Gold in South Africa

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South African gold output in 2006 fell to its lowest level in 84 years because of decline in grades mined, but there are strong signs that production will stabilise in 2007. Gold output of 275,119 kg in 2006 was 7,5% lower than the previous year. The last time South Africa recorded an increase in gold production was in 2002 when the Rand gold price averaged R104,000/kg on the back of currency weakness. It rose 0,3%. The rate of annual decline in South African gold output has slowed. In 2005, gold output fell 13% year on year to 296,3 tonnes. South African gold output peaked in 1970 at 1,000 tonnes, but has been falling steadily as mines grow older, deeper and more expensive to operate. Australian gold output in 2005 was 263 tonnes and the US 262 tonnes. China produced 224 tonnes and Peru 208 tonnes. All the major producers have experienced declining gold production in the past five years. Australian gold output dropped 33 tonnes from 296 in 2000, while the US recorded output of 355 tonnes in that year, 93 tonnes more than last year’s production. China, however, added 52 tonnes over that period. South African gold production fell 98 tonnes.

Eskom forces SA mines to stop mining (Source: Miningmx)

  • AngloGold Ashanti (South Africa, NYSE:AU; JSE:ANG) mines in Argentina, Australia, Brazil, Ghana, Guinea, Mali, Namibia, South Africa, Tanzania and the USA. AngloGold Ashanti's gold production fell to 5,6 million oz in 2006 from 6,2 million oz in 2005. The seven underground mines in South Africa produced 2,554 million oz in 2006, five percent less than the previous year, at a total cash cost of $285/oz. AngloGold Ashanti had 181,6-million oz of gold resources globally at the end of December, 2006. About 83-million of AngloGold's gold resource oz are in South Africa. Anglo American said on I October, 2007, it would sell about half of its stake in gold miner AngloGold Ashanti as part of its strategy to focus on core commodities.
    Anglo holds a 41.8% stake in South Africa's AngloGold, the world's third-biggest gold producer. Anglo said it plans to sell 61 million ordinary shares, worth about R18.8bn, and that its remaining representatives on AngloGold's board would resign once its stake falls below 20%.
  • Gold Fields (South Africa, NYSE:GFI; JSE:GFIELDS) mines in South Africa, Ghana (Tarkwa and Damang), Australia and Venezuela with projects in Peru, the Dominican Republic, Kyrgyzstan, Burkina Faso and Congo (Kinshasa). The company produces about 4,1 million oz annually from its operations. Gold Fields issued 145 million shares to buy out Barrick in the South Deep mine project in South Africa and to raise $1.2 bn to fund the project and others. South Deep has 28 million oz of gold. Gold Fields estimated total resources of 252-million oz of gold in 2007.
  • Harmony Gold Mining (South Africa, NYSE:HMY; JSE:HAR) is the fifth largest gold producer in the world, with operations and projects in South Africa, Senegal, Australia and Papua New Guinea. The Hidden Valley Project in PGN comprises the Hidden Valley/Kaveroi and Hamata open pits, a 43 million tonne tailings facility and associated infrastructure, the mine will produce approximately 300,000 oz of gold and 4 million oz of silver over a 10-year life.The Golpu copper gold project in the Morobe Province of Papua New Guinea, resource stands at 163 million tonnes at 1,1% Cu, 0,6 g/t Au and 132 parts per million molybdenum containing 3,9 billion pounds of copper, 2,96 million oz of gold and 47 million pounds of molybdenum. Harmony has announced plans to dispose of less profitable mines and assets for sale include its South African Kalgold open pit mine and its Australian mines. Harmony aggregates its Free State operations into total resources of 94,5-million oz and the mines in its Freegold operation have total resources of 111,5-million oz, including surface stockpiles. Harmony's Target mine has total gold resources of 92-million oz.
Pan African and Wits Gold buy Evander - Monday, January 30, 2012
  • DRD Gold (South Africa, Nasdaq:DROOY; JSE:DRD) mines in South Africa, Papua New Guinea and Fiji. The Australasian assets represent roughly two million oz of reserves out of the DRDGOLD’s attributable 8,9 million oz of reserves, and seven million oz of its 47,6 million oz resources. DRD Gold subsidiary Emperor Mines entered into an agreement in 2007 to sell its 20% stake in the Porgera gold mine in Papua New Guinea to its partner in the project, Barrick Gold, for $250m, erasing all its debt and leaving it cash positive. Following completion of the transaction, Emperor will have no debt and will have cash resources of approximately A$130 million.
  • Simmer & Jack Mines Ltd [JSE:SIM] acquired Buffelsfontein Gold Mines Limited (comprising Hartebeesfontein and Buffelsfontein mines) for R70-million in October 2005 after it had been placed into provisional liquidation by DRDGold in March that year. Underground operations began in earnest in December 2005 and the first positive cashflow from mining operations was generated in March 2006.
    Buffelsfontein has measured and indicated resources of 11.12 million ounces.
    Transvaal Gold Mining Estate Limited (TGME), a wholly-owned subsidiary of Simmer & Jack, situated in the Pilgrim's Rest/ Sabie goldfields approximately 450 kilometres North East of Johannesburg is the operational focus of the company's Mpumalanga operations. Another Simmers subsidiary, Sabie Mines Limited, houses various mining and prospecting rights in the area and is managed by the TGME team.
    The company has two operations in the Mpumalanga region through its wholly owned subsidiary, Transvaal Gold Mining Estate (TGME) - one is an underground mine and one is a surface operation.
    The drilling project, which started in August 2007, aims to locate a million resource oz by March 2009.
