineral
Resources
and
Energy
(DMRE). They
have
been determined
on both
an
“unscheduled” and
“scheduled” basis. The unscheduled estimate is based on the costs of rehabilitating the TSFs in their present state without any mining activity having
taken place. The disclosure to the DMRE and the quantum of financial guarantees required is based on the unscheduled estimate.
The closure liability bank guarantees under Regulation 7 of the NEMA Financial Provision Regulations (2015) must ensure that the financial provision
is, at any
given time, equal
to the
sum of the
actual costs
of implementing the
plans for
a period of
at least
ten years
forthwith (this
includes the
annual rehabilitation, final, decommissioning and
closure plans). This figure is required
to be updated annually and adjusted. In the
case of the FWGR
the annual updates will
show reduced amounts
as the tailing’s
facilities decrease to
only footprint rehabilitation.
The scheduled estimate
assumes
that mining takes place and that the final rehabilitation will be confined to rehabilitation of the TSF footprints and the RTSF.
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0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
20232024202520262027202820292030203120322033203420352036203720382039204020412042
ZAR M
Guardrisk has issued financial guarantees in
favor of the DMRE
of ZAR169.0 M. An amount
of ZAR444.1 M is also
invested in Guardrisk Cell
Captive
under a ring-fenced environmental rehabilitation
policy. The financial guarantees
and funds held with the Guardrisk Cell Captive
(30 June 2022) are
sufficient to cover the 2022 estimated unscheduled liability of ZAR309.69 M as estimated for the operation.
1.13.
Capital Expenditure and Operating
Costs
The capital and
operating cost estimates
used to examine
the viability of the
estimated Mineral Reserve
were informed by
current operations and
recent feasibility
study work
(i.e., 2020
and 2021)
on processing,
the RTSF
and associated
pumping and
piping infrastructure.
The operating
cost
estimates are supported by actual on mine invoices
received and paid, while the capital estimates have
been determined using unit rates (obtained
from quotations or bench marked against recent installations) and design quantities.
Although the previous feasibility study work was
in most instances to a definitive level of accuracy, the estimates are no longer current
and therefore
deemed to be at a
preliminary feasibility level of accuracy
(i.e., +/-25%). Where necessary estimates have
been appropriately inflated to
June 2022
real terms and Sound Mining has included a 15% contingency on all costs to reflect the confidence expected for a PFS level of study.
An annual Stay-in-Business (SiB) provision of ZAR8.7 M is considered until 2030 after which it is increased
to ZAR16.0 M for the rest of the LoM. This
provision covers maintenance and
the replacement of equipment
across the operation. The
Guardrisk Cell Captive exceeds
the current environmental
liability and
so no
additional provision
has been
made in
the capital
estimate.
Graph B
presents the
annual capital
expenditure forecast
for the
operation.
Graph B: Capital Expenditure Forecast
Source:
Sound Mining, 2022
Early capital will be required to
access the Leeudoorn TSF,
whereafter, DP2 will be
expanded (i.e., FY2025 and FY2026). The RTSF is scheduled to
be
constructed over four years (i.e., FY2027 to FY2030) with the
remaining capital expenditure largely earmarked for piping and pumping
infrastructure.
The DP2 operating cost estimate (Table F) are based on the actual costs being incurred by the current operation. Economies of scale were taken
into
consideration by applying a factor to the escalated budget as DP2 increases its throughput.
Table F: Average DP2 Operating Cost over LoM
Description
Unit Costs
(ZAR/t)
Salaries and Wages
10.40
Contractors
8.89
Reagents
20.63
Other Engineering Stores
6.20
Electricity
15.56
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Water
0.46
Machine Hire
1.51
Other
8.15
Other Corporate Costs
3.23
Contingency (15%)
10.20
DP2 Operating Costs
85.23
Source:
Sound Mining, 2022; and FWGR, 2020
A contingency of 15% was included for the assessment of economic viability.
1.14.
Economic Assessment
A Discounted Cashflow
(DCF) modelling approach
was adopted to
assess the economic
viability of the Mineral
Reserves as stated.
Considering the
stage
of development
of the
operation
and the
uncertainties of
future global
economics, as
well
as exchange
rate,
interest
rate
and gold
price
uncertainties, a real
DCF model is
deemed more appropriate
than a nominal
DCF model. The
DCF model was
generated in June 2022
real South African
Rand (ZAR) terms and
is based on the revenue
forecast, associated capital and operating cost forecasts, and
on appropriate and reasonable economic
assumptions (Table G).
Table G: Inputs to the DCF Model
Description
Quantum
Unit
Key Dates
Money Terms
30 June 2022
Phase Description
Phase 2 Includes:
DP2 Expansion
Mtpm
1.2
LoM
Phase 2
Years
20
Contingencies
Contingency
%
15%
Gold Price
ZAR/USD
ZAR/USD
15.60
USD/oz Gold
USD/oz
1,823
ZAR/kg Gold
ZAR/kg
914,294
Source:
Sound Mining, 2022; and FWGR, 2022
These assumptions are based on information received from FWGR and from the various consultants who contributed to the Mineral Resources, LoM
planning and technical
study work that
underpin this Mineral
Reserve estimate.
The economic assessment
assumes a 100%
equity-based business
and does not consider the effect
of working capital changes. The
QP is satisfied with the quality
of this information, including the revenue
and cost
forecasts, and considers the inputs to the DCF model to constitute an overall PFS level of accuracy (i.e., +/-25%).
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0
500
1,000
1,500
2,000
2,500
3,000
20232024202520262027202820292030203120322033203420352036203720382039204020412042
Gold Sold (kg)
Financial Year
The revenue forecast is a function of gold sales and the pricing assumptions used for the economic analysis. The commissioning of an expanded DP2
enables an increase in gold sales (Graph C).
The revenue forecast is a function of gold sales and the pricing assumptions used for the economic assessment. The following processing recoveries,
which are supported by test
work and current plant performance data, were
applied to the material from
the respective TSFs to compute the amount
of gold sold:
●
49.8% for Driefontein 5 TSF material;
●
56.6% for Driefontein 3 TSF material;
●
50.5% for Kloof 1 TSF material;
●
47.2% Libanon TSF material;
●
62.5% for Venterspost South TSF material; and
●
54.7% for Venterspost North TSF material.
The expansion of DP2 facilitates an increase in gold sales over time (Graph C).
Graph C: Gold Sales Forecast
Source:
Sound Mining, 2022
Processing throughput can continue after 2042 when the available TSFs
are likely to be incorporated into
the operation. At this stage, the economic
assessment has
only considered
the depletion
of the
TSFs
that comprise
the current
Mineral Reserves.
The gold
sold from
these TSFs
equate to
approximately 1.3Moz.
The real revenue forecast relies
on a gold price
of ZAR914,294 (i.e., USD1,823/oz
at ZAR15.60/USD). Taxes would be determined
using the gold mining
tax formula with all unredeemed capital taken into account. The assets are part
of the ongoing business of FWGR, which
is not subject to the Mineral
and Petroleum
Resources Royalty
Act, 2008
(Act No. 28
of 2008) and
so the royalty
formula for unrefined
metals was
not included in the
revenue
determination.
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-1,000
-500
0
500
1,000
1,500
2,000
2,500
20232024202520262027202820292030203120322033203420352036203720382039204020412042
NPV
10
(ZAR M)
Financial Year
Post Tax Discounted Cashflow
Cumulative Cashflow
Graph D presents the post-tax cashflow for an operation that excludes the benefits that would eventually be derived from the available TSFs.
Graph D: Post-tax Discounted Cashflows
Source:
Sound Mining, 2022
The cumulative post-tax cashflows over
the LoM remain positive.
When assuming a discount
rate of 10% for the
unleveraged operation, a Net Present
Value (NPV) of ZAR2.32 Billion is computed.
The achievability of the LoM plans, budgets and forecasts cannot be assured as they are based on
economic assumptions, many of which are beyond
the control of the company. Future cashflows and profits derived from such forecasts are inherently uncertain and actual results may be significantly
more or less favorable. The technical
risks as identified by Sound Mining are provided in
Item 12.1. These and other environmental risks
can impact
the anticipated revenue and cost forecasts and accordingly have been assessed against upside or downside changes of between -20% and +20%. The
consequential potential impacts are presented in Table H and are illustrated graphically in Graph E.
Table H: Sensitivity of Post-tax NPV
Variance
NPV
10
(ZAR Billion)
80%
90%
100%
110%
120%
Revenue (ZAR Billion)
0.12
1.23
2.32
3.36
4.41
Capital Expenditure (ZAR Billion)
3.11
2.71
2.32
1.92
1.53
Operating Costs (ZAR Billion)
3.81
3.06
2.32
1.57
0.83
Source:
Sound Mining, 2022
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0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
80%
90%
100%
110%
120%
NPV
10
(ZAR M)
Net Revenue
Capital Expenditure
Operating Costs
-1,000
-500
0
500
1,000
1,500
2,000
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
NPV
10
(ZAR M)
Financial Year
Post Tax Discounted Cashflow
Cumulative Cashflow
Graph E shows that changes to the revenue forecast will impact margins the most.
Graph E: Sensitivity to Expected Revenue and Costs
Source:
Sound Mining, 2022
Table I shows the materiality of changes in the gold price.
Table I: Sensitivity of Gold Price
Gold Price
ZAR/kg
700,000
800,000
900,000
1,000,000
1,100,000
NPV (ZAR Billion)
(0.27)
0.96
2.15
3.30
4.45
Source:
Sound Mining, 2022
The operation is economically viable above
a gold price of ZAR721,264/kg.
The impact of changes to the
operating cost forecast is materially less, and
any variance in capital expenditure being relatively insensitive.
As a final
sensitivity, the
QP has tested
the impact of
FWGR having
to revert
to the use
of a synthetic
liner for
the RTSF
as opposed to
the design
currently included in the LoM plan. The impact of this expenditure on the discounted post-tax cashflows is shown in Graph F.
Graph F: Post-tax Discounted Cashflows (including liner)
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Source:
Sound Mining, 2022
The NPV
10
still returns a positive number of ZAR1.58 Billion, albeit the overall margins are reduced.
The QP is satisfied that the Mineral Reserves as
stated are all economically viable. Indeed, the economic assessment
of viability includes substantial
additional capital for a growing business while not capturing the potential benefits of the envisaged long term revenue potential.
1.15.
Concluding Comments
Despite the usual existence
of environmental, political,
social and infrastructural risks
the QP’s are
satisfied that the FWGR
operation is a relatively
low risk business in the context of the broader South African mining industry.
FWGR’s legal tenure is underpinned by
the amended EMPs and
access and usage rights
to exploit the moveable
assets. The assets held
by FWGR were
acquired from Sibanye Gold Limited,
a subsidiary of
Sibanye-Stillwater Limited, in a transaction
in which common law
ownership was established over
the various
TSFs containing
the Mineral
Resources and
Mineral Reserves.
A Use
and Access
Agreement with
Sibanye Gold
articulates the
various
rights, permits and
licenses held by
Sibanye Gold
in terms of
which FWGR
operates, pending
the transfer
to FWGR
of those that
are transferable.
FWGR conducts its activities inter
alia in accordance with
Environmental Approvals
(EAs) and the provisions
of the Mine Health and
Safety Act and
regulations.
Most of the land on which the RTSF
is to be constructed has been purchased by
FWGR with a final outstanding property secured through
an option
agreement.
The drilling, sampling, analytical processes and governance of the exploration programs are appropriate and in-line with industry best practice. They
are considered to be
of high confidence. The
density used to determine quantities
from volumes has been
determined from both in
situ measured
values and
empirical data
and is
considered reliable.
The QPs
conclude that
the estimations
are based
on a
suitable database
of code
compliant
information.
TSFs constructed from the
tailings of Witwatersrand gold
mining operations have been successfully
and economically exploited for several
decades
and the geotechnical and geometallurgical characteristics are well understood from experience and from test
work on the FWGR assets themselves.
Notwithstanding the risks
identified herein, which
can be managed,
no material factors
of a geotechnical
or geometallurgical nature,
for example,
have been identified that would have a significant effect on the prospects for eventual economic extraction.
The
DP2
plant
has
performed
in-line
with
expectations
and
the
design
for
its
expansion
to
1.2Mtpm
is
based
on
representative
and
adequate
metallurgical test
work. The
mass balance
for the
plant is
appropriate. Scrutiny
of the
LoM plan
reveals that
recoveries currently
being achieved
coincide with expectations from metallurgical test
work and that the quantities and grades
reported are consistent with forecasts
from the Mineral
Resource estimation.
New
arisings
will
eventually
be
stored
in
the
RTSF
which
will
have
excess
capacity
from
both
a
depositional
rate
(2.4Mtpm)
and
final
capacity
perspective (800Mt). All the necessary infrastructure requirements have been reviewed and
are considered appropriate. Sound Mining has reviewed
the design for the RTSF prepared by FWGR’s specialists and has concluded that the detailed design report provides the framework and guidelines for
the future safe development of the RTSF.
The estimated capital expenditure
and operational costs are
aligned with actual
operational data from current operations
and considered appropriate
and in-line with industry standards.
The operation is
robust, the Mineral
Reserves are economically
viable, and the QP
considers the LoM
plan to be
sufficient for the
Mineral Reserve
estimate. The QPs
note the necessity
for FWGR to
acquire the necessary regulatory
approvals for
the RTSF timeously
to achieve the
production as
forecast.
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2.
INTRODUCTION
Item 2 - (i); (ii); (iii); (iv) and (v)
DRDGOLD Limited (DRDGOLD)
is a tailings retreatment
company located near Johannesburg,
South Africa. It
has a primary
listing on the Johannesburg
Stock Exchange (JSE) and a secondary listing on the New York Stock Exchange
(NYSE). The DRDGOLD operations are comprised of two wholly owned
entities covering their East Rand (east of Johannesburg) and far West
Rand (far west of Johannesburg) businesses. The East Rand operations are run
by Ergo Mining (Proprietary) Limited
(Ergo) and the West rand operations by Far West Gold Recoveries (Proprietary) Limited
(FWGR). FWGR currently
own six Tailings
Storage Facilities (TSFs)
with additional TSFs, although not owned by
FWGR, potentially available in
the area for future
reclamation
(Available TSFs).
This Technical Report
Summary (TRS) was prepared for
DRDGOLD as the registrant.
It has been compiled to
align with the requirements of
Subpart
1300 of Regulation S-K under the
U.S. Securities Exchange Act of 1934
(Regulation S-K) and Item
601(b)(96) of Regulation S-K (Item 601(b)(96)) (S-K
1300). It is
a first submission
to the Securities
Exchange Commission (SEC)
and presents
DRDGOLD’s Mineral Resources and
Mineral Reserves of
FWGR.
FWGR completed various studies to examine the techno economic merits of a phased approach to expanding the current operations:
●
Phase 1 is the current operations which
involved upgrading the Driefontein
Processing Plant 2 (DP2) to process tailings
from the closest TSF at
a
planned throughput of around 500ktpm. This Phase was
successfully commissioned and the operation reached steady state
production in 2019;
and
●
Phase 2 involves building additional processing capacity through the expansion of DP2 rather
than the construction of a Central Processing Plant
(CPP) which will
remain part of FWGR’s strategic options.
The DP2 expansion
will facilitate an eventual DP2
throughput of 1.2Mtpm.
Only 750ktpm
of this capacity
will be utilized
from January 2026
to December 2029
because of the
prevailing depositional constraints.
The new arisings
(i.e.,
retreated tailings) will initially be
redeposited onto the Driefontein 4
TSF (at 250ktpm) and
the Leeudoorn TSF (at
500ktpm) between January
2026
and December 2029, whereafter a
newly constructed Regional Tailings
Storage Facility (RTSF)
will be commissioned in 2030.
The RTSF will have
sufficient storage
capacity to also
accommodate new
arisings at
a rate
of 1.2Mtpm from
the mining of
available TSFs
in the area
well into
the
future. Examples of these include the Driefontein 1 TSF,
Driefontein 2 TSF and Kloof 2 TSF,
which, once decommissioned are to be transferred to
FWGR from Sibanye Gold Limited (Sibanye Gold).
2.1.
Corporate Structure and Compliance
Figure 1 presents FWGR’s corporate structure.
Figure 1: DRDGOLD Corporate Structure
Source:
Sound Mining,
2022
Sibanye Gold
owns a
50.1% shareholding
of DRDGOLD.
DRDGOLD’s non-public
ownership which
includes shareholding by
subsidiary,
Ergo Mining
Operations (Proprietary) Limited, of 0.8% and 0.1% shareholding by directors. Such shareholding is classified as non-public.
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2.2.
Purpose and Terms
of Reference (ToR)
FWGR commissioned Sound Mining
International SA (Proprietary) Limited (Sound Mining)
to compile a SEC S-K 1300
compliant TRS that describes the
Mineral Resource and Mineral Reserve estimates as at
30 June 2022. The document date
is 28 October 2022 and there
are no material chances in the
period between these dates.
The Qualified Person (QP)
has relied on information
provided by FWGR
for this purpose with respect
to legal matters
(Item 3), the gold
price (Item
16.1), environmental or social and labor planning aspects (Item 17) and economic assumptions (Item 19).
Sound Mining
is an
independent advisory
company.
The ToR
required an
independent technical
review of
FWGR in
order to
identify factors
of a
technical and strategic nature
that would influence the future
viability of the Mineral Reserves.
The review accords with
the principles of open and
transparent disclosure that are embodied in internationally accepted
Codes for Corporate Governance. It has been based
upon technical information
supplied by FWGR and its appointed consultants. The contractual agreement with FWGR, for the preparation of the TRS, was with Sound Mining and
not with the QP as an individual. The QPs provide independent opinions and conclusions throughout this TRS.
The estimation of Mineral Resources and Mineral Reserves is inherently subject to some level of uncertainty and inaccuracy, because they are based
on analytical results of samples
that commonly represent only a small portion
of a mineral deposit. The uncertainty of the
estimates, where material,
are explained in this TRS and are reflected in the choice of Mineral Resource and Mineral Reserve categories.
2.3.
Qualified Persons Declaration
and Qualifications
The signatories to this TRS are qualified to
express their professional opinions on the technical aspects and
value of the mineral assets described. The
technical and economic information provided
are correct to the best of the
QPs’ knowledge, having followed best endeavors. The QPs responsible
for
this TRS and the Mineral Resource and Mineral Reserves as stated are:
●
Mr V Duke
is the designated
QP responsible for
the compilation and
reporting of FWGR’s Mineral
Reserves. He is
a partner
of Sound Mining
located
at 2A Fifth Avenue, Rivonia,
South Africa. He holds a B.Sc.
Mining Engineering (Hons.), is registered with
the Engineering Council of South Africa
(ECSA) and
is a
Fellow of
the Southern
African Institute
of Mining
and Metallurgy
(FSAIMM) (Membership
No.: 37179).
He has
over 35
years'
experience in the
minerals industry,
specializing in engineering
studies, due diligence
audits and valuations.
Mr Duke
has sufficient experience
that is relevant to the
style of mineralization and type of
deposit under consideration. The QP is recognized
by ECSA located at Lake
Office Park,
1st Floor, Waterview Corner Building, 2 Ernest Oppenheimer Avenue, Bruma, Johannesburg, South Africa;
●
Mrs D van
Buren is the designated
QP responsible for
the compilation and reporting
of FWGR’s
Mineral Resources. Mrs
van Buren who holds
a
B.Sc. (Hons.) in geology and is
registered with the South African
Council for Natural Scientific
Professions (Pr.
Sci. Nat. No.: 440107/14), and
the
Geological Society of South Africa (GSSA) located
on the corner of Carlow Road and Rustenburg Road, Auckland
Park, Johannesburg, South Africa.
She is a principal geologist with over twelve years' experience in mining, geology and consulting; and
●
Mr K Raine is the designated QP responsible for the compilation reporting of the environmental and permitting requirements of FWGR. Mr Raine
holds a B.Sc. (Hons.), B.Sc. (Zoology) and is registered with the South African Council for Natural
Scientific Professions (Pr.
Sci. Nat. No.: 114290).
He is
a consultant
with more
than ten
years’
experience in
mining projects,
environmental
legal
compliance, sustainability,
construction and
wildlife preservation.
The QP
is recognized
by the
South African
Council for
Natural Scientific
Professions (SACNASP)
located at
Management
Enterprise Building,
Mark Shuttleworth Street, Innovation Hub, Pretoria, Gauteng, South Africa.
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The QPs were assisted by the following specialists:
●
Mr M Nasiri - Mining Engineer for the mining and production scheduling;
●
Mr R Spargo - Metallurgist for the DP2 and RTSF;
●
Mr N Weeks - Geologist for the background and modelling of the Mineral Resource estimate;
●
Mr M Turnbull - Financial Modeler for the discounted cashflow (DCF) modelling.
The QPs also relied on reports from:
●
DRA SA (Proprietary) Limited;
●
Beric Robinson Tailings (Proprietary) Limited (Beric Robinson Tailings); and
●
Digby Wells Environmental (South Africa) (Proprietary) Limited (Digby Wells).
Detailed references and sources of information and data contained in this TRS is presented in Item 24.
The Sound Mining QPs and other specialists visited FWGR in 2019, 2020 and 2022 and examined the operations
as shown in Table 1. During the site
visit, the infrastructure, TSFs and the proposed RTSF and DP2 sites were inspected.
Table 1: Personal Inspection
Professional
Site Visit
V Duke
Visited in 2019, 2020 and 2022 as a QP
D van Buren
Visited in 2019 and 2020 as a QP
K Raine
Visited in 2020 as a QP
M Nasiri
No site visit
R Spargo
Visited DP2 in 2020
N Weeks
Visited in 2020 and 2022
M Turnbull
Visited in 2020
Source:
Sound Mining, 2022
2.4.
Units, Currencies and Survey Coordinate
System
The economic assessment in this TRS have all been carried out in South African Rands (ZAR). All other units
used in this TRS are defined in the text or
in the Glossary (Item 24). All references to tonnage are in metric tonnes; gold ounces (oz Au) are troy ounces (oz) and the conversion
factor used for
conversion to troy ounces is
31.10348. Unless explicitly
stated, all units presented in
this TRS are in the
Système Internationale (SI) - i.e.,
metric tonnes
(t), kilometers (km), metres (m),
and centimeters (cm). Throughout the technical studies relating
to the FWGR numerous acronyms
have been used
but for reporting purposes, the use of acronyms has been kept to a minimum, with the convention being definition of the acronym in the first usage.
However, where required throughout the document the full term may be used for clarity and ease of reading.
The coordinate system employed by the
surface surveys at the operation is
based on the Gauss
Conform Projection (UTM), Hartebeeshoek
94 Datum,
Ellipsoid WGS84,
Central Meridian
WG27. Some
regional scale
maps in
this Technical
Summary may
be referenced
with Latitude
and Longitude
coordinates for ease of reading.
2.5.
Political and Economic Climate
South Africa gained independence from Britain
on 31 May 1961, and
was declared a republic. From 1948
until 1990, the South African political and
legal systems were based upon the concept of apartheid. South Africa
became a constitutional democracy in 1994, and the
first democratic elections
brought an end
to apartheid
and ushered in
majority rule under
the African National
Congress (ANC) political
party, with a number
of different political
parties participating in the
elections. The country continues
to hold democratic, peaceful,
free and fair
elections, the last of
which was won by
the
ANC in 2019, who appointed Mr Cyril Ramaphosa as President.
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2.6.
Minerals Industry
South Africa has
a mature
minerals industry
developed from
gold and
diamond discoveries
in the
late 1800s.
It is
the world's
largest producer
of
platinum and chrome and ranks highly in the
production of diamonds, coal, iron ore, vanadium and base
metals. GDP generated by the South African
Mining industry has averaged ZAR223 Billion per quarter between 1993 and 2022, reaching an all-time
high of ZAR240 Billion in the fourth quarter of
2006 and a record low of ZAR147 Billion in the second quarter of 2020.
One of the greatest challenges associated with
the minerals and mining industry in
South Africa is the political instability, concerns over the reliability
of legal tenure, rising costs
of labor,
electricity, diesel and steel,
among other costs. Labor and community unrest
caused by low wages, particularly
among
contract
workers
and
under-resourced
communities has
proved
problematic
in recent
years
and
exacerbated
municipalities’ inability
to
provide adequate infrastructure to communities.
Other important concerns
for the mining
industry are the
effect of diseases (i.e.,
HIV/Aids and Covid-19) on
the workforce and
the recent downgrading
of the
country’s credit
risk rating
to junk
status. Although
the South
African political
system
has credibility,
the political
risk index,
indicates that
factors such as the
country’s high degree of
unionization, the threat of
industrial action and
the disruption to
economic activity are
a constant concern
to investors.
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3.
PROPERTY DESCRIPTION
Item 3 (i); (ii); (iii); (iv), (v) and (vi)
3.1.
Property Location
The FWGR operations are
located in the
Gauteng province of South
Africa, approximately 70km
South West of
the city of Johannesburg
(Figure 2).
The operations can
be accessed from
Johannesburg by traveling
for approximately
one hour along
tarred roads.
The operations which
are located
between the latitudes and longitudes 26°32'34.90"S and 26° 5'32.68"S, and 27°24'6.49"E and 27°49'4.84"E,
and cover an area of 29,577.62ha.
Figure 2: Location of the FWGR Operations
Source:
Sound Mining, 2022
FWGR is
located in
an area
with a
long history
of gold
mining and
as a
consequence the region
is disseminated
with TSFs
and supporting
mining
infrastructure. The operation’s infrastructure and current TSFs lie across two mining rights which stretch from Westonaria
to Carletonville (Figure 3).
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Figure 3: FWGR Operations
Source:
Sound Mining, 2022
3.2.
Legal Tenure
and Permitting
Sound Mining’s environmental
and permitting specialist has
undertaken a review
of the legal
aspects of the assets.
This review
has been based on
information provided by DRDGOLD and FWGR. DRDGOLD
is a subsidiary of Sibanye Gold and FWGR operates within
the extensive framework of legal
tenure held by Sibanye Gold.
3.3.
Material Agreements, Access and Surface
Rights
3.3.1.
Exchange Agreement
Sibanye Gold and
DRDGOLD signed an Exchange
Agreement on 22
November 2017. The
agreement contains terms
in connection with
FWGR which was
established specifically to
house the intended
TSF reclamation
activities. The agreement
provided that Sibanye
Gold
initially obtained a 38,05% stake in DRDGOLD in exchange
for the FWGR assets, with the option to increase it
to 50,1% by way of a cash
subscription.
Sibanye Gold currently holds a 50.1% equity in DRDGOLD meaning that Sibanye Gold is now the ultimate holding company
of FWGR.
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3.3.2.
Use and Access Agreement
A “Use and Access Agreement” signed in November 2017, grants FWGR the rights to following:
●
access to Kloof 10 shaft located in
the Kloof Mining Right area and Driefontein
10 shaft located in the Driefontein
Mining Right area
for the purpose of pumping and supplying the required quantities of water to FWGR;
●
agreements for the installation, supply and distribution of power;
●
existing and proposed pipeline routes;
●
servitudes, wayleaves and surface right permits; and
●
access to the Driefontein 1 Gold Plant.
The agreement stipulates that it will endure until the end of FWGR’s business and that FWGR is to give Sibanye
Gold at least 18 months’
prior written notice of the anticipated end of life of the business.
The surface rights agreements over
both the Driefontein and Kloof
Mining Rights (held by
Sibanye Gold) for the TSFs and
processing plant
sites are
adequate for
the current
Sibanye Gold
operations and
would therefore
also be
applicable to
FWGR's operations.
FWGR will
secure servitudes for all of its infrastructure located on Sibanye Gold land.
FWGR owns the majority of the land on which the RTSF will be constructed. FWGR has an option agreement with the landowner for the
purchase of
the remaining
land still
required for
the RTSF.
FWGR is
in the
process of
complying with
the requirements
of the
Spatial
Planning and Land Use
Management Act, 2016 (Act
No. 13 of 2016)
(SPLUMA) and is having
the land rezoned from agricultural
use to that
of mining.
3.3.3.
Leeudoorn Agreement
The QP has had sight of a document describing DRDGOLD’s requirement with regard to the use of the Leeudoorn TSF for a period to the
point that the RTSF is commissioned (i.e.,
2030). This document also initiated negotiations
between DRDGOLD and Sibanye Gold for such
access to the Leeudoorn TSF which at this stage, will remain the property of Sibanye Gold. Accordingly,
the associated liabilities will also
remain with Sibanye Gold.
3.4.
Permitting
The permitting associated with the different Mining Right (MR) areas (Figure 4) are commented on below.
The minerals in tailings
fall outside the
definition of ‘mineral’ in
the Mineral and
Petroleum Resources Development
Act’ (MPRDA), where a
MR as
defined in this act is
technically not a requirement,
and the operations of
FWGR are conducted in terms
of Environmental Authorizations
(“EA”). In
2016, Sibanye
Gold applied
and received
an EA
which incorporated
an Environmental
Impact Assessment
(EIA) and
Environmental Management
Programs report (EMPr)
for their West Rand
Tailings Retreatment Project (WRTRP). FWGR
applied to the
Department of Mineral
Resources and Energy
(DMRE) for
Sibanye Gold’s
EAs to
be transferred
to FWGR.
As part
of its
expansion plans,
FWGR will
be required
to make
similar applications
for
appropriate EAs.
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Figure 4: Sibanye Gold Mining Rights
Source:
Sound Mining, 2022
3.4.1.
Driefontein Operational Area
The
DMRE
granted
Sibanye
Gold
an
EA
under
the
2014
EIA
Regulations
(GNR
983
and
GNR
984)
(the
2014
Regulations)
on
11 May 2018. The approval is recorded in GP 30/5/1/2/3/2/1 (51) EM.
Driefontein MR:
a new order
MR (GP 30/5/1/2/2/51MR)
was issued in
2007 and
is valid until
January 2037 and
covers 9,490.62ha. Sibanye
Gold is entitled to mine all declared material situated within this MR and has all the necessary statutory requirements in place.
3.4.2.
Kloof Operational Area
In 2016, Sibanye Gold also applied for
an Integrated Environmental
Authorization (IEA) which includes a waste
management license for
Kloof
to
undertake
various
listed
activities,
which
the
DMRE
equally
granted
on
11
May
2018.
The
grant
is
recorded
under
GP
30/5/1/2/3/2/1 (66) EM and the
IEA remains valid until the end
of Life-of-Mine (LoM). This IEA was transferred to FWGR in January
2022.
Kloof MR:
a new order
MR (GP 30/5/1/2/2/66MR)
issued in 2007,
is valid
until 2027 and
covers 20,087ha.
Sibanye Gold is
entitled to
mine all declared material falling within this MR and has all the necessary statutory requirements in place.
Two Section 102 amendments were submitted in 2015 to
extend the Kloof MR to include the Venterspost North, Venterspost South TSFs
and RTSF.
The Section 102
amendment for
Venterspost
North and
Venterspost
South TSFs
was granted
at the
end of 2021.
The RTSF
Section 102 amendment was granted but has not been executed by Sibanye Gold as yet.
A Section 102
is an application
to the Minister
of the DMRE
to amend the
rights permits, programs
or plans. Sound Mining
notes that
FWGR is not involved with any legal proceedings that may have an influence on the rights to extract minerals nor on the legal ownership
of all mining and surface rights.
Neither Sibanye
Gold nor
FWGR are
aware of
any outstanding
legal disputes
that are
applicable to
FWGR as
stated in
the Exchange
Agreement signed on 22 November 2017 and effective at the end of July 2018. To
the best of Sibanye Gold’s and FWGR’s
knowledge no
land claims exist over the relevant properties and no outstanding legal disputes exist that could affect FWGR right to further develop the
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assets. To
the best
of the
Sound Mining’s
legal specialist's
knowledge, all
statutory permits
have either
been approved
or are
in the
process of being approved.
In summary, the security of
tenure for the FWGR
is considered to be intact.
The transfer of the TSFs
by Sibanye Gold to FWGR
involved
the transfer of moveable assets; and therefore, are not subject to the transfer of the associated MRs to FWGR. In terms of the Exchange
Agreement all risks and benefits of the business, passed from Sibanye Gold to FWGR including the rehabilitation liability of the TSFs. The
portion of the Sibanye
Gold’s rehabilitation
trust fund related
to these assets was
transferred to an
environmental trust
fund. In 2022,
these funds were subsequently transferred to a
Guardrisk Cell Captive, under a
ring-fenced environmental rehabilitation insurance policy
for the sole use of the rehabilitation liability.
3.5.
Driefontein Environmental
Authorization Transfer
Sibanye
Gold’s
Driefontein
EA
still
needs
to
be
transferred
to
FWGR.
An
Amendment
Application
was
filed
at
the
DMRE
(on
18 August 2020), for the following purposes:
●
application with a request that the scope of FWGR be expanded
by including DP2 for tailings processing and Driefontein 4 TSF as a deposition
site
as well as amending the sequence of reprocessing and disposal of residue tailings of Driefontein 3 TSF and 5 TSF; and
●
application for the transfer of EA (Reference No.: GP 30/5/1/2/2 (51) EM to FWGR.
3.6.
