Neal Froneman, CEO Aflease Gold
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» Aflease Gold clears feasibility hurdle
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Aflease Gold weighs a second gold mine
Allan Seccombe
Posted: Mon, 04 Dec 2006

[miningmx.com] -- AFLEASE GOLD could bring its Sub Nigel gold mine into production before its flagship Modder East project after revising upwards its reserves and resources at the projects in its November 2006 resource statement.

“Sub Nigel represents a real opportunity to expand the gold mining profile of Aflease Gold in the short term,” CEO Neal Froneman said.

“Given the excellent state of the existing infrastructure, we could possibly begin production at Sub Nigel even earlier than at Modder East, if our feasibility studies produce the expected positive results,” he said.
production at Sub Nigel earlier than at Modder East
A pre-feasibility study into restarting the mine will be completed in the first quarter of 2007. Production could start in 2008 given the quality of the operational infrastructure at Sub Nigel.

Robert van Niekerk, Afgold’s chief operating officer, said the condition of the shaft and most underground infrastructure was in very good condition and what was most needed was a processing plant, but there is spare capacity at the nearby Petrex operation owned by Pamodzi Gold and Canada’s Bema.

“While not a turnkey operation, it will not take years and years to bring Sub Nigel into production,” he said. “The only significant capital we’ll need is for a processing plant.”

Modder East, a shallow deposit 30km east of Johannesburg, is scheduled to start production in the third quarter of 2009. JSE-listed Afgold is 71% owned by Toronto- and Johanneburg-listed sxr Uranium One.

At the Sub Nigel mine, just the Nigel Reef has been classified as an indicated resource, rising to 205,000 oz of contained gold and 13,000 oz of inferred resources. This is an increase from the 180,000 oz of inferred resources in December 2005.

There are another 404,000 oz of gold in the inferred category for the Main Reef and Erosion Channel, which will be targeted for exploration in 2007.
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“If you ask me if I’m still excited about the Erosion Channel, I’ll say ‘Absolutely!’ I’m just as excited about the Main Reef potential too,” Van Niekerk said.

At Modder East, the probable reserve has grown to 1.37m oz, a 28% increase from the August estimate.

Indicated resources have increased by 19% to 2.4m oz, largely as a result of an improved grade, which rose to 3.31 grams/tonne from 2.79 g/t before.

In its feasibility study, Afgold projected an average cash operating costs of $217/oz over the 10-year first phase. Production will average 110,000 oz/year. Afgold is spending R753m on the Modder East project.

There is more potential at Modder East.

“Is Modder East going to get bigger? I believe it will. Our exploration programme is by no means complete and in the new year we’ll be doing a lot of work on the Kimberleys,” van Niekerk said.