[miningmx.com] — NEVER-SAY-DIE Central Rand Gold (CRG) has said it could be one of South Africa’s lower cost gold producers and be the solution to rising acid mine water in the Central Basin, if only the courts would return its revoked mining licence in time.
Releasing an operational update on Monday, two weeks after the Department of Mineral Resources suspended its mining licence, CRG reported back on two “critical challenges’ facing group’s operations, namely the Central Basin’s rising water table and grade-dilution due to its proposed long hole stoping methods.
On the latter, CRG said its decision to abandon mechanised long hole stoping was due to a “very significant amount of zero grade material’ which diluted its processed ore. It subsequently undertook a study to evaluate whether the reef could be safely stoped using conventional means on a viable basis.
CRG said a three-month trial using hand-held stoping methodology showed “30,000oz to 40,000oz per annum operations’ were viable, giving a life-of-mine of approximately 12 years on the western portion of the Consolidated Main Reef (CMR)property.
“This initial study and schedule estimates a project cash operating cost of R427 per tonne ($779/oz) and total production cost of R586 per tonne ($1,068/oz),’ CRG said.
“A further report was subsequently compiled.to optimise the CMR West mining plan maximising extraction economics. The optimised 50,000oz per annum plan suggests a cash operating cost of R342/tonne ($623/oz) and total production cost of R492/tonne ($899/oz) and a positive life of mine net operating cash flow of R1.5bn at an average gold price of $1,613/oz.’
A comparison with the costs of South Africa’s major gold producers make for interesting reading. AngloGold Ashanti reported an average total cash cost of $705/oz for the June-quarter. Similarly, peers Gold Fields and Harmony produced at $816/oz and $1,115/oz respectively over the same period.
“The company believes that the new conventional mining method is scalable and repeatable across its tenement area,’ said CRG. “There remains sufficient mineral inventory on both CMR East and Crown West to establish similar sized operations that could be brought on line in parallel with the proposed CMR West operation and generate a significant number of additional jobs over and above the 700 required under the mine plan for CMR West.’
ACID MINE DRAINAGE
CRG said CMR was integral to the solution for acid mine drainage in the Central Basin, saying the contractor appointed to handle the issue, Trans Caledon Tunnel Authority (TCTA), on September 7 presented a proposed solution to government that included the use of CRG’s pumps to de-water and maintain the region.
“The Ritz submersible pumps were successfully tested in Germany in the presence of TCTA,’ the company said. “The pumps will remain in Germany until such time as clarity with regards to the company’s mining right has been obtained.’
The plan on acid mine drainage also included a commitment to maintain water levels below the environmental critical level of 186m below surface, the construction of a new high density sludge plant with a capacity of 84 million litres per day, as well as the transfer of treated water via a pipeline to Elsburg Spruit.
TCTA has requested National Treasury for additional funding to the R225m budget allocation, with a revised budget of R924m proposed.
“In light of the DMR’s cancellation of the company’s mining right, the implementation of the above plan can only be considered once it has successfully appealed the Minister’s decision,’ said CRG. “The company hopes that its appeal will be heard by the Pretoria High Court by end-October 2011.’