Water Use Licenses
Two Water Use Licenses (WUL) were granted to Sibanye Gold in terms of Section
21 of the National Water Act, 1998 (Act No. 36
of 1998) (NWA) over
the Driefontein and
Kloof mining areas on
9 March 2017
with Reference numbers:
10/C22B/ACFG/496 and 10/C23E/ACEFGJ4527
respectively. The
WUL’s
are
valid
for
a
period
of
twenty
years,
from
the
date
of
issuance
and
thus
expire
on
9 March 2037.
Sibanye Gold
is permitted
to reclaim
TSFs through
hydraulic mining
following which,
retreatment takes
place in
and at
the process
plants. All
the
water comes from Driefontein’s underground works at Driefontein
10 shaft and from Kloof 10 shaft.
Currently, residue
from DP2 is
disposed at Driefontein
4 TSF,
however when the
RTSF has been
constructed and is
operational, the residue
will be
disposed of at this facility. A return water dam will receive water from the RTSF where it will be recycled and reused in the reclamation operations.
FWGR has chosen to use a closed water reticulation system to reduce its water consumption needs by recycling process water.
The Dam Safety Regulations, under the NWA,
require a Dam Safety License for the construction of the RTSF.
The overarching WRTRP WUL has been
successfully transferred to FWGR. In addition, an application has been submitted for the transfer of applicable water uses from
the Driefontein WUL
to FWGR. This application is yet to be granted by the Department of Water Affairs and Sanitation.
3.7.
Other Permitting Requirements
A Refinery License has been issued to FWGR by the South
African Diamond and Precious Metals Regulator (SADPMR) to deal in unwrought
precious
metals.
A Heritage
Impact Assessment
(HIA) covering
Driefontein and
Kloof was
prepared and
submitted to
The South
African Heritage
Resource Agency
(SAHRA). SAHRA responded
by means of
a Final Statutory
Comment in letters
dated 22 April
2016, granting conditional
approval regarding the heritage
sites at Driefontein and Kloof.
FWGR is the holder
of Certificates of
Registration 281 (CoR)
issued in July 2019,
in terms of the
National Nuclear Regulator (NNR)
for Driefontein 3
TSF,
Driefontein 4 TSF,
Driefontein 5
TSF,
Kloof 1 TSF,
Venterspost South
TSF,
Venterspost North
TSF,
Driefontein Plant 2
(DP2) Driefontein Plant
3
(DP3) and the RTSF.
FWGR’s operations are governed by the Mine Health and Safety Act, 1996 (Act No. 29 of 1996) (MHSA).
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3.8.
Royalties
Under the MPRDA, no Mineral Royalties are payable on the reprocessing of TSFs for gold.
3.9.
Liabilities
The Driefontein
and Kloof
EAs
contain
stipulative
clauses as
to what
mitigatory
and rehabilitative
obligations exist
and explicitly
states
that the
rehabilitation requirements
must be
adhered to.
Financial provision
for remediation
of environmental
damage is
stipulated in
Section 24P
of the
National Environmental Management Act, 1998 (Act No. 107 of 1998) (NEMA) (as amended). FWGR obtained a Closure Cost Assessment from Digby
Wells in June 2022 for two gold processing plants and seven TSFs.
Currently, FWGR
has sufficient rehabilitation
guarantees and
funds in place
for all of
its assets to
satisfy the DMRE.
The closure and
rehabilitation
liability for the operation is updated annually at the end of the financial year (FY).
3.10.
Concluding Comments
In terms of the
Exchange Agreement all risks and
benefits of the operation
passed from Sibanye Gold
to FWGR. In particular, the rehabilitation
liability
of the TSFs and associated infrastructure have been transferred to FWGR. The portion of the Sibanye Gold’s rehabilitation trust fund related to these
assets has
been transferred
to the
Guardrisk Cell
Captive, under
a ring-fenced
environmental
rehabilitation insurance
policy for
the sole
use for
environmental rehabilitation activities, with any shortfall covered by an insurance policy taken out by FWGR.
FWGR owns the majority of the land on which the RTSF will be constructed. FWGR has an option agreement with the landowner for the purchase of
the remaining land still required for the RTSF. Provision has been made for this within the cashflow model.
There are no significant factors or material risks to the access, title or ability to perform work on the property.
A consequence of the Use and Access
Agreement is that
there are no
significant encumbrances to
the property with
regard to
current and
future permitting requirements.
Outstanding
permitting conditions are
being proactively managed
in line with the
required timeframes (Item
17). FWGR has
not been served with
any fines for
violations.
The QP
notes that
the Dam
Safety Regulations,
under the
NWA,
require a
Dam Safety
License for
the construction
of the
RTSF.
The existing
and
overarching WRTRP WUL has been successfully transferred to FWGR.
As an administrative matter, an application has also been submitted for
the transfer of the water uses from the Driefontein WUL to FWGR. Approval
of this application by the Department of Water Affairs and Sanitation is pending. This is not deemed a material risk to the ongoing operations.
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4.
ACCESSIBILITY,
CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
Item 4 (i); (ii); (iii) and (iv)
The FWGR operations are 70km west of Johannesburg from where they
can be accessed by travelling for approximately one hour along tarred roads.
The TSFs are located at elevations between 1,570mamsl and 1,720mamsl (Figure 5).
Figure 5: Topography of Southern Africa
Source:
Sound Mining, 2022
The area which forms
part of the
South African inland
plateau region is typical of
a mature landscape with
gentle rolling undulations and
shallow sided
river valleys as shown in the topographic map (Figure 6).
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Figure 6: Topography Map of FWGR
Source:
Sound Mining, 2022
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Climatically, the area is classified as ‘moderate eastern plateau’ with by well-defined seasons characterized by warm to hot, moist summers and cool
dry winters, often accompanied by frost (Figure 7).
Figure 7: Climate and Rainfall of South Africa
Source:
Sound Mining, 2022
The temperate climate has an
average ambient temperature of
20°C with dry winters between May and
July (0°C to 18°C) and wet, warm
summers
from September to March (0°C
to 27°C). The daily mean
temperatures in January and July
are 21.2°C and 9.8°C
respectively. The Randfontein
area,
on average, receives 571mm of rain per year, with most rainfall occurring during summer in the form of thunderstorms. The highest rainfall occurs in
January (107mm) and
the lowest in June
(0mm) where the wet
season occurs from November to
April. With the exception of
summer thunderstorms,
the climatic conditions have little
to no effect on
the mining operations at FWGR
where work is done at all
times of the year and
where there is no
operating season.
The vegetation of the
region is typical savannah
grassland (Figure 8)
but most of
the area comprises
disturbed grazing land and
minor crop production.
The
major land
uses in
the area
include agriculture
in the
form
of maize
and
soya
production as
well
as
livestock grazing,
formal
and informal
residential, mining and business uses.
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Figure 8: Vegetation of South Africa
Source:
Sound Mining, 2022
The area developed on the back of gold mining and is now well serviced with schools,
suburbs, medical facilities, a rail network and other supporting
infrastructure.
The operation
lies across
the Randfontein
and Merafong
City Local
Municipalities which
provide
potable water
with the
national
electricity supplier - Electricity Supply Commission (Eskom), suppling the operation with power (see Item 15).
Infrastructure includes formal
and informal dwellings, buildings,
commercial farming infrastructure,
roadside shops, privately owned
infrastructure
such as access
roads, boreholes and
dams, public infrastructure
(roads and
transmission lines) and
mine accommodation.
Personnel and supplies,
from the surrounding areas, make use of
both tarred and gravel roads connecting farms, mines and urban
centers such as Carletonville and Fochville.
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5.
HISTORY
Item 5 (i) and (ii)
Gold and uranium mining
operations commenced in the
late 1800s in
the Witwatersrand Basin
goldfields of South Africa,
and have resulted
in the
accumulation of substantial amounts of surface tailings and other mine residues. The possible re-treatment of TSFs in the West Rand area has a long
and
complex
history
with
Gold
Fields
Limited
(Gold
Fields),
Rand
Uranium
Limited
(Rand
Uranium),
Harmony
Gold
Mining
Company
Limited
(Harmony),
Gold
One
International
Limited
(Gold
One)
and
Sibanye
Gold
completing
a
number
of
parallel,
independent studies
relating
to
the
retreatment of these TSFs. There is an approximate fifteen-year history of metallurgical test work and process design which has been undertaken for
a
variety
of
combinations
of
assets
and
products
recovered,
as
summarized
in
Table 2. Whilst these historical studies were for specific combinations of assets, they are not all relevant to FWGR in its current form.
Prior to 2009,
Gold Fields
embarked on a
project known as
the West Wits
Project (WWP) aimed
at retreating several TSFs
on its four
mining complexes:
Kloof, Driefontein, Venterspost and South Deep (Table 2) to
recover residual gold, uranium
and sulfur and
storing the tailings on
a new Central Tailings
Storage Facility
(CTSF). Similarly,
Rand Uranium had
embarked on the
Cooke Uranium
Project (CUP), which
endeavored to treat
the Cooke TSF
for
gold, uranium and sulfur and ultimately
deposit the tailings onto the
Geluksdal TSF, located very close to the CTSF. The two independent projects had
similar operational and environmental mandates, within a 25km radius of each other.
In 2009, Gold Fields
and Rand Uranium
evaluated the potential
synergy of an
integrated retreatment
plan for TSFs
located within the
South Deep,
Cooke, Kloof, Driefontein and Venterspost
mining complexes.
In
2012,
Gold
One
acquired
Rand
Uranium
and
in
the
same
year
acquired
the
Ezulwini
Mining
Company
(Proprietary)
Limited
(Ezulwini)
in
an
agreement with First Uranium Corporation.
During the same year Gold One,
revived the tailings retreatment
project and Gold Fields entered
into a
joint venture (JV) partnership with Gold One to investigate the economic viability of concurrently reprocessing current arisings and historical
tailings
from a number of sites situated in the greater Carletonville/Westonaria/Randfontein area. A scoping study was concluded in 2012.
In early 2013, Gold Fields unbundled its Kloof and Driefontein Complex and Beatrix gold mines in the Free State
Province to create a separate entity
in Sibanye Gold
and listed Sibanye
Gold as a
fully independent company
on both the
JSE and the
NYSE stock
exchanges. Subsequently,
in October
2013,
Sibanye
Gold
Limited
purchased
the
interest
held
by
Gold
One
in
Rand
Uranium
and
Ezulwini.
The
Gold One assets
which became part
of Sibanye Gold
included the Cooke
operations (underground mining
and surface
reclamation operations)
for
gold and uranium
production. This transaction
gave Sibanye
Gold control
of a substantial
portion of the
surface mineral resources
in the region.
A
Preliminary Feasibility Study (PFS) was completed during 2013 and confirmed that there is a significant opportunity to extract value from the surface
Mineral Resources. Subsequently,
a number of Definitive Feasibility Studies
(DFSs) have been completed on
various combinations of TSFs
as shown
in Table 2. Sibanye Gold’s TSF
reclamation assets were housed in a special purpose vehicle (SPV) called WRTRP.
In 2018, Sibanye Gold vended
its interest in WRTRP
to DRDGOLD for an equity
stake of 38.05%
and an option to subscribe
for additional shares for
cash to take its stake to 50.1%. In mid-2018, FWGR initiated Phase 1 of a phased approach to its growing reclamation operations.
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Table 2: Historical Development of FWGR
Owner/Operator
Period
Project and/or Transaction
Properties
Activity
Comment
Gold Fields Group Limited
WWP
Driefontein Complex (Driefontein
1, 2, 3, 4 and 5 TSFs);
Kloof Complex (Kloof 1 and 2 TSFs, Libanon and Leeudoorn
TSFs; Venterspost Complex
(Venterspost North and
Venterspost South); and the South Deep Complex
Aimed at retreating several West
Rand TSFs to recover gold,
uranium and sulfur and storing the tailings on a new CTSF
Gold Fields - subsidiary
GFI Mining South Africa
(Proprietary) Limited
2009
West Wits Tailings Treatment
Project (WWTTP)
Driefontein Complex, Kloof Complex, Libanon, Leeudoorn,
Venterspost Complex and South Deep
Complex
WWTTP Feasibility Study near completion
Rand Uranium Limited (Rand
Uranium)
2009
CUP
Cooke mining Complex
CUP Feasibility Study near completion
Treatment of the Cooke
TSF for gold, uranium and sulfur.
Arising tailings would be deposited onto the Geluksdal TSF
located near the CTSF
Gold Fields and Rand Uranium
Late 2009
Discussion of synergy of WWTTP and CUP -
combination of WWTTP and CUP
Evaluation of a combined project
Significant re-engineering and metallurgical test
work
required and the project was put on hold
Rand Uranium
2010 to 2012
Completed the CUP and the Cooke Optimization
Project (COP)
CUP and COP Feasibility Study completed
Applications for authorizations partially complete
Gold One International Limited
(Gold One)
2012
Acquisition of Rand Uranium and Ezulwini
Revived the surface retreatment integration
discussions - update CUP DFS
Gold One JV with Gold Fields
2012 to 2013
JV to investigate economic potential
of
concurrently re-processing current arisings and
TSFs
TSFs and current arisings in the
Carletonville/Westonaria/Randfontein
region
Gold One/Gold Fields JV Scoping Study completed
end 2012
Gold Fields unbundled GFI
Mining South Africa
(Proprietary) Limited and
created Sibanye Gold Limited
Early 2013
Unbundling of the Kloof-Driefontein Complex and
Beatrix Gold Mines and listing of Sibanye Gold on
the JSE Limited and NYSE
Unbundling of the Kloof-Driefontein Complex and Beatrix
Gold Mines
Sibanye Gold Limited
2013
Acquisition from Gold One of the Rand Uranium
and Ezulwini assets
As a result of the transaction, Sibanye Gold held most
of the
surface resources in the region
Gold One/Gold Fields JV Scoping Study completed a
PFS
PFS showed significant opportunity to extract
value from
the surface resources
Sibanye Gold
2015
Study initiated for the original
Version 1 West Rand Tailings
Retreatment Project
(V1-WRTRP)
Treatment of the Driefontein
3 and 5 TSFs using Ezulwini
uranium process plant
DFS for the first phase of the
V1-WRTRP
Sibanye Gold
December
2015
Integrated study on Version
2 of the WRTRP (V2-
WRTRP)
Cooke, Driefontein 3, Driefontein
5 and Cooke 4 South TSFs
Integrated study for the production of
gold, uranium
and sulfuric acid - DFS for V2-WRTRP
DFS for V2 - WRTRP.
On completion of the DFS, the project
progressed to Front End Engineering Design (FEED) level of
accuracy whilst funding and permitting was sought
Sibanye Gold
2016
Decision to close Cooke No 4 shaft
DFS to determine economic viability of using
existing infrastructure including DP2 and Ezulwini
uranium process plant
DRDGOLD
2018
DRDGOLD acquired 100% of Sibanye Gold’s
SPV
(WRTRP) for a now 50.1% equity in DRDGOLD
Driefontein 3, Driefontein 4, Driefontein
5, Kloof 1, Libanon,
Venterspost North, Venterspost
South, TSFs, DP2 and land
for a RTSF and CPP
2017 Competent Persons Report, required
in terms
of Chapter 12 of the JSE listing requirements,
outlining category one transaction
DRDGOLD renamed the WRTRP to FWGR
Source:
DRDGOLD, 2022
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6.
GEOLOGICAL SETTING, MINERALIZATION AND DEPOSIT
Item 6 (i); (ii) and (iii)
6.1.
Regional Setting, Mineralization
and Deposit
The mineral assets
considered in this
TRS are the
tailings derived
through the mining
and processing of
the Driefontein, Kloof, Libanon
and Venterspost
mines of the
Witwatersrand Gold Fields. As
such the mineralization of
the mined material
which produced the
tailings, now being
processed by FWGR,
is described in this TRS. Whereas the
nature of the underlying geology is
not of direct relevance, an understanding of the scale and nature
of the gold
mineralization that was targeted in the historical mining operations provides insight into the structure and composition of the mineral assets.
The assets of FWGR are derived from the West Rand and Carletonville Goldfields
of the gold-bearing, late Archaean (2.7Ga to 3.2Ga), Witwatersrand
Supergroup (Witwatersrand Basin). The Witwatersrand
Basin is the largest gold bearing metallogenic
province globally and is a roughly oval-shaped
sedimentary basin, elongated
in a northeast-southwest
direction. The major
north-south axis of
the basin is
approximately 160km
long, stretching
from Welkom to Johannesburg and where
the minor, east-west axis, spans approximately 80km. The
Witwatersrand Basin is filled
with approximately
14,000m
of
sedimentary
and
subordinate
volcanic
units,
of
which
only
small
portions
outcrop
to
the
south
and
west
of
Johannesburg.
The
Witwatersrand
Supergroup
overlies
an
Archaean
(>3.1Ga)
granite-greenstone
basement
and
the
3.08Ga
to
3.07Ga
Dominion
Group
and
is
subsequently uncomfortably overlain, by units of the Ventersdorp (~2.7Ga), Transvaal (~2.6Ga) and Karoo (~280Ma) Supergroups (Figure 9).
The basin hosts vast
auriferous and uraniferous
deposits which have been
grouped into geographically
distinct sub-basins or goldfields (Figure
10).
The
goldfields
are
separated
by
stratigraphy
where
no
economic
mineralization
has
been
discovered.
The
stratigraphy
of
the
Witwatersrand
Supergroup is broadly split into
two Groups, namely the Central Rand
and the West Rand
Groups, which in turn are split
into a series of subgroups,
formations and members (Figure 11). The stratigraphic structure of the Witwatersrand Supergroup is well understood at
subgroup level, however at
formation level, correlation problems are encountered between the
defined goldfields. The recognition
of basin-wide disconformities, can be used
as
a basis for stratigraphic correlation and thus permits the correlation of
formations between the various goldfields to higher comfort levels (McCarthy
and Rubidge, 2006). The principal economic reefs have been correlated across various goldfields and do not occur at the same stratigraphic level.
Recent studies consider
the deposition in
the Witwatersrand sediments to
have taken place along
the interface between a
fluvial system and an
inland
sea. Specifically, this body of water is considered to
be a retroarc-foreland basin which formed in response
to crustal thickening on the northern edge
of the Kaapvaal Craton, during a collision
with the Zimbabwe craton to the north.
The varying stratigraphic position of the
narrow, 0.1m to 2.0m thick
quartz-pebble conglomerate
reefs are
interpreted to
represent major,
diachronous, entry
points of
coarse-grained sediment
into the
basin. They
appear to be laterally coalesced fluvial braid-plains, where gold
was concentrated within conglomerates which
developed, primarily along erosional
unconformities. The extent
of the development
of the various
unconformities is greatest
near the basin
margins and decreases
towards the more
distal areas.
Complex patterns
of syn-depositional faulting
and folding have
caused significant variations
in sediment thickness
and sub-vertical
to
over-folded reef structures are characteristic of the basin margins.
Structurally, the Witwatersrand Basin has experienced a long and
complex history, affected by several superimposed structural events, differentiated
as syn- and post-depositional deformations. Syn-depositional
deformation played a key role in the original distribution
of sediments which controlled
the locality of
auriferous conglomerates and the thickness
of enclosing sedimentary
sequences. Later faulting and
folding of the sequence
determined
which parts of the Witwatersrand Basin remained buried, as well as the depth extent of mineable horizons, relative to the present-day surface.
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Figure 9: Regional Geological Setting of the Witwatersrand Supergroup
Source:
Sound Mining, 2022
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6.2.
Local Geological Setting, Deposit and Minerali
zation
In terms of a more
local description, the FWGR assets comprise
of TSFs of tailings material
derived from the mining and
processing of ore from
the
Driefontein, Kloof,
Libanon and Venterspost
mining operations, located
in the West
Rand and Carletonville Goldfields, on
the north-western rim of
the Witwatersrand Basin (Figure 10).
Figure 10: Geology of the Witwatersrand Basin
Source:
Sound Mining, 2022
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These operations exploit the
Ventersdorp Contact
Reef (VCR) located
at the top
of the Central Rand
Group, the Carbon Leader
Reef (CLR) near the
base of the Central Rand Group and the Middelvlei Reef, which stratigraphically occurs 50m to 75m above the Carbon Leader. Additional minor reefs
including the Kloof,
Elsburg, Kimberley and
Libanon Reefs
are exploited
at some
operations (Figure
11). The
Central Rand Group,
is dominated
by
course-grained siliciclastic metasedimentary
facies with subordinate
fine grained (mudstone)
facies. Its depositional
environment is
interpreted as
alluvial deltas and braided streams
which formed at the fluvial
- shallow marine interface. The
proximal, high energy,
facies are directly linked
with
the
concentration
of
detrital
gold,
pyrite
and
uraninite
and
thus
the
Central
Rand
Group
accounts
for
95%
of
the
gold
production
from
the
Witwatersrand Basin.
Figure 11: Witwatersrand Supergroup Stratigraphic Section
Source:
Frimmel et al, 2005
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The gold bearing reefs are fundamentally distinguished
by their association with quartz-pebble
conglomerates, which are confined by a basal angular
unconformity and an upper planar bedding
surface separating it from
an overlying quartz wacke
or siltstone unit. The extent
of the unconformable
surfaces is
typically greatest at
the basin
margins and decreases
towards the distal
areas of the
basin. The
Witwatersrand Supergroup is poorly
exposed
in outcrop due to the overlying, younger cover
sequences. The surface geology of the mining
area comprises outliers of Karoo Supergroup shales and
sandstones,
followed
by
Pretoria
Group
sediments
and
the
Chuniespoort
Group
dolomites
of
the
Transvaal
Supergroup.
In
the
center
of
the
Witwatersrand Basin,
units of the
Witwatersrand Supergroup
have been
upturned and exposed
in the Vredefort
meteorite impact crater
which is
dated at 2,023Ma.
The region is
structurally complicated
with a major
structural fault,
the West
Rand Fault, separating
the West
Rand Goldfield operations
from the
South Deep
Gold Mine
to the east
(Figure 10). Additional
horst structures are
superimposed upon
the southeast
plunging West Rand Syncline
including
the Bank Fault (Figure 10), a
large west dipping fault with a
down-throw to the west. The structural
features affect the preservation, depth and length
of the economic reefs. In the area east of the Bank Fault
the majority of mining exploits the VCR, with minor contributions from the Middelvlei Reef
and the Kloof
Reefs (Gold
Fields). West
of the
Bank Break
the CLR
is generally
a high-grade
reef and
represents the
major source
of Run-of-Mine
(RoM) with minor contributions from the VCR and Middelvlei Reef.
6.3.
Property Geology,
Deposit and Mineralization
FWGR TSFs are located on
two mining rights (Figure 12) within the
West Rand and Carletonville Goldfields. As
stated above, they are the processed
waste derived from the
mining and processing
of auriferous and
uraniferous ores from Driefontein, Kloof, Libanon
and Venterspost mining operations.
The mining operations targeted different reefs, namely:
●
the Driefontein TSFs comprise primarily processed VCR, CLR and Middelvlei Reef;
●
the Kloof TSF comprises primarily processed VCR, Middelvlei Reef and the Kloof Reef;
●
the Venterspost TSFs comprise primarily processed Middelvlei Reef and VCR; and
●
the Libanon TSF comprises material from the VCR, Libanon Reef, Kloof Reef and Middelvlei Reef.
The composition of
a TSF
depends on the
geochemical make-up
of the material
being mined and
the chemicals used
in the mining
and extraction
process. In addition
to the
internal structure,
the TSF
reflects the
mining strategy
and depositional methodologies
employed at
each operation.
A
single TSF can have portions of different
composition and specific gravity (SG) due to changes
in underlying orebody contribution, the deposition of
tailings arising from different operations and differing depositional strategies.
The bulk density of tailings material
is a critical factor
in the accurate estimation
of quantities and thus an investigation
into the lateral and
vertical
variation was conducted. These factors can result in a considerable variation
in gold content and distribution throughout a TSF where such variation
has an impact on final recoveries and projected revenues
for the operation. Various exploration
programs and subsequent geological modelling has
enabled the classification of FWGR TSFs as Mineral Resources with a bulk density ranging from 1.40g/cm
3
to 1.45g/cm
3
.
In
addition,
secondary
processes
such
as
metal
re-mobilization,
erosion,
weathering,
leaching
and
acid
mine
drainage
can
further
affect
the
geochemical characteristics of
a TSF.
These processes tend to
progress faster
in a TSF
compared to a
primary ore body as
weathering, erosion and
oxidation are accelerated by the fine particle
size of the material, and leaching
together with acid mine drainage occur
due the large amount of water
associated with TSFs. Gold can undergo mobilization within the TSF with time
and hence may exhibit areas of re-concentration and even be present
in the
sub-structure soil.
The geochemical
characteristics
of the
footprint
geology,
such as
dolomites, granites,
quartzites, has
a bearing
on the
mobilization dynamics of
a TSF.
Hence, depending on
several factors
such as
footprint, age
of deposition, beneficiation
and primary reef
origin of
slimes, a TSF may exhibit areas/layers of differing
grade profiles. The modelled dumps show vertical and lateral variation in gold grade
and although
exceptions occur,
in general,
the grade
tends to
increase towards
the bottom
of the dump
and into
the footwall.
Detailed exploration
results and
geological modelling is outlined in Item 7 and Item 11 respectively.
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Figure 12: Property Geology
Source:
Sound Mining,
2022
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7.
EXPLORATION
Item 7 (i); (ii); (iii); (iv); (v) and (vi)
7.1.
Methods and Databases
The extent, morphology
and structure of
the TSFs is relatively
simple when compared
to conventional mineral deposits.
Consequently, the exploration
programs are also simple and straightforward. Exploration of the FWGR’s assets comprised:
●
auger drilling programs to permit sampling for gold content and mapping of the gold distribution undertaken in drilling campaigns by Gold Fields
in 2007, 2008 and 2009 for the Driefontein, Kloof, Libanon and Venterspost TSFs;
●
surveying
of
the
borehole
collars
undertaken
by
Gold
Fields
in-house
surveyors
to
determine
physical
dimensions
and
volumes
verified
independently by Light Detection and Ranging (LIDAR) consultants;
●
metallurgical and flow
sheet development test
work including historical
studies by SGS
South Africa (Proprietary)
Limited (SGS) and
recent test
work by Mintek; and
●
tailings toxicity tests and SG determination - undertaken by SLR
Consulting (Africa) (Proprietary) Limited and The
RVN Group (Proprietary) Limited
(The RVN Group).
7.2.
Geophysical Characterization
No geophysical investigation of the TSFs has been undertaken as part of the exploration programs.
7.3.
Geo-hydrological Characteri
zation
A geohydrological investigation of
the TSFs did not form part of
the exploration programs. It is
not required for the determination and classification
of FWGR’s Mineral Resources. The handling of surface water is described in the mining and processing Items (Item 13 and Item 14). Hydrological and
geohydrological considerations for the Leeudoorn TSF and RTSF are discussed in Item 15.1.1 and Item 15.2.1.
7.4.
Geotechnical Characterization
A geotechnical
investigation of
the TSFs
did not
form part
of the
exploration programs.
It is
not required
for hydro
-mining of
the unconsolidated
tailings material. The slope angles and bench
widths do not pose a risk to
the mine design (Item 13.1). Geotechnical assessments
were performed for
the design of the Leeudoorn TSF and RTSF (Item 15.1.1 and Item 15.2.1). The auger drilling method performed during exploration does not allow for
the orientation of samples. Geotechnical characterization is not applicable to the determination and classification of FWGR’s Mineral Resources.
7.5.
LIDAR and Surveying
A detailed
helicopter-based LIDAR
survey was
undertaken by
Gold Fields in
late 2008.
The survey was
conducted by
Southern Mapping Company
(Proprietary) Limited
and the total
area surveyed
was approximately
44,000ha. The
aerial survey was
conducted using
an aircraft
mounted LIDAR
system which scanned the ground
below with a 70kHz laser.
Digital color images were also gathered
to produce color orthophotos. The survey was
conducted at a
height of 1,100m
above datum with
an image
pixel size
of 15cm. The
vertical accuracy was
10cm and
the horizontal
accuracy was
20cm. The survey was calculated
in Hartebeesthoek94, LO27 projection with
ellipsoidal heights. The data was
supplied to Gold Fields in
CAPE LO27
with orthometric heights. The LIDAR survey provided surface data from which three-dimensional (3D) models of the TSFs were constructed.
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The Driefontein 5 TSF and Driefontein 3 TSFs were surveyed
in 2004 and 2006 respectively
by Gold Fields, using differential Global
Positioning System
(GPS) methodology.
In all
instances it
was found
that the
vertical positioning
of the
drillhole collars
were offset
from the
surface of
the TSFs
as
determined from the LIDAR
survey. The offset ranges from approximately 0.5m
to several metres. It
was assumed that the
LIDAR survey was the
more
accurate of the two surveys and the drillhole positions were moved to intersect the top of the TSF wireframes.
7.6.
Drilling
Historical exploration programs and Mineral Resource estimates that have contributed to the overall
exploration database include:
●
a Mineral Resource estimate (Minxcon 2008); and
●
Gold Fields
(2007) undertook
an initial
drilling campaign
on Driefontein
3 TSF
and Driefontein
5 TSF.
The Mineral
Resources were
reported in
Minxcon (Proprietary) Limited
(Minxcon) report R2008-14
(2008). The drilling continued
in 2008 to
cover 13 TSFs
in the Kloof,
Driefontein, and
Venterspost areas.
The
drilling
was
done
on
either
a
100m-by-100m
or
a
200m-by-200m
grid.
All
drillholes
were
vertical
and
downhole surveys
were
considered
unnecessary as the drillholes were
shallow,
generally <70m deep. The
drillhole grid and downhole sampling density
are sufficient to
establish both
grade and geological continuity.
The drilling was undertaken using a fully
portable hydraulic drill rig comprising a rotating spiral auger
drill encased in a stainless-steel core barrel/rod.
The rod comprises a 50mm nominal bore
drill rod and inner spiral,
with the inner spiral rotating
in the opposite direction to
the outer casing whilst
advancing
into
the tailings
material.
The
drilling is
performed dry
and
due
to
the nature
of
the drilling
the
resultant
samples
are
not
oriented.
Orientation is not relevant to mining methodologies of the TSFs.
Samples have been described and assayed appropriately to support a Mineral Resource estimation.
Two drilling contractors were utilized, namely
Dump and Dune
Drillers (Proprietary) Limited and
Gold Mine Sands
and Slime Dam Drillers
(Proprietary)
Limited. Both companies have experience in the drilling of tailings material and comply with industry practices.
Auger and sonic drilling
of tailings material
by its nature
is intrinsically open to
contamination and therefore
requires particular care
to ensure the
results are adequate for use
in a Mineral Resource estimate. The
drilling programs were supervised by
in-house qualified geologists and
a high degree
of corporate governance is evident. The drilling methodologies were independently
audited by SRK Consulting (Proprietary) Limited (SRK) in
2008 for
Driefontein 3 TSF,
Driefontein 5 TSF, Kloof 1 TSF,
Libanon TSF, Venterspost
North TSF and Venterspost South TSF.
Drilling
logs
were
kept
by
the
drilling
foreman
but
no
sample
photographs
were
kept.
Given
the
drilling
methodology,
this
is
not
considered
inappropriate.
Overall conclusions for each drilling campaign suggest that the
drilling and sampling programs were conducted to industry standards and suitable for
incorporation into a Mineral Resource estimate.
The location of
the drillhole collars
for the
TSFs
are shown in
Figure 13
to Figure
18. The total
number of drill
holes is 1,180
with an approximate
length of 72km.
7.7.
Exploration Budget
Numerous historical exploration activities
now contribute to the
FWGR’s overall
exploration database and it
is anticipated that FWGR
will continue
to conduct exploration activities which are
necessary to keep ahead of
recoveries and to update knowledge of the
content within the TSFs. Provisions
for future exploration are included in the DCF model.
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8.
SAMPLE PREPARATION,
ANALYSIS AND SECURITY
Item 8 (i); (ii); (iii); (iv) and (v)
8.1.
Sampling Method
Auger Drilling:
the auger drill comprises
a rotating spiral auger drill bit
encased in a stainless-steel core barrel. The
core barrel comprises a 50mm drill
rod and inner spiral, with
the inner spiral rotating
in the opposite direction to
the outer casing as the
tailings material is penetrated.
The extension
rods and spiral augers have
three lengths; namely 1.5m, 3.0m and
4.5m. The typical drilling cycle comprised the following
sequence, repeated until
the floor of the TSF was intersected:
●
an initial sample was drilled with a 1.5m spiral auger/sample tube, after which the first sample was extracted;
●
the subsequent sample was drilled with a 3.0m auger/sample tube and the 1.5m sample extracted;
●
thereafter, a 4.5m spiral auger/sample tube was used and the sample extracted; and
●
the succeeding samples were extracted from the 4.5m spiral auger plus a 1.5m extension rod, followed by a 3.0m extension rod and then a 4.5m
drill rod.
The first two samples were extracted directly
into new sample bags by
using the drill rig to
reverse the rotation of the spiral within
the 1.5m and 3.0m
auger/sample tubes. The sample bag was
placed over the end of the
tube to collect the sample following
which the spiral auger and
interior of the
barrel were cleaned by using a cloth and a steel brush to remove the tailings material.
Subsequent samples were extracted by removing the spiral auger and the sample collected in a rubber trough. The first 10cm to 15cm of the sample
were discarded as they would be the most likely
to have contamination and the remainder of the sample was
transferred into the bag at the
end of
the rubber trough. The sample
bag was then closed,
placed in sequence and the
tickets added. The sample at the
floor of the TSF is collected
into two
separate bags containing the soil/footprint sample and the lowermost tailings sample.
