[miningmx] — THE proposed surface-operations joint venture on the West Rand
between Gold Fields and Gold One International is one step closer to becoming a
reality, based on the results of a scoping study of the project.
The two companies first told the market about their plans for the venture in January,
describing it as an “Ergo on the West Rand’, referring to DRDGold’s highly profitable
surface-reclamation operations on the East Rand.
Gold One said on Wednesday that the scoping study confirmed that the project
underpinned “a significant opportunity to extract value from the parties’ surface
resources that [was] not inherent in either company’s share price’.
The project would now move on to the pre-feasibility stage, expected to be completed
by June 2013.
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 the former Rand Uranium property that Gold One
acquired in 2011.
These assets are expected to comprise in excess of 700 million tonnes and represent
over 60% of the total tailings material in the region.
Gold One CEO Neal Froneman said the deal would also have a strong environmental
slant to it, as the redepositioning of residues would go a long way towards solving
existing environmental problems related to high levels of uranium and sulphide
contained in the dumps.
DIFFICULT QUARTER
The announcement on the results of the tailing project’s scoping study counted
among the few items of good news in an otherwise dire quarterly update by Gold One,
which in recent months had to bear the brunt of labour disruptions at two of its
operations.
The ramp-up in production at the flagship Modder East mine following an unprotected
strike in June made some progress, but it was slower than expected, an outcome that
Gold One blamed on the “ongoing intimidation of loyal employees’.
The group expects to only attain pre-strike output levels – around 13,000 oz per
month – by December. September’s output for Modder East was 6,766 oz. The
company is also suing the Professional Transport and Allied workers Union (PTAWU)
to the tune of R9.9m for losses suffered during the strike. “PTAWU has not opposed
the application and Gold One is currently waiting for the High Court to set a date
upon which the matter will be heard,’ the group said.
Management at the mine had, however, concluded a new wage deal for employees
with the National Union of Mineworkers, effective for two years from January 2013.
Salaries would increase by between 8% and 10%, while the agreement also sees the
introduction of maternity leave, physical transport, a medical allowance as well as the
issuing of a 13th cheque dependent on the achievement of production targets.
Further afield, the company also suffered losses at the Cooke Underground
operations. Production of 25,701 oz during the period under review was only
marginally below forecasts, but most of it was derived from low grade mining areas
below the pay limit.
Gold One said it would over the next 12 months increase its mining flexibility at the
mine by developing an additional 140,000 square metres of payable mining ground.
Over the short term, it would decrease its volume by around 25,000 tonnes per
month, compared to original planning of 100,000 tonnes.
Overall, Gold One produced 59,642 oz of gold during the quarter at a negative cash
flow of $9.19m. Cash costs were $1,318/oz of gold produced.
