EX-96.1 4 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
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
2
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
................................
................................
................................
................................
................................
....... 21
1.11.
Market Studies
................................
................................
................................
................................
................................
..... 23
1.12.
Environmental Permitting and Liability
................................
................................
................................
............................ 23
1.13.
Capital Expenditure and Operating Costs
................................
................................
................................
........................ 24
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 ................................
................................
................................
................................
................................
............... 39
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
7.5.
LIDAR and Surveying
................................
................................
................................
................................
........................... 52
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
3
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 ................................
................................
................................
................................
......................... 55
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 ................................
................................
................................
................................
............. 85
15.1.3.
Conclusions
................................
................................
................................
................................
......................... 87
15.2.
Regional Tailings Storage Facility ................................
................................
................................
................................
...... 87
15.2.1.
Geotechnical, Hydrological and Geohydrological Considerations
................................
...............................
89
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 ................................
................................
................................
................................
................... 103
16.3.
Global Demand ................................
................................
................................
................................
................................
..
104
16.4.
Global Supply ................................
................................
................................
................................
................................
.....
104
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
4
16.5.
Concluding Comments ................................
................................
................................
................................
..................... 105
17.
Environmental Studies, Permitting, or Agreements with Locals, 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) ................................
................................
................................
.............................. 107
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 ......................................................................................................................
135
26.
Qualified Persons Disclosure Consent
.................................................................................................................................................
136
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
5
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 Witwatersrand 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 ....................................................................................................................................................................
80
Figure 23: Driefontein 4 TSF Location and Infrastructure...........................................................................................................................
82
Figure 24: Leeudoorn TSF Layout ......................................................................................................................................................................
83
Figure 25: Final Layout of Airspace Model ......................................................................................................................................................
85
Figure 26: Position of the Elevated Drain Filter
.............................................................................................................................................
86
Figure 27: Cyclone Layout ...................................................................................................................................................................................
86
Figure 28: Geo-hydrological Regime at the RTSF Site ..................................................................................................................................
91
Figure 29: Geo-hydrological Effects of Scavenger Wells beneath the RTSF ..........................................................................................
91
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
Table 6: Driefontein 3 TSF Feed Sample Assay by Size ................................................................................................................................
58
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
6
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 ....................................................................................................................................................
83
Table 16: Changes in Parameters ......................................................................................................................................................................
88
Table 17: Environmental Elements under Consideration for RTSF Design and Disposal Method ....................................................
88
Table 18: Engineering Elements under Consideration for RTSF Design and Disposal Method .........................................................
89
Table 19: RTSF Design Criteria ...........................................................................................................................................................................
89
Table 20: Underground Water Sources ............................................................................................................................................................
98
Table 21: Power Requirements for FWGR Operations .................................................................................................................................
99
Table 22: Eskom Points of Delivery ...................................................................................................................................................................
99
Table 23: Existing Pipeline and Pumping Infrastructure ...........................................................................................................................
100
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
.....................................................................
112
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 ............................................................................................................................................................
128
Table 40: QP Area of Responsibility and Disclosure Consent ..................................................................................................................
136
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
7
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 5: Gold Price Historical Trendline ........................................................................................................................................................
102
Graph 6: Exchange Rate Historical Trendline ...............................................................................................................................................
103
Graph 7: Global Gold Demand from 2012 to 2021 ......................................................................................................................................
104
Graph 8: 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
List of Appendices
Appendix 1: Summary of the DCF Model (excluding liner) .......................................................................................................................
137
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
8
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
9
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
).
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
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
10
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
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
11
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 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.
Far West Gold Recoveries
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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
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
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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
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
14
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
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Figure E: Property Geology
Source:
Sound Mining, 2022
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
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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
mineralization
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.
Far West Gold Recoveries
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Document No: PR/SMI/1203/22
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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.
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).
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Figure F: Mining Methodology
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“.
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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 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.
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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.
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
22
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
24
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.
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
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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
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%).
Far West Gold Recoveries
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Document No: PR/SMI/1203/22
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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.