The entire sample
was collected and
consequently the full
length of the
TSF was
sampled, ensuring representivity.
No relationship exists
between
sample recovery and
grade as
the material
is fine grained
and the entire
sample was collected
so no preferential
loss of fines
is anticipated.
Each
resulting sampled
weighed between 2kg
and 4kg and
is considered suitable
for the fine
grain size of the
tailings. No selective
sampling was undertaken.
The drilling sites
were visited
by independent
consultants who
concluded the
sampling and
management of
samples by
the drillers
was of
a high
quality, well controlled and from the evaluation of the quality control data, the number of errors made by the drillers was very small.
The samples were not geologically nor geotechnically logged as these criteria cannot be obtained from an auger sample.
8.2.
Sample Security
The database used for the Mineral Resource estimation was thoroughly reviewed and found to be reliable.
8.3.
Analytical Laboratories
Four independent laboratories were used for sample analysis, namely SGS, Set Point Laboratories (Set Point), ALS
Chemex South Africa (Proprietary)
Limited (ALS)
and Performance Laboratories
(Proprietary) Limited (Performance
Laboratories). All except
for Performance Laboratories,
are accredited
by the South African
National Accreditation System (SANAS) for gold
assay. At the time of work, Performance Laboratories
did meet the requirements
of ISO/IEC 17025:2005 for gold assay which accreditation was valid until February 2015.
Set Point
and
ALS were
independently inspected
and
found
to
follow
best
practice
principles of
quality management.
They have
procedures of
chemical
analysis
and
assay
that
meet
the
requirements
for
code
compliance.
They
use
sample
preparation
equipment
that
complies
with
international accepted
practices and
laboratory information
management systems
with sample
tracking. Quality
management systems
exist with
quality checks throughout the entire assay and analytical process.
8.4.
Analytical Procedures
Gold analysis was undertaken using standard fire assay methodology with gravimetric
finish which is considered entirely appropriate for the sample
type.
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The
laboratory
sample
preparation
was
standard
for
auger
drill
samples
and
included
drying,
jaw
crushing
to
a
nominal
10mm
if
compacted,
pulverizing with a
disc pulverizer
and manual homogenization.
The final sample
size submitted
for assay
was 500g
and the likelihood
the samples
being non-representative is low.
8.5.
Bulk Density
In general, the conversion from volume to quantity
in the case of mineral deposits
is undertaken by the application of a
density or the SG determined
experimentally on dry samples. Density is the mass per unit volume e.g., t/m
3
, whilst SG is the ratio of the density of a
substance to the density of a
reference substance (usually water); and
is a unitless
ratio of the mass of
a substance to the
mass of a reference substance
for the same given
volume.
Wet density measurements can be undertaken for samples with moisture content.
Bulk density, however is defined as the dry weight of a material per unit volume of that material. Bulk density considers both the solids and the pore
space; whereas, density and SG consider only the solids.
The density throughout the various TSFs will vary marginally depending on the original
reefs mined. An average
density of 1.40t/m
3
was used in the
2018 Mineral Resource estimate but this
Mineral Resource has now been updated
using a density of 1.42t/m
3
because of data subsequently
available
to FWGR from the current
operations and from recent test
work performed by The RVN
Group. This compares favorably with
the average densities
reported by other companies in the business of retreating Witwatersrand tailings (Table 3).
Table 3: Dry Densities used by Other Re-treatment Companies for the Witwatersrand Operations
Company
TSF
Dry Density
(t/m
3
)
Rand Uranium
West Rand Operations
1.45
Anglo Gold Ashanti
Vaal River Operations
1.45
Ergo Mining (Proprietary) Limited
Elsburg Tailings Complex
1.42
Mintails SA
West Rand Projects
1.40
Source:
Sound Mining,
2022
The QP has therefore assumed a consistent density of 1.42t/m
3
for the Mineral Resource estimate as at 30 June 2022.
The use of a dry density in the estimation
of an in situ Mineral Resource is
standard best practice and the dry
density value has been applied to the
Mineral Resource estimate.
8.6.
Concluding Comments
The QP considers
the sampling method
and preparation
adequate for
this type of
mineralization. Sample
security is considered
adequate and the
resulting database
reliable. Standard
analytical processes
were used
for sample
grade determination
with Quality
Assurance and
Quality Control
(QA/QC) (Item 9) providing confidence in the results.
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9.
DATA
VERIFICATION
Item 9 (i); (ii) and (iii)
9.1.
Quality Assurance and Quality Control (QA/QC)
The internal laboratory standards and blanks (between two and four per fifty) were inserted in every batch. Internal standard
s
with a blind standard
were used on all instruments. The laboratories undertake regular evaluation of overall performance by statistical evaluation of all
QC data.
The laboratory internal checking processes were independently checked
and found to be standard
and reliable. Several checks were undertaken
on
the importation of data into the Mineral Resource estimation software with no issues highlighted.
Laboratory reports
suggest that
blanks and
Certified Reference
Materials (CRM)
were included
for every
100 samples.
The CRMs
submitted were
African Mineral
Standards (AMIS)
AMS0046 at
0.67g/t Au;
AMIS AMS0080
at 1.14g/t
Au and
accredited blank
AMIS AMS0069
<0.002g/t Au.
The
spread of gold grades
in the CRM is appropriate
and the review of
the quality control and quality
assurance data concluded that
13.7% of the total
population of samples (13,000 samples) were outside of the two standard deviation limits allowed and were re-analyzed.
9.2.
Independent Verification
The TSFs
exploration programs
were
conducted during
2007 to
2009 with
independent oversight
and review
provided by
Minxcon
(Proprietary)
Limited, with
auditing of
the results
by SRK
Consulting (Proprietary)
Limited. The
overall conclusions
for each
drilling campaign
suggests that
the
drilling and sampling
programs were
conducted to industry
standards and
are acceptable for
a Mineral
Resource estimate.
The TSF
volumes were
independently verified by Southern Mapping Company Limited.
Sound Mining has since completed an independent
review of the available information and a verification of the data used for the
LoM plan to exploit
FWGR’s assets. This involved
integrity checks on
the capturing of
data and interviews
with the specialists
involved in the
original exploration programs.
The QP
is satisfied
with the
accuracy and
integrity of
the Mineral
Resource estimate.
The QP
is further
comforted by
the fact
that mining
of the
Driefontein 5 TSF (December 2018 to current) has confirmed both the volume and grade estimates of the TSF.
It should also
be noted
that the type
and style
of mineralization
of the original
reefs exploited
during the establishment
of the TSF
assets are not
relevant to the Mineral Resource estimate.
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10.
MINERAL PROCESSING AND METALLURGICAL TESTING
Item 10 (i); (ii); (iii); (iv) and (v)
10.1.
Metallurgical Test
Work
The test work described here under relates to understanding recoveries applicable to the TSF mineral deposits. The metallurgical characterization of
the TSFs in the area have been covered
by numerous techno-economic studies from 2000 to date. These have ranged
from Scoping Studies through
PFS work to DFS levels of accuracy. The metallurgical test work covered various processing options including direct leach,
grinding, ultra-fine grinding
and flotation.
Metallurgical test work, on the FWGR’s TSFs, was completed by three independent laboratories, namely SGS Lakefield (SA), Mintek, and Patterson
&
Cooke. Results were independently review by ENC Minerals (Proprietary) Limited and
are considered acceptable by the QP. These laboratories are all
accredited by
the SANAS
for gold
assay.
All three
laboratories were
independently inspected. They
follow conventional
best practice
principles of
quality management and have procedures of
chemical analysis and assay that are accepted as
fulfilling the requirements of compliancy demanded
of
modern mining
companies. They
use sample
preparation equipment
that complies
with international
accepted practice.
They have
installed well
developed laboratory information management systems with sample tracking. They have evolved quality management systems
in place with quality
checks through the entire assay and analytical process.
Test
work has
been performed
on Driefontein
3 TSF,
Driefontein 5
TSF,
Libanon TSF,
Kloof 1
TSF and
Venterspost
North TSF.
Less test
work was
performed on the
Venterspost South TSF. The diagnostic leach results as
well as gold deportment
per size fraction of
the Driefontein TSFs are included
in Table 4, Table
5 and Table 6.
Table 4: Full Diagnostic Leach Results on Un-milled Feed Samples
Diagnostic Results Un-Milled Feed Sample Association
Driefontein 3 TSF
Driefontein 5 TSF
(g/t Au)
(% Au)
(g/t Au)
(% Au)
Gold Available to Direct Cyanidation
0.24
54.7
0.22
52.4
Gold that is Preg-robbed Carbon-in-Leach (CIL)
0.02
3.5
0.00
0.0
Gold Associated with GCI Digestible Minerals
0.06
14.9
0.05
11.4
Gold Associated with HNO₃
Digestible Minerals
0.03
6.9
0.04
10.3
Gold Associated with Carbonaceous Matter
0.02
4.1
0.00
0.0
Gold Associated with Quartz (balance)
0.07
16.0
0.11
25.9
Total
0.43
100.0
0.41
100.0
Source:
Mintek, 2015
Table 5: Driefontein 5 TSF Feed Sample Assay by Size
Particle Size
(µm)
Mass
(%)
Cumulative
Mass
(% mass)
Discrete
Grade Au
(g/t)
Discrete Distribution
(%)
Cumulative Distribution
(%)
Au
U
3
O
8
S
2
Au
U
3
O
8
S
2
150
5.5
94.5
1.13
15.2
4.1
0.9
100.0
100.0
100.0
106
10.8
83.6
0.62
16.3
4.8
1.9
84.8
95.9
99.1
75
15.1
68.5
0.34
12.4
7.9
6.1
68.6
91.0
97.2
53
10.6
58.0
0.27
6.9
6.3
11.9
56.1
83.2
91.1
38
8.7
49.3
0.32
6.7
6.4
16.1
49.2
76.9
79.2
25
9.0
40.3
0.31
6.8
7.9
17.6
42.5
70.5
63.1
15
22.0
18.3
0.23
12.3
36.9
33.6
35.7
62.6
45.5
-15
18.3
0.53
23.4
25.7
11.9
23.4
25.7
11.9
Total
100.0
100.0
100.0
100.0
Head Grade (calculated)
0.41
Head Grade (measured)
0.41
Variance
0.70%
Source:
Mintek, 2015
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Table 6: Driefontein 3 TSF Feed Sample Assay by Size
Particle Size
(µm)
Mass
(%)
Cumulative
Mass
(% mass)
Discrete
Grade Au
(g/t)
Discrete Distribution
(%)
Cumulative Distribution
(%)
Au
U
3
O
8
S
2
Au
U
3
O
8
S
2
150
5.0
95.0
1.48
18.0
5.5
0.08
100.0
100.0
100.0
106
12.9
82.0
0.39
12.2
5.9
1.8
82.0
94.5
99.2
75
17.0
65.0
0.37
15.3
8.9
7.9
69.8
88.6
97.5
53
10.5
54.6
0.34
8.6
6.8
12.6
54.5
79.8
89.5
38
8.4
46.2
0.34
6.9
6.3
16.1
45.9
72.9
76.9
25
7.8
38.4
0.27
5.1
6.1
14.7
38.9
66.7
60.7
15
24.9
13.5
0.29
17.5
40.2
38.8
33.8
60.5
46.1
-15
13.5
0.50
16.3
20.3
7.3
16.3
20.3
7.3
Total
100.0
100.0
100.0
100.0
Head Grade (calculated)
0.41
Head Grade (measured)
0.43
Variance
4.10%
Source:
Mintek, 2015
The presence of preg-robbers in the tailings material can be ascertained
from the above results. Preg-robbing is the phenomenon whereby the gold
cyanide complex, Au(CN)
2
, is removed from solution by the constituents of the ore. The preg-robbing
components may be the carbonaceous matter
present in the ore, such as wood chips, organic carbon, or other impurities, such as elemental carbon.
The actual content
of the preg-robbers
in the samples
seems to vary
from 0% up
to 10% in
certain samples. This pattern
is consistent with
results
from similar operations and is a function of the nature of the material being re-mined. In particular, areas on a TSF which contain organic matter and
plants (i.e., side walls, reed beds etc.) will have elevated preg-robbing content. It is therefore an established practice to design
a plant with a Carbon-
in-Leach (CIL) system and not a
Carbon-in-Pulp (CIP) system. The process design
does allow for CIL to mitigate the
impact of preg-robbers on recovery
potential.
The recoveries in Table 7 are underpinned by test work
and records from the currently throughput of Driefontein 5
at the DP2. FWGR also actively
try
to
liberate
addition
gold
locked
in
silicates
through
additional fine
grinding
at
DP2
to
enhance overall
recoveries.
This
possibility
for
improved
recoveries is
supported by
the fact
that approximately
30% of
the contained
gold is
found in
the coarse
fractions (>106µm).
Historically the
most
favorable liberation
on Witwatersrand Basin
gold bearing ores have
been achieved at grind
sizes of <75µm.
Both the diagnostic leach and
assay by
size results confirm the need to mill the coarse fractions in order to improve recovery.
Based on the test
work, Sound Mining’s
QP is comfortable
that the following
processing recoveries are
achievable on the
various TSF feed
sources
(Table 7).
Table 7: Summary of Process Recovery Potential
TSF
Process Recovery
(%)
Driefontein 5
49.8
Driefontein 3
56.6
Kloof 1
50.5
Libanon
47.2
Venterspost North
54.7
Venterspost South
62.5
Source:
Sound Mining,
2022; and FWGR, 2020
10.2.
Concluding Comments
The initial
metallurgical test
work, sampling
and bulk
sample trials
used to
support the
Mineral Resource
estimates and
feasibility study
work is
considered by
the QP
to reasonably
represent the
deposit as
a whole.
The processing
of the
Driefontein
5 TSF
has provided
the QP
with further
confidence in that the actual metallurgical recoveries have been consistent with the initial forecast.
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11.
MINERAL RESOURCE ESTIMATES
Item 11 (i); (ii); (iii); (iv); (v); (vi) and (vii)
The original
Mineral Resource
estimates of
2009 were
confirmed by
Sound Mining
in 2020.
Sound Mining
independently reviewed
the database,
geological models, estimation methodology and
classification criteria. Sound Mining concluded
that the estimations are based on
a suitable database
of reliable information and that no material
issues were found which could affect
the overall estimate. The density assumption used for
the various
TSFs
in the
2018 Mineral
Resources
estimate was
1.40t/m
3
. It
has since
been revised
to 1.42t/m
3
following FWGRs
data from
the mining
of the
Driefontein 5 TSF. Geological losses are not
applied because the
entire volume of a TSF
will be processed
once included into FWGR’s Mineral Resource
base for future exploitation.
11.1.
Geological Models and Interpretation
TSFs constructed from the tailings of Witwatersrand
gold mining operations have been successfully and economically exploited
for decades and the
geotechnical and geometallurgical
characteristics are well
understood from
experience and test
work on the
FWGR assets themselves.
Apart from
the potential risks identified in Item 12.1,
no factors of a geotechnical or
geometallurgical nature have been identified that would
have a significant
effect on the prospects for
eventual economic extraction.
The exploration
database has
been demonstrated
to comprise
analytical data
obtained from
reliable laboratory
assays on
samples obtained from
sampling and drilling programs based on industry best practice. The drillhole grid spacing is comparatively close for typical TSF drilling programs and
the entire depth of each
TSF was sampled. The data density
is therefore considered sufficient to assure continuity of
mineralization and structure and
provides an adequate basis for estimation.
The exploration database was imported into DataMineTM Studio 3 software and data
validation was undertaken to ensure the integrity and validity
of the imported
data. The samples
for Driefontein
3 TSF
and Driefontein 5
TSFs represent
3.0m composite samples
and not 1.5m
composites. The
samples from all
of the other
TSFs were
1.5m in length.
The end of
the drillhole sample, where
it contained footwall
material, was
separated into
tailings and footwall material and treated separately by the laboratory.
Three dimensional
wireframes
were constructed
from surveyed
data and
drillhole information.
The top
wireframe
surface for
the Driefontein
3,
Driefontein 5, Kloof 1, Libanon, Venterspost North and South
TSFs were constructed from LIDAR data. The base/footprint wireframe was constructed
from the soil
intercept depths from
the drillhole data
and the footprint
perimeter. The wireframes comprised simple
3D representations of
the volume
of the TSFs and as such are not open to alternative interpretations.
11.2.
Estimation Methodology
Ordinary Kriging was undertaken for
the gold grade estimation which allows
for testing of the accuracy
and efficiency of the estimation. Due
to the
construction of the TSFs
and potential gold
remobilization, a spatial
grade distribution was
anticipated and since
Kriging is based
on modelling the
spatial variances within an orebody, this method was considered the most reliable and accurate.
The capping of anomalously high-grade values was
only applied to Driefontein 5 TSF and Kloof 1 TSF These
capping values were determined from the
probability plots generated for
each TSF.
Capping in the variography
stage of the estimation
limits the excessive
variances of the anomalously high
grade from skewing
the distribution away
from the representative
variance of the
data distribution. Capping
in the Kriging stage
limits the zone
of
influence that the ultrahigh grades have on the estimation of the surrounding areas. This is considered an appropriate method of data handling.
The following parameters were applied in the Kriging process:
●
50m-by-50m-by-3m
block
size
as
derived
from
100m-by-100m
drillhole
spacing
and
1.5m
sample
lengths
for
Driefontein
5,
Driefontein 3, Kloof 1, Libanon, Venterspost North and South TSFs;
●
sub-cells employed at a minimum of 10m-by-10m (X and Y) for each TSF;
●
first search volume (SVOL1):
X and Y at approximately the variogram range;
Z search volume
was in general
the downhole variogram
range equating to
a search of
6m. Given the
stratified nature of the
TSFs an excessive
search in the vertical direction could result in smearing of grades vertically;
minimum of 12 samples within the search volume one (SVOL1); and
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maximum of 40 samples within the search volume one (SVOL1).
●
second search volume (SVOL2):
approximately 1.5 times the first search volume;
minimum of four samples within the search volume; and
maximum of 40 samples within the search volume.
The
spatial
relationships
of
the
sample
grades
were
investigated
with
variograms.
Both
downhole
and
planar
variograms
were
calculated
and
modelled. The aim
of the downhole
variograms was
to determine a
nugget value and
the applicable vertical
range of
continuity,
whilst the planar
variogram used the nugget value determined from the downhole variogram. The anisotropy (the difference, when measured along different axes, in
a
material's
physical
or mechanical
properties) for
gold
in each
TSF
was
investigated.
The
variograms
were
deemed best
represented
by
omni-
directional models and the variogram parameters are shown in Table 9.
The vertical
(i.e., Z)
range
of the
planar variogram
model is
replaced by
the range
determined from
the downhole
variogram.
Where
necessary
(Driefontein 5 TSF and Kloof 1 TSF) both the downhole and planar variograms were conducted using top-cuts, determined from the probability plots
generated for each element for each TSF.
11.3.
Mineral Resource Classification
The applied Mineral Resource classification is
a function of the confidence of
the asset tenure and consideration
of the entire process from
drilling,
sampling, geological
understanding and
geostatistical relationships.
FWGR’s
legal tenure
is secured
through the
necessary permitting
required to
access
and
exploit
the
moveable
assets.
The
drilling,
sampling,
analytical
processes
and
governance
of
the
exploration
programs
have
been
appropriate and in-line with industry best
practice and are considered to be
of high confidence. The density used in the
conversion from volume to
tonnage has been determined from
both in situ measured values
and empirical data and
is considered reliable. In
addition, the following statistical
criteria were applied to the Mineral Resource classification:
●
number of samples used to estimate a specific block:
Measured - at least four drillholes within the variogram range and minimum of twenty 1.5m composited samples;
Indicated - at least three drillholes within the variogram range and a minimum of twelve 1.5m composite samples;
Inferred - less than three drillholes within the variogram range.
●
distance to sample (variogram range):
Measured - within at least 60% of variogram range;
Indicated - within variogram range;
Inferred - further than variogram range.
●
lower confidence limit (blocks):
Measured - less than 20% from mean (80% confidence);
Indicated - 20% to 40% from mean (80% to 60% confidence);
Inferred - more than 40% (less than 60% confidence).
●
Kriging efficiency:
Measured - more than 40%;
Indicated - 20% to 40%;
Inferred - less than 20%.
●
Kriged variance - a relative parameter used in conjunction with the other criteria.
●
deviation from lower 90% confidence limit (data distribution within the Mineral Resource area considered for classification):
Measured - less than 10% deviation from the mean;
Indicated - 10% to 20%;
Inferred - more than 20%.
In accordance with the criteria noted above all of the TSF Mineral Resources were classified as Measured Mineral Resources.
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11.4.
Mineral Resource Verification
The following data was received, interrogated, and verified by Sound Mining (Table 8).
Table 8: Data Interrogated per TSF
TSF
De-surveyed DataMine
TM
Borehole File
Final Block Model
Report
Driefontein 5
compall1_au_u_s.dm
dr5_krig_all fin.dm
Minxcon 2009 updated by Sound Mining 30 June 2022
Driefontein 3
compall.dm
drth_krig_allfinal2b.dm
Minxcon 2009
Kloof 1
compall.dm
kl1_krig_all_final3c.dm
Minxcon 2009
Libanon
compall1.dm
lib_krigall1_2010c.dm
Minxcon 2009
Venterspost North
BHA.dm
vn_krig_all1_fin2d.dm
Minxcon 2009
Venterspost South
COMPALL1.dm
vs_krig_all1_final2c.dm
Minxcon 2009
Source:
Sound Mining, 2022
No original laboratory assay reports were received for the TSFs for verification of the
assay results; however, it must be noted that head grade assays
of the
Driefontein
5 TSF
correspond with
that expected
from the
Mineral Resource
model. An
interrogation
of the
stated
modelling parameters
yielded acceptable
results
and
demonstrate
that the
variography
and
parameters
used in
the Kriging
process are
reasonable (Table
9).
The
QP
concludes that the
reported Mineral
Resource estimation methodologies
and interpretations
are reasonable and
can be relied
upon to reflect
the
Mineral Resource base for FWGR.
Table 9: Variogram
Parameters
TSF
Parameter
Domain
Sill
Nugget
Sill 1
X1 Range
Driefontein 5
Au
1
0.029
0.180
68.51
124
Driefontein 3
Au
1
0.024
0.280
91.47
134
Kloof 1
Au
1
0.008
0.560
82.82
120
Libanon
Au
1
0.018
0.450
91.59
130
Venterspost North
Au
1
0.025
0.290
90.98
123
Venterspost South
Au
1
0.020
0.290
75.80
117
TSF
Y1 Range
Z1 Range
Sill 2
X2 Range
Y2 Range
Z2 Range
Driefontein 5
124
6
100
545
545
6
Driefontein 3
134
6
100
655
655
6
Kloof 1
120
6
100
406
406
6
Libanon
130
10
100
522
522
10
Venterspost North
123
10
100
385
385
10
Venterspost South
117
6
100
272
272
6
Source:
Minxcon, 2009
11.5.
Cross-sections and Grade Distribution
Cross-sections and
grade
distribution through
each TSF
are provided
in
Figure 13
to Figure
18. The
Driefontein
5 TSF
has been
reclaimed since
December
2018
and
the
cross-section
presents
the
depleted
TSF
as
at
30
June
2022.
The
other
TSFs
have
not
yet
been
reclaimed.
Driefontein
5
TSF
and
Driefontein
3
TSFs
have
the
highest
average
grade
of
0.47g/t
Au,
with
isolated
sections
up
to
0.80g/t
Au
to
1.05g/t Au. Driefontein 3 TSF
and Venterspost North
TSF show a clear
trend where grade increases
with depth, whilst Driefontein
5 TSF appears to
have no such pattern. Kloof 1
TSF and Libanon TSF show a
slight increase in grade with depth, whilst
the opposite is the case for
Venterspost South
TSF where grades
increase quite markedly
towards the surface.
Libanon TSF and
Venterspost North
TSF display the
lowest average
grades but are
both fairly large deposits of 74.3Mt and 55.3Mt respectively.
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Figure 13: Cross-sections and Grade Distribution - Driefontein 5 TSF
Source:
Sound Mining,
2022
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Figure 14: Cross-sections and Grade Distribution - Driefontein 3 TSF
Source:
Sound Mining,
2022
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Figure 15: Cross-sections and Grade Distribution - Kloof 1 TSF
Source:
Sound Mining,
2022
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Figure 16: Cross-sections and Grade Distribution - Libanon TSF
Source:
Sound Mining,
2022
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Figure 17: Cross-sections and Grade Distribution - Venterspost North TSF
Source:
Sound Mining,
2022
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Figure 18: Cross-sections and Grade Distributions - Venterspost South TSF
Source:
Sound Mining,
2022
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11.6.
Reasonable and Realistic Prospects
for Economic Extraction
Both Mineral Resources and Mineral Reserves for FWGR are determined by the average grade of a TSF which must be above or equal to a plant feed
cut-off grade.
The assumptions
on a
Mineral Resource
cut-off include
working costs,
the average
plant recovery,
the expected
residue grade,
the
required yield based on working cost and gold price.
The cut-off assumptions for FWGR (Item 13.2)
have been based on the
experience of FWGR from its current
(i.e., Phase 1) operations. The capital
and
operational costs
of the
infrastructure and
mining equipment have
been estimated at
a PFS
level of accuracy
and all
services including water
and
power are current and appropriately priced.
A real gold price of ZAR914,294/kg was used
in the estimation of the Mineral Resources and Mineral Reserves as
of June 2022. The QP is comfortable
with this price assumption in
the context of
the long-term consensus pricing
used by FWGR for
its LoM and annual business
planning. These prices
are based on information received from various independent sources.
The economic assessment provided in this TRS
demonstrates positive margins and
confirms reasonable prospects for eventual
economic extraction
for all FWGRs TSFs at an
average cut-off grade
of 0.15g/t. The average grades of the TSFs
included in the Mineral Resource statement
are therefore
all above 0.15g/t. This means that the
Mineral Resources when stated
exclusive of Mineral
Reserves will amount to
zero because all of
the Mineral
Resources will be exploited and converted to Mineral Reserves.
The QP is of the opinion that reasonable technical and economic factors have been considered and that there are reasonable and
realistic prospects
for economic extraction of the Mineral Resources as at 30 June 2022.
There are no permitting risks in relation to mineral title with regard
to eventual extraction. Security of tenure for eventual extraction
is premised on
common law
ownership and
EAs. Access
to the
moveable assets
has been
provided in
the “Use
and Access
Agreement” with
Sibanye Gold.
The
granting of the necessary environmental authorizations and permits to continue operations are in place.
11.7.
Mineral Resource Estimation
FWGR currently owns six
TSF assets totaling
229.4Mt with a total
gold content of
76.39t. All Mineral Resources
estimates fall within
the Measured
Mineral Resource category. Table
10 presents the Mineral Resource estimate for FWGR as at 30 June 2022.
Table 10: Mineral Resource Estimate for FWGR as at 30 June 2022
TSF
Volume
('000m
3
)
Density
(t/m
3
)
Quantity
(Mt)
Grade
(g/t)
Content
(t)
Content
(koz)
Driefontein 5
5,685
1.42
8.07
0.48
3.85
124
Driefontein 3
35,540
1.42
50.47
0.47
23.71
762
Kloof 1
19,931
1.42
28.30
0.33
9.20
296
Libanon
52,351
1.42
74.34
0.27
20.23
650
Venterspost North
38,954
1.42
55.31
0.27
15.16
487
Venterspost South
9,068
1.42
12.88
0.33
4.24
136
Total Mineral Resource Estimate
161,529
1.42
229.37
0.33
76.39
2,456
Source:
Sound Mining, 2022
Notes:
Apparent computational errors
due to rounding
All of these Mineral Resources
are above the cut-off grade of 0.15g/t
These Mineral Resources are stated
inclusive of Mineral Reserves
Mineral Resources, if stated
exclusive of Mineral Reserves,
would equate to zero
In situ Mineral Resource estimate
reported according to S-K 1300 requirements
No geological losses applied
The Mineral Resources in Table 10 are inclusive of Mineral Reserves. As the entire TSF is mined, Mineral Resources exclusive of Mineral Reserves will
be zero. It accounts
for the revised bulk
density of 1.42t/m
3
and caters for the
depletion of the
Driefontein 5 TSF through
hydro-mining from December
2018 until 30 June 2022.
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11.8.
Additional Mineral Resources
Once decommissioned, FWGR is contractually entitled to receive the Driefontein 1, Driefontein 2 and Kloof 2 TSFs from Sibanye Gold as a part of the
2018 Exchange Agreement. These represent growth options available for FWGR
to extend the LoM, but do not form part of FWGR’s
current Mineral
Resource. In addition to these currently available TSFs, the area hosts other potentially available TSFs.
11.9.
Concluding Comments
Upon interrogation of
borehole and production
data, Sound Mining
observes the continuation of
gold grade
beyond the TSF
material and into
the
footwall. This grade does not form part of the Mineral Resource estimation.
No geological losses have been applied as the entire volume of the TSF will be mined.
The initial TSF
Mineral Resources were
estimated by Minxcon
2009, confirmed by
Sound Mining through
remodeling of the
TSFs in
2018 and then
updated and now
restated in 2022.
The Driefontein 5
TSF has been
depleted through reclamation
and Sound Mining
has updated the
Mineral Resource
estimate as at 30 June 2022.
The QP is of the opinion that there are no material risks which are expected to hinder the prospects for reasonable and realistic economic extraction
of the Mineral Resources.
Both the actual recoveries
and grades may
differ to those
used for the Mineral
Resource estimate during
exploitation of
the TSFs, but experience from the reclamation of the Driefontein 5 TSF
suggests that in that these variations are unlikely to be material. The QP also
notes that the underlying geology from which the TSFs are comprised, is similar and does not expect significant variation.
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12.
MINERAL RESERVE ESTIMATES
Item 12 (i); (ii); (iii); (iv); (v) and (vi)
The Mineral Reserves were prepared in accordance with the requirements of S-K 1300 (Table 11) and at a real gold price of ZAR914,294/kg.
The QP is comfortable with the use of this long-term pricing assumption of FWGR which it has used for both LoM and
annual business planning. The
forecast price
assumption is based
on information
provided by
various independent
institutions that do
commodity forecasting.
ZAR914,294/kg is
considered
a
reasonable
representation
of
the
price
to
be
expected
over
the
20-year
LoM
in
real
30
June
2022
terms.
The
operation
remains
economically viable above a gold price of ZAR721,264/kg (Item 16.1).
A LoM plan
and mining schedule
was developed by
FWGR and modified
by Sound Mining,
as outlined
Item 13.2. The
LoM plan was
tested for economic
viability in the DCF model which indicated a positive cashflow through to the end of LoM.
No mining
losses or
dilution are
applied in
determining the
Mineral Reserve
estimates
because the
TSFs
are re-mined
and re-processed
in their
entirety. All other modifying factors are captured in
the mine design together with all of the associated technical aspects that inform the capital and
operating cost estimates.
FWGR’s six TSF assets convert to a total Mineral Reserve of 229.4Mt with a gold content of 76.39t.
Table 11: S-K 1300 Compliant Mineral Reserve Estimate as at 30 June 2022
TSF
Volume
('000m
3
)
Density
(t/m
3
)
Quantity
(Mt)
Grade
(g/t)
Content
(t)
Content
(koz)
Driefontein 5
5,685
1.42
8.07
0.48
3.85
124
Driefontein 3
35,540
1.42
50.47
0.47
23.71
762
Kloof 1
19,931
1.42
28.30
0.33
9.20
296
Libanon
52,351
1.42
74.34
0.27
20.23
650
Venterspost North
38,954
1.42
55.32
0.27
15.16
487
Total Proved Mineral Reserve
152,461
1.42
216.49
0.33
72.15
2,320
Venterspost South
9,068
1.42
12.88
0.33
4.24
136
Total Probable Mineral Reserve
9,068
1.42
12.88
0.33
4.24
136
Total Mineral Reserve Estimate
161,529
1.42
229.37
0.33
76.39
2,456
Source:
Sound Mining, 2022
Notes:
Apparent computational errors
due to rounding and are not considered
significant
Mineral Reserves are reported using
a dry density of 1.42t/m
3
and at the head grade on delivery to the plant
The Mineral Reserves constitute
the feed to the gold plants
The Mineral Reserves are stated
at a price of ZAR914,294/kg
A cut-off grade of 0.15g/t is applicable to the
FWGR LoM plan
Although stated separately,
the Mineral Resources are inclusive
of Mineral Reserves
Venterspost South
TSF is classified as a Probable Mineral Reserve
due the level of uncertainty regarding
the processing recovery
Uranium has been excluded in the Mineral
Reserve estimate as it is not being recovered
by FWGR
Grade and quantity measurements are
reported in metric units (Mt) rounded
to two decimal places
The input studies are to a PFS level
of accuracy
The
Mineral
Reserve
estimates
contained
herein
may
be
subject
to
legal,
political,
environmental
or
other
risks
that
could
materially
affect
the
potential
development of such
Mineral Reserves
12.1.
Risk to the Mineral Reserve Estimate
Uncertainties associated with the FWGR
operations, and therefore the Mineral Resource and Mineral Reserve
estimates, are can be mitigated. Sound
Mining has not
exposed any fatal
flaws or
technical risks to
the successful execution
of the LoM
plan and the
QP does not
anticipate any
material
changes to the associated modifying factors.