  • Great Basin Gold (JSE:GBG, TSX:GBG) could see a larger gold mine of 4.5 million oz at its Burnstone project in South Africa's South Rand Basin as it moves towards a narrow stoping mechanised mine that would deliver an additional 1 million oz. Grades mined from measured and indicated resources would improve from 4.5 g/t to 5.8 g/t. Burnstone will deliver 6,000 oz in 2008 from bulk sampling at the operation. In terms of current projections, the mine will reach its average annual production of 250,000 oz around 2012. The current mine plan for Burnstone is based on 3.5 million proven and probable oz out of 7.7m measured and indicated oz. Depth starts at 300 m and extends to 800 m at this stage, while Great Basin Gold does not anticipate mining any deeper than 1400m. The company has earmarked $6m annually for exploration the South Rand basin where Burnstone is located. Great Basin Gold had an 8 million resource at Burnstone at the moment and the company was confident it would reach 10 million over the next year as it continued exploration on area four of its Burnstone project.
  • Central Rand Gold (CRG), a new company that plans to extract gold from old workings around Johannesburg, plans to raise about R210m in SA ahead of listings in London and Johannesburg. Central Rand has assembled a portfolio of mining properties stretching south of Johannesburg from Western Areas in the west through to Simmer & Jack's operations in the east. CRG is looking at restarting operations immediately south of Johannesburg incorporating parts of the old mines, including Consolidated Main Reef, Langlaagte, Crown Mines, Village Main, Robinson Deep, City Deep and Simmer & Jack. Central Rand's current indicated resources are about 21,4-million oz of gold at an average grade of 8,9 g/ton and its inferred resources, which are less certain of being mined economically, are 12,4-million oz at 7,4 g/t.
  • "Central Rand Gold (CRG) barred journalists from its first annual general meeting"
  • Witwatersrand Consolidated Gold Resources (Wits Gold, JSE:WGR) have been granted rights in the Potchestroom, Klerksdorp and Southern Free State goldfields covering 91 039 ha. They contain an inferred resource of 159,7-million ounces of gold and 136,3-million pounds of uranium oxide. It has been granted an additional prospecting right by the Departmentof Minerals and Energy for gold, silver and uranium over subdivision 3 of the farm Doornrivier 330. The area covers 214 ha and is adjacent to the Beatrix Mine in the Free State province. Snowden Mining Industry Consultants has estimated that the Doornrivier prospecting right contains an inferred resource of 0,9-million ounces of gold and 1,6-million pounds of uranium oxide. The three prospecting rights granted to Wits Gold in the southern Free State cover 13 067 ha and contain 44,4-million ounces of gold and 136,3-million pounds of U3O8. The company is engaged in exploration drilling in five relatively shallow priority areas with an inferred resource of 42,9 million oz of gold. Wits Gold is busy defining the ore body at its Bloemhoek-de Bron property in Free State, which appears to host a world-class gold deposit, the company announced in October, 2007. The property, which is close to Gold Fields’ Beatrix and to Harmony Gold Mining’s Joel, St Helena and Bambanani mines, potentially contains 10 million to 15 million ounces of gold, grading about six grams per tonne, at a depth of 500 metres to 1.5 kilometres. This made it the 10th-largest undeveloped gold resource in the world. Wits Gold’s total gold resource of 160 million oz made it the sixth-largest gold company in the world, ranked by resources. As it has a market capitalisation of about $500 million, investors were paying about $3.30 for an oz of gold. Wits Gold reported a substantial increase in its indicated gold resource to almost 20-million oz , the company said in November, 2007. Following a review of its gold and uranium resources by Snowden Mining Industry Consultants, its total indicated gold resource increased to 19,4-million oz, compared with the previous estimate of 3,9-million oz. Wits Gold recorded an inferred gold resource of 130,4-million oz, compared with 155,8-million oz previously. The total inferred uranium resource was 54,3-million pounds, compared with Snowden's previous estimate of 136,3-million pounds.
  • "Wits Gold, a strange stock for strange times" (Source: Mineweb)
  • Mintails Limited (ASX:MLI) is involved in the development, processing and production of gold and uranium and potentially sulphuric acid from "mining tailings" located on the West and East Rand areas of the Witwatersrand Basin, near Johannesburg. Mintails recently announced a new 50:50 Joint Venture with DRDGOLD in respect to substantial tailings resources located on the East Rand. The JV will own the rights to process over 1.7 billion tonnes of tailings materials on the East Rand. Mintails is involved in a further JV with DRDGOLD in respect of a new underground exploration company called West Wits Mining Limited formed to investigate and potentially exploit any economic underground mineralisation located at historic leases on the West Rand.
    Gold mining first commenced in the Witwatersrand Basin in 1886 and has since produced over 50,000 tonnes (1.7 billion ounces) of gold. This represents over 40% of the world's gold production. The massive multi-million tonne tailings deposits, which line the outskirts of Johannesburg, are the remnants of over a century of deep underground and open cast mining.
    Mintails currently has the rights to exploit in excess of 305 million tonnes of sands, slime and rock tailings material situated on the West Rand approximately 70kms west of Johannesburg, and now also owns 50% of a JV formed with DRDGOLD which has access to a further 1.7 billion tonnes located on the East Rand, 60 kms east of Johannesburg.

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