Drdgold Ltd 20-F/A, filed Apr 12, 2023
Drdgold Ltd (DRD)
20-F/A
2023-04-12
For: 2022-06-30
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Added on
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About this 20-F/A
Drdgold Ltd filed this 20-F/A on April 12, 2023, covering the fiscal year ended June 30, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 2054 9
FORM
(Amendment No. 2)
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year
ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934
Commission file number
(Exact name of Registrant as specified in its charter and translation of Registrant's name into English)
REPUBLIC OF SOUTH AFRICA
(Jurisdiction of incorporation or organization)
,
, Chief Financial Officer, Tel. no. +
, Email
Mpho Mashatola, Group Financial Manager Tel. no. +27 11 470 2600, Email mpho
.
mashatola@drdgold.com
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act
Title of each class:
Trading symbol
Name of each exchange on which registered:
The
, Inc.
Securities registered or to be registered pursuant to Section 12(g) of the Act
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act
None
Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period
covered by the annual report.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes
☐
☑
If this report is an annual report or transition report, indicate by check mark if the registrant is not required to file reports pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934 Yes
☐
☑
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.
☑
☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted
pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).
☑
☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an
emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2
of the Exchange Act.
Large accelerated filer
☐
☑
☐
Emerging growth company
If any emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if
the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act
☐
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board
to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the
effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report.
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing
.
U.S. GAAP
☐
International Accounting Standards Board
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Other
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If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the
registrant has elected to follow. Item 17
☐
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If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes
☐
☑
Auditor Name:
EXPLANATORY STATEMENT
SIGNATURES
authorized the undersigned to sign this annual report on its behalf.
DRDGOLD LIMITED
By:
/s/ D.J. Pretorius
D.J. Pretorius
Chief Executive Officer
By:
/s/ A.J. Davel
A.J. Davel
Chief Financial Officer
Date: November 8, 2022
Exhibit 12.1
CERTIFICATION
I, Daniel Johannes Pretorius, certify that:
(1)
I have reviewed Amendment No. 2 to the annual report on Form 20-F of DRDGOLD LIMITED;
(2)
Based on my knowledge, this Amendment No. 2 does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this
report;
Date: April 12, 2023
/s/ Daniel Johannes Pretorius
Daniel Johannes Pretorius
Chief Executive Officer
Exhibit 12.2
CERTIFICATION
I, Adriaan Jacobus Davel, certify that:
(1)
I have reviewed Amendment No. 2 to the annual report on Form 20-F of DRDGOLD LIMITED;
(2)
Based on my knowledge, this Amendment No. 2 does not contain any untrue statement of a material
fact or omit to state a material fact necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to the period covered by this
report.
Date: April 12, 2023
/s/ Adriaan Jacobus Davel
Adriaan Jacobus Davel
Chief Financial Officer
MINERAL INDUSTRY ADVISORY
Sound Mining International Limited
Directorate:
Sound Mining House, 2A Fifth Avenue, Rivonia 2128, South Africa |
Tel:
+23 (0) 11 234 7152 |
Reg no:
2007/020184/07
TECHNICAL REPORT SUMMARY
FAR WEST GOLD RECOVERIES
(PROPRIETARY) LIMITED
Prepared for:
Far West Gold Recoveries
(Proprietary) Limited
Cycad House, Building 17
Constantia Office Park
Cnr 14
th
Hendrik Potgieter Road
Weltevredenpark, 1709
Document No.: PR/SMI/1203/22
Effective date: 30 June 2022
Document date: 28 October 2022
Far West Gold Recoveries (Proprietary) Limited
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2
TABLE OF CONTENTS
Far West Gold Recoveries (Proprietary) Limited
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Far West Gold Recoveries (Proprietary) Limited
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Far West Gold Recoveries (Proprietary) Limited
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List of Figures
List of Tables
Far West Gold Recoveries (Proprietary) Limited
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Far West Gold Recoveries (Proprietary) Limited
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List of Graphs
List of Photographs
List of Appendices
Far West Gold Recoveries (Proprietary) Limited
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1.
EXECUTIVE SUMMARY
1.1.
Introduction
DRDGOLD Limited (DRDGOLD), which has a primary listing on the Johannesburg Stock Exchange (JSE) and a secondary listing on the New
York Stock Exchange (NYSE), is an established gold tailings retreatment company located near Johannesburg, South Africa. The company’s
business is to profitably reclaim tailings from surface Tailings Storage Facilities (TSFs). DRDGOLD has arranged its operations into two
wholly owned entities covering their East Rand (east of Johannesburg) and far West Rand (far west of Johannesburg) businesses. The
East Rand operations are run by Ergo Mining (Proprietary) Limited (Ergo) and the West rand operations by Far West Gold Recoveries
(Proprietary) Limited (FWGR). FWGR currently own six TSFs on the West Rand between Roodepoort and Carletonville, approximately
70km South West of Johannesburg (Figure A). There are an additional three TSFs which are to be transferred from Sibanye Gold Limited
(Sibanye Gold) to FWGR once no longer required by the existing operations (Available TSFs). Numerous other TSFs are potentially available
in the area for future reclamation (Target TSFs).