The uncertainties requiring comment in the context of their impact on these estimates
are:
●
Mining:
whilst the mining method and practices are well established and conducted by experienced hydro-miners,
throughput could be affected
by a variety of issues, including, but not limited to availability of electricity
and water.
●
Quality of the
Mineral Assets:
the six TSFs
that comprise the
Mineral Reserve have
all been adequately
drilled, their likely
content adequately
assessed and recovery test work satisfactorily completed. The actual recoveries will be influenced by the actual RoM grade
entering DP2 and the
amount of carbon (elemental and/or organic) in the RoM. This risk could be managed by blending material from different TSFs’, where possible.
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●
Plant Performance:
the management of the
risk of a lower-than-expected overall throughput
recovery can be mitigated by ensuring
optimal grind
sizes at the DP2 facility.
●
RTSF Design
Risk:
the QP considers
the main design
risk of the
RTSF to
be the effectiveness
of the proposed
scavenger well
system to
contain
future groundwater plumes. This system replaces the use of a
synthetic liner,
installed at the base of the RTSF to create a
third ‘perched’ aquifer
above the
current weathered
zone
aquifer.
It provides
an elegant
solution to
pollution containment
and has
been demonstrated
to
operate
successfully on other South African TSFs.
●
Delayed Commissioning of Key
Infrastructure:
any delays to
the scheduled commissioning of the
Leeudoorn TSF,
RTSF or expanded processing
capacity of DP2 will impact on the proposed production forecast and anticipated revenues. Sound Mining is of the opinion, with the exception of
the permitting
and licensing
process currently underway
for the RTSF, that in
the absence
of unforeseen circumstances,
delays to key infrastructure
are unlikely and notes that the current LoM plan only requires the RTSF by 2030.
●
Water
Supply:
South Africa
is a
relatively dry
area and
predictions are
that dry
conditions will
escalate. Mining
is heavily
reliant on
water
to
transport material over large distances and for processing. FWGR uses potable water for potable usage and not mining operations. Process water
is secured through a combination
of harvested return water from the treated tailings
and dewatering from local shaft systems and local
wellfields.
●
Power Supply:
power is provided
by the
national power supplier,
Eskom. The
national power supply
and distribution infrastructure
is severely
destressed and this results in frequent disruptions to the power delivered to the South African mining industry. There is a curtailment agreement
in place with Eskom which requires
that during black-outs electricity
use is to be curtailed, which
is typically achieved by shutting down
the milling
section. Diesel generators are used to restart the plant.
Sound Mining
understands that
no alternative
power supply
arrangements are
currently in
place at
FWGR and
as such
consider the
threat of
production losses resulting from power disruption to represent a significant production risk.
●
Grave
Relocation:
the process
of grave
relocation
is well
understood
in the
South African
mining industry
and
supported by
comprehensive
statutory
guidelines. It
will
be
managed
by
FWGR
specialists who
will
ensure
that
full
consultation
with
next
of
kin
is
undertaken
and
that
appropriate compensation is realized.
●
Long-term Sustainability:
the RTSF design and
capacity caters for
the long-term sustainability of
FWGR which includes the
potential increase in
production rates above 1.2Mtpm. Continued production beyond the current LoM plan and Mineral Reserve estimate relies on available TSFs that
can be brought on line in
the future. There is ample time
for additional sampling and resource modelling
to confirm their extent and content prior
to production
and the
three currently
available TSFs
envisaged by
FWGR’s
long-term operational
aspirations, are
controlled by
Sibanye Gold.
Sound Mining do not envisage any future security of tenure complications arising from the inclusion of these TSFs in the overall LoM plan.
●
Extreme Weather:
As a result of
climate change, extreme
weather events such as
droughts, extreme rainfall
and high wind volumes
are on the
increase. Specifically, the
increase in intensity of events,
such as thunderstorms on
the Highveld, where the
operations are situated, will
impact
operations. Major property, infrastructure
and/or environmental damage as well as
loss of human life could also be caused by
extreme weather
events.
●
Rising
Costs:
The
global
economic
environment,
geopolitical
tensions
and
inflationary
pressures
world-wide
have
led
to
above
inflationary
increases in production costs as well as an unavailability of critical material such as reagents and critical equipment which effects production and
operating costs. FWGR remains a relatively low-cost operation however a pro-longed period of high inflation will erode financial value over time.
●
Gold Price:
FWGR takes full exposure to the gold price,
and therefore a reduction in the price of
gold may erode margins or lead to the
operations
making a loss.
For additional information regarding the Company’s risks, see Item 3D of the Form 20-F.
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13.
MINING METHOD
Item 13 (i); (ii); (iii); (iv) and (v)
The mining
method is
hydro-mining (or hydraulic mining),
which uses high-pressure
water monitors to
deliver a high-pressure
water jet to
hydraulically
repulp and mobilize
tailings material within
the TSFs. The water
from the monitors mixes
with the tailings
and forms a slurry
with a high
solids content.
The slurry flows under gravity along channels
at the base of the dump to a collection
sump at the lowest elevation of the bench being
mined. Screens
are installed to remove debris, which must be cleaned regularly to prevent an impact on the pumping operations.
The monitors comprise
of 200mm self-propelled
track monitor guns
(Photograph 1),
each with production rates
of up to
300ktpm. They discharge
approximately 500m
3
/hr of water at pressures up to 30bar through a variable sized nozzle depending on the hardness of the material being slurried,
and can be controlled remotely by the operator. In order to minimize hydraulic pressure losses and poor
reclamation gun efficiencies, water pressure
is designed to reach the monitor guns at a minimum pressure of 25bar.
Photograph 1: Monitor Gun
Source:
FWGR, 2020
The prerequisites for hydro mining are limited to
the infrastructure discussed in Item 14 and Item 15. Pre-stripping and
backfilling processes are not
applicable to this mining method.
Early forms of hydraulic mining were adapted from methods developed in the United Kingdom for the mining of primary kaolin deposits. These early
attempts used a high-pressure monitor located at the base of the TSF to
wash material from the base of the slope. A disadvantage of this
approach is
that by directing the
water jet at
the base of the
slope, the slope is undercut
and can become unstable,
leading to uncontrolled slope
failure. With
sufficient off-set distance between the slope and
the monitor and/or monitor operator,
this is not necessarily a problem, however,
given that many
of the tailings
dams that are
available for
reprocessing are
located in urban
locations, a safer
system of
monitor operation has
subsequently been
developed.
The
majority
of
tailings
dams
that
have
been
mined
in
the
last
20 years have utilized
a monitor located on
the upper bench of the
tailings dam, directing a water
jet downwards to cut
a stable slope surface
into
the face
of the
TSF.
This approach
has been successfully
applied within densely
populated urban
areas. It
is considered
safer
and allows
for rapid
changes in slope angles to cope with
any operational variances that may
be encountered. The resulting slopes
usually consists of a 15m
high bench
with a
45º to
50º slope angle.
High faces
with consistent
slope angles can
be formed
using the
top-down hydraulic
mining technique as
shown in
Figure 19 and Figure 20.
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Figure 19: Mining Methodology
Source:
Sound Mining, 2022
Figure 20: Mining Widths
Source:
Sound Mining, 2022
Increased production
is achieved
by
the inclusion
of additional
units and
this modular
approach provides
a high
degree of
flexibility that
allows
simultaneous mining at a number of points over a wide range of production rates and consequently, grade blending is readily achievable if required.
The slurry density produced by the monitors is controlled by the operator.
Actively moving the monitor and consistently cutting the face results in a
slurry with relatively
high solids
content. Experience
from FWGR’s
ongoing operations
has demonstrated
that slurries
with 35%
to 50%
solids can
consistently be achieved. The monitor guns seek to maintain optimal slurry densities in the region of 1.42t/m
3
.
The TSFs
consist of fine
tailings material,
with a typical
particle size
of 70% <75µm.
Relatively flat flow
channels will develop
with gradients
in the
order of 1:100m. The position of the sump will change as mining proceeds along a bench,
to limit the distance between the monitor and the sump. If
too far from the active face, tailings material may drop out of suspension and reduce the solids content
of the slurry pumped to the plant. However,
the slurry
tends to flow
at a natural
beaching angle which
is generally self-correcting.
If the slope
gets too steep,
flow velocities increase
in the channels
causing erosion until
the equilibrium slope
is attained.
If the
slope is
too flat
the solids settle
out reducing
the height of
the mining
face until
the
equilibrium slope is achieved (Figure 20). A monitor gun dislodges the in situ material which washes into slurry channels
(Photograph 2).
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Photograph 2: Monitor Gun in Operation
Source:
FWGR, 2022
The slurry flows through the
channel and passes through screens
to remove debris which
may cause blockages in
the pipeline. After screening, the
slurry collects in the sump and is pumped to the plant for processing. Slurry densities
are maintained at approximately 1.42t/m
3
, for optimal pipeline
performance.
13.1.
Mining Plan and Layout
Hydro-mining and the re-deposition of tailings is a specialized activity and is accordingly outsourced by FWGR to competent and experienced service
providers. The hydro-mining performance assumptions used are based on
the current operations where the method has been
successfully “tried and
tested”. The equipment requirements, manning complements and necessary supporting infrastructure, in terms of water and power supply, are well
understood and have been accurately planned by both FWGR and their current service provider.
No untested technical assumptions with regards to
the mining have been made.
Monitors remove the
tailings material from
the top of
a TSF to
the natural ground
level in 15m
layers. The monitor
is positioned on the
top of the
working bench to direct the water jet down into the TSF. It will work the face in one
direction along the front edge of the dam before returning in the
opposite direction when
it reaches
the far
end of
the dam.
As the
mining faces
advance, slurry is
directed via
launders to
a pit
pump which
then
transfers the slurry to a fixed transfer pump station that includes a vibrating trash screen.
A stepped
bench approach
is adopted
to most
efficiently reclaim
the TSF
while maintaining
slope stability.
Horizontal benches
of 100m
to 200m,
inclusive of the face angle,
are created to maintain safe working distances between
simultaneous operations at different bench elevations. The
layout
is illustrated in a schematic cross-section (Figure 21).
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Figure 21: Mining Sequencing
Source:
Sound Mining, 2022
The top and second layers progress simultaneously until a safe distance (~200m) for
the third 15m layer is reached, and so forth until ground level is
reached and the entire TSF is reclaimed. As mining progresses and the footprint is exposed, the final layer is cleared, prepared and rehabilitated.
13.2.
Modifying Factors and Mining Schedule
No mining
losses or
dilution are
applied in
determining the
Mineral Reserve
estimates because
the TSFs
are re-mined
and re-processed
in their
entirety. All other modifying factors are captured in
the mine design together with all of the associated technical aspects that inform the capital and
operating cost estimates.
However, the QP has observed
from on-site inspections
of the mining
process that FWGR also
reclaims footwall material, where
deemed economically
viable. This practice could
imply the application of an
appropriate modifying factor in the
derivation of Mineral Reserves when not
part of the Mineral
Resource estimate. FWGR are keeping suitable records to assess the materiality of this practice on the Mineral
Reserve estimate and if material may
be included in future mineral Reserve estimates.
Table 12 reports the production as
scheduled from the FWGR’s owned TSFs.
It reveals a total recovered RoM
quantity of 229.37Mt at
an average head
grade of 0.33g/t. Table 12 also presents the average metallurgical recovery anticipated from each TSF.
Table 12: Scheduled RoM Production
TSF
Mineral Resource Category
RoM Quantity
(Mt)
In situ Grade
(g/t Au)
Recovery
(%)
Driefontein 5
Measured
8.07
0.48
49.9
Driefontein 3
Measured
50.47
0.47
56.6
Kloof 1
Measured
28.30
0.33
50.5
Libanon
Measured
74.34
0.27
47.2
Venterspost North
Measured
55.32
0.27
54.7
Venterspost South
Measured
12.88
0.33
62.5
Total
229.37
0.33
-
Source:
Sound Mining,
2022; and FWGR, 2020
The reclamation sequencing was designed in line with FWGR’s phased approach to increase production (Graph 1).
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0
1,000
2,000
3,000
4,000
5,000
6,000
0
2
4
6
8
10
12
14
16
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
Financial Year
Gold Content (kg)
Production (Mt)
Financial Year
Driefontein No 5 Dump
Driefontein No 3 Dump
Kloof 1
Libanon
Venterspost North
Venterspost South
Gold Content
0
2
4
6
8
10
12
14
16
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
2043
2045
2047
2049
2051
Production (Mt)
Financial Year
Driefontein No 5 Dump
Driefontein No 3 Dump
Kloof 1
Libanon
Venterspost North
Venterspost South
Available TSFs
Graph 1: LoM Production Forecast
Source:
Sound Mining, 2022
Graph 2 demonstrates
an the Available
TSFs which are
included in
FWGR’s longer-term growth strategy and
which justifies
the envisaged RTSF capacity
and planned DP2 upgrade.
Graph 2: Potential LoM Production Forecast
Source:
Sound Mining, 2022
13.3.
Cut-off Grade
A cut-off grade has been computed for each of FWGR’s TSFs considering the assumed gold price,
anticipated recovery through the planned plant and
the expected operating costs. The results are presented in Table 13.
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Table 13: Calculated Cut-off Grades
TSF
Cut-off Grade
(g/t)
Driefontein 5
0.19
Driefontein 3
0.16
Kloof 1
0.18
Libanon
0.20
Venterspost North
0.17
Venterspost South
0.15
Source:
Sound Mining, 2022
The cut-off grades for
the respective dumps range from
0.15g/t to 0.20g/t with an average of 0.18g/t. A cut-off grade
of 0.15g/t is applicable to the
FWGR LoM plan.
13.4.
Mining Contractor
The cost and
maintenance of the
mining equipment at
reclamation sites, employees
and other
operational resources are
for the operating
contractor’s
account. They are the subject of contractual agreements with FWGR. Initial capital is not required for the mining. The equipment (i.e., monitor guns)
supplied by the contractor is shown in Table 14.
Table 14: Mining Equipment Planned for each TSF
TSF
Steady State Production
(ktpm)
Required Units
(Number)
Driefontein 5
520
2
Driefontein 3
600
2
Kloof 1
600
2
Libanon
600
2
Venterspost North
600
2
Venterspost South
600
2
Source:
Sound Mining, 2022
The mining contractor currently relies on two active mining units with a third unit in transit to the next planned set-up position.
The operating cost estimate for the mining and re-deposition of tailings
is supported by actual operational figures. They are presented in the
working
cost estimates as “contractor costs”.
The capital expenditure estimates for the pipeline and pumping design to move the RoM material to the respective plants for processing and for the
return of the processed material (new arisings) for re-deposition, is provided in Item 18.
13.5.
Concluding Comments
Hydro-mining is an
existing “tried and
tested” process which
is well understood.
The contractor is
entitled to decide
on various operational
alternatives
and to deploy capital equipment
and manage costs. The QP has checked the
integrity of the mine design
and associated costs and is satisfied
with the
level of detail and accuracy of the study work completed. The selective mining of portions of a TSFs is not considered an option by Sound Mining.
From a
health and safety
perspective, hydro-mining
does not create,
but rather
ameliorates the
airborne dust problem
often associated
with fine
tailings material. Safe bench
heights are governed by the
material’s strength which is influenced by the
phreatic surface within a
TSF. These have been
dormant for many years and the
phreatic surface is expected to
be well below the surface of the dumps.
The drilling program to define the
Mineral
Resource did not encounter saturated zones or phreatic surfaces and so
the risk of slope failure or liquefaction is
considered to be low. Slope stability
is however
managed and
the hydrological
aspects affecting
the TSFs
are not
considered significant
to the
operation. There
is a
clean/dirty water
separation system with
emergency paddocks to
prevent any
spillage or run-off
from the facilities.
These assist in
preventing chocked screens
from
vegetation or heavy rainstorm events, where the runoff needs to be contained prior being pumped through the circuit back to the TSF.
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0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Production (tpm)
Month
Production (FY 2022)
Production (FY 2021)
Production (FY 2020)
Capacity
14.
PROCESS AND RECOVERY METHODS
Item 14 (i); (ii); (iii) and (iv)
An expansion
of the
currently operating
DP2 processing
plant is
planned to
facilitate
an increase
in processing
throughput from
the current
TSF
Mineral Reserve inventory.
14.1.
Existing DP2 Processing Facility
Phase 1 of FWGR’s
long-term growth strategy required
that the original Driefontein Plant
2 (DP2) be modified and refurbished
to accommodate up
to 600ktpm of
RoM slime from
the TSFs.
This has been
accomplished but with a
throughput constraint
of approximately
500ktpm imposed by
the
maximum deposition rate for new arisings onto the Driefontein 4 TSF.
Based on current deposition rates, this TSF is due to reach its storage capacity
at the end of 2025.
The Phase 1 work
on the plant included
a refurbishment of the conventional CIL plant
and modifications to the
milling and cyclone
circuits to ensure the production of a finer grind for gold liberation as suggested by metallurgical test
work. The existing primary ball mill design was
modified to incorporate an overflow discharge rather than the grate discharge
and the use of a 30mm ball charge instead of the 50mm ball size that
was included in the original mill
design. This improved contact between grinding media and
gold ore particles for increased grinding efficiency in
gold
liberation. A new
45m diameter hi-rate
thickener was also
installed. The achievable
grind of 70% <75µm
proved to be
satisfactory for current
gold
recoveries, however,
closed circuit
milling with
cyclones was
introduced for
an improved
grind of
between 75%
and 80%
<75µm to
improve the
liberation of gold locked within
coarser silicates. Further revisions to the
process flow have since included
a copper elution step on the
loaded carbon,
which delivers a higher-grade gold bar and an improved
efficiency of gold removal from cathodes, by
improving the gold to copper ratio in
the RoM
feed.
Graph
3
and
Graph
4
show
actual
DP2
plant
production
capacity
and
plant
recoveries
over
the
period
FY2020
to
FY2022.
DP2
Plant
capacity
improvements over the period
analyzed show a gradual improvement
of 4.2% when
comparing FY2021 (average of
513ktpm) against FY2022 (average
of 506ktpm). Plant metallurgical
recoveries over the period
FY2021 to FY2022 range between
49.0% to 49.8% and
report lower than metallurgical test
work forecasts. However, it should be noted that the metallurgical plant recoveries
will be materially affected by plant head grade feed.
Graph 3: Actual Production Capacity of DP2 for FY2020, FY2021 and FY2022
Source:
FWGR, 2022
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0%
10%
20%
30%
40%
50%
60%
70%
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Plant Recovery (%)
Month
Actual Recovery
Forecast Recovery
Graph 4: Actual Plant Recovery for DP2 versus Forecast Recovery for FY2020, FY2021 and FY2022
Source:
FWGR, 2022
The process flow is now as follows:
●
the slurry
from the
hydro-mining operation
is pumped
to a
surge tank
via a
25m
2
linear trash
screen (800μm).
Lime, sourced
from a
contract
supplier as milk of lime, is added directly into a receiving tank for pH control;
●
from the
receiving surge
tank, the
slurry is
pumped to
the milling
and classification
section from
where the
cyclone overflow
reports to
the
thickener for thickening to 1.45t/m
3
before being pumped to the CIL plant;
●
the CIL section comprises seven tank stages of
1,600m
3
per tank combining to approximately twelve hours residence time. Each
tank is fitted with
carbon retaining screens and a recessed impeller vertical spindle carbon transfer pump. Sodium cyanide solution is added to CIL Tank
1 and Tank
2 in order to maintain the required concentration for
the leach reaction. Slurry flows downstream through the screens and via launders from CIL
Tank 1 to CIL Tank
7 from where it exits to the 25m
2
tailings linear screen. Fine carbon is recovered from the screen overflow while the underflow
is pumped by the CIL tailings pump to the tailings tank at the slurry receiving area;
●
loaded carbon flows upstream from
CIL Tank
7 to CIL Tank
1 and is recovered
daily from the CIL
tank 1 by batch
transferring of carbon
slurry to
the loaded carbon screen and into a holding tank for transfer to the elution circuit after undergoing copper elution;
●
loaded carbon is batch processed through a 9t elution circuit for gold stripping with the stripped solution reporting to 128m
3
holding tanks;
●
the solution is passed through an electrowinning circuit for cleaning. The sludge is then calcined and smelted into doré bars;
●
the doré bars are dispatched to Rand Refinery Limited for final refining;
●
the eluted carbon is thermally regenerated in a horizontal kiln at 700°C and returned to DP2 for re-use in the CIL circuit. Fresh carbon is added to
the circuit as required; and
●
CIL tailings
and oversize
waste from
the incoming
TSF re-mined
slurry is stored
in a
mechanically agitated
surge tank
and pumped
by the
final
tailings pumps to the Driefontein 4 TSF.
14.2.
Planned Expansion of DP2
The latest LoM plan requires an expansion of DP2 rather than the construction of a CPP facility which had been a part of FWGR’s strategic plans. DP2
will be expanded from its
current production capacity of 600ktpm
to a higher throughput rate
of 1.2Mtpm, while the CPP
will remain an option for
future strategic planning.
The DP2 expansion scheduled
to occur during FY2025
and FY2026, although the
plant will only be
required to treat 750ktpm
until January 2030 when the new
RTSF is planned to
be fully commissioned and operational.
The design approach to
the DP2 expansion design has
been to modify
existing ball
milling capacity and
duplicate existing
processing circuits. The
process flow
block plan shown
in Figure
22 depicts the
changed DP2 plant layout planned from the plant expansion.
Figure 22: DP2 Revised Block Plan
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Source:
DRA, 2022
Historically achievable plant gold recoveries are expected to be
realized from the expanded DP2 plant with gold
recoveries being principally driven by
the plant feed head grade.
A provision of
ZAR1,283.20M (excluding contingencies)
has been included
in the LoM
plan for this
expansion. The principal
areas of capital
expenditure
covered by this provision are:
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●
Slurry Receiving and Trash Screening
(ZAR64.19 M):
the hydraulically mined material
is pumped over trash
screens before entering the respective
receiving tanks. Lime can
be added in the receiving
tank for pH
correction. From the
slurry receiving tanks the material
is pumped either to
the
classification and milling circuit or can be bypassed directly to the CIL or pre-leach thickeners.
The provision addresses process design
screen changes and the tank
volume adjustments necessary to
address the increased production capacity.
●
Milling and Thickening (ZAR146.81 M):
prior to milling the material passes through
a primary classification stage, via
cycloning, where after the
coarser material is closed circuit milled and the finer material from the milling circuit directed to the pre-leach thickeners. Thickener underflow is
pumped to a second set of trash linear screens prior to CIL.
The provision addresses the newly designed cyclone cluster installations, the new 45m diameter thickener circuit,
along with all the adjustments
and modifications necessary to the current ball milling circuit.
●
Leach and Adsorption (ZAR231.70 M):
reclamation slurry is either pumped directly
to the CIL or first passes through the classification,
milling and
thickening circuits
before passing
through the
CIL trash
screens and
into the
CIL. Each
circuit consists
of one
stage of
pre-oxidation and
seven
stages of CIL where
gold is leached and
adsorbed onto activated carbon,
which flows counter-currently
to gold-bearing slurry.
Loaded carbon is
directed to elutriation and elution circuits while tailings pass over carbon safety screens before being pumped to the final tailings tank.
The provision provides for the installation of a new CIL section which will duplicate the currently installed capacity.
●
Tailings Disposal
(ZAR86.70 M):
CIL tails gravitate
through to carbon safety
screens. The screen oversize
is pumped to the
fine carbon handling
circuit ensuring that any
carbon passing through the
CIL circuit is recovered.
The screen undersize
is sampled before being
collected in the final
tailings tank and then pumped to the TSF.
The
provision
recognizes
the
requirement
for
additional
pumping
infrastructure
to
deliver
the
increased
throughput
capacity
to
the
future
identified TSF sites at Leeudoorn and the RTSF.
●
Services and Distribution (ZAR193.01
M):
this provision considers all
of the supporting bulk
services
required
for the plant expansion and
includes
the necessary road access construction for the expanded plant site.
●
Water and Air Services (ZAR57.97 M):
the requirements for process water and compressed air
services at the increased production capacity are
covered by this provision.
●
Reagents (ZAR52.14 M):
this provision covers the infrastructure necessary to ensure correct reagent dosage in the duplicated processing circuits.
●
Elution and
Carbon Handling
(ZAR175.09 M):
loaded carbon from
the CIL
circuit is
elutriated to
remove any
foreign particles
prior to
elution.
Adsorbed gold will be eluted from the activated carbon by means of a heated solution of sodium cyanide and caustic soda. This elution
process is
followed by rinsing and cooling stages. Barren carbon from
the batch elution process will be directed to carbon
regeneration while the pregnant
leach solution will be routed to pregnant solution tanks for zinc precipitation.
The barren carbon from the elution circuits passes through carbon
regeneration kilns to volatilize
off impurities and reactivate
the carbon where after
it is acid washed and transferred
back to the last CIL
tank of
each circuit. Regenerated carbon
is pumped into an acid wash
hopper where it undergoes acid
wash to remove precipitated
material (inorganic
and organic) to restore additional carbon activity prior to being pumped back to the respective CIL circuit.
The provision
addresses the requirement
for the installation
of a new
elution and
carbon handling
circuit which will
duplicate the currently
installed
capacity.
●
Zinc Precipitation and Smelting (ZAR81.42 M):
Gold in solution from the elution circuit will be recovered by zinc precipitation in plate and frame
filters.
The provision addresses the requirement
for the installation of a
new zinc precipitation and smelting
circuit which will enable the production
of
doré to match the currently installed capacity.
●
Indirect Capital (194.16):
which is comprised of Construction Costs (ZAR4.79
M), First Fill Consumables (ZAR0.18 M),
Commissioning and Spares
(ZAR10.96 M) and Project Services (ZAR178.23 M).
14.3.
Concluding Comments
The current DP2
process performance
and subsequent modifications
to the
original DP2 plant
circuit, along with
the supporting metallurgical
test
work have indicated that the forecast DP2 expansion will be capable of meeting the expected financial forecasting.
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15.
INFRASTRUCTURE
Item 15 (i); (ii); (iii); (iv); (v); (vi); (vii); (viii); (ix) and
(x)
Phase 1 capital expenditure
on surface infrastructure
was mostly on pump
stations, pipelines and a
cyclone deposition system
at the Driefontein
4
TSF to facilitate the storage
of tailings derived from the initial reclamation and processing
of the Driefontein 5 TSF.
The Driefontein 4 TSF provides a
current depositional capacity of
500ktpm. Phase 1 capital expenditure
on surface infrastructure was mostly on
pump stations, pipelines and a
cyclone
deposition system at the Driefontein 4 TSF to facilitate the storage of tailings derived from the initial reclamation and processing of the Driefontein 5
TSF. The Driefontein 4 TSF provides a current depositional capacity of 500ktpm, which will reduce to
250ktpm from December 2025, when additional
depositional capacity of
500ktpm at the Leeudoorn
TSF will become available in
terms of an in-principle
agreement with Sibanye Gold.
The Leeudoorn
TSF will
be converted
from a
day-wall design
to a
cyclone deposition design
and the processing
at DP2
is planned to
increase in
to 750ktpm.
This
depositional arrangement is scheduled to
carry on until January 2030
when the RTSF is planned
to be operational at
a deposition rate of
1.2Mtpm.
Figure 23 shows the locality of the existing Driefontein 4 TSF and the DP2 plant.
Figure 23: Driefontein 4 TSF Location and Infrastructure
Source:
FWGR,
2020
15.1.
Leeudoorn Facility
The Leeudoorn TSF is
located 7km north-east of
Fochville on the
West Rand,
Gauteng Province. Sibanye
Gold have, after
a detailed, joint
technical
review, agreed in principle that FWGR
may, with effect
from January 2026, deposit up to 500ktm of tailings onto the Leeudoorn TSF provided FWGR
paid the capital cost to convert the TSF
to cyclone depositioning.
FWGR intends to use
this TSF for a
period of four
years, until the RTSF is
constructed.
The TSF incorporates two independent
and active compartments
namely the western (lower) compartment and the eastern (upper) compartment.
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A return water dam (RWD) and storm water dam (SWD) are located to
the west of the lower TSF compartment. The upper and lower compartments
were
commissioned
in
1991
and
1990
respectively.
The
TSF
footprint
is
189ha
with
a
lower
compartment
footprint
of
108ha
and
an
upper
compartment footprint of 81ha. Underdrains are
installed at the base of the
TSF which discharge into an unlined
solution trench. Sibanye Gold, the
current TSF operator are presently installing two floating penstocks on the lower and upper compartments.
Water from
the TSFs is
diverted to the RWD
through the unlined solution trench.
A spillway links
water from the
RWD to the SWD
with a pumping
system which returns water
back to the TSF compartments. A further spillway allows the release of water from the SWD into
the environment. Both
TSF compartments are unlined. Figure 24 shows the current layout of the Leeudoorn TSF.
Figure 24: Leeudoorn TSF Layout
Source:
Geo Tail, 2022
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Table 15 presents a summary of the design criteria and assumptions used for the Leeudoorn TSF design.
Table 15: Design Criteria and Assumptions
Description
Value/Output
Source
General
Topographical Survey
A Lidar survey dated May 2021
Sibanye Gold
Residue Materials
Gold tailings
FWGR
Legal Framework
South Africa and benchmarking against good practice international standards i.e., GISTM
FWGR
Process Criteria
Tailings Deposition Rate
Deposition strategy
FWGR
Slurry Density
Average Relative Density = 1.38
FWGR
Design Life
Deposition strategy
FWGR
Water Management
Objectives
•
Minimize usage
•
Encourage drying and consolidation of the tailings
•
Separate clean run-off from potentially contaminated process water
•
Prevent uncontrolled dirty surface water discharge to the environment
GTSA
Principles
•
Divert clean storm water run-off away from the facility
•
Minimize the storage of water on the facility
•
Contain and re-use the water emanating from the facility
•
Discharge excess water from the facility to the environment only if the structural stability of the
facility is compromised
GTSA
Water Balance
A continuous daily time step water balance (GoldSim)
iLanda
Climatic Data
MAP = 624 mm
MAE: 1,670 mm (S-Pan)
iLanda
Storm Event
1 in 50-year, 24-hour = 119 mm
1 in 10,000-year, 24-hour,
or PMP = 248 mm
iLanda
Decant Rate
•
Decant slurry water daily to ensure that the average pool volume is maintained as small as possible
•
Transfer the design storm from the storage facility basin to the return water dam within an
acceptable period
GTSA
Water Storage and Return
Pumping Capacity
•
The objective will be to create adequate water storage and water return pumping capacity to
prevent uncontrolled discharge of dirty surface water to the environment. The water balance will
confirm the frequency for controlled discharges, if necessary
•
The return water pumping system will be designed to return 100% of the process demand from the
return water dam to the process
GTSA
Lining Requirement
No lining required
FWGR
Structural Stability
Objective
To create a safe and stable tailings storage complex and to minimize the risk to human lives, health,
and property
GTSA
Design Storm
1 in 50-year, 24-hour (minimum)
1 in 10,000-year, 24-hour (maximum)
GTSA
Freeboard Target
The minimum freeboard target will be to accommodate the 1 in 50-year, 24-hour storm volume plus
0.8m dry freeboard on top of the normal operating level (excluding decant return) or the 1 in 10,000-
year, 24-hour storm volume on top of the normal operating level (excluding decant return). The most
conservative storm event will be utilized for freeboard analysis
GTSA
Side Slope Stability
•
The minimum factor of safety will be 1.5 for drained conditions at peak strength
•
The minimum factor of safety will be 1.1 for seismic loading (drained analysis)
•
The minimum factor of safety will be 1.3 for undrained conditions at peak strength
•
The minimum factor of safety will be 1.1 for undrained conditions at residual strength
GTSA
Source:
Geo Tail, 2022
15.1.1.
Geotechnical, Hydrological and Geohydrological Considerations
The area to be covered by the TSF overlies mostly an andesitic volcanic intrusive with typically fine and expansive soil profiles. While the
weathering profiles are
highly variable within
this host formation,
no dolomite has
been identified within
the TSF
footprint. There is
a
single north-south striking linear structural feature (possible dyke or fault) located east of the upper compartment.
It is noted
from geotechnical
observations that
the TSF
comprises sand and
silty sand grading
to clay
and silty
sand within the
middle
region of the TSF profile and
clay along the base. Clayey and silty
layers occur within the upper
regions as thin cohesive lenses,
associated
with a reduction in the cone
resistance. The tailings appear to be stiff across
both compartments of the TSF and
the underlying basement
materials also exhibit very
stiff consistencies.
Overall, the observations
made along the surface
of each section
on both the
Upper and
Lower Compartments presents evidence of cementation and densification of tailings materials with depth.
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A geo-hydrological
study was
completed in
2019 regarding
the impact
of the
Leeudoorn RWD
and the
Leeudoorn TSF
on the
ground
water.
The TSF contributes the majority of the contamination to the ground water,
with the rest being from the Leeudoorn RWD. When
using sulphate as an
indicator leachate concentration in the pollution
plume are in the
order of 50,000m
3
/month from the Leeudoorn
TSF
and only 60m
3
/month Leeudoorn RWD.
An independent risk assessment was completed on the possibility of a dam breach using a
2020 as-built survey. The most critical failure
scenario recorded was a
rainy-day cascade failure
at the western
wall of the lower
compartment, with an estimated
Population at Risk
(PAR) of 2,570 people and
a Potential Loss of Life
(PLL) of between 13
and 400 people and
when classified by the
Global Industry Standard
for Tailings Management (GISTM) Classification system, was reported as an Extreme Consequence Classification.