Graph C shows the expansion of DP2 facilitates an increase in gold sales over time (refer
to
Appendix 1
).
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
27
Graph D presents the post-tax cashflow for an operation that excludes the benefits that would eventually be derived from the available
TSFs (refer to
Appendix 1)
.
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.
FWGR is an ongoing operation and thus the Internal Rate of Return (IRR) and
a capital payback period are not applicable.
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
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
28
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)
Source:
Sound Mining, 2022
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
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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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
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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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
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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 (DRA);
●
Geo Tail SA (Proprietary) Limited’s (GTSA);
●
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.
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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 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.
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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).
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.
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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.
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 Mineralization
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
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Source:
Frimmel et al, 2005
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 Characterization
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
54
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
55
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.
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
56
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 standards
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
57
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
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
58
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.
Far West Gold Recoveries
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Document No: PR/SMI/1203/22
59
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;
Far West Gold Recoveries
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Document No: PR/SMI/1203/22
60
●
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
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.
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●
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.
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.
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●
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.
●
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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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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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. DRA were responsible for the detailed design and associated
cost estimates for the expansion of
DP2 as well as
the piping and pumping
infrastructure. The QPs appointed Spargo
Consult, as an independent expert,
to assist with the
review of the metallurgical aspects.
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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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.
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Figure 22: DP2 Revised Block Plan
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:
●
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.
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●
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
(ZAR194.16):
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.
The QPs have relied on
the findings of Geo Tail SA
(Proprietary) Limited’s (GTSA)
Leeudoorn TSF Cyclone Conversion
Design and technical
evaluation for an understanding of the planned conversion of the current day wall TSF to a cyclone-based deposition system. The design
has been developed to accommodate the required deposition plan. While the QP
has not interrogated the voracity of this work in detail,
it has
been benchmarked
against other
similar conversion
projects and
has been
found to
be within
proven operational
practice and
acceptable risk levels.
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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.
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
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
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Description
Value/Output
Source
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.
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.
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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
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
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.
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.
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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
Seismicity
Low, medium or high
Geochemistry
Low, moderate, severe
Tailings SG
High, average, low
Source:
Beric Robertson Tailings, 2020
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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
average 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
).
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Figure 28: Geo-hydrological Regime at the RTSF Site
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
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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.
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
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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.
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.
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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.
Figure 30
shows the layout of the RTSF.
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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 FWGR Regional
Tailings Dam Report
and design prepared by
Beric Robinson Tailings
(2020)
(costed by DRA) 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.
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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.
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.
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
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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.
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
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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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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
). After interrogating the
gold price, the QPs
are of the opinion
that a gold
price of ZAR914,294/kg,
provided by FWGR, is appropriate for use in the economic assessment.
Graph 5: Gold Price Historical Trendline
Source:
Sound Mining, 2022
The linear trendline indicates robust
gold price potential over the near to medium-term.
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16.2.
Exchange Rate Forecast
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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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
LOCALS,
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
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.
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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.
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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.
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.
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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 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
Sound Mining
has relied
on environmental
closure liability
estimates provided
by Digby
Wells. They
are experts
in this
field and
were
commissioned for the purpose. A review of the closure estimate and associated plans covered
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;
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●
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.
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
ZAR166.90 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%.
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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
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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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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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.
Graph 11
shows the expansion of DP2 facilitates an increase in gold sales over time (refer to
Appendix 1)
.
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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 (refer to
Appendix 1)
.
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 with. FWGR is an ongoing operation and thus the Internal Rate of Return (IRR) and
a capital payback period are not applicable.
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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
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Source:
Sound Mining, 2022
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);
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●
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
●
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
122
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.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
123
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;
●
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).
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
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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.
Far West Gold Recoveries
(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.