Figure A: Location of the FWGR Operations
Source: Sound Mining, 2022
This Technical Report Summary (TRS) was prepared by Sound Mining International SA (Proprietary) Limited (Sound Mining) for DRDGOLD
as the registrant. It was compiled by qualified persons (QPs) in line with the Securities Exchange Commission (SEC) requirements,
Regulation S-K 1300. It presents the Mineral Resources and Mineral Reserves of FWGR as at 30 June 2022, and as a maiden submission to
the SEC.
Far West Gold Recoveries (Proprietary) Limited
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The QP has relied on information provided by FWGR with respect to legal matters (Item
), the gold price (Item
), environmental or
social and labor planning aspects (Item
) and economic assumptions (Item
).
The qualified persons Mrs Diana van Buren (Mineral Resources), Mr Vaughn Duke (Mineral Reserves) and Mr Keith Raine (Environmental,
Social and Governance) have reviewed the exploration data base; the geological block models; the processing plant design and costing;
mine plans, production scheduling, infrastructure; legal tenure, permitting, environmental and social compliance status and the latest
assessment of the environmental rehabilitation liabilities required for eventual closure of the operation.
The information was used to substantiate the confidence in the Mineral Resource and Mineral Reserve estimates and then incorporated
into a Discounted Cashflow (DCF) Model for an economic assessment of the viability of the Mineral Reserves.
The assets held by FWGR were acquired from Sibanye Gold Limited (Sibanye Gold), a subsidiary of Sibanye-Stillwater Limited (Sibanye-
Stillwater), in a transaction which was concluded in July 2018 in which common law ownership was established over various TSFs
containing the Mineral Resources and Mineral Reserves.
FWGR conducts its activities inter alia in accordance with Environmental Approvals and the provisions of the Mine Health and Safety
regulations. A Use and Access Agreement with Sibanye Gold articulates the various rights, permits and licenses held by Sibanye Gold in
terms of which FWGR operates, pending the transfer to FWGR of those that are transferable. The FWGR operations are comprised of a
variety of assets (Table A), including a processing plant and land for the development of a Regional Tailings Storage Facility (RTSF) for
long-term sustainability.
Table A: FWGR Assets
Asset Type
Asset
Location
TSFs
Driefontein 3
Driefontein Mining Right area
Driefontein 5
Kloof 1
Kloof Mining Right area
Libanon
Venterspost North
Venterspost South
Depositional
TSF
Driefontein 4
North-east of Driefontein Mining Right area
Operating
Surface Gold
Processing
Plants
DP2
Located on:
Farm Blyvooruitzicht 116IQ Portion (Ptn) 6; and
Farm Driefontein 113IQ Remainder (Re) of Ptn 1
Pilot plant
Located at:
Driefontein 1 processing plant
Land for
Phase 2
Land for the RTSF
Located on:
Farm Cardoville 647IQ;
Re Ptn 6 Farm Cardoville 364 IQ;
Ptn 8 of Ptn 6 of Farm Cardoville 364IQ;
Ptn 13 of Ptn1 of Farm Cardoville IQ;
Ptn 50 Farm Kalbasfontein 365IQ;
Re Ptn 3 Farm Cardoville 364;
Re Ptn 5 of Ptn 3 Farm Cardoville 364IQ; and
Ptn 11 Farm Cardoville 364IQ
Land for a Central Processing Plant (CPP) which provides strategic
optionality
Located after subdivision of:
Farm Rietfontein 347IQ Ptn 35 and Ptn 73
Access Rights
Access to water from the Driefontein 10 shaft and Kloof 10 shaft,
for the purposes of hydro-mining
Located within the Driefontein and Kloof Mining
Right areas
Installation, supply, distribution and maintenance of power supply
Driefontein 1 gold plant
Located at Driefontein 1 processing plant
Source: FWGR, 2022
Far West Gold Recoveries (Proprietary) Limited
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A review of the environmental permitting concluded that the necessary permitting requirements are in place or are being proactively
addressed. Sufficient provision is included to address the rehabilitation liabilities associated with the above assets. The QPs are satisfied
that FWGR has the legal right to reclaim and process the TSFs forming part of the operation. These are classified as moveable assets and
so there is no immediate requirement to transfer any part of the mining rights from Sibanye Gold Limited (Sibanye Gold). The operations
are not subject to royalty payments.
The initial phase of FWGR’s long-term growth strategy is now complete. It included upgrading the Driefontein Plant 2 (DP2) to process
tailings material through the hydro-mining of Driefontein 5 TSF at approximately 500ktpm. Phase 2 will begin with the expansion of DP2
to a processing capacity of 1.2Mtpm. New arisings (i.e., retreated tailings) from DP2 are being deposited onto the Driefontein 4 TSF
(0.5Mtpm), which is due to reach capacity towards the end of calendar year 2025 whereafter the depositional rate would have to decrease
materially. Sibanye Gold has in principle approved the deposition of new arisings onto their Leeudoorn TSF until the planned new RTSF is
operational in 2030. Upon the conclusion of written terms, FWGR will be able to deposit 500ktpm on the Leeudoorn TSF until 2029.