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15.1.2.
Leeudoorn Design
Figure 25 shows the final layout for the Leeudoorn TSF.
Figure 25: Final Layout of Airspace Model
Source:
Geo Tail, 2022
The elements of the proposed Leeudoorn design are described further:
Transport
System:
A booster
pump station
located
at
the existing
Leeudoorn Process
plant will
pump slurry
to the
cyclone delivery
stations located on the TSF.
The supernatant water will decant
via the existing gravity
penstock systems to
the new silt traps which will
overflow to
the solution
trench. The
solution trench
reports to
the return
water
dam from
where the
water
will be
pumped to
the
operating plant for re-use in the process. Excess water from the return water dam will spill to the SWD.
Elevated Filter Drain:
The elevated filter drains
will be installed during
the operation ahead of
the development of the
underflow wall.
The outflow collection
system must
be pre-installed
as part
of the construction
works. The
drain outflow
collection system
comprises
HDPE manholes at the
end of the outlet pipes
from the filter drains.
These are located on
the newly formed step-in.
Outlet pipes from
the manholes will divert the water down the side slope to the solution trench.
Figure 26 shows the position of the elevated drain filter.
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Figure 26: Position of the Elevated Drain Filter
Source
Geo Tail, 2022
Cyclone Set-up:
The cyclone layouts for the two compartments are shown in Figure 27.
Figure 27: Cyclone Layout
Source:
Geo Tail, 2022
Engineered Benches:
Engineered benches will collect surface run-off
and silt load. Bench penstocks will be
utilized to divert excess water
to the solution trench from where
the flow will be diverted
to the RWD. The in-line bench
penstocks will be linked with a single
downpipe
with a
maximum of
five bench
penstocks feeding
into each
downpipe. Run-off
will be
temporarily stored
on the
benches during high
rainfall events and to accommodate this, benches will be sloped inwards and a bund wall will be constructed.
Wall Development:
The 250mm, 30tph, cyclones
will be 24m
apart along the
complete perimeter.
There will be
no disconnecting and
relocating of cyclones
from one point
to another on
the wall with
every cyclone being
required to
develop a 24m
section of wall.
The
cyclone is used to create a trapezoidal wall cross-section with
anticipated approximate 1v:3h side slopes and a 1.0m to 1.5m wide crest.
The outcome of the cyclone deposition
operation must be a smooth consistent
outer profile, conforming to
the specified profile with a
level crest.
The TSF
Contractor shall
regularly take
feed,
under and
overflow density
measurements to
calculate the
cyclone split.
In addition,
a
monthly survey shall be conducted to
allow a volumetric reconciliation and
calculation of under/overflow split to
be determined at the
same time checking the wall geometry and freeboard.
Pool and
Decant Management:
Routine rotation
of deposition
around the
perimeter should
maintain the
pool around
the penstock
intakes.
Given the
high deposition
rate
and the
expected increased
vertical freeboard,
the pool
will be
larger than
with the
day wall
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operation and likely to be
permanent. Decanting will be continuous with no
stacking of night rings. The decant
return should always be
maximized to ensure minimum storage of supernatant and storm water with excess water only being temporarily stored in the TSF basin
during high rainfall periods.
Silt Trap:
The elevated penstocks
discharge directly into
the new lined silt
traps before it
overflows into the
solution trench. Discharge
into the silt traps should be regularly stopped to allow the silt to settle and be measured.
15.1.3.
Conclusions
A Leeudoorn TSF design has been completed to enable the conversion of the current day wall TSF to a cyclone-based deposition system.
The design has been developed
to accommodate the required deposition
plan. It has been benchmarked
against other similar conversion
projects and has been found to be within proven operational practice and acceptable risk levels.
The stability assessment of the proposed
conversion has demonstrated factors
of safety which exceed
the design targets and therefore
considered satisfactory for normal
operating conditions. This assumes that
the TSF operation will be
properly managed and that
all the
identified critical parameters will be monitored.
A water balance has been developed for the proposed changes to the current conventional TSF design.
This water
balance demonstrates
the expected
improvements in
water recovery
resulting from
the increased
rate of
rise and
greater
water recovery efficiency of the cyclone system.
The forecast returns
from the Leeudoorn TSF
are expected to
be approximately 50%
of slurry water.
Modelling has demonstrated
that
the current penstock arrangement on both compartments is adequate to maintain pool control within both basins.
In order to ensure compliance with the Government Notice
(GN) 704 (Regulations on Use of Mining and Related
Activities Aimed at the
Protection of Water Resources - published
in the Government Gazette 20119) the
RWD will require a capacity
of 56,000m
3
between 2026
and 2029 (period of high deposition
rate) and a capacity of 107,000m
3
from post 2030 (period of low deposition
rate). The water balance
indicates that during storm conditions up to 90% of the slurry water is likely to be returned to the system.
15.2.
Regional Tailings
Storage Facility
The LoM planning by FWGR includes the establishment of a RTSF on a site 10km east of Fochville.
The RTSF
site consists of
an area
of approximately
1,000ha. It
is located
between two
water courses,
the Leeuspruit to
the north east
and an
un-
named ephemeral stream/wetland to
the south west, both
merging south east of
the site. FWGR
owns most of the
land on which the
RTSF will be
constructed, with the balance covered by way of an option agreement. Topographically this creates a slightly convex spur. Elevations in the area vary
between around
1,540mamsl along
the northern extremity
to around
1,500mamsl in
the south
east over
a distance
of some
6km. This
results in
typically gentle slopes of around 0.7% with some localized variations in gradient.
FWGR has a development plan for the RTSF which incorporates the following changes to the WUL as originally approved:
●
the inclusion of an alternative barrier system to the previously proposed synthetic barrier for groundwater protection; and
●
the submission of a detailed design to the Department of Water and Sanitation (DWS) for approval.
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Table 16 outlines the main
differences between the earlier
RTSF design and the
revised design. These differences
include a significantly
larger capacity
of 800Mt compared to
an earlier 290Mt, along with
a correspondingly higher disposal rate
which is ramped up
in phases to 2.4Mtpm
compared to
1.4Mtpm. In
the revised
design, the
overall percentage
of slurry
solids is
reduced to
a 50%
segregating
slurry compared
to an
earlier 65%
non-
segregating slurry.
Table 16: Changes in Parameters
Criteria/Parameter
Sibanye Gold FS
FWGR FS
LoM
Phase 1 only - 17 years
Complete life 25 years
Processing Plant
Au, U, H
2
SO
4
, roaster
Gold only
Total Disposal Quantity
FS only 290Mt
800Mt
Disposal Rate
1.4Mtpm
1.2Mtpm, increasing to 1.8Mtpm,
then 2.4Mtpm
Slurry Delivery
Single Pipe
2 to 5 pipes
Slurry Percentage Solids
65% - non-segregating
50% - segregating
Surface Water Management
Treat and discharge
Collect and re-cycle
Ground Water Protection
Synthetic barrier
Scavenger wells
Tailings Dam Development Method
Untried spigotting of a non-segregating slurry at <3m/yr
Proven on-wall cyclones at 4m/yr to 6m/yr
Source:
Beric Robertson Tailings,
2020
Coupled to the deployment of this lower density slurry is the use of proven on-wall cyclones. The water treatment approach for the revised design is
to consider
a closed
circuit, which
collects and
re-cycles the
water load.
FWGR proposed
amended designed
provides that
groundwater is
to be
managed by way of a network of interception scavenger wells positioned to capture and recycle the
pollution plume. It is proposed that this replaces
the previously considered method of a
synthetic barrier.
It is noted that the impact
of adopting a disposal method which generates
a higher rate of
rise per annum is to promote a smaller environmental footprint.
The approach
to the
RTSF
design and
disposal policy
has been
guided by
the FWGR
policy,
the objective
of which
is “to
develop an
indefinitely
sustainable landscape that, at worst, has a benign, but preferably positive socio-environmental impact”.
The following has been referenced in developing the RTSF design:
●
the Chamber of Mines Guide to the Design of Metalliferous Tailings Dams 1972, as revised; and
●
SABS 0286; Mine Residue standard (now SANS 10286) (1998).
Following
the
headline
TSF
failures
in
Brazil
at
Samarco
(2015)
and
Brumadinho
(2019)
a
number
of
initiatives
have
been
promulgated
in
the
international
mining
community.
The
International
Council
for
Mining
and
Minerals
(ICMM)
developed
a
Global
Industry
Standard
for
Tailings
Management (GISTM) (2020). The
GISTM is a guide
with no regulatory jurisdiction outside
of the membership articles
of the ICMM and
consists of
fifteen principles which can be adopted voluntarily by mining companies. In March 2020, the International Council for Large Dams (ICOLD) published
a draft bulletin on Tailings Dam Safety.
The RTSF
design adopted
by FWGR
has taken
reference
from SANS
10286 and
all other
relevant
South African
legislation including
the National
Environmental Management: Waste Act, 2008 (Act No. 59 of 2008) (NEM:WA), the NWA, the MHSA and their associated regulations. All of this work
has been undertaken in the context of the FWGR Tailings Disposal Policy.
The RTSF
design approach
has undertaken
a rigorous
iterative examination
of an
appropriate tailing
disposal method,
for the
class, quantity
and
quality of tailings under
consideration. Throughout the design process,
cognizance has been taken of the
potentiality of catastrophic or consequential
failure resulting from the following two most commonly responsible mechanisms:
●
hydraulic over topping leading to erosion of the containment wall with consequent collapse; and
●
geotechnical instability as a result of insufficient shear strength resulting in a collapse of a portion of the outer wall.
The iterative examination process has considered the following environmental and engineering elements (Table 17 and Table
18).
Table 17: Environmental Elements under Consideration for RTSF Design and Disposal Method
Criteria/Parameter
Description
Topography
i.e., Mountainous, hilly or planar
Climate
i.e., Arid, semi-arid, temperate, sub-tropical, tropical, monsoon
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Seismicity
Low, medium or high
Geochemistry
Low, moderate, severe
Tailings SG
High, average, low
Source:
Beric Robertson Tailings,
2020
Table 18: Engineering Elements under Consideration for RTSF Design and Disposal Method
Criteria/Parameter
Description
Disposal
Wet or Dry
Generation Type
1st, 2nd, 3rd or 4th
PSD
CC, FC, CF or FF*
Slurry Density
Low, Ave, High (up to paste)
Wall Development Method
Downstream, centerline or upstream
Deposition Method
Open-end, spigot, on-wall cyclones
Decant System
Gravity, pumped, siphon
Ground Water Protection
Synthetic liner or scavenger wells
Air and Surface Water quality Protection
Various options
Post-closure Options
Various approaches
Source:
Beric Robertson Tailings,
2020
Note:
* C=coarse, F=fine
Based on the above criteria, the design for the RTSF includes the following attributes (Table 19):
Table 19: RTSF Design Criteria
Design Criteria
A 4th generation TSF
Low density slurry feed to an on wall upstream ring dyke dam
A pumped decant system
The abstraction containment of the leachate plume
The progressive cladding and vegetation of the outer slopes
Post closure water treatment designed for a non-consumable agricultural product farming business
Source:
Beric Robertson Tailings,
2020
The proposed RTSF will cover an area of approximately 1,000ha with a final surface top area of around 600ha. The RTSF has been planned within the
original demarcated and authorised site area.
15.2.1.
Geotechnical, Hydrological and Geohydrological Considerations
Geotechnical investigations have confirmed that there are
no related fatal flaws. They
demonstrate that the RTSF site is suitable
for the
construction of
a RTSF and
its related infrastructure.
The natural material
available on site
is suitable, both
qualitatively and quantitatively,
for the construction of the various structures including embankments, canals, foundations, roadways,
compacted clay liners and for use
as cover placement. In areas with collapsible topsoil
an allowance was made to excavate and use this material for general compacted fill,
and to use an impact roller to compact the remaining material from surface in order to reduce its collapse potential to
acceptable levels
thereby forming a suitable foundation in these areas.
The current legislation contains mechanisms for the
classification of processed tailings, which
in the case of the approved RTSF, called for
the use of
a liner (Class
C barrier or
equivalent). This legislation
has been reviewed
by the legislature
to address various
shortcomings
with
one
material
change
being
that
the
remediation
requirements
will
be
informed
by
the
outcome
of
a
comprehensive
hazard
identification and risk assessment approach, subject to final approval of this legislation. The latest design
of the RTSF is aligned with the
requirements of the pending changes to the legislation.
Hydrological studies have assessed the impact of the RTSF on the hydrology of the local area. Mean average rainfall of around 600mm
is
noted. The
area has
exceptionally high
evaporation rates
of around
2,000mm and
this will
assist in
removing water
content from
the
tailings which will aid tailings stability. It is expected that climate change impacts are unlikely to be material over the next decade.
A consequence of
the ring dyke dam design
and the hydrological setting is
that surface water will tend
to flow away from the
RTSF surface
footprint. As a consequence, the RTSF has no direct riverine impact being well above the 1:100-year flood lines as confirmed in the most
recent hydrological assessment.
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RTSF run-off impacts will be managed
through the progressive soil cladding
and grassing of the slopes with
clear water run-off forecast
after some four years from commissioning.
Overall water management has
been assessed
through the use
of a dynamic
water simulation model
over the LoM.
The model as
expected
confirms low averag
e
monthly returns as
the return water
pumping rate
is controlled. This
results in seasonal
fluctuations in the
RTSF
pond volume driven principally by reduced winter evaporation. The model outcomes imply that due to the relatively high basin capacity
of the RTSF, the risk of over topping due to hydro-meteorological events
and operational practices is considered to be low.
Storm
water
management
on
the
RTSF
slopes
between
the
crest
of
the
basin
and
the
perimeter
toe
is
managed
through
the
implementation of the following design approach:
●
the slope is divided into 400m wide segments around the perimeter;
●
each 400m wide segment has a centrally located outlet down the slope consisting of precast concrete chutes;
●
the cross-section comprises a series of 10m high, 35m wide scallops forming a 1.6m high (but could be reduced
to 1.4m) bund along
the lower edge of each;
●
the scallops temporary buffer create capacity for run-off prior to discharge down the chutes; and
●
the scalloped benches are divided into paddocks by cross-walls or bunds with hydraulic links to control flow between paddocks.
The concrete chute system has been successfully used at other TSFs.
The geo-hydrological impacts of the RTSF will be managed through the installation of a network of abstraction
wells. The regional water
table is found
at relatively shallow depths
across the RTSF site
of 3m to
8m. The impact
of tailings deposition
will be that a
phreatic surface
will merge between the
original water table
setting and the
TSF.
Seepage modelling has been used
to analyze
the impacts on the
geo-
hydrology. Input
requirements into this modelling include,
the site geological structure
and the topology of all
the materials in the TSF.
Each material type or zone is assigned appropriate
permeability properties along with other factors such as slurry water
inflow, rainfall,
evaporation and
run-off rates.
Further modelling
describes the proposed
zoning of
the under
and overflow
from the
cyclone disposal
positions during the TSF operation.
The seepage modelling has confirmed that the stability of the RTSF can be enhanced through the construction of filter drains
integrated
into the underflow tailings
walls which protrude into
the basin of the
RTSF.
These underflow curtains which are
described as similar to
the “fins of a radiator”, draw down the phreatic surface of the underflow which contributes to the enhancement of the wall stability.
Post closure modelling indicates
that drain flows of
up to 700m
3
/d may need will need
to be treated through
a small sustainable water
treatment facility.
The primary purpose
of the ground water modelling
has been to validate the use
of a scavenger well network to
control pollution impacts
on the
local aquifer
system.
This modelling
has been
developed from
calibrating existing
boreholes and
using an
historical database
established by the earlier investigators.
The geo-hydrological regime at the RTSF site consists of the stacking of a weathered aquifer over a deeper fractured aquifer (Figure 28).
Figure 28: Geo-hydrological Regime at the RTSF Site
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Source:
Beric Robinson Tailings,
2020
The water table approximates the topography at
a depth of 3m to
8m and the general ground
water flow is from north
west to south east
with local
south and
eastward
flows to
the adjacent
streams. Earlier
studies promoted
the use
of a
synthetic
liner for
ground water
protection. The use of a synthetic
liner, installed at
the base of the RTSF would
be to create a third
‘perched’ aquifer above the current
weathered zone
aquifer.
Installing such
a barrier over
a 1,000ha
footprint could
result in a
design which will
ultimately end
up with
a
compromised liner integrity,
requiring the eventual
implementation of a
well system
to contain the
contaminant plume. In
addition to
this, the inclusion of a liner in the design significantly raises RTSF geotechnical risk.
The scavenger
well system
generates a
hydraulic barrier
around the
RTSF by
directing ground
water flow
towards the
RTSF footprint
(Figure 29).
Figure 29: Geo-hydrological Effects of Scavenger Wells beneath the RTSF
Source:
Beric Robinson Tailings,
2020
The deeper fractured aquifer exhibits
low permeability characteristics which promote the
flow of the contaminated
plume towards the
peripheral abstraction wells which
recover the polluted ground
water and contain
the plume dispersion. All
the dirty water from
these
scavenger wells accumulates
in large concrete
sumps before
being pumped back
into the operational
circuit whilst operating
and post
closure will be treated for either disposal or utilization.
Ground water
modelling was
carried out
in an
appropriate software
package
and confirmed
the effectiveness
of the
abstraction well
system methodology. Numerous modelling iterations were carried out to identify optimal borehole spacing and localities. The modelling
has indicated that
a series of
abstraction wells drilled
into the weathered
aquifer to a depth
of around 20m,
arranged in three
rows around
the perimeter should effectively prevent the lateral spread of
any contaminant plume. Vertical containment is effectively achieved at the
base of the weathered aquifer, the underlying fractured aquifer exhibiting low permeability characteristics.
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A
critical feature
of the
implementation
of the
scavenger
well
system
methodology will
be the
practice of
systematic
water
quality
sampling and it is proposed that 25% of all wells are tested on a monthly basis. This will be used for the regular updating and
calibrating
of the ground water model which will enable, where necessary, practical interventions into the well field design to be implemented.
15.2.2.
The RTSF Design
The RTSF design has been configured by assembling the following components or design elements:
Toe Wall Embankment and Cladding Stockpile: the perimeter boundary of the RTSF is defined by a single Toe Wall (3m high by 6m wide).
This serves as a containment barrier and as
a perimeter access road. The tailings placement has been
planned to fill within 1.5 to 2.0m of
the
Toe
Wall
crest.
Compacted
material
for
the
Toe
Wall
will
be
borrowed
from
a
2m
deep
trench
excavated
within
the
Toe
Wall
perimeter.
This trench
will form
a paddock for
tailings run-off
material at
the toe of
the slope.
A temporary
cladding stockpile
will be
formed outside the Toe Wall.
Heel Wall
Embankment: in the
case of RTSF,
an upstream cyclone
dam, the containment
wall formed from
the underflow needs to
be
established
on
a
stable
platform
for
the
tailings
placement
to
be
ultimately
stable.
The
overflow
is
therefore
contained
behind
an
embankment upstream
of the intended
wall footprint
and is
called a
Heel Wall.
The Heel
Wall therefore
defines the initial
division or
separation of the under and overflow with the overflow area termed the Basin.
The height of the Heel Wall changes progressively as the dam is developed and is
determined from the availability of underflow and the
relative rates
of rise of
the over and
underflow. The determination
of the expected
height and position of
the Heel Wall
is an iterative
process of trial and optimization with
the base of the wall being typically selected
at approximately one third
of the horizontal distance
of the base length of the final slope.
Heel Wall structure
on a dam
the size of
the RTSF represents
a substantial embankment
structure with a
correspondingly high level
of
material requirements. This material has been sourced within the RTSF footprint which reduces further
environmental degradation from
external borrow pits and reduces haul distance costs. A further feature
to assist construction material placement is the incorporation of
access ramps onto the Heel Wall at 400m centers. Geotechnical
site investigations have verified the suitability and availability of
material
excavated from within the RTSF footprint for Heel Wall construction.
Miscellaneous Embankments: in order to control the run-off harvested between the Heel Wall and Toe Wall on the low south side of the
RTSF and prevent an overtopping of
the Toe Wall, it is necessary to construct a
series of radial cross walls at
approximately 400m centers.
These compartments serve to spread the containment of run-off material
over a broader area and reduce the depth of material around
the RTSF perimeter.
Where necessary, low
embankments will be constructed to
correct the gradients of
filter drains. The decant
pumping arrangement will
require an embankment on which the pumps can stand, which will also provide an access road facility.
Filter Drain System: the
beneficial reduction of pore water pressure
in the underflow results in a
lowering of the phreatic surface
levels
and improved tailings
strength development,
along with a reduction
in the risk
of slope undercutting
at the slope
toe. This is
achieved
through the use
of a filter
drain network which promotes
high permeability conducts
which evacuates pore water while
holding back solid
particles. The
impact of
an effective
drainage system
is to
activate
the radial
flow of
water
towards
the drain
centers. Various
drain
configurations have been incorporated into the RTSF design. These variations have been optimised through iterative stages of numerical
seepage analysis.
Scavenger Well System: the scavenger well system is
a viable alternative to
managing the inherent
geotechnical risks and financial
burden
of a synthetic barrier. The system
exploits the existing geo-hydrological regime beneath the proposed RTSF,
which consists of an aquifer
comprising of two horizons;
the upper 20m to
30m a weathered
aquifer and an
underlying fractured aquifer.
The transmissivity of the
fractured aquifer is limited to
discontinuities in the rock mass.
This confines ground water flow
almost entirely to the upper
weathered
aquifer.
A well system
of three rows
of scavenger wells
is envisaged, consisting
of an outer
row along the Toe
Wall of
the facility,
the Toe
Wall
Scavenger Wells
(TWSWs), a middle
row along the line
of the Heel Wall
Scavenger Wells
(HWSWs) and an
inner third row to
be drilled
after the fourth bench of the RTSF.
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The HWSW and
TWSW wells would
be installed from
the outset, with
the TWSW wells
being used initially as
monitoring wells. As
and
where necessary, additional boreholes will be established downstream for additional scavenger well purposes.
Deposition System:
on-wall cyclones will
be used to
deposit the tailings
pumped from the
DP2 Plant some
46km to
the RTSF
through
500mm high-density polyethylene (HDPE) lined steel pipelines. A
relatively low target slurry density
of 1.38t/m
3
has been stipulated for
the RTSF.
The slurry is pumped in
trains of 600ktpm per pipeline,
starting with two pipelines to accommodate the
production rate of 1.2Mtpm. The
pipe servitude enters the RTSF
site from the north-east where
the pipes will be taken
through the pre-cast box
culverts to the inside of
the Toe Wall. One pipe will continue straight onto the dam
with the pipe being extended up the side of the dam, suitably profiled across
the benches,
as the
dam develops
in height.
Two
of the
slurry pipes
will be
directed clockwise
along the
inside of
the Toe
Wall, one
extending 20% and the second 40% around the perimeter. The other two slurry pipes will be similarly routed, but anti-clockwise.
For the first three years of operation, 250mm cyclones will be deployed so as to
ensure a maximum split of underflow during the period
when underflow demand is greatest
due to wall construction
requirements. This cyclone
arrangement has been
deployed in the South
African tailings environment since the 1980s.
A 600ktpm slurry stream will require
some 20 to 25 cyclones to deposit
material based on a cyclone throughput
of 40tph to 45tph. The
eventual layout of cyclones will consider
some 37 to 41 cyclones
per dam sector of
around 1,000m to 1,100m. This
is estimated to service
approximately 25% to 30% of the dam perimeter with
all five slurry streams operating (5% to 6% per pipeline).
This is expected to deliver
a deposition to drying ratio of 1.3 to 1.4 which is considered acceptable for sustainable underflow consolidation.
Once the underflow
wall has been established,
consideration may be given to
changing from the Multiple
Deposition Point (MDP) 250mm
cyclones to the less efficient, but more economic Single Deposition Point (SDP) system, in this case in the form of Self-Propelled
Cyclone
Units (SPCUs). This system has been successfully deployed on an East Rand TSF for the last eight years.
Decant System: the decanting system
handles the clear water from the deposited slurry which separates
into clear water and saturated
solids on the TSF. The clear water accumulates in a supernatant pond or pool in the basin which becomes available for decanting and re-
cycling through
the process.
The selected decant
system is
a series of
pumps which
are commonly
used globally.
In the
South African
mining space, gravity
penstocks predominate in decanting
solutions, however this would
not provide the optimal
solution for the RTSF
case.
The pumping system to be deployed at the basin pond at RTSF will consist of a skid-mounted land-based pump with ancillary power and
control equipment which
will be intermittently
moved across the
basin from south
east to the
middle and raised
vertically as the
dam
develops.
Return Water System:
the water recovered from the RTSF will be
returned to DP2 and any other
sites that may require water. The return
water system comprises a decant water receiving stilling chamber that overflows into twin concrete
lined silt traps that in turn spill over
into twin HDPE lined RWDs. Return water pumps at the RWDs, pump water back to DP2 through twin overland pipes following the same
servitude as the slurry delivery pipes.
Other Supporting
Infrastructure: power
will be
delivered to
the RTSF
complex via
a 10km
33kV overhead
powerlines from
Kloof.
The
power is first stepped to 11kV prior
to transmission to required locations via overhead
bundled lines. Numerous pole transformers step
down the power to
3.3kV for distribution to
the scavenger wells. Diesel
back-up power generators are placed to
sustain critical operability
of seepage recycling as well as
alternate powering of the decant
pumps and return water pumps.
Solar energy will be utilized
to power
the administrative buildings and external ergonomic lighting.
For security against theft and destruction
against infrastructure, the entire RTSF complex will be surrounded by a 2.1m
tall shotcrete wall
with razor coil on the top. Tamper sensors will be placed on the wall that are wirelessly linked to a permanently manned security control
room.
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Figure 30 shows the layout of the RTSF.
Figure 30: RTSF Layout
Source:
Beric Robertson Tailings,
2020
The revised
design of the
RTSF was
undertaken by
Beric Robinson
Tailings
for the
current configuration
of the
FWGR operations.
This
study was independently reviewed by a Sound Mining appointed specialists who concluded that there are no fatal flaws in the design.
15.2.3.
Concluding Comments
Sound Mining has reviewed the Far West
Gold Recoveries Regional Tailings
Dam Report prepared by Beric Robinson Tailings
(2020) and
has concluded that the report provides a solid basis for
the future development of a safe RTSF.
Sound Mining believes that by following
the principles and design strategy
outlined in the report, the
chances of a TSF
failure will be unlikely.
However,
cognizance needs to be
taken of the uncertainties discussed subjectively below.
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There are concept risks associated with the
recommended RTSF tailings disposal solution which
proposes the implementation of a fourth
Generation, unlined, ring-dyke, upstream, on-wall cyclone dam with a pumped decant system, on a site with poor to moderate soils and
a high-water table. Furthermore, for
risk analysis purposes it is noted that
there is an absence of water
courses over the intended RTSF
site area and that the operation of the on-wall cyclone disposal method will initially be relatively labor intensive.
Based on the proposed RTSF solution, the following inherent risks are apparent:
●
the stability of upstream development;
●
the sufficiency of underflow to form an adequate wall around the perimeter ring dyke;
●
the capability of the management and labor force to perform as required;
●
the ability of a pumped system to decant adequately; and
●
undue impacts on the environment.
The proposed solution has been
operated on a number of South
African TSFs over the last three to
four decades. Each TSF has performed
as expected, demonstrating stability with the underflow arisings. All these TSFs have and in some cases still operate without evidence of
overtopping with
pumped decants.
In these
cases, while
water contaminant
plumes have
been generated,
their impact has
not been
shown to be significant.
The RTSF
design has
been undertaken
by a
team of
assembled experts
who are
familiar with
the application
of an
upstream cyclone
method
delivering
relatively
uniform
sized
tailings
in
the
South
African
context.
The
lead
RTSF
designer
has
over
30 years’
experience in similar
local installations
and operations.
The design
work has
also been independently
reviewed by
two local
tailings engineering specialists.
The effectiveness
of the proposed
RTSF is
dependent on the
delivery of
acceptable underflow particle
quality and
quantity. Failure
to
deliver on either of
these parameters will compromise wall development
and stability. Historical observations of a number
of similar TSFs
have shown that TSF development has progressed adequately with no significant design risks realized.
Underflow demand is high during the initial development phase and increases as the dam elevation is increased and the dam perimeter
is subsequently
decreased. This
has
been accommodated
in the
RTSF
design with
the decision
to deploy
the
more efficient
250mm
cyclones during the start-up period.
It is noted that the RTSF design is based on underflow splits currently achieved at
the Driefontein 4 TSF.
Although in the early years, the
RTSF design underflow demand is close to these levels, this demand drops in the later years proving an acceptable error margin.
Hydrological risk is managed through
the provision of a substantial
freeboard over the LoM and
the verification through modelling that
the storm water capacity of the dam is in
excess of 20Mm
3
which compares to a Probable Maximum Precipitation (PMP) event
of around
1,600Mm
3
.
The requirement for
the management of
tailings disposal operations
is stipulated in
SANS 10286 which
was initially published
in 1998.
Recent initiatives through ICMM and ICOLD have provided guidelines for corporate management. Despite this,
it is a recognized fact that
most TSF disasters have been attributable to management failures.
FWGR’s
approach to
the management
of surface
mining risk has
been to
adopt a
pro-active strategy,
whereby maintenance
and risk-
reducing activities
are carried out
timeously. This operating philosophy
is now being
formalized and outlined
in their management
system.
Effective operational
performance will deliver
into the
achievement of the
necessary targets of
appropriate underflow
characteristics,
wall geometry
and consistently acceptable
freeboard. For
this risk to
be managed
it is imperative
that all
involved operational
parties
including specialist support services and equipment
suppliers, are appointed on
the basis of their appropriate
experience, capacity and
competency.
Based on FWGR’s
extensive history
of operational
experience in surface
mining and tailings
disposal, it is
Sound Mining’s
opinion that
operational risks can be adequately controlled.
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The current DP2 deposition at Driefontein
4 TSF (0.5Mtpm) can only continue
until 31 December 2025, at current
deposition rates. The
commissioning
of
the
RTSF
has
been
delayed
until
January
2030
while
approval
for
the
amended
design
is
being
sought
from
the
authorities.
Due
to
this
delay,
the
Leeudoorn
TSF
has
to
be
converted
to
a
cyclone
depositioning
system
to
accommodate
FWGR
deposition
requirement
between
January
2026
and
December
2029.
Any
delay
in
the
RTSF
commissioning
may
result
in
reduced
production until such time as full capacity of the RTSF is available.
Sound Mining is of the
opinion that the selected
site is appropriate for the intended construction
and operation of the RTSF and endorses
the proposed scavenger well solution
for ground water as this
can provide a sustainable solution
to the RTSF’s future plume management
requirements.
15.2.4.
Technical Studies - Water
Water is required
for the hydro
-mining of the TSF’s
and for the processing
of the reclaimed material.
FWGR commissioned an external
assessment of
the water
requirement for
an expanded
operation in
2020. The
work involved
modelling the
waterflows to
establish a
water balance for the operation at steady state. The inputs to the model were examined by Sound Mining and found to be appropriate.
The planned water supply will primarily be from the RTSF return water and from underground water sources (Figure 31).
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Figure 31: TSF Location, Make-up Water Shafts, Processing Plants and Pipeline Layouts
Source:
Sound Mining, 2022
Kloof
10
shaft,
which
is
located
at
the
Libanon
TSF,
will
supply
make-up
water
for
the
hydro-mining
of
Kloof
1
TSF,
Libanon
TSF,
Venterspost North
TSF and Venterspost
South TSF.
Two WULs
have been granted
for the Kloof
and Driefontein
operating areas, which
permit the pumping of water from nearby underground workings as presented in Table 20.
Table 20: Underground Water Sources
Facility
Permitted Quantity
(m
3
/a)
Kloof 10 Shaft
9,487,500
Driefontein 10 Shaft
2,555,000
Source:
Sound Mining,
2022; and FWGR, 2020
Return water from Driefontein
4 TSF is currently re-used
for the reclamation of the Driefontein
5 TSF and associated processing at
DP2.
Make-up water is sourced from Driefontein 10 shaft (~6,000m
3
/d).
Water from DP2, the Leeudoorn TSF,
RTSF and Kloof 10 shaft will be pumped to a Central Water
Facility (CWF). There are currently four
water
tanks
at
the
CWF
used for
water
storage.
Water
will
be
pumped from
the
CWF
to
the
necessary sites
for
hydro-mining
and
processing.
Water and slurry from the hydro-mining of distal TSFs
will be pumped to the pumping stations closer to the hydro-mining sites to piggy-
back off these sites to avoid having to use
additional Booster Pump Stations (BPS). The water pumps
at DP2 supply sufficient pressure for
the Driefontein 5 TSF hydro-mining operation.
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High-pressure water
pumps will
be placed
at the
various TSFs
(i.e., excluding
Driefontein 3
TSF) to
avoid having
high-pressure water
pipelines between the
hydro-mining sites and the processing
plant. They will be
utilized in series to deliver
the required pressure of 25bar
to 30bar, for hydro
-mining.
