In the media

Ergo JV expects first gold before year-end

[Mining Weekly] - The joint venture, between ASX-listed Mintails and JSE-listed DRDGOLD South Africa, Ergo Mining, has revitalised the Ergo tailings retreatment operation in Brakpan, and hopes to have the plant refurbished by September, and ready to commission in October, with first gold eagerly anticipated before Christmas 2008.

The joint venture (JV), between ASX-listed Mintails and JSE-listed DRDGOLD South Africa, Ergo Mining, has revitalised the Ergo tailings retreatment operation in Brakpan, and hopes to have the plant refurbished by September, and ready to commission in October, with first gold eagerly anticipated before Christmas 2008.

The plant, which was bought from AngloGold Ashanti, has potential access to 1,7-billion tons of mine dump material on the East Rand. The JV has also recently finalised the acquisition of the Withok and Benoni tailings dams from AngloGold Ashanti, bringing the number of dumps accessible for retreatment to over 55.

The first phase of the Ergo plant refurbishment operation, with a capital expenditure (capex) of R477-million, is targeted to produce 75 000 oz/y of gold. Tailings for retreatment will be drawn from the recently acquired Benoni tailings dam at first, at a rate of 600 000 t/m. At a later stage another 600 000 t/m will be drawn from the Elsburg tailings complex, which has an initial measured resource of 171-millions tons.

The first phase of the project also included an exploration and drilling programme, and well as the completion of a bankable feasibility study for uranium and sulphuric acid production - which the Ergo plant had previously done. The possible start of construction in 2009 of the uranium and acid plants was dependant on the outcome of the feasibility study. The design of the Withok deposition site, scheduled for 2009, would also form part of the first phase.

About R62-million was earmarked for the refurbishment of one of the two carbon-in-leach (CIL) circuits at the Ergo Brakpan plant, which is currently in full swing. The yearly tailings retreatment rate would go from 7,2-million t/y from the fourth quarter of 2008, to 15-million t/y from mid-2009.

A significant portion of the capex would also be spent on the servitudes, such as the pipelines from the Brakpan plant to Benoni and from the Brakpan plant to the Elsburg complex tailings to transport material from the dumps to the processing plant.

The average gold head grade targeted was 0,32 g/t, with the extraction efficiency rate of 49,8%, at the operating cost of R20,39/t.

“We expect payback in five years,” stated DRDGOLD South Africa regional GM and Ergo Mining director Charles Symons. If the gold price continued to soar, it could be significantly sooner than that, he added.

The Ergo Mining JV was in line with DRDGOLD South Africa’s “deliberate strategy of acquiring a mix of assets”, which CEO Niel Pretorius indicated would diversify risk.

DRD has through Crown Gold Recoveries (CGR) operated the Crown Mines operations in central Johannesburg for over 25 years, and "succeeded where many other had failed" in ensuring that the tailings operation there remained viable.

Once up and processing, Ergo Mining would be operated by CGR. “Crown has the necessary services on which Ergo can piggyback for the moment,” indicated Symons.

Environmental management was a distinct priority for the JV, and essentially a large number of smaller scattered dumps on the East Rand could be cleared, processed through Ergo and the tailings then placed at a larger central dump location, with emphasis on management of dust and water pollution. By clearing significant portions of land, there is room for development of those areas, as well as an elimination of environmental risks, by eliminating the source - the actual dumps.

“We cant be certain that large tracts of land will be cleared completely, but that is the Utopia that we will strive for, and we will have a good go at it,” Symons said.