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
Environmental/Legal
Department of Minerals
Resources and Energy
May 2018
pdf
WRTRP Driefontein Environmental Authorization GP30/5/1/2/3/2/1(51)EM
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
127
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
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
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
128
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
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
Far West Gold Recoveries
(Proprietary) Limited
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Term
Explanation
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 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
Far West Gold Recoveries
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Document No: PR/SMI/1203/22
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Term
Explanation
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
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
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Document No: PR/SMI/1203/22
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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
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
Far West Gold Recoveries
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Document No: PR/SMI/1203/22
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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
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
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
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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)
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,
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
134
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
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
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
135
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
as noted
in this
item. The
QPs have
relied on
this information
with respect
to legal
matters (Item
3
),
Environmental Studies, Permitting, or Agreements with locals
or Individuals or Groups (Item
17
) and the economic Assessment (Item
19
).
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 (throughout Item
3)
.
The QPs have reviewed this information at face value and are satisfied that it is both reasonable and
appropriate. The QPs
believe that it
is reasonable to rely
on the information provided by
FWGR as identified in
this item because they
are intimately more familiar with
the
operations and ongoing
progress of FWGR
since inception,
and as a consequence
this provides the
QPs with an enhanced
level of comfort
with respect to the management,
processes, procedures and quality of planning at FWGR.
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
136
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
Far West Gold Recoveries
(Proprietary) Limited
Document No: PR/SMI/1203/22
137
Appendix 1: Summary of the DCF Model (excluding liner)
Description
Unit
Total/
Average
2023
FY
2024
FY
2025
FY
2026
FY
2027
FY
2028
FY
2029
FY
2030
FY
2031
FY
2032
FY
2033
FY
2034
FY
2035
FY
2036
FY
2037
FY
2038
FY
2039
FY
2040
FY
2041
FY
2042
FY
Reclaimed Tonnes
kt
229.371
6,044
6,044
6,044
7,546
9,048
9,048
9,048
11,148
14,400
14,400
14,400
14,400
14,400
14,400
14,400
14,400
14,400
14,400
14,400
7,000
Head Grade
g/t
0.33
0.48
0.47
0.47
0.41
0.36
0.36
0.36
0.37
0.37
0.37
0.32
0.30
0.30
0.30
0.30
0.30
0.28
0.27
0.27
0.27
Recovery
%
53%
50%
54%
57%
55%
53%
53%
53%
53%
53%
53%
51%
49%
49%
49%
54%
58%
55%
55%
55%
55%
Gold Sold
kg
40,409
1,404
1,528
1,592
1,674
1,740
1,740
1,740
2,216
2,840
2,840
2,369
2,105
2,105
2,105
2,322
2,532
2,190
2,159
2,159
1,049
Revenue
ZAR M
36,946
1,284
1,397
1,455
1,531
1,591
1,591
1,591
2,026
2,597
2,597
2,166
1,924
1,924
1,924
2,123
2,315
2,003
1,974
1,974
959
Operating Costs
ZAR M
19,550
838
538
538
773
868
868
868
995
1,168
1,168
1,168
1,168
1,168
1,168
1,168
1,168
1,168
1,168
1,168
717
Capital Expenditure
ZAR M
6,767
326
61
1,595
957
300
589
1,120
565
18
402
146
18
18
416
152
18
18
18
18
20
Post-tax Free Cashflow
ZAR M
7,338
288
555
(678)
(199)
424
118
(397)
404
987
714
600
525
525
242
567
794
579
559
559
171
Cumulative Post-tax Free
Cashflow
ZAR M
7,338
288
843
165
(34)
389
507
110
514
1,501
2,216
2,816
3,341
3,867
4,108
4,675
5,469
6,049
6,608
7,167
7,338
Post-tax Discounted Cashflow
ZAR M
2,318
262
459
(509)
(136)
263
66
(204)
189
419
275
210
167
152
64
136
173
115
101
91
25
Cumulative Post-tax Discounted
Cashflow
ZAR M
2,318
262
721
211
75
338
405
201
389
808
1,083
1,294
1,461
1,613
1,677
1,813
1,986
2,100
2,201
2,292
2,318
Notes:
Apparent computational errors due to rounding