The mining operation
will pump approximately 42,000m
3
/d of water from
the various mining
sites to feed the
DP2 expansion facility. Each
production unit (or
monitor) requires in the
order of 10,500m
3
/d for the hydro-mining of
TSF material and each
site will have two
monitor
units running
and one
on standby
during steady
state operations.
Water
will be
recovered from
the various
deposition
facilities and
returned to the system.
Make-up water (i.e.,
30% - 40%
of the total water
requirement) will be
required to compensate
after accounting for
losses and rainfall
(~18,000m
3
/d), with Kloof 10 shaft alone, having ample available capacity (~36,000m
3
/d).
15.2.4.1.
Concluding Comments
The available water supply more
than adequately meets the
FWGR requirements including the make-up water
during the dry season.
The
supply from Driefontein 10 shaft and Kloof 10 shaft do not exceed the permissible pumping rates approved in the WULs.
According to the
WULs the return
water will be
treated in an
advanced water treatment facility
and discharged into
Leeuspruit or disposed
to dust
suppression. Instead
of this
open configuration
FWGR has
opted for
a closed
water system
throughout the
LoM so
no water
treatment or discharge into the surface water courses will occur. The final water still in use at the point of closure will be deposited onto
the RTSF for evaporation,
or an alternative water treatment and use will be considered.
15.2.5.
Technical Studies - Power
The power
supply and
Point of
Delivery (PoD)
for the
operations has
been determined
by independent
specialists. These
have been
reviewed and are deemed appropriate for the operation. Power is currently supplied to transformers at the various sites (Table 21) from
Eskom’s 132kV and 44kV grid, where the voltage is reduced to 6.6kV.
Table 21: Power Requirements for FWGR Operations
Site
Installed
(kVA)
Used
(kVA)
Available
(kVA)
Comments
Driefontein 8 Shaft
20,000
11,000
9,000
Sufficient for reclamation operations
Driefontein 13 Shaft
10,000
6,600
3,400
DP2
40,000
-
40,000
18,000kVA required by DP2 at 1.2Mtpm capacity
Libanon
40,000
22,000
18,000
Sufficient for reclamation operations
Kloof 4 Shaft
80,000
64,000
16,000
3,500kVA required by RTSF
Kloof Main Complex
140,000
81,000
59,000
Leeudoorn Shaft
100,000
61,000
39,000
2,500kVA required by Leeudoorn TSF
Total
430,000
245,600
184,400
Source:
FWGR, 2022; and Sound Mining, 2022
The capital estimates take account of
the available equipment at the respective substations and routing
from the substations. The PoDs
feeding the substations are shown in Table 22.
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Table 22: Eskom Points of Delivery
Eskom PoD
NMD
Maximum Utilized
NMD
Transformer Size
Comments
Driefontein 8 Shaft
14.0MVA
11.0MVA
4 by 5MVA
Driefontein 13 Shaft
4.3MVA
6.6MVA
4 by 5MVA
There are sufficient transformers
Kloof 1 Shaft (132kV)
81MVA
81MVA
7 by 20MVA
Libanon Shaft
5.2MVA
6.92MVA
1 by 20MVA
FWGR to install 1 by 20MVA transformer
Libanon Gold
22MVA
19.3MVA
2 by 20MVA
Source:
FWGR, 2022; and Sound Mining,
2022
Suitable PoDs have been
identified for the FWGR operations,
as shown in Figure
31. Eskom will be
notified of the
increased load - Nominal
Maximum Demand (NMD) to be catered for within the existing
contracts - at the appropriate
time. Overhead lines will be utilized as far
as possible
to reduce
the installation
costs and
reduce the
risk of
cable theft.
The aggregate
load requirement
has been
based on
a
conservative diversity factor of 0.8 for the low voltage loads, which represents a relatively flat load profile.
The current Eskom
supply is stable
in that it
is linked
to the main
ring feed.
There is a
curtailment agreement in
place and only
under
severe power disruption, would
the area lose supply.
In this case there
is still sufficient capacity
to run the vital
plant areas by shutting
down the milling section
and using diesel generators which will
provide enough emergency power to ensure
that selected critical process
plant equipment is able to re-start immediately in the event of a power failure.
15.2.5.1.
Concluding Comment
It is
noted by
Sound Mining
that the
power estimates
determined are
considered appropriate
for the
planned operations. The
power
requirement to the various components of the FWGR operation is within the spare capacity available to the related ongoing and current
underground mining and
processing operations. Management
will need to
ensure timely modifications
to the agreements
with Eskom
and sufficient allowance for the rising cost of power.
15.2.6.
Technical Studies - Pipelines and Pumping
FWGR’s
expansion planning
requires a
network of
slurry pipelines
from
the TSF
sites to
DP2,
and tailings
pipelines from
DP2 to
the
Leeudoorn TSF and to the RTSF.
Low-pressure return water pipelines will be required from the RTSF
to the CWF and from the CWF back
to the TSF sites. High
pressure pumps will provide the
mining operations with the pressures
they require (25bar to 30bar).
This eliminates
having to install high-pressure pipelines from the processing plants to the TSF sites.
FWGR worked with
specialists on the design
and cost estimates for
the pipelines. Cognizance was
also taken of the
environment, mine
owned land and already disturbed areas.
The pipeline layout has been designed
to make use of
the shortest possible routes, while also
using existing mine servitudes as far as possible. Use was made of the road servitudes to prevent additional impacts associated with the
clearing and construction of the pipelines, and to ensure that the pipelines are easily accessed for maintenance. Alternative routes were
also considered to avoid wetland
areas; and existing impacted land,
in the context of the
effect on operating costs
due to the influence
of topographical and pumping costs. A summary of the current pipeline and pumping infrastructure Figure 31, is provided in Table 23.
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Table 23: Existing Pipeline and Pumping Infrastructure
Existing Pipeline and Pumping Infrastructure
Approvals
Pre-screening and Slurry Pumping Reclamation Station at Driefontein 5 TSF
Hydraulic Mining Site
Approved EA and Environmental Management Plan
(EMP)
Fine Screening and Slurry Transfer Pump Station at Mining Site
Approved EA and EMP
Slurry Pipeline between Driefontein 5 TSF and DP2
Approved EA and EMP
Tailings Pipeline from DP2 to Driefontein 4 TSF
Approved EA and EMP
Return Water Dam at Driefontein 4 TSF and Process Water Supply to DP2
Approved EA and EMP
Process Water Make-up Storage and Pump Station at Driefontein 10 Shaft
Approved EA, Integrated Water Use Licenses (IWUL)
and EMP
Process Water from Driefontein 10 Shaft to DP2
Approved EA, IWUL and EMP
Source:
Sound Mining, 2022
A summary of the additional piping requirements is presented in Table 24.
Table 24: Phase 2 Pipeline and Pumping Infrastructure
Planned Pipeline and Pumping Infrastructure
Approvals
Pre-screening and Slurry Pumping Reclamation Stations at Driefontein 3 TSF
Approved EA and EMP
Pre-screening and Slurry Pumping Reclamation Stations at Kloof 1 TSF
Approved IEA and EMP
Pre-screening and Slurry Pumping Reclamation Stations at Libanon TSF
Approved IEA and EMP
Pre-screening and Slurry Pumping Reclamation Stations at Venterspost North TSF
Approved IEA and EMP
Pre-screening and Slurry Pumping Reclamation Stations at Venterspost South TSF
Approved IEA and EMP
Slurry Pipeline from Libanon TSF to DP2
Approved IEA and EMP
Slurry Pipeline from Venterspost South TSF to Libanon TSF
Approved IEA and EMP
Slurry Pipeline from Kloof 1 TSF to DP2
Approved IEA and EMP
Return Water Pipeline from CWF to DP2
Approved IEA and EMP
Water Pipeline from DP2 to Driefontein 3 TSF
Approved EA and EMP
Return Water Pipeline from CWF to Libanon TSF
Approved IEA and EMP
Return Water Pipeline from CWF to Venterspost South TSF
Approved IEA and EMP
Process Water Make-up Storage and Pump Station at Kloof 10 Shaft
Approved IEA, IWUL and EMP
Process Water from Kloof 10 Shaft to DP2
Approved IEA, IWUL and EMP
Slurry Pipeline from DP2 to the RTSF
Approved IEA and EMP
Slurry Pipeline from Libanon TSF to DP2
Approved IEA and EMP
Source:
Sound Mining, 2022
The civil infrastructure requirements for pipeline
crossings of road/rail, pipe jack
culverts, open/minor culverts have been
considered and
amount to around 65 installations.
15.2.6.1.
Concluding Comments
The QP considers the pipeline infrastructure design to be well-engineered
and underpinned by practical experience. There appear to be
no fatal flaws
in the thinking behind amendments to
various EIAs and EMPs
to accommodate the changes to
the pipeline and pumping
infrastructure.
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800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Gold Price (USD/oz)
Gold's Monthly Closing Price
Trendline
Upper and Lower Standard Deviation Bands
16.
GOLD MARKET
Item 16 (i) and (ii)
All gold produced is delivered to the Rand Refinery for
refining with no restrictions on the quantity or time frame.
DRDGOLD has a long-standing off
take agreement with the Rand Refinery according
to which gold is sold
on the prevailing spot in
South African Rands. When applying
the 30 June 2022
spot exchange rate (ZAR16.29/USD) to the associated gold price of USD1,819.06/oz Au, a real gold price of ZAR952,721.20/kg is computed.
Gold is a precious metal,
refined and sold as bullion
on the international market. It is traded
on the global financial markets and
has traditionally been
used for jewelry, bartering or storing wealth. Aside from the gold holdings of central
banks, current uses of gold include jewelry, private investment,
dentistry, medicine and technology (Table 25).
Table 25: Above Ground Gold Stocks in 2021
Description
Quantity
(t)
Contribution
(%)
Jewelry
94,464.0
46%
Private Investment
45,456.0
22%
Bank Holdings
34,592.3
17%
Other
30,726.0
15%
Source:
GoldHub, 2022
The largest use of gold is in jewelry, accounting for approximately 46% of the above-ground gold. Gold does not follow the usual supply and demand
logic because it is virtually indestructible and can easily be recycled. In
addition, gold stored in the vaults of banks
is relatively illiquid and subject to
the vagaries of global economies. These characteristics of the gold market make it challenging to forecast the gold price.
16.1.
Gold Price Trends
The QP
considered a
five-year period
of historical
analysis to
form an
opinion of
the gold
price and
exchange rate
to be
expected going
forward
because the QP
is of
the opinion
that a
five-year period
sufficiently covers
the market
volatility seen
in the
international gold
market. This
is also
consistent with the five-year period of consensus
pricing relied on for the price
forecast. The gold price increased in 2020 due
to uncertainties related
to the outbreak of Covid-19.
It then steadily declined to
a spot price of ~ZAR945,295/kg
(i.e., USD1,806.89/oz at ZAR16.27/USD) as at
30 June 2022
(Graph 5).
Graph 5: Gold Price Historical Trendline
Source:
Sound Mining, 2022
The linear trendline indicates robust gold price potential over the near to medium-term.
16.2.
Exchange Rate Forecast
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10
11
12
13
14
15
16
17
18
19
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Exchange Rate (ZAR/USD)
Monthly Closing USD/ZAR Rate
Trendline
Upper and Lower Standard Deviation Bands
The ZAR
to USD
exchange
rate
saw record
breaking highs
in the
second quarter
of 2020
(ZAR19.35/USD) but
has subsequently
dropped back
to
ZAR16.27/USD as at 30 June 2022. A factor
in the deterioration of the local
currency in 2020 was the lockdowns
and economic volatility brought on
by Covid-19.
The spot exchange rate of ZAR16.27/USD compares well with the six-year historical trendline as visually displayed in Graph 6.
Graph 6: Exchange Rate Historical Trendline
Source:
Sound Mining, 2022
Various service providers and financial institutions are consulted to determine consensus forecasts of the gold price (Table 26).
Table 26: Long Term
Consensus Forecasts in Nominal Terms
Description
Year 1
(FY2023)
Year 2
(FY2024)
Year 3
(FY2025)
Year 4
(FY2026)
Year 5
(FY2027)
Gold Price (USD/oz)
1,823
1,799
1,751
1,724
1,496
Exchange Rate (ZAR/USD)
15.60
15.74
15.77
15.79
15.20
Gold Price (ZAR/kg)
914,294
910,051
888,083
875,474
731,081
Source:
DRDGOLD, 2022
The economic assessment for the
Mineral Reserve estimate
relies on a real
price of ZAR914,294/kg (i.e., USD1,823/oz
at ZAR15.60/USD) in 30 June
2022 terms as provided by FWGR. The QP has considered the consensus forecasts supplied by FWGR against linear trends in the demand and supply
of gold as recorded over the period from 2012 to 2021 to examine whether these forecasts are reasonable.
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0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Quantity (t)
Year
4,100
4,200
4,300
4,400
4,500
4,600
4,700
4,800
4,900
5,000
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Quantity (t)
Year
16.3.
Global Demand
Graph 7 reveals a gradual reduction in demand (~14.2%) over the past ten years (2012 to 2021).
Graph 7: Global Gold Demand from 2012 to 2021
Source:
GoldHub, 2022
16.4.
Global Supply
The global gold supply from mining and recycling activities over the same period is presented in Graph 8.
Graph 8: Global Gold Supply from 2012
to 2021
Source:
GoldHub, 2022
While the graph suggests an overall
upward trend from 2012
to 2021 (~2.6%), the supply generally levelled
out over the past five
years. The supply
from mining satisfied some 76% of the demand in 2021, with the balance met by recycled gold.
Gold supply from mining increased by approximately 106t during 2021 (3,582t) when compared with 2020 (3,476t) despite an overall drop in supply
since 2019 (GoldHub, 2022). Below are the top ten gold producing countries in 2021 Table 27.
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Table 27: Global Gold Production
Rank
Country
Production
(t)
2016
2017
2018
2019
2020
2021
1
China
464
429
404
383
368
332
2
Russia
262
281
295
330
331
331
3
Australia
288
293
313
325
328
315
4
Canada
163
171
189
183
171
193
5
United States of America
229
236
225
200
190
187
6
Ghana
131
133
149
142
139
129
7
Peru
166
167
163
143
98
127
8
Mexico
131
120
118
109
102
125
9
Indonesia
118
118
153
92
101
118
10
South Africa
163
154
128
111
99
114
Source:
GoldHub,
2022
Even though China has
experienced five years
of consecutive decline
in annual gold production,
it remains the
largest producer of gold (~10%
of global
gold production in 2021).
16.5.
Concluding Comments
The QP notes a short term
up-tick despite the long-term reduction in demand
together with an essentially constant
supply over the past five
years.
These trends are not inconsistent with the forecast price trend in Table 25. The QP is satisfied that a real 30 June 2022 gold price of ZAR914,294/kg
is
a reasonably conservative assumption for examining the economic viability of the Mineral Reserve estimate.
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17.
ENVIRONMENTAL STUDIES, PERMITTING, OR AGREEMENTS WITH LOCAL INDIVIDUALS OR GROUPS
Item 17 (i); (ii); (iii); (iv); (v); (vi) and (vii)
A
review
of
the
environmental
status
was
undertaken
by
Sound
Mining.
It
relies
on
information
provided
by
DRDGOLD
and
FWGR.
The
key
environmental aspects are
discussed below,
along with any
associated liabilities and
risks. Risks or
liabilities, that would
generally be addressed
in
terms of accepted environmental practice and which do not have significant cost implications, have not been discussed.
17.1.
Permitting Status
The environmental and
social compliance
status in relation
to South
African legislation
is summarised
in Item 21.
The following expands
on the relevant
authorizations or permits required.
17.1.1.
The National Environmental Management Act (NEMA)
EAs have been granted in terms of NEMA and the Environmental Impact Assessment (EIA) Regulations of 2014 as described below.
Driefontein
Mining
Right
Area:
in
March
2016,
Sibanye
Gold
Limited
submitted
an
application
for
an
IEA
including
a
Waste
Management
License
(WML)
for
the
proposed
activities
on
the
Driefontein
Mining
Right
area
(DMRE
Ref.
No.:
GP 30/5/1/2/2 (51) MR. The DMRE granted the EA Ref. No.: GP 30/5/1/2/3/2/1 (51) EM on 11 May 2018.
The Driefontein
MR and
EA are
in good
legal standing.
Sibanye Gold
applied for
a Section
102 amendment
to the
MR to
include the
Driefontein 4 TSF,
which has been granted. FWGR has submitted an
application to the DMRE for the transfer
of the existing Driefontein
EA (Ref. No.: GP 30/5/1/2/3/2/1 (51) EM) as well as the
inclusion of related activities covered by the existing Driefontein EMP relevant to
the FWGR operation. The amendment was for the following:
●
the transfer of the Driefontein EA to FWGR;
●
a modification to scope of how the Phase 1 operations are currently being executed; and
●
to include DP2, DP3 and Driefontein 4 TSF.
Permission for depositing
onto the Driefontein
4 TSF
is contained
in the original
Driefontein EMP
associated with the
MR. This EMP
is
needed for the operation’s
waste management obligations. The pipelines fall
within the scope of the existing infrastructure
recorded in
the current EA and EMP.
Table 28 summarizes the current environmental legal standing for the Driefontein
mining area.
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Table 28: Required Environmental Legislation and the Status for the Driefontein Mining Area
Act, Regulation or By-Law
Requirements
Status
Driefontein Area
MPRDA, 2002 (Act No. 28 of 2002)
Mining Right
This is currently in place.
Social and Labor Plan (SLP)
FWGR has an internally signed-off SLP, however,
an SLP is
not required for FWGR.
NEMA, 1998 (Act No. 107 of 1998):
Environmental Impact Assessment
Regulations 2014 (GNR 982)
EA
This is currently in place; an application has been submitted
for a name change to FWGR and for the inclusion of the
Driefontein 4 TSF.
EMPr/EIA
Forms part of the Driefontein EMPr/EIA.
The Rehabilitation and Closure Cost plan
must be annually adjusted.
This is guaranteed through a Guardrisk Cell Captive.
National Environmental
Management: Air Quality Act, 2004
(Act No. 39 of 2004) (NEM:AQA)
An Atmospheric Emissions License (AEL) is
required for any listed activity within this
Act.
N/A
NEM:WA, 2008 (Act No. 59 of
2008)
A WML is required for any listed activities
within the Act.
There is an EA in place for Driefontein. The TSFs are
currently managed under Sibanye Gold’s existing EMPs
which were in operation prior to the legislation coming into
effect.
National Heritage Resources Act,
1999 (Act No. 25 of 1999) (NHRA)
Permission from SAHRA is required for
the removal of graves.
This area is currently operational, and all correct process
have been followed.
NWA,
1998 (Act No. 36 of 1998)
Any abstraction, storage, diversion, flow
reduction and disposal of water and
effluent requires an IWUL.
This is included in the IWUL. An application was submitted
for a name change and the transfer of applicable water uses
to FWGR.
The application to change the name from WRTRP to FWGR
has been approved.
Source:
FWGR, 2020; and Sound Mining,
2022
Kloof Mining Right Area: in March 2016, Sibanye Gold submitted
an application for an IEA including a WML for the proposed
activities on
the Kloof Mining Right area
(DMRE Ref.
No.: GP 30/5/1/2/2 (66) MR). The
DMRE granted the IEA
(Ref. No.:
GP 30/5/1/2/3/2/1 (66) EM
on 11 May 2018.
Table 28 summarizes the current
environmental legal standing of the
Kloof mining area which
includes the
new pipelines
and the RTSF.
The
Kloof
MR
is
in
good
legal
standing
and
its
IEA
has
been
transferred
to
FWGR.
Sibanye
Gold
has
applied
for
two
Section
102
amendments to the
Kloof MR for
the inclusion of
the Venterspost
North and South
TSFs as
well as land
for the
RTSF.
The Section 102
amendment
for
Venterspost
North
and
Venterspost
South
TSFs
was
granted
at
the
end
of
2021.
The
RTSF
Section 102 amendment was granted but has not been executed by Sibanye Gold as yet.
17.1.2.
National Environmental Waste Management
Act (NEM:WA)
FWGR has confirmed that their
TSFs have an approved Code of Practice (CoP)
on Mine Residue Deposits in
terms of the MPRDA. The
TSFs
on the
Driefontein MR
and Kloof
MR are
covered under
this CoP.
For Phase
2, the
following waste
management activities
have been
granted in terms of
GNR 921 of 13 November
2013 (as amended) under the NEM:WA,
2008 (Act No. 59 of 2008)
(Table 29). The
DMRE
granted the
IEA Ref.
No.: GP
30/5/1/2/3/2/1 (66)
EM on
11 May
2018. The
waste management
activities in
Table
30 allow
FWGR to
construct the RTSF and associated infrastructure. The requirements under NEM:WA have been covered.
Table 29: Activities for Phase 2 Requiring a Waste Management License (WML)
Number of the Relevant
Government Notice
Listed Activity Number
Authorised
Description of Activity
GNR 921
Activity B (1)
Construction and operation of the RTSF and the sewage treatment plant
GNR 921
Activity B (7)
Operation of RTSF
GNR 921
Activity B (11)
Establishment of the RTSF
Source:
FWGR, 2020
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17.1.3.
National Water Act (NWA)
FWGR
is
operating
under
two
authorised
IWUL,
FWGR
License
No.:
10/C22B/ACFGI/4976
and
Driefontein
License
No.:
10/C23E/ACEFGJ4527 both issued 9 March 2017. The
FWGR IWUL is valid for a period
of twenty years from the date of issuance and may
be reviewed at intervals of
not more than five
years. The Driefontein IWUL is valid
for a period of
fourteen years from the date of
issuance
and may
be reviewed at
intervals of
not more than
five years.
An application to
transfer the
applicable Driefontein
uses to
FWGR has
been submitted.
Compliance is also required with the general provisions of the regulations on the use of water for mining and related activities published
under the NWA in GN 704 of 1999. Storm water needs to be managed in line with GN 704 of 1999.
FWGR has proposed an amendment to the conditions of the WUL based on a design that includes a network of intercept wells, in lieu of
a synthetic liner, and will apply for approval in terms of the Dam Safety Regulations (GNR 139 of 24 February 2012). This approval will be
required before FWGR can construct
the RTSF and approval for this has to
date, not been forthcoming. It is in this context
that the LoM
plans now include interim
deposition onto the Leeudoorn TSF,
to allow time to
obtain the requisite amendment
of the Leeudoorn TSF,
incorporated, to reduce the load on the Driefontein 4 TSF and to allow more time for this approval to be obtained.
17.2.
Environmental Considerations
The EIAs
for the
Kloof and
Driefontein operation
areas state
that the
TSFs are
permanent sources
of pollution.
Dust from
the TSFs
impact on the
ambient air quality, the surrounding
soils and the wetlands and surface water
resources. Ground water is also
significantly affected by leaching and
the seepage of pollutants from the TSFs that are located over dolomitic aquifers. Any seepage from the Driefontein 3 TSF,
Driefontein 4 TSF, Libanon
TSF,
Venterspost
North TSF,
Venterspost
South TSF
and Driefontein
5 TSF
is expected
to migrate
downwards into
the aquifers.
Monitoring
data
indicates elevated concentrations of sulphate, total dissolved solids
(TDS) and nitrate in the groundwater which are all
typical constituents associated
with contamination emanating from gold mining areas.
The pH ranges from 4.1 to 8.0 and
is indicative of acid mine
drainage, which is associated with
seepage from existing tailings and surface mining facilities.
Underground
mining
in
these
areas
have
significantly
dewatered
the
dolomitic
systems
which
have
resulted
in
numerous
sinkhole
formations.
Dewatering reduces pressure within the dolomite and this encourages drainage from the overlying TSFs. The removal of these TSFs in the region will
result in long-term
positive benefits to
the region. It
is expected that
the removal
of the TSFs
off the underlying
dolomite will improve
the ground
water quality near the TSFs. There is
no dolomitic risk in the area of the RTSF.
The RTSF site is underlain by Transvaal
Supergroup Strubenkop shale,
Daspoort quartzite and Silverton
shale units. The baseline
groundwater quality is
good. However,
there will be
contamination of the
ground water
quality in
the area.
The
main
elements of
concern are
sulphate
and
manganese,
and
to
a
lesser extent
arsenic,
uranium
and
iron.
These could
potentially impact private boreholes
and the Leeuspruit or its
tributary. TSFs
will be relocated to
the new RTSF
which is more suitably
located with
respect to
ground water.
New environmental
impacts and
risks associated
with the
RTSF
will need
to be
adequately mitigated
and appropriate
measures implemented.
Dust measurements from the TSFs
are generally within the
limits specified by the National Dust
Control Regulations. However,
the EIA found some
sites to be a problem during the dry winter months.
Land is used in the
region for mining
activities, the cultivation of crops,
and for grazing.
The pipeline routes will utilize
existing servitudes and mine
owned land.
Prior to final rehabilitation of reclaimed TSFs, and any subsequent development thereafter, a radiation assessment will be completed to determine if
any
radioactive
hotspots
exist
on
the
site.
Should
any
exist,
they
will
be
excavated
and
taken
to
the
RTSF.
If
a
site
falls
within
the
clearance
requirements of the NNRs,
for the proposed
land use, a
report will need to
be submitted to
the NNR for
approval. Once approved,
the site will
be
rehabilitated with indigenous vegetation and handed back to the landowner.
The RTSF is planned on agricultural land over a small wetland area. The EA
state that a wetland offset strategy must be implemented within one year
of the wetland being
impacted. These impacts will be
mitigated through the correct
and careful stripping, stockpiling
and use of the
soil resources.
The impacts due to contaminated water
run-off and windblown dust, will be mitigated
through the use of wind breaks, concurrent
rehabilitation of
the RTSF and the installation of silt traps.
Clearing and grubbing
of the
vegetation for
construction will
leave the
soils open
to erosion
which could
lead to
sedimentation of
surface water,
wetlands, and the deterioration of aquatic habitats. These impacts will be mitigated through either silt curtains, cut off drains or siltation ponds.
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Fauna
and Flora
Impact Assessments
formed part
of the
EIAs.
The vegetation
comprises of
Carletonville
Dolomite Grassland
and Gauteng
Shale
Mountain Bushveld (both with
a vulnerable conservation status),
as well as
Rand Highveld Grassland (Endangered)
and Soweto Highveld
Grassland
(Endangered). There is also other vegetation namely: grasslands, ridges and wetland vegetation of high-ecological importance due to their influence
on the overall ecosystem. They are seen to be valuable to maintain the biodiversity balance and therefore, should be conservation priorities.
Fauna expected to occur within the
area include mammals, birds, reptiles, amphibians
and invertebrates. Fauna species of importance are the
White-
Tailed Mouse (Endangered) and Rough Haired Golden
Mole (Vulnerable). Some thirty-seven bird species
were identified with some of
them being the
“Listed Red Data” bird
species. However,
the Grass Owl (Vulnerable) is
expected to occur within the wetland
habitats. Red Data reptile
species that
have a low
probability of occurring within
the operation area
include the Giant Girdled
Lizard (Vulnerable)
and the Striped Harlequin
Snake (Rare).
None of the identified amphibians are of concern. Red Data butterfly species expected to occur on site are the Marsh sylph, Roodepoort Copper and
Highveld Blue.
A consolidated Heritage Resources Management process
was completed in 2016 for
the Driefontein and Kloof Mining
Right areas. No fatal flaws were
identified despite the fact that the operation is situated within a sensitive cultural landscape. An environmental compliance audit of
the 2019 EA and
the Driefontein
EMPr
in September
2020
recorded
no major
issues with
an
overall
compliance of
88%.
Construction on
the Kloof
area
has
not
commenced, and so environmental compliance audits are not available.
17.3.
Social and Political Considerations
The operation is located in the vicinity of the following four
local municipalities: Mogale City, Westonaria,
Randfontein and Merafong City.
The RTSF
is in
the Westonaria
and Merafong
City Local Municipalities.
Local towns
include Fochville,
Carletonville, Westonaria
and Venterspost.
The land
is
used for mining, agriculture,
residential and businesses. Agriculture covers
the largest portion of
the area, followed
by mining and residential uses.
Human settlements are relatively scattered due to the mining activities and impact of dolomite. Two thirds of the local GDP is from finance, personal
services and government
services.
The Westonaria
and Merafong
City economies
are more
dependent on
the mining
industry than the
district in
general. Merafong City has
an unemployment rate of over
21%, while the Westonaria
unemployment rate exceeds 42%.
The expansion is expected
to improve
the socio-economic
status
with new
jobs
will be
created
during construction.
Capital
investment
and
contributions to
the GDP
as
a
consequence of the FWGR
operations, and the obvious
multiplier effect, will have
a positive impact in the
area. Employment opportunities include
direct employment
by the
operation, indirect
employment will
be created
by procuring
local goods
and services,
induced employment generated
through
spending
and
associated
job
creation
in
the
economy.
Operation
related
employment
has
the
potential
to
considerably
improve
the
livelihoods and income stability of employees and their dependents.
17.3.1.
Discussions with Local Individuals or Groups
Interested and Affected Parties
(I&APs) raised concerns during the public participation phase
of the Kloof EIA process. A
petition of 793
signatories was compiled in this regard
by the “No for Mega
Dump Forum” representing the community (farmers,
business owners and
residential areas). The concerns raised included:
●
environmental impacts from the existing TSFs and whether the FWGR operation would worsen the conditions;
●
dust being a major concern for health reasons;
●
safety and security on surrounding farms;
●
water quality;
●
population influx; and
●
reduced economic activity within the local community after the LoM.
Some of
the I&APs
acknowledged that the
FWGR operation
would have
a long-term
positive impact by
removing TSFs.
Other positive
impacts expected skills development, employment creation and the benefits
of the multiplier effect where, local
procurement of goods
and services, as well as local and regional economic development would benefit.
Improved quality of life and increased
availabilities of land were also
cited as positive impacts. These
will be managed by the
FWGR Social
and Labor Plan.
The Social Impact Assessment (SIA)
revealed political and community expectations for sharing
in the benefits by local communities. Local
municipalities sometimes claim
that they
are disproportionally
benefiting, or
not benefitting
at all,
from mining
when compared
with
district municipalities and the provinces at large. It is not the responsibility of FWGR to control informal settlements or to provide public
services and
facilities. However,
the existence
of informal
settlements near
the operations
poses a
risk to
the operation
in terms
of
political stability and
community relations/support. FWGR’s internal
controls
state that the
operation has a
shared responsibility (together
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with the relevant local authorities and key
stakeholders) to address operational
induced in-migration to affected communities. Farmers
in the area are more hostile towards the mining industry and they contribute to poor community relations.
A social and labor plan exists to address any negative social impacts of the operation on host communities. Potential positive impacts on
host communities
will be
optimized
and enhanced
in a
sustainable manner.
Emphasis will
be placed
on skills
development and
local
economic development
as these aspects
would constitute the
foundation for enhancing
the operation’s social capital.
Moreover, negative
impacts, such as
increased pressure on
infrastructure and services,
and economic dependence
on FWGR can
be more effectively
mitigated
when the social
capital of the
operations are enhanced.
It is anticipated
that the consequence
and/or probability of
most negative impacts
can be reduced to acceptable levels and that the positive impacts of the operations will outweigh the negative effect.
17.4.
Environmental Closure
Liability Estimate
A review of the closure estimate and associated plans covers the following aspects:
●
discussion of the methodology used to derive the costs for demolition, closure and rehabilitation; and
●
comment on the adequacy of the financial provisions made for the operation.
17.4.1.
Basis of the Closure Liability Estimate
The closure cost assessment was conducted according to the requirements of NEMA as amended (refer to Section 13), by Digby Wells in
June 2022. The purpose of the financial provision assessment was to revise the existing estimate for closure and rehabilitation to
reflect
current conditions as of June 2022.
17.4.2.
Quantum of the Closure Liability
The closure cost estimate is for the purpose of reporting the liability in the annual financial statements
of FWGR.
NEMA as amended, requires the holder of a MR to make full financial
provision for the rehabilitation of negative environmental impacts.
This liability is required to be updated annually and adjusted.
The closure costs are determined
on both an “unscheduled” and “scheduled” basis.
Scheduled costs assume that mining continues and
that
the
final
rehabilitation
will
be
confined
to
the
rehabilitation
of
the
TSF
footprints.
Unscheduled
costs
assume
the
immediate
termination of mining and
provide for rehabilitation
of the area in
its current condition. The
detailed closure cost
model calculates the
cost of demolishing, removing and rehabilitating each infrastructure component which may include (but is not limited to):
●
rehabilitation of the pump station and pipeline footprints;
●
generalized rehabilitation and vegetation management strategies;
●
ensuring the reclaimed footprints are free draining;
●
vegetating the TSFs that will remain post closure;
●
radiation clearance for each rehabilitated footprint; and
●
post-closure maintenance and monitoring costs.
●
FWGR has provided for the quantum of the financial guarantees on an unscheduled estimate basis.
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Table 30 presents the closure cost estimates of the June 2022 Digby Wells Annual Financial Provision Assessment.
