Gold One, Gold Fields explore surface JV

André Janse van Vuuren | Tue, 24 Jan 2012 11:59

[miningmx.com] -- FOLLOWING a year of frenetic corporate activity at Gold One International, CEO Neal Froneman has revealed his next play: a possible surface-operations joint venture with Gold Fields in the West Rand.

The assets at the core of such a venture would be the mining dumps – some of which are decades old – at Gold Fields’ Kloof, Driefontein and South Deep mines, as well as the gold plant and Cooke dump at Gold One’s recently acquired Rand Uranium.

“Gold One and Gold Fields are pleased to announce that they have entered into a memorandum of understanding [MOU] to investigate the viability of concurrently reprocessing their combined surface tailings deposits,” read a statement issued by both parties on Tuesday. “Should the joint venture [JV] proceed, the intention is to reclaim and retreat the historical tailings material and current tailings to recover residual gold, uranium and sulphur.”

These assets are expected to comprise in excess of 700 million tonnes and represent over 60% of the total tailings material in the region.

The parties said a detailed scoping study would be done by mid-year, whereafter they’ll decide on whether to proceed with a feasibility study. According to Gold One CEO Neal Froneman, the company and Gold Fields should have a solid agreement in place by year-end.

Froneman described the possible venture as the creation of “an Ergo on the West Rand,” referring to DRDGold’s highly profitable surface-reclamation operations on the East Rand.

“The principle is commercially smart,” he said. “The deal would also have a strong environmental slant to it.”

He said the redepositing of residues would go a long way towards solving existing environmental problems related to high levels of uranium and sulphide contained in the dumps.

Asked whether Gold One foresaw opposition to such a transaction due to environmental issues - similar to what First Uranium experienced at Mine Waste Solutions - Froneman said the parties were already consulting with the relevant stakeholders.

“We’re far more proactive in involving the environmental lobby groups,” he said. “They are important stakeholders and we treat them as such.”

MORE VALUE

The announcement came after both Gold Fields and the previous management of Rand Uranium extensively explored separate strategies to extract more value from their surface assets.

In 2010, Gold Fields completed economic studies on what it described as a uranium project and a “fifth mine” for the group in South Africa. It declared a mineral resource of 475.6 million tonnes at its tailing storage facilities, which included gold resources of 4.5 million ounces and uranium resources of 53.6 million pounds.

“This is an exciting opportunity to investigate the feasibility of extracting value from our substantial surface resources in the West Rand,” said Gold Fields CEO Nick Holland in Tuesday’s announcement. “Gold Fields already has projects in place to retreat our tailings, and the MOU with Gold One allows us to further explore a relatively low risk opportunity to extract value from surface resources that are not inherent in our share price.”

At Rand Uranium, the surface operations processes around 300,000 tonnes of tailings material per month through the Cooke gold plant. According to Froneman, throughput would be expanded to 400,000 tonnes within the next few months.

Since the announcement of the Rand Uranium transaction in April last year, Froneman has maintained that uranium production would be key to the economic rationale of the deal. Gold One has since commenced with a review of the Cooke Uranium Project, which included the construction of a uranium plant.