Table 30: Current Closure Cost Estimates for FWGR
Asset
Unscheduled Cost 2022
(ZAR M)
Scheduled Cost 2022
(ZAR M)
Driefontein 5 TSF
9.61
9.61
Driefontein 3 TSF
27.61
11.61
Kloof 1 TSF
14.71
11.87
Libanon TSF
21.03
14.84
Venterspost North TSF
23.59
12.33
Venterspost South TSF
6.87
4.82
DP2
14.36
14.36
DP3
11.54
11.54
Driefontein 4 TSF
19.87
20.38
Pipelines
3.35
3.35
Post Closure Aspects Driefontein 5 TSF
2.85
2.85
Post Closure Aspects Driefontein 3 TSF
9.17
3.62
Post Closure Aspects Kloof 1 TSF
24.45
3.70
Post Closure Aspects Libanon TSF
7.53
4.60
Post Closure Aspects Venterspost North TSF
41.16
3.84
Post Closure Aspects Venterspost South TSF
12.25
1.56
Post Closure Aspects DP2
2.42
2.42
Post Closure Aspects DP3
0.24
0.24
Post Closure Aspects Driefontein 4 TSF
14.34
6.35
Project Management
16.09
8.71
Contingency
26.82
14.51
Total
309.69
166.90
Source:
Digby Wells, 2022
Note: Apparent computational errors
due to rounding
As mining of the TSFs progress, the liability for
rehabilitation and closure will decrease from the current
unscheduled cost of ZAR309.69
M
to
a
final
scheduled
cost
of ZAR16
6.90
M.
FWGR
will make
appropriate
application
to
the DMRE
for
adjustments
to
the closure
obligation to cater for this decreasing liability.
Guardrisk Insurance Company Limited
(GICL) has issued
financial guarantees in favor of
the DMRE of
ZAR169.0 M. An amount
of ZAR444.1
M is also
invested in Guardrisk Cell
Captive under the
ring-fenced environmental rehabilitation insurance
policy. The funds are
ring-fenced
for the sole objective
of future rehabilitation
activities during and at
the end of the
LoM. The financial guarantees
and funds held with
the Guardrisk Cell Captive (30 June 2022) is sufficient to cover the 2022 estimated unscheduled
liability of ZAR309.69 M as estimated for
the operation.
Table
31 shows the
closure liability for
the RTSF calculated
in the 2016
Digby Wells
EIA and Environmental
and Management Program
Report Under Regulation 7
of the NEMA Financial Provision
Regulations (2015) which states
that the financial provision is,
at any given
time, equal to the sum of the actual costs of implementing the plans for a period of at least ten years forthwith (this includes the annual
rehabilitation, final, decommissioning and
closure plans). Sound Mining has
been informed by FWGR
that a ZAR169.0
M of the closure
cost estimate for
the RTSF has
been guaranteed by FWGR
through Guardrisk and satisfies
the IEA requirements.
The 2022 closure cost
estimate was normalized by inflating the 2016 estimate by 6%.
Table 31: Closure Cost Estimates from Kloof EIA and Guaranteed through Guardrisk
Asset
Unscheduled Costs after
One Year 2016
(ZAR M)
Scheduled Costs 2016
(ZAR M)
Unscheduled Costs
30 June 2022
(ZAR M)
Scheduled Costs
30 June 2022
(ZAR M)
RTSF
77.17
172.31
116.04
259.09
Source:
Digby Wells, 2016
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17.5.
Concluding Comments
The FWGR IWUL of 9 March
2017 provides for this facility to
be constructed on a synthetic liner.
FWGR is pursuing an amendment of
this condition
following its latest design specification.
It is noted that the SAHRA issued a Final Statutory Comment supporting the requirements and conditions contained in the HIA Reports.
It is the opinion
of the environmental specialist that
the FWGR operations have been
well planned and executed thus
far. The legislative requirements
have been identified and addressed
and where there are gaps
,
measures are being taken
to address them. The
identified risks are well
understood
by FWGR and at the time of this TRS are being addressed to avoid any
significant impact to the operations. No fatal flaws were
identified during this
review.
An insurance policy through Guardrisk of
ZAR169.0 M, combined with the current
balance in the Guardrisk Cell Captive
of ZAR444.1 M (30 June 2022)
is sufficient to cover the 2022 unscheduled liability of ZAR309.69 M as estimated for the operation.
Cognizance needs to be taken of the following:
●
a risk assessment should be completed as per Government Gazette No.: GNR 1147 the NEMA
Financial Provision Regulations (2015) (as amended
January 2020) to determine any residual or latent costs to be included;
●
FWGR has applied for amendments to the Driefontein EA, and is awaiting a response;
●
FWGR is in the process of amending and transferring its Driefontein IWUL to FWGR;
●
FWGR is in the process of confirming the RTSF design, if it is not approved by Department of Water Affairs (DWA)
or if further amendment to the
FWGR’s IWUL or IEA are required it could impact the proposed timing of the operations;
●
numerous heritage sites and grave sites have been identified across the scope of the operations, which require appropriate attention;
●
illegal mining activities,
and nearby informal
settlements may
encroach on the
operations. In terms
of the Extension
of Security of
Tenure
Act,
1997 (Act No.
62 of 1997)
(ESTA),
any illegal land
occupiers may
also be entitled
to certain tenure
rights, which could
prevent landowners
and
government from evicting them unless
the provisions of ESTA
have been met. This
may have been exacerbated
during the Covid-19 restrictions
as no evictions were allowed during this period;
●
dust resulting from the TSFs and the mining activities
needs to be managed; and
●
the quality or quantity of water available to agricultural activities needs to be preserved.
These are being addressed according to the required timelines.
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18.
CAPITAL AND OPERATING
COSTS
Item 18 (i) and (ii)
The capital and
operating cost estimates
used to examine
the viability of
the estimated Mineral
Reserve were informed
by current operations
and
recent feasibility
study work
(i.e., 2020
and 2021)
on processing,
the RTSF
and associated
pumping and
piping infrastructure.
The operating
cost
estimates are supported by actual on mine invoices
received and paid, while the capital estimates
have been determined using unit rates
(obtained
from quotations or bench marked against recent installations) and design quantities.
Although the previous feasibility study work was
in most instances to a definitive level of accuracy, the estimates are no longer current and therefore
deemed to be at
a preliminary feasibility level of
accuracy (i.e., +/-25%). Where
necessary estimates have been
appropriately inflated to
June 2022
real terms and Sound Mining has included a 15% contingency on all costs to reflect the confidence expected for a PFS level of study.
18.1.
Capital Expenditure
The capital expenditure is estimated
in 30 June 2022 real terms and is summarized in Table 32.
Table 32: Summary of Capital Expenditure
Description
June 2022
(ZAR M)
Property Purchases
Land (RTSF and Pipelines)
71
Total for Property Purchasing
71
DP2 Expansion
Equipment and Infrastructure
1,283
Total for DP2 Expansion
1,283
RTSF
RTSF Construction*
1,511
Total for RTSF
1,511
Pumping and Piping
RTSF
776
Driefontein 3
151
Kloof 1
444
Libanon
406
Venterspost South
462
Leeudoorn
525
Total for Pumping and Piping Capital Expenditure
2,765
Total Direct Capital Expenditure
5,630
Indirect Capital Expenditure
Rehabilitation Provision**
-
Stay-in-Business (SiB)
254
Total Indirect Capital Expenditure
254
Contingency
Contingency (15%)
883
Total Capital Expenditure
6,767
Source:
Sound Mining,
2022; and FWGR, 2020
Note:
* RTSF Provision does not cater for
a liner which could amount to approximately
ZAR1.5 Billion
** This rehabilitation requirement is currently
exceeded by the provisions
in the associated trust fund
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0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
20232024202520262027202820292030203120322033203420352036203720382039204020412042
ZAR M
An annual Stay-in-Business (SiB) provision of ZAR8.7 M is considered until 2030 after which it is increased to ZAR16.0 M
for the rest of the LoM. This
provision covers maintenance and the replacement of equipment across the operation. Sound Mining has noted that the Guardrisk Cell Captive
is in
excess of the environmental
liability and therefore no
provision was included. Graph
9 illustrates the resulting
annual capital expenditure requirement
for the operation.
Graph 9: Capital Expenditure Forecast
Source:
Sound Mining, 2022
Early capital will be required to
access the Leeudoorn TSF,
whereafter, DP2
will be expanded (i.e., FY2025 and FY2026). The RTSF
is scheduled to be
constructed over four years (i.e., FY2027 to FY2030) with the
remaining capital expenditure largely earmarked for piping and pumping infrastructure.
18.2.
Operating Costs
The DP2 operating cost estimate (Table 33) and forecast (Graph 10) are based
on the actual costs being
incurred by the current operation. Economies
of scale were taken into consideration by applying a factor to the escalated budget as DP2 increases its throughput.
Table 33: Average DP2 Operating Cost over LoM
Description
Unit Costs
(ZAR/t)
Salaries and Wages
10.40
Contractors
8.89
Reagents
20.63
Other Engineering Stores
6.20
Electricity
15.56
Water
0.46
Machine Hire
1.51
Other
8.15
Other Corporate Costs
3.23
Contingency (15%)
10.20
DP2 Operating Costs
85.23
Source:
Sound Mining,
2022; and FWGR, 2022
A contingency of 15% was included for the assessment of economic viability.
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0
200
400
600
800
1,000
1,200
1,400
20232024202520262027202820292030203120322033203420352036203720382039204020412042
ZAR M
Financial Year
Graph 10: Operating Cost Forecast
Source:
Sound Mining, 2022
18.2.1.
Concluding Comments
The impact of a change in the pumping costs for longer average distances between the deposition sites, current TSFs, available
TSFs and
DP2, is not fully
captured in the operating
cost estimates over
the LoM. There is
a risk that the
operating costs may
prove to be
higher
over time, but these are not expected to be material.
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19.
ECONOMIC ASSESSMENT
Item 19 (i); (ii); (iii) and (iv)
A Discounted Cashflow
(DCF) modelling approach
was adopted to
assess the economic viability
of the Mineral
Reserves as stated.
Considering the
stage
of development
of the
operation
and the
uncertainties
of future
global economics,
as well
as
exchange
rate,
interest
rate
and gold
price
uncertainties, a real DCF model
is deemed more appropriate
than a nominal DCF model.
The DCF model was generated
in June 2022 South African
Rand (ZAR)
real terms
and is
based on
the revenue
forecast, associated
capital and
operating cost
forecasts,
and on
appropriate and
reasonable
economic assumptions (Table 34).
Table 34: Inputs to the DCF Model
Description
Quantum
Unit
Key Dates
Money Terms
30 June 2022
Phase Description
Phase 2 Includes:
DP2 Expansion
Mtpm
1.2
LoM
Phase 2
Years
20
Contingencies
Contingency
%
15%
Gold Price
ZAR/USD
ZAR/USD
15.60
USD/oz Gold
USD/oz
1,823
ZAR/kg Gold
ZAR/kg
914,294
Source:
Sound Mining,
2022; and FWGR, 2022
These assumptions are based on information received from FWGR and from the various consultants who contributed to the Mineral Resources, LoM
planning and technical
study work
that underpin this
Mineral Reserve estimate.
The economic assessment
assumes a 100%
equity-based business
and ignores the effect
of working capital changes.
The QP is satisfied
with the quality of this
information, including the revenue
and cost forecasts,
and
considers
the
inputs
to
the
DCF
model
to
constitute
an
overall
PFS
level
of
accuracy
(i.e., +/-25%).
19.1.
Revenue Forecast
The revenue forecast is a function of gold sales and the pricing assumptions used for the economic assessment. The following processing recoveries,
which are supported by test work
and current plant performance data, were applied
to the material from the respective
TSFs to compute the amount
of gold sold:
●
49.8% for Driefontein 5 TSF material;
●
56.6% for Driefontein 3 TSF material;
●
50.5% for Kloof 1 TSF material;
●
47.2% Libanon TSF material;
●
62.5% for Venterspost South TSF material; and
●
54.7% for Venterspost North TSF material.
The expansion of DP2 facilitates an increase in gold sales over time (Graph 11).
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0
500
1,000
1,500
2,000
2,500
3,000
20232024202520262027202820292030203120322033203420352036203720382039204020412042
Gold Sold (kg)
Financial Year
-1,000
-500
0
500
1,000
1,500
2,000
2,500
20232024202520262027202820292030203120322033203420352036203720382039204020412042
NPV
10
(ZAR M)
Financial Year
Post Tax Discounted Cashflow
Cumulative Cashflow
Graph 11: Gold Sales Forecast
Source:
Sound Mining, 2022
Processing throughput can continue after 2042 when the available TSFs
are likely to be incorporated into
the operation. At this stage,
the economic
assessment has
only considered
the depletion
of the
TSFs
that comprise
the current
Mineral Reserves.
The gold
sold from
these TSFs
equate to
approximately 1.3Moz.
The real revenue forecast relies
on a gold price
of ZAR914,294 (i.e., USD1,823/oz
at ZAR15.60/USD). Taxes would be determined
using the gold mining
tax formula with all unredeemed capital taken into account. The assets are part of the ongoing business of FWGR, which fall outside the ambit of the
provision of the MPRDA that would place an obligation to pay royalties on the proceeds of the operations.
19.2.
Cashflows
Graph 12 presents the post-tax cashflow for an operation that excludes the benefits that would eventually be derived from the Available TSFs.
Graph 12: Post-tax Discounted Cashflows
Source:
Sound Mining, 2022
The cumulative post-tax
cashflows over the
LoM remain positive.
When assuming a
discount rate of
10% the unleveraged
operation reflects
a Net
Present Value (NPV) of ZAR2.32 Billion.
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0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
80%
90%
100%
110%
120%
NPV
10
(ZAR M)
Net Revenue
Capital Expenditure
Operating Costs
19.3.
Sensitivities
The achievability of the LoM plans, budgets and forecasts cannot be assured as they are based on economic assumptions, many of which
are beyond
the control of the company. Future cashflows and profits derived from such forecasts are inherently uncertain and actual results may be significantly
more or less favorable. The
technical risks as identified by Sound Mining are
provided in Item 12.1. These and other environmental
risks can impact
the anticipated revenue and cost forecasts and accordingly have been assessed against upside or downside changes of between -20% and +20%. The
consequential potential impacts are presented in Table 35 and is illustrated graphically in Graph 13.
Table 35: Sensitivity of Post-tax NPV
Variance
NPV
10
(ZAR Billion)
80%
90%
100%
110%
120%
Revenue (ZAR Billion)
0.12
1.23
2.32
3.36
4.41
Capital Expenditure (ZAR Billion)
3.11
2.71
2.32
1.92
1.53
Operating Costs (ZAR Billion)
3.81
3.06
2.32
1.57
0.83
Source:
Sound Mining, 2022
Graph 13 shows that changes to the revenue forecast will impact margins the most.
Graph 13: Sensitivity to Expected Revenue and Costs
Source:
Sound Mining, 2022
Table 36 shows the materiality of changes in the gold price.
Table 36: Sensitivity of Gold Price
Gold Price
ZAR/kg
700,000
800,000
900,000
1,000,000
1,100,000
NPV (ZAR Billion)
(0.27)
0.96
2.15
3.30
4.45
Source:
Sound Mining, 2022
The operation is economically viable above
a gold price of ZAR721,264/kg. The
impact of changes to the
operating cost forecast is materially less, and
any variance in capital expenditure being relatively insensitive.
A sensitivity on the discount rate is displayed in Table 37.
Table 37: Sensitivity of the Discount Rate
Discount Rate
0%
5%
8%
10%
13%
NPV (ZAR Billion)
7.34
3.97
2.85
2.32
1.74
Source:
Sound Mining, 2022
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-1,000
-500
0
500
1,000
1,500
2,000
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
NPV
10
(ZAR M)
Financial Year
Post Tax Discounted Cashflow
Cumulative Cashflow
As a final
sensitivity,
the QP has
tested the
impact of FWGR
having to
revert to
the use of
a liner
for the
RTSF as
opposed to the
design currently
included in the LoM plan. The impact of this expenditure on the discounted post-tax cashflows is shown in Graph 14.
Graph 14: Post-tax Discounted Cashflows (including liner)
Source:
Sound Mining, 2022
The NPV
10
still returns a positive number of ZAR1.58 Billion,
albeit the overall margins are reduced.
19.4.
Concluding Comments
The QP is satisfied that the Mineral Reserves as stated are all economically viable.
20.
ADJACENT PROPERTIES
Item 20 (i); (ii); (iii) and (iv)
A discussion of the
characteristics of adjacent properties is usually
relevant for in situ mineral deposits. The
TSF assets are independent from adjacent
properties with no correlation in mineralization.
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21.
OTHER RELEVANT DATA
AND INFORMATION
Item 21
Information relevant
to the
Mineral Resource
and Mineral
Reserve statements
will certainly
include the
prevailing legislative
framework in
South
Africa.
21.1.
South African Minerals Policy and Legislative
Framework
The South African
Government has an
extensive legal framework within
which mining, environmental
and social aspects
are managed. Inclusive
within
the framework are
international treaties and
protocols, and national
acts, regulations, standards,
and guidelines which
address international, national,
provincial and local management areas. The role of the Government and the relevant regulatory authorities can be summarised as follows:
●
the custodian of environmental and mining legislation as a Constitutional imperative;
●
a conduit between
the public and
mining companies to
ensure that mineral
rights holders satisfy
the objectives
of transforming the mining
industry
by,
inter alia, increasing
the number of
black people in
the industry to
reflect the country’s
population demographics, to
empower and enable
them to meaningfully
participate in
and sustain the
growth of
the economy;
thereby ensuring transparency
to achieve
accelerated and
shared
economic growth;
●
advocate of sustainable development, from a socio-economic and environmental management perspective; and
●
ultimate custodian of historical mining legacies, inclusive of abandoned mines.
The Government
has significantly
reformed its
environmental legislation.
The driving force
behind this
is the
need to
support the
overall national
objective of sustainable
development. Most recently, in 2015, the
government published the National
Environmental Management Laws Amendment
Bill for public comment and the Draft
Revised Financial Provision Regulations were published in
General Notice No.: R1228 of 10 November 2017
in
Government Gazette No.: 41236 in respect of prospecting, exploration and mining or production operations. The applicable laws are listed below:
●
The Constitution of South Africa (Act No. 108 of 1996);
●
Mines and Works Act, 1956 (Act No. 27 of 1956);
●
the Mine Health and Safety Act, 1996 (Act No. 29 of 1996);
●
the National Environmental Management Act, 1998 (Act No. 107 of 1998) (NEMA);
●
National Water Act, 1998 (Act No. 36 of 1998) (NWA);
●
National Nuclear Regulator Act, 1999 (Act No. 47 of 1999) (NNRA);
●
National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004);
●
National Environmental Management: Air Quality Act, 2004 (Act No. 39 of 2004);
●
National Environmental Management: Waste Act, 2008 (Act No. 59 of 2008) (NEM:WA);
●
the Competition Act, 1998 (Act No. 89 of 1998);
●
the Companies Act, 2008 (Act No. 71 of 2008);
●
Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002) (MPRDA);
●
Mineral and Petroleum Resources Royalty Act, 2008 (Act No. 28 of 2008) (MPRRA);
●
Mining Titles Registration Act, 1967 (Act No. 16 of 1967);
●
Mining Titles Registration Amendment Act, 2003 (Act No. 24 of 2003);
●
Broad-Based Socio-Economic Charter (and associated amendments, 2010), also known as the Mining Charter;
●
National Heritage Resources Act, 1999 (Act No. 25 of 1999) (NHRA);
●
National Environmental Management: Protected Areas Act, 2003 (Act No. 57 of 2003) (NEM:PAA);
●
National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004) (NEM:BA);
●
National Forests Act, 1998 (Act No. 30 of 1998) (NFA);
●
Hazardous Substances Act, 1973 (Act No. 15 of 1973) (HSA);
●
Explosives Act, 1956 (Act No. 25 of 1956);
●
National Road Traffic Act, 1993 (Act No. 93 of 1996) (NRTA);
and
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●
New Broad-Based Black-Economic Empowerment
Charter for the South
African Mining Industry
(also known as
the New Mining
Charter) published
in September 2018.
21.2.
South African Legislative Framework
South African legislation applicable
to mining related activities and
specifically with regard to environmental, social and
community impact issues are:
●
The Constitution of South Africa Act, 1996 (Act No. 108 of 1996);
●
Mineral and Petroleum Resources Development Act, 2008 (Act No. 28 of 2002) (MPRDA);
●
National Environmental Management Act, 1998 (Act No. 107 of 1998) (NEMA);
●
National Water Act, 1998 (Act No. 36 of 1998) (NWA);
●
National Environmental Management: Waste Act, 2008 (Act No. 59 of 2008) (NEM:WA);
●
National Environmental Management: Air Quality Act, 2004 (Act No. 39 of 2004) (NEM:AQA);
●
Hazardous Substances Act, 1973 (Act No. 15 of 1973) (HSA);
●
National Heritage Resources Act, 1999 (Act No. 25 of 1999) (NHRA);
●
National Environmental Management: Protected Areas Act, 2003 (Act No. 57 of 2003) (NEM:PAA);
●
National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004); and
●
National Forests Act, 1998 (Act No. 30 of 1998) (NFA).
A brief description of the above Acts is summarised below:
The Constitution of
South Africa Act,
1996 (Act No.
108 of 1996):
Mines must comply
with South African
constitutional and common
law by conducting
their operational and closure activities with due diligence and care for the rights of others.
Section 24(a) of the Constitution states that everyone has
the right to (a) an environment which is
not harmful to their health or well-being; and (b)
to have the environment protected, for the benefit of present and future generations, through reasonable legislative and other measures that:
●
prevent pollution and ecological degradation;
●
promote conservation; and
●
secure ecologically sustainable development and use of natural resources.
while promoting justifiable economic and social development.
Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002) (MPRDA): The MPRDA provides a holistic cradle-to-grave approach to
prospecting and mining by fully considering economic, social and environmental
costs to achieve sustainable development of
South African Mineral
Resources.
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National Environmental
Management
Act,
1998
(Act
No.
107
of
1998)
(NEMA):
NEMA
was
promulgated
in
1998
to
replace
the
Environmental
Conservation Act, 1989 (Act No. 73 of 1989) (ECA) as the overarching national environmental
legislative framework. NEMA was promulgated to give
effect to
the Environmental
Management Policy
(published in
2007), and
has been
subsequently amended,
including the
National Environmental
Management Amendment Act of 2003, and the National Environmental Management Second Amendment Act, 2004 (Act No. 8 of 2004).
The requirements for financial provisions
for rehabilitation and closure
are evolving. Historically,
closure and rehabilitation liability
calculations and
financial provisions
had to
be determined
and provided
for in
accordance with
Regulations 53
and 54
under the
MPRDA (GN
527, April
2004), a
guideline document for the evaluation of
the quantum of closure-related financial provisions
issued by the DMRE in 2004/5, and
a set of master rates
updated from time to time by the DMRE based on inflation.
Financial provision regulations (GNR
1147) were published on
November 2015 (as
amended January 2020) to
replace Regulations 53
and 54 under
the MPRDA. The new regulations require the following:
●
annual rehabilitation, as reflected in an annual rehabilitation plan;
●
final
rehabilitation,
decommissioning
and
closure
of
the
prospecting,
exploration,
mining
or
production
operations
at
the
end
of
the
life
of
operations, as reflected in a final rehabilitation, decommissioning and mine closure plan; and
●
remediation of latent or
residual environmental impacts which
may become known in
the future, including
the pumping and
treatment of polluted
or extraneous water; as reflected in an environmental risk assessment report; and
●
The applicant or holder of a right or
permit must ensure that the financial provision is,
at any given time, equal to
the sum of the actual costs of
implementing the plans and report contemplated in regulation 6 and regulation 11 (1) for a period of at least 10 years forthwith.
The NEMA Section 24P (as amended in April 2014) also applies.
It requires:
●
financial provisions to be made in the prescribed manner before an environmental authorization is issued by the DMRE;
●
annual assessment of environmental liabilities; and
●
annual “increase” of available financial provisions to the satisfaction of the Minister of Mineral Resources.
National Water Act,
1998 (Act No. 36
of 1998) (NWA):
The NWA
stipulates that a WUL
is required for
the abstraction, storage,
use, diversion, flow
reduction and disposal of water and effluent in terms of Section 21 of the Act.
Use of water for
mining and related activities is
also regulated through regulations
that were updated after
the promulgation of the NWA
in 1999 -
GN 704.
GN 704
addresses the regulations
on use
of water
for mining
and related
activities aimed at
the protection
of water
resources. Inclusive
within GNR 704 are the control measures for activities and its regulation of the sizing, control and monitoring of water management measures.
National Environmental Management: Waste Act, 2008 (Act No. 59 of
2008) (NEM:WA): Waste management activities listed in terms of the NEM:WA
(GN 921,
29 November 2013)
include: storage
of waste;
the reuse,
recycling and
recovery of
waste; treatment
of waste;
and disposal of
waste at
specified thresholds. Historically,
mine residues were
managed in accordance
with the MPRDA
and the NEMA. This
situation changed in 2014
with
the promulgation
of the
National Environmental
Management: Waste
Amendment Act
of 2014
and its
inclusion of
mine residue
as a
Category A
(hazardous) waste, as well as
the addition of
mine residue stockpiles and
residue deposits to the
list of waste management activities
requiring a WML.
In 2008 the Ministers of Mineral Resources and Environmental
Affairs concluded an agreement on the “One
Environmental System” for
the country
with respect to mining. Ministers adopted an integrated mine environmental management system and sought to align the MPRDA, NEMA, NEM:WA,
NEM:AQA and NWA. In short, the agreement implied that environmental issues resulting from mining, prospecting, production and related activities
will be regulated in terms of the NEMA, whilst the Minister of Mineral Resources will become a competent authority in terms of NEMA.
Following the acceptance
of the above-mentioned
agreement various amendments
were made to
environmental legislation, inter
alia, the NEMA,
MPRDA and NEM:WA.
Significant to these
amendments were the
inclusion of residue
stockpiles under the
NEM:WA
listed activities as
well as the
publication
of
regulations
regarding
the
planning
and
management
of
residue
stockpiles
and
residue
deposits
from
the
prospecting,
mining,
exploration or production operation in GNR 632 of 2015 and GN 921 July 2015.
Transitional provisions specifically include the following:
●
any activity in terms of regulation 73 of the MPRDA
relating to the management of residue stockpiles and residues
deposits, that can be done in
terms of a provision of GNR 632 of 2015, must be regarded as having been done in terms thereof;
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●
management measures of residue stockpiles and residue deposits
approved in terms of the MPRDA,
at the time of the coming into
operation of
GNR 632 of 2015, must be regarded as having been approved in terms thereof;
●
a holder of a right or permit in terms of the MPRDA must continue the management of the residue stockpiles and residue deposits in accordance
with the approved management measures; and
●
a person who lawfully conducts a waste management activity listed in the NEM:WA Schedule on the date of the coming
into effect of this Notice
may continue with the waste management activity until such time that the Minister by notice in a Gazette calls upon such a person to apply for a
WML.
National Environmental Management: Air Quality Act,
2004 (Act No. 39 of
2004) (NEM:AQA): In terms of
Section 21 of the NEM:AQA,
an Atmospheric
Emissions License (AEL) is required for listed processes that may result in atmospheric emissions, which may
have a significant detrimental effect on
the environment, health, social and economic conditions. These requirements apply to
smelters, refineries and certain processing plants. NEM:AQA
GN 283 April
2015 requires mines to
register with the Department
and submit results
in line with
the National Atmospheric Emission
Inventory System
(NAEIS) requirements. The
National Dust Control
Regulations (GNR 827,
1 November 2013)
provides standards for
dust-fall
in residential and
non-
residential areas, and
the requirements of
monitoring and reporting
to the air
quality officer.
Mining operations have
the responsibility to
comply
with the standards.
Hazardous
Substances
Act,
1973
(Act
No.
15
of
1973)
(HSA):
The
regulations
relating
to
Group
IV
Hazardous
Substances
(GNR
247
of
26 February 1993) in terms of the HSA apply to the use and transportation of radioactive nuclides used in metallurgical processing plants.
National Heritage Resources Act, 1999 (Act No. 25 of 1999) (NHRA): The NHRA requires that a heritage assessment be undertaken for developments
listed in the Act.
The Act prohibits the
following: the alteration, disturbance,
damage or demolishment
of buildings and
structures older than 60
years;
archaeological and paleontological artefacts; cultural significant
graves and burial sites; and public monuments,
except for where a permit was issued
by the relevant Provincial Heritage Resources Authority.
National Environmental Management: Protected
Areas Act, 2003 (Act No.
57 of 2003) (NEM:PAA):
The NEM:PAA regulates
the system of protected
areas in South Africa and their management. It distinguishes between the
following types of protected areas: national parks; nature reserves; special
nature reserves;
and ‘protected
environments. Mining
is prohibited
in national
parks, nature
reserves and
special nature
reserves, but
mining in
‘protected environments’ may be allowed with
the necessary permission
from the Minister of Environmental Affairs as
well as the Minister of
Mineral
Resources.
National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004) (NEM:BA): Holders of a mining right need to comply with the alien
and
invasive
species
regulations
(GNR
598
of
1
August
2014)
in
terms
of
NEM:BA
for
species
listed
in
GN
864,
of
29 July 2016, which
deal with different categories
of alien and
invasive plant and animal
species that are
prohibited, must be combatted or
eradicated,
controlled, require a permit or are subject to certain exemptions and prohibitions.
National Forest Act, 1998 (Act
No. 84 of 1998)
(NFA): The NFA prohibits the cutting, disturbance,
damage or destruction of trees
in natural forests and
trees included in the
lists of protected tree species
published in terms of
the NFA, except where a license was
issued by the Department
of Agriculture
Forestry and Fisheries (DAFF).
DRAFT
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Document No: PR/SMI/1203/22
124
22.
INTERPRETATIONS
AND CONCLUSIONS
Item 22
A full list of all technical
documents used in the compilation of the
TRS is provided in Item
24. The QP has interrogated
all of this information in the
process of generating
the Mineral Resource
and Mineral Reserve
estimates and remains
satisfied with the
technoeconomic merits of
the LoM planning
and of the integrity of the information and study work performed.
The QP’s
are of
the opinion
that the
operations of
FWGR are
reasonably robust
in the
context of
the current
methodologies and
systems. These
operations are
ongoing with
an experienced management
team, skilled employees
and a mining
contractor whose
track record
demonstrates the
required competence. Apart from the
uncertainties identified herein, which risks are
manageable, no factors of
an operational or geo-metallurgical
nature have been identified that could significantly impact the prospects for eventual economic extraction, or the validity of the Mineral Reserves as
stated.
The QP is comfortable with the
gold price of ZAR914,294.00/kg used for
the economic assessment. This price was
provided by DRDGOLD and is not
inconsistent with the spot price as at 30 June 2022 of ZAR945,295/kg (i.e., USD1,806.89/oz at ZAR16.27/USD).
Sound Mining has reviewed the EIA
and Environmental Management Plan (EMP)
that were provided. The assets
held by FWGR were acquired
from
Sibanye Gold,
a subsidiary
of Sibanye-Stillwater,
in a
transaction in
which common
law ownership
was established
over the
various tailings
dams
containing the Mineral Resources and Mineral Reserves. FWGR conducts
its activities inter alia in accordance with EAs and
the provisions of the Mine
Health and Safety
regulations. A Use
and Access Agreement
with Sibanye
Gold articulates the
various rights, permits
and licenses held
by Sibanye
Gold in terms of which FWGR operates, pending the transfer to FWGR of those that are transferable.
The drilling, sampling, analytical processes and governance of the exploration programs are appropriate and in-line with industry best practice. They
are considered to be
of high confidence. The
density used to determine quantities
from volumes has been
determined from both in
situ measured
values and
empirical data
and
is considered
reliable. Sound
Mining concludes
that the
estimations are
based on
a suitable
database
of reliable
information.
Scrutiny of the LoM plan
has shown that the recoveries
coincide with the recoveries
achieved in the metallurgical
test work and the
quantities and
grades used are
consistent with
those estimated in
the Mineral Resource
estimation. A review
of the processing
at DP2 reveals
that the plant
has
performed in-line with
expectations and with
further modifications will
adequately handle the
planned increase in
throughput to 1,200ktpm
for Phase
2. The design for the expansion is based on representative and adequate metallurgical
data, knowledge and insights. The mass balance for the plant
is appropriate.
The tailings material arising from DP2 will
be stored at the Driefontein 4 TSF and Leeudoorn TSF before being rerouted to a
RTSF that will have excess
capacity from both
a depositional
rate (3.0Mtpm) and final
capacity perspective (800Mt).
Sound Mining has
reviewed the design
for the RTSF prepared
by FWGR’s specialists and has concluded that the detailed design report provides a solid basis for the future development of a safe RTSF.
The capital provision
for all of the
necessary infrastructure requirements have
been reviewed and
are considered appropriate. The
capital expenditure
estimates
for
the
expansion
of
DP2
and
the
RTSF
were
undertaken
independently and
are
currently
presented
at
a
PFS
level
of
accuracy.
The
operational expenditure has been estimated from actual data at the current operations. These estimates are considered appropriate and in-line with
industry standards.
The QP while cognizant of the risks identified in
Item 12.1, remains satisfied that Mineral Resources
and Mineral Reserves of FWGR are not
likely to
change materially as a consequence of these uncertainties.
DRAFT
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(Proprietary) Limited
Document No: PR/SMI/1203/22
125
23.
RECOMMENDATIONS
Item 23
The QPs
recommend that
FWGR continues
to proactively
seek the
necessary regulatory
approvals for
the RTSF
timeously to
ensure that
forecast
production can continue uninterrupted.
DRAFT
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
126
24.
REFERENCES
Item 24
The sources of data and information used in preparation of this TRS are presented in Table 38.
Table 38: TRS Data and Information Sources
Source
Date
File Type
Title
Engineering
Beric Robinson Tailings
(Proprietary) Limited
September 2020
pdf
FW Regional Tailings Dam Model - Detail Design Report (BRT-10-
2020)
DRA SA (Proprietary) Limited
May 2011
pdf
DRDGOLD - Far West Gold Recoveries Phase 2 Expansion Project
Feasibility Study - Major Pipeline Routes
DRA SA (Proprietary) Limited
May 2011
pdf
FWGR Phase 2 Process Flow Diagrams IZADBR4544
DRA SA (Proprietary) Limited
August 2020
pdf
RTSF Hazard and Operational Study 2 Report
DRA SA (Proprietary) Limited
August 2020
pdf
Far West Gold Recoveries RTF FS RTSF Complex Infrastructure
Fencing 2.1m High Shotcrete Perimeter Wall Layout & Details
DRA SA (Proprietary) Limited
September 2020
pdf
Far West Gold Recoveries Regional Tailings Facility - Basis of
Estimate
DRA SA (Proprietary) Limited
September 2020
pdf
Far West Gold Recoveries Regional Tailings Facility Basis of
Estimate
DRA SA (Proprietary) Limited
June 2020
pdf
Plant layout DRD FWGR Phase 2 Expansion Project (CPP)
DRA SA (Proprietary) Limited
June 2020
pdf
DRD FWGR Phase 2 Expansion Project Feasibility Study Process
Design Criteria (CPP)
DRA SA (Proprietary) Limited
June 2020
pdf
DRD FWGR Phase 2 Expansion Project Feasibility Study
Mechanical Equipment List (CPP)
DRA SA (Proprietary) Limited
November 2020
pdf
DRD FWGR Phase 2 Expansion Project Feasibility Study Executive
Summary
DRA SA (Proprietary) Limited
November 2020
pdf
DRD FWGR Phase 2 Expansion Project Feasibility Study Opex (CPP)
DRA SA (Proprietary) Limited
November 2020
xlsx
Phase 2 Expansion Project Feasibility Study Capital Cost Estimate
(CPP and Piping Rev 6)
DRA SA (Proprietary) Limited
October 2020
xlsx
Far West Gold Recoveries Regional Tailings Facility Capital Cost
Estimate: Scenario 2
DRA SA (Proprietary) Limited
October 2020
xlsx
DRDGOLD - Far West Gold Recoveries Phase 2 Expansion Project
Feasibility Study OPEX
DRA SA (Proprietary) Limited
August 2022
pdf
00301-Blockplan with Google Overlay
DRA SA (Proprietary) Limited
2022
pdf
00301-Blockplan
DRA SA (Proprietary) Limited
2022
xlsx
DP2 - expansion capital spend
DRA SA (Proprietary) Limited
March 2022
pdf
Far West Gold Recoveries DP2 Expansion Project
Feasibility Study Basis of Estimate
DRA SA (Proprietary) Limited
2022
pdf
FZADBR6245-PROC-PDC-005-Rev B_PDC
DRA SA (Proprietary) Limited
2022
xlsx
FZADBR6245-PROC-PDC-005-Rev B_PDC
DRA SA (Proprietary) Limited
May 2022
pdf
Far West Gold Recoveries Dp2 Expansion Project
Feasibility Study Process Flow Diagram
DRDGOLD Limited
August 2020
docx
Manual for the Management of the Disposal of Tailings on the Far
West Gold Recoveries Regional Tailings Facility
DRDGOLD Limited
August 2020
pdf
Electrical Point of Delivery Meeting minutes
Geo Tail SA (Proprietary) Limited
June 2022
pdf
Leeudoorn TSF Cyclone Conversion Design
Geo Pollution Technologies -
Gauteng (Proprietary) Limited
August 2021
pdf
Kloof Gold Mine Leeudoorn Return Water Dam Strategy
Highlands Hydrology (Proprietary)
Limited and Water Hunters
August 2020
pdf
Hydrological Assessment for the Proposed Regional Tailings
Facility, Far West Gold Recoveries Version
1
Knight Piesold (South Africa)
(Proprietary) Limited
August 2021
pdf
Geotechnical Investigation for Leeudoorn Active TSF
Mintek and DRDGOLD Limited
September 2020
xlsx
Predicted yields from the various dams based on test work results
at September 2020
Water Hunters
January 2020
xlsx
WRTRP Output Analysis v 0.5e2 Base Case
Water Hunters
August 2020
pdf
Far West Gold Recoveries - Regional Tailings Facility - Updated
Ground Water Model Report
DRAFT
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
127
Environmental/Legal
Department of Minerals Resources
and Energy
May 2018
pdf
WRTRP Driefontein Environmental Authorization
GP30/5/1/2/3/2/1(51)EM
Department of Minerals Resources
and Energy
May 2018
pdf
WRTRP Kloof Integrated Environmental Authorization
GP30/5/1/2/3/2/1 (66)EM
Department of Water and
Sanitation
March 2017
pdf
WRTRP Integrated Water Use License. License No.:
10/C22B/ACFGI/4976
Department of Water and
Sanitation
March 2017
pdf
Driefontein Water Use License. License No.:
10/C23E/ACEFGIJ/4527
Digby Wells Environmental (South
Africa) (Proprietary) Limited
July 2022
pdf
Far West Gold Recoveries Closure Cost Assessment 2022. Financial
Provision Assessment Report
Digby Wells Environmental (South
Africa) (Proprietary) Limited
March 2016
pdf
Environmental Impact Assessment and Environmental
Management Programme for the Amendment of the existing EMP
and Inclusion of Listed Activities Associated with Operations at
Driefontein Mining Right Area, Sibanye Gold Limited
Digby Wells Environmental (South
Africa) (Proprietary) Limited
March 2016
pdf
Environmental Impact Assessment and Environmental
Management Programme for the Amendment of the existing EMP
and Inclusion of Listed Activities Associated with Operations at
Kloof Mining Right Area, Sibanye Gold Limited
Digby Wells Environmental (South
Africa) (Proprietary) Limited
May 2020
pdf
Far West Gold Recoveries Closure Costs Assessment 2020
(ERG6453)
Digby Wells Environmental (South
Africa) (Proprietary) Limited
September 2020
pdf
Driefontein Environmental Authorization Audit
Digby Wells Environmental (South
Africa) (Proprietary) Limited
July 2022
pdf
Far West Gold Recoveries Closure Cost Assessment 2022
Financial Provision Assessment Report
Kongiwe Environmental
(Proprietary) Limited
October 2019
docx
The reclamation and reprocessing of the Soweto Cluster dumps in
the City of Johannesburg, Gauteng. Draft Environmental Impact
Assessment Information
Malan Scholes Inc
November 2017
pdf
Due Diligence Report for DRDGOLD Limited in respect of the West
Rand Tailings Retreatment Project
National Nuclear Regulator
July 2019
pdf
Certificate of Registration in terms of the National Nuclear
Regulator Act, 1999 (Act No. 4T of 1999)
Sibanye-Stillwater Limited
December 2019
xlsx
19128093_SS_RUSO CC 2019_20191118_FINAL_09_03_20
(Consolidated)
Sibanye-Stillwater Limited
December 2019
xlsx
19128093_SS_RUSO CC 2019_20191118_FINAL_V1
Werksmans Attorneys
November 2017
pdf
Exchange agreement between Sibanye Gold Limited and
K2017449061 (WRTRP to be renamed) and including DRDGOLD
DRAFT
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
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Schedule and Economics
DRDGOLD Limited
2022
xlsx
SK1300 - DP2 Expansion LOM plan_13Jul22_Option
3_REAL_Blended_50_MT Edited_Rev3
DRDGOLD Limited
July 2022
pdf
DRDGOLD Group Information Sharing Document – Financial
Reporting
DRDGOLD Limited
2022
pdf
Annual Integrated Report
DRDGOLD Limited
2022
xlsx
Production information_Jun22
Financial Times
2022
https
https://www.ft.com/content/be9c5a5e-1280-4281-8b28-
04717d2c7e66
GoldHub
2022
https
World Gold Council, Gold supply and demand statistics -
https://www.gold.org/goldhub/data/gold-supply-and-demand-
statistics
GoldHub
2022
https
https://www.gold.org/goldhub/research/gold-demand-
trends/gold-demand-trends-q2-2022
GoldHub
2022
https
https://www.gold.org/goldhub/data/historical-mine-production
GoldHub
2022
https
Gold Supply and demand statistics 30 July
2022https://www.gold.org/goldhub/data/gold-supply-and-
demand-statistics
Sibanye-Stillwater Limited
2019
pdf
Mineral Resources and Mineral Reserves Report
Sound Mining
December 2017
pdf
Competent Persons' Report on the West Rand Tailings
Retreatment Project for DRDGOLD Limited
Sound Mining
December 2020
pdf
PR SMI 0921 20 DFS Report for FWGR - Phase 2 Expansion Project
USGS
2017
https
https://s3-us-west-2.amazonaws.com/prd-
wret/assets/palladium/production/mineral-pubs/gold/mcs-2017-
gold.pdf
USGS
2018
https
https://s3-us-west-2.amazonaws.com/prd-
wret/assets/palladium/production/mineral-pubs/gold/mcs-2018-
gold.pdf
USGS
2019
https
https://prd-wret.s3-us-west-
2.amazonaws.com/assets/palladium/production/s3fs-
public/atoms/files/mcs-2019-gold.pdf
USGS
2020
https
https://pubs.usgs.gov/periodicals/mcs2020/mcs2020-gold.pdf
World Gold Council
2022
https
Gold Demand Trends Q2 2022 -
https://www.gold.org/goldhub/research/gold-demand-
trends/gold-demand-trends-q2-2022/supply
Geology
Frimmel et al
2005
pdf
The Formation and Preservation of the Witwatersrand Goldfields,
the World’s Largest Gold Province
Geographicx Surveys CC
July 2022
dwg
Driefontein 5 02072022 Merge R1
Geographicx Surveys CC
July 2022
pdf
Quantity Report of Driefontein 5 02072022 R1
Geoplan Materials Engineering
(Proprietary) Limited
November 2020
xlsx
DRDGOLD Density Data
McCarthy and Rubidge
2005
Book
The Story of Earth and Life
Minxcon (Proprietary) Limited
June 2009
pdf
Technical Report on the Surface Mineral Resource Estimation,
Scheduling and Financial Valuation of the West Wits HTO Project,
Gold Fields (Pty) Ltd. South Africa
Minxcon (Proprietary) Limited
February 2013
pdf
A Technical Report on The Gold1 TSFs in the Gauteng Province,
South Africa
Minxcon (Proprietary) Limited
2013
dm
d4_e_krig_all1
Minxcon (Proprietary) Limited
2013
dm
d4_w_krig_all1
Minxcon (Proprietary) Limited
2009
dm
drth_krig_allfinal2b
Minxcon (Proprietary) Limited
2009
dm
DTOPO_pt/tr
Minxcon (Proprietary) Limited
2009
dm
dr5_krig_all fin
Minxcon (Proprietary) Limited
2009
dm
dtopo_pt/tr
Minxcon (Proprietary) Limited
2009
dm
kl1_krig_all_final3c
Minxcon (Proprietary) Limited
2009
dm
DTOPO_pt/tr
Minxcon (Proprietary) Limited
2009
dm
lib_krig_all1_2010c
Minxcon (Proprietary) Limited
2009
dm
dtopo_pt/tr
Minxcon (Proprietary) Limited
2009
dm
vn_krig_all1_fin2d
Minxcon (Proprietary) Limited
2009
dm
vn_fin_pt/tr
Minxcon (Proprietary) Limited
2009
dm
vs_krig_all1_final2c
DRAFT
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Minxcon (Proprietary) Limited
2009
dm
vs_fin_pt/tr
The RVN Group (Proprietary)
Limited
July 2020
pdf
Density Measurements and Supervision DRDGOLD
The glossary of terms, units and abbreviations used in this TRS are presented in Table 39.
Table 39: Glossary and Abbreviations
Term
Explanation
Archaean
Geological eon from 2,500Ma - 4,000Ma
Assay
The chemical analysis of ore samples to determine their metal content
Auriferous
Containing, or producing, gold
Basin
A geological basin is a large low-lying area, often below sea level
Clastic
A rock or sediment composed principally of transported broken fragments derived from pre-existing rocks or
minerals
Conformable
A sequence of beds is said to be conformable when they represent an unbroken period of deposition
Conglomerate
A coarse-grained clastic sedimentary rock composed of rounded to subangular fragments set in a fine-
grained matrix
Craton
An old and stable section of the continental lithosphere which has survived cycles of merging and
rifting
continents. Cratons are today generally found in the interior of tectonic plates
Cut-off grade
The lowest grade of mineralized rock that determines as to whether or not it is economic to recover its gold
content by further concentration
Density
Measure of the relative “heaviness” of objects with a constant volume, density = mass/volume
Deposit
Any sort of earth material that has accumulated through the action of wind, water, ice or other agents
De-survey
Mathematical reconstruction in 3D space of a borehole trace using azimuth and dip
survey data
Detrital
Formed from eroded loose rock and mineral material
Dilution
Waste or material below the cut-off grade that contaminates the ore during the course of mining operations
and thereby reduces the average grade mined
Definitive Feasibility
Study (DFS)
A definitive engineering estimate of all costs, revenues, equipment requirements and production at a -5% to
+10% level of accuracy. The study is used to define the economic viability of a project and to support the
search for project financing
Distal
Relating to or denoting the outer part of an area affected by geological activity
Dolomite
Carbonate mineral, CaMg(CO
3
)
2
. The word dolomite is also used to describe the sedimentary carbonate
rock, which is composed predominantly of the mineral dolomite
Doré
An unrefined, therefore impure, alloy of gold with variable quantities of silver and smaller quantities of base
metals, which is produced at a mine before passing on to a refinery for upgrading to London Good Delivery
standard, which usually consists of 85% gold on average
Drillhole
Exploration hole drilled for the purposes of exploring for and evaluating sub-surface geology, in this instance
the presence and distribution of gold
Dyke
A tabular vertical or near-vertical body of igneous rock formed by magmatic injection into planar zones of
weakness such as faults or fractures that is discordant to the bedding or foliation of the country rock
Estimation
The quantitative judgement of a variable
Exploration
Prospecting, sampling, mapping, drilling
and other work involved in the search for mineralization
Facies
The sum total of sedimentary features that characterize a sediment as having been deposited in a given
environment; an assemblage of metamorphic rocks which are considered to have formed under similar
conditions of temperature and pressure
Fault
A fracture in earth materials, along which the opposite sides have been displaced parallel to then
plane of
the movement
Fire Assay
The assaying of metallic ores by methods requiring the use of furnace heat
Fluvial
Produced by the action of a stream or river
Footwall
The underlying side of a stope or ore body
Goldfield
An auriferous deposit defined in a geographically distinct sub-basin
Granite
An intrusive felsic rock which is granular in texture
Hydrothermal
The circulation of hot water. Hydrothermal circulation occurs most often in the vicinity of sources of heat
within the Earth's crust. In general, this occurs near volcanic activity
Indicated Mineral
Resource
Is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of
adequate geological evidence and sampling. The level of geological certainty associated with an
indicated
Mineral Resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to
support mine planning and evaluation of the economic viability
of the deposit. Because an indicated Mineral
Resource has a lower level of confidence than the level of confidence of a measured mineral resource, an
indicated Mineral Resource may only be converted to a probable Mineral Reserve.
Inferred Mineral
Resource
Is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of
limited geological evidence and sampling. The level of geological uncertainty associated with
an inferred
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Term
Explanation
Mineral Resource is too high to apply relevant technical and economic factors likely to influence the
prospects of economic extraction in a manner useful for evaluation of economic viability. Because an
inferred Mineral Resource has the lowest level of geological confidence of all Mineral Resources, which
prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an
inferred Mineral Resource may not be considered when assessing the economic viability of a mining project,
and may not be converted to a Mineral Reserve.
Karoo
A large semi-desert natural region of South Africa which lends its name to the geological Karoo Supergroup
which is often used as an age description for the eon from 145Ma - 360Ma
Kriging
An interpolation method that minimizes the estimation error in the determination of a mineral resource.
Kriging is a method of interpolation for which the interpolated values are modelled by a Gaussian process
governed by prior covariances
License, Permit, Lease
or other similar
entitlement
Any form of license, permit, lease or other entitlement granted by the relevant Government department in
accordance with its mining legislation that confers on the holder certain rights to explore for and/or extract
minerals that might be contained in the land, or ownership title that may prove ownership of the minerals
Life-of-Mine (LoM)
Number of years in the current mine plan that an operation will extract and treat ore
Measured Mineral
Resource
is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of
conclusive geological evidence and sampling. The level of geological certainty associated with a measured
Mineral Resource is sufficient to allow a qualified person to apply modifying factors, in sufficient detail to
support detailed mine planning and final evaluation of the economic
viability of the deposit. Because a
measured Mineral Resource has a higher level of confidence than the level of confidence of either an
indicated Mineral Resource or an inferred Mineral Resource, a measured Mineral Resource may be
converted to a proven Mineral Reserve or to a probable Mineral Reserve.
Mineable
That portion of a mineral resource for which extraction is technically and economically feasible
Mineral Asset(s)
Any right to explore and/or mine which has been granted (“property”), or entity holding such property or
the securities of such an entity, including but not limited to all corporeal and incorporeal property, mineral
rights, mining titles, mining leases, intellectual property, personal property (including plant equipment and
infrastructure), mining and exploration tenures and titles or any other right held or acquired in connection
with the finding and removing of minerals and petroleum located in, on or near the Earth’s crust. Mineral
Assets can be classified as Dormant Properties, Exploration Properties, Development
Properties, Mining
Properties or Defunct Properties
Mineral Reserve
Is an estimate of tonnage and grade or quality of indicated and measured Mineral Resources that, in the
opinion of the QP, can be the basis of an economically viable project. More specifically, the economically
mineable part of a measured or indicated Mineral Resource, which includes diluting materials
and
allowances for losses that may occur when the material is mined or extracted. The determination that part
of a measured or indicated Mineral Resource is economically mineable must be based on a preliminary
feasibility or feasibility study conducted by a QP applying the modifying factors to indicated or measured
Mineral Resources. The study must demonstrate that, at the time of the reporting, extraction of the Mineral
Reserve is economically viable under reasonable investment and market assumptions. The study must
establish a life of mine plan that is technically achievable and economically viable, which will be
the basis of
determining the Mineral Reserve. And the term “economically viable” means that the QP has determined,
using a discounted cashflow analysis, or has otherwise analytically determined that
the extraction of the
mineral reserve is economically viable under reasonable investment and market assumptions.
Mineral Resource
Is a concentration or occurrence of material of economic interest in or on the Earth's crust in such form,
grade or quality, and quantity that there are reasonable prospects for economic extraction. A Mineral
Resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off
grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and
economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an
inventory of all mineralization drilled or sampled.
Modifying Factors
Are the factors that a qualified person must apply to indicated and measured Mineral Resources and then
evaluate in order to establish the economic viability of Mineral Reserves. A qualified person must apply and
evaluate modifying factors to convert measured and indicated Mineral Resources to proven and probable
Mineral Reserves. These factors include, but are not restricted to: Mining; processing; metallurgical;
infrastructure; economic; marketing; legal; environmental compliance; plans, negotiations, or agreements
with local individuals or groups; and governmental factors. The number, type and specific characteristics of
the modifying factors applied will necessarily be a function of and depend
upon the mineral, mine, property,
or project.
Reef
A precious metal bearing stratiform tabular ore body
Run-of-Mine (RoM)
Means the mineralized, raw unprocessed or uncrushed material obtained after blasting or excavating
Shale
A fine-grained detrital sedimentary rock formed from clay, mud or silt
Strike
Refers to the orientation of a geologic feature which is a line representing the intersection of that feature
with a horizontal plane. This is represented as a compass bearing of the strike line
Syncline
A fold with strata sloping upward on both sides from a common valley/base
Tailings
Material remaining after ore has been processed
Unconformity
A surface between successive strata representing a missing interval in the geologic record of time and
produced either by an interruption in deposition or by the erosion of lithology followed
by renewed
deposition
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Term
Explanation
Uraninite
A black, brown or grey uranium ore mineral, UO
2
Variogram
A measure of the average variance between sample locations as a function of sample separation
Wireframe
A 3D surface constructed from vertices with connecting straight lines or curves
Term
Description
%
percentage
% Au
percentage gold
% mass
percentage mass
~
approximate
‘
minutes
‘000m
3
thousand cubic metres
“
seconds
°
Degree
°C
Degrees Celsius
µm
micrometer
3D
three dimensional
AEL
Atmospheric Emissions License
ALS
ALS Chemex South Africa (Proprietary) Limited
AMIS
African Mineral Standards
ANC
African National Congress
Au
Gold
Au(CN)
2
gold cyanide complex
bar
metric unit of pressure
Beric Robinson
Tailings
Beric Robinson Tailings (Proprietary) Limited
BPS
Booster Pump Stations
CaSO
4
Calcium sulfite (gypsum)
CC
coarse coarse
CF
coarse fine
CIL
Carbon-in-Leach
CIP
Carbon-in-Pulp
CLR
Carbon Leader Reef
cm
centimeter
CoP
Code of Practice
COP
Cooke Optimization Project
CoR
Certificate of Registration
Covid-19
Coronavirus Disease 2019
CPP
Central Processing Plant
CRM
Certified Reference Material
CTSF
Central Tailings Storage Facility
CUP
Cooke Uranium Project
CWF
Central Water Facility
DAFF
Department of Agriculture Forestry and Fisheries
DCF
Discounted Cashflow
DFS
Definitive Feasibility Study
Digby Wells
Digby Wells Environmental (South Africa) (Proprietary) Limited
DMRE
Department of Mineral Resources and Energy (Department of Mineral Resources prior to 2019)
DP2
Driefontein Plant 2
DP3
Driefontein Plant 3
DRA
DRA SA (Proprietary) Limited
DRDGOLD
DRDGOLD Limited
DWA
Department of Water Affairs
DWS
Department of Water and Sanitation
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E
east
EA
Environmental Authorization under NEMA
ECA
Environmental Conservation Act
ECSA
Engineering Council of South Africa
EIA
Environmental Impact Assessment
EMP
Environmental Management Plan
EMPr
Environmental Management Program Report
EPCM
Engineering, Procurement and Construction Management
Ergo
Ergo Mining (Proprietary) Limited
Eskom
Electricity Supply Commission
ESTA
Extension of Security of Tenure Act
Ezulwini
Ezulwini Mining Company (Proprietary) Limited
FC
fine coarse
FEED
Front End Engineering Design
FF
fine fine
FSAIMM
Fellow of the Southern African Institute of Mining and Metallurgy
FW
Footwall
FWGR
Far West Gold Recoveries (Proprietary) Limited
FY
Financial Year
g
gram
g/cm
3
grams per cubic centimeter
g/t
grams per tonne
g/t Au
grams per tonne gold
Ga
Giga annum (a period of 1 billion years)
GDP
Gross Domestic Product
GICL
Guardrisk Insurance Company Limited
GISTM
Global Industry Standard on Tailings Management
GISTM
Global Industry Standard for Tailings Management
GN
Government Notice
GNR
Government Notice Regulation
Gold Fields
Gold Fields Limited
Gold One
Gold One International Limited
GPS
Global Positioning System
GSSA
Geological Society of South Africa
GTSA
Geo Tail SA (Proprietary) Limited
H
2
SO
4
sulfuric acid
ha
Hectare
Harmony
Harmony Gold Mining Company Limited
HDPE
high-density polyethylene pipe
HIA
Heritage Impact Assessment
HIV/AIDS
Human Immunodeficiency Viruses/Acquired Immunodeficiency Syndrome
HNO
3
nitric acid
hr
Hour
HSA
Hazardous Substances Act
HWSW
Heel Wall Scavenger Wells
I&APs
Interested & Affected Parties
ICMM
International Council for Mining and Minerals
ICOLD
International Council for Large Dams
IEA
Integrated Environmental Authorization
IEC
International Electrotechnical Commission
iLanda
iLanda Water Services CC
IRR
Internal Rate of Return
ISO
International Organization for Standardization
IWUL
Integrated Water Use License
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JSE
Johannesburg Stock Exchange Limited
JV
Joint Venture
kg
kilogram
kHz
kilohertz
km
kilometre
koz
kilo ounce
ktpm
kilotonne per month
kV
kilovolt
kVA
kilovolt-ampere
LIDAR
light detection and ranging
LoM
Life-of-Mine
m
metres
M
million
m/yr
metres per year
m
2
square meter
m³
cubic meter
m³/a
cubic meter per annum
m³/d
cubic metres per day
m³/hr
cubic meter per hour
Ma
Mega annum (a period of 1 million years)
mamsl
metres above mean sea level
MCNCF
Maximum Cumulative Negative Cashflow
MDP
Multiple Deposition Point
MHSA
Mine Health and Safety Act
Minxcon
Minxcon (Proprietary) Limited
mm
millimeters
Mm
3
Million cubic meters
Mm
3
/a
Million cubic meters per annum
Moz
Millions of ounces
MPRDA
Mineral and Petroleum Resources Development Act
MPRRA
Mineral and Petroleum Resources Royalty Act
MR
Mining Right
Mt
Million tonnes
Mtpm
Million tonnes per month
MVA
Mega Volt Ampere
N
north
NAEIS
National Atmospheric Emission Inventory System
NEM:AQA
National Environmental Management Air Quality Act
NEM:BA
National Environmental Management Biodiversity Act
NEM:PAA
National Environmental Management: Protected Areas Act
NEM:WA
National Environmental Management Waste
NEMA
National Environmental Management Act
NFA
National Forests Act
NGL
Nominal Ground Level
NHRA
National Heritage Resources Act
NMD
Nominal Maximum Demand
NNR
National Nuclear Regulator
NNRA
National Nuclear Regulator Act
NPV
Net Present Value
NPV
10.17
Net Present Value at 10.17%
NRTA
National Road Traffic Act
NWA
National Water Act
NYSE
New York Stock Exchange
oz
troy ounce (conversion to troy ounces is 31.10348)
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Document No: PR/SMI/1203/22
134
oz Au
gold ounces
PAR
Population at Risk
PFS
Preliminary Feasibility Study
pH
scale used to specify the acidity or basicity of an aqueous solution
PLL
Potential Loss of Life
PMP
Probable Maximum Precipitation
PoD
Point of Delivery
PSD
particle size distribution
QA/QC
Quality Assurance and Quality Control
QP
Qualified Person
Rand Uranium
Rand Uranium Limited
RoM
Run-of-Mine
RTSF
Regional Tailings Storage Facility
RWD
return water dams
S
south
S
2
sulfur
SABS
South African Bureau of Standards
SACNASP
South African Council for Natural Scientific Professions
SADPMR
The South African Diamond and Precious Metals Regulator
SAHRA
South African Heritage Resources Agency
SAIMM
Southern African Institute of Mining and Metallurgy
SANAS
South African National Accreditation System
SDP
Single Deposition Point
SEC
Securities Exchange Commission
Set Point
Set Point Laboratories
SG
Specific Gravity
SGS
SGS South Africa (Proprietary) Limited
SI
Système Internationale
SIA
Social Impact Assessment
SiB
Stay-in-Business
Sibanye Gold
Sibanye Gold Limited
Sibanye-Stillwater
Sibanye-Stillwater Limited
S-K 1300
Subpart 1300 of Regulation S-K under the U.S. Securities Exchange Act of 1934
SLP
Social and Labor Plan
SLR
SLR Consulting (Africa) (Proprietary) Limited
Sound Mining
Sound Mining International SA (Proprietary) Limited
SPCU
Self-Propelled Cyclone Units
SPLUMA
Spatial Planning and Land Use Management Act,
SPV
Special Purpose Vehicle
SRK
SRK Consulting (Proprietary) Limited
SVOL1
first search volume
SVOL2
second search volume
SWD
storm water dam
t
metric tonne
t/m
3
tonnes per cubic meter
TDS
total dissolved solids
the Trust
DRDSA Empowerment Trust
ToR
Terms of Reference
tpa
tonnes per annum
tph
tonnes per hour
tpm
tonnes per month
TRS
Technical Report Summary
TSF
Tailings Storage Facility
TWSW
Toe Wall Scavenger Wells
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U
uranium
U/O
Underflow/Overflow
U
3
O
8
triuranium octoxide
USD
United States Dollars
USD/oz
United States Dollars per ounce
V1
Version 1
V2
Version 2
VCR
Ventersdorp Contact Reef
W
west
Witwatersrand Basin
Witwatersrand Supergroup
WML
Waste Management License
WRTRP
West Rand Tailings Retreatment Project (Proprietary) Limited
WUL
Water Use License
WWP
West Wits Project
WWTTP
West Wits Tailings Treatment Project
ZAR
South African Rands
ZAR Billion
Billion South African Rands
ZAR M
Million South African Rands
ZAR M/yr
Millions of South African Rands per year
ZAR/kg
South African Rands per kilogram
ZAR/t
South African Rands per tonne
ZAR/USD
South African Rands and United States Dollars exchange rate
DRAFT
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25.
RELIANCE ON INFORMATION PROVIDED BY THE REGISTRANT
Item 25
The information
and conclusions
within this
TRS are
based on
information made
available to
the QPs
by DRDGOLD
and FWGR
at the
time of
the
preparation of this TRS.
The QPs have relied on
this information with respect to
legal matters (Item
3), the gold price (Item 16.1),
environmental or
social and
labor planning
aspects (Item
17) and
economic assumptions
(Item 19).
The QPs
have reviewed
this information
at face
value and
are
satisfied that it is both reasonable
and appropriate. QPs consider it reasonable
to rely on the information
provided by FWGR since they
are familiar
with the
operations
and ongoing
progress
of FWGR
since inception,
and
as a
consequence enjoy
an
enhanced level
of comfort
with respect
to
management integrity and the processes, procedures and quality of planning conducted at FWGR.
Additional information provided by
FWGR included technical reports
supplied by its consultants
and associates and the
relevant published data,
as
listed below:
●
the QPs
have
not independently
conducted any
title or
litigation searches
but have
relied upon
FWGR
for information
on the
property title,
agreements and other pertinent conditions;
●
these studies were undertaken
by Digby Wells
Environmental (South Africa) (Proprietary)
Limited (Digby Wells)
and Sound Mining has relied
on
the findings of these studies;
●
DRA SA
(Proprietary) Limited
were responsible
for the
detailed design
and associated
cost estimates
for the
expansion of
DP2 and
associated
piping and pumping infrastructure. Beric Robinson
Tailings (Proprietary)
Limited (Beric Robinson Tailings)
were responsible for the design
of the
RTSF which was also costed by DRA. The QPs have relied on Spargo Consult as an independent expert for the review of this work; and
●
Geo Tail SA (Proprietary) Limited (GTSA)
were responsible for the Cyclone Conversion Design and technical evaluation of the Leeudoorn TSF; and
the QPs have relied on the findings of this study.
DRAFT
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(Proprietary) Limited
Document No: PR/SMI/1203/22
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26.
QUALIFIED PERSONS DISCLOSURE CONSENT
Item 26
We,
the signees,
in our
capacity as
Qualified Persons
in connection
with the
Technical
Report Summary
of Far
West
Gold Recoveries
Proprietary
Limited dated 28 October 2022 (The Technical Report Summary) as required by Item 601(b)(96) of Regulation S-K and filed as
an exhibit to DRDGOLD
Limited’s (DRDGOLD)
annual report
on Form
20-F for
the year
ended 30
June 2022
and any
amendments or supplements
and/or exhibits
thereto
(collectively,
the “Form
20-F”) pursuant
to
Subpart 1300
of Regulation
S-K
promulgated
by
the U.S.
Securities and
Exchange
Commission (1300
Regulation S-K), each hereby consent to:
●
the public filing and use by DRDGOLD of the Technical Report Summary for which I am responsible as an exhibit to the Form 20-F;
●
the use and reference to my name, including my status
as an expert or Qualified Person (as defined by SK-1300) in connection with the Form 20-
F and Technical Report Summary for which I am responsible;
●
use of any extracts
from, or summary of,
the Technical
Report Summary in the
Form 20-F and the
use of any information
derived, summarized,
quoted or referenced from the Technical
Report Summary, or portions thereof,
that is included or incorporated by reference into the Form
20-F;
and any amendments or supplements thereto.
I am responsible for authoring, and this consent pertains to, the Technical Report Summary for which my name appears below and certify that
I have
read the 20-F and that it fairly and accurately represents the information in the Technical Report Summary for which I am responsible.
Table 40: QP Area of Responsibility and Disclosure Consent
Property Name
TRS Effective Date
QP Name
Affiliation to
Registrant
Field or Area of
Responsibility
Signature
Far West Gold Recoveries Proprietary
Limited (A subsidiary of DRDGOLD
Limited)
30 June 2022
Mr Vaughn Duke
Independent
Consultant
Mineral Reserves
/s/ Vaughn Duke
Far West Gold Recoveries Proprietary
Limited (A subsidiary of DRDGOLD
Limited)
30 June 2022
Mrs Diana van Buren
Independent
Consultant
Mineral Resources
/s/ Diana van Buren
Far West Gold Recoveries Proprietary
Limited (A subsidiary of DRDGOLD
Limited)
30 June 2022
Mr Keith Raine
Independent
Consultant
Environmental and
Social Governance
/s/ Keith Raine