Supporting pipelines will link this infrastructure to additional TSFs that have been identified as potentially available for reclamation to
extend the life of the operation beyond the current Mineral Reserves.
The construction of a significantly larger CPP has been considered as a strategic option to facilitate growth beyond the throughput of
1.2Mtpm called for in the Life-of-Mine (LoM) plan. A large RTSF has been designed to accommodate such strategic growth over the longer
term and the LoM plan anticipates that this facility will be commissioned in 2030. The Leeudoorn TSF will enable the expansion to 750ktpm
planned by FWGR over the shorter term, until 2030.
The operation’s infrastructure and current TSFs lie across two mining rights which stretch from Westonaria to Carletonville (Figure B).
Figure B: FWGR Operations
Source: Sound Mining, 2022
Far West Gold Recoveries (Proprietary) Limited
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The TSFs are located at elevations between 1,570mamsl and 1,720mamsl in an area that is typical of a mature landscape with gentle
rolling undulations and shallow sided river valleys. The area enjoys warm to hot, moist summers and cool dry winters with an average
ambient temperature of 20°C. The operation experiences some 571mm of rain each year, with most of it occurring during summer in the
form of thunderstorms. Most of the area comprises disturbed grazing land and minor crop production. The area is well serviced with
schools, medical facilities, a rail network, power, water and other supporting infrastructure. Both tarred and gravel roads are used to
commute between farms and mines, as well as to and from urban centers.
1.2.
History
Gold and uranium mining operations commenced in the late 1800s in the Witwatersrand Basin goldfields of South Africa, and have
resulted in the accumulation of substantial amounts of surface tailings and other mine residues. The possible re-treatment of TSFs in the
West Rand area has a long and complex history with Gold Fields Limited (Gold Fields), Rand Uranium Limited (Rand Uranium), Harmony
Gold Mining Company Limited (Harmony), Gold One International Limited (Gold One) and Sibanye Gold completing a number of parallel,
independent studies relating to the retreatment of these TSFs. There is an approximate fifteen-year history of metallurgical test work
and process design which has been undertaken for a variety of combinations of assets and products recovered. Whilst these historical
studies were for specific combinations of assets, they are not all relevant to FWGR in its current form.
Prior to 2009, Gold Fields embarked on a project known as the West Wits Project (WWP) aimed at retreating several TSFs on its four
mining complexes: Kloof, Driefontein, Venterspost and South Deep to recover gold, uranium and sulfur and storing the tailings on a new
Central Tailings Storage Facility (CTSF). Similarly, Rand Uranium had embarked on the Cooke Uranium Project (CUP), which endeavored
to treat the Cooke TSF for gold, uranium and sulfur. The two independent projects had similar operational and environmental mandates,
within a 25km radius of each other.
In 2009, Gold Fields and Rand Uranium evaluated the potential synergy of an integrated retreatment plan for TSFs located within the
South Deep, Cooke, Kloof, Driefontein and Venterspost mining complexes.
In 2012, Gold One acquired Rand Uranium and in the same year acquired the Ezulwini Mining Company (Proprietary) Limited (Ezulwini).
During the same year Gold One, revived the tailings retreatment project and Gold Fields entered into a joint venture (JV) partnership with
Gold One to investigate the economic viability of concurrently reprocessing current arisings and historical tailings from a number of sites
situated in the greater West Rand area. A scoping study was concluded in 2012.
In early 2013, Gold Fields unbundled its Kloof and Driefontein Complex and Beatrix gold mines in the Free State Province to create a
separate entity in Sibanye Gold and listed Sibanye Gold as a fully independent company on both the JSE and the NYSE stock exchanges.
Subsequently, in October 2013, Sibanye Gold Limited purchased the interest held by Gold One in Rand Uranium and Ezulwini. The
Gold One assets which became part of Sibanye Gold included the Cooke operations (underground mining and surface reclamation
operations) for gold and uranium production. This transaction gave Sibanye Gold control of a substantial portion of the surface mineral
resources in the region. A Preliminary Feasibility Study (PFS) was completed in 2013 and confirmed that there is a significant opportunity
to extract value from the surface Mineral Resources. Subsequently, a number of Definitive Feasibility Studies (DFSs) have been completed
on various combinations of TSFs. Sibanye Gold’s TSF reclamation assets were housed in a special purpose vehicle (SPV) called West Rand
Tailings Retreatment Project (WRTRP).
In 2018, Sibanye Gold traded its SPV for an equity share in DRDGOLD, which as a consequence then wholly owned the tailings retreatment
project which was subsequently renamed FWGR. In mid-2018, FWGR initiated Phase 1 of a phased approach to its growing reclamation
operations.
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1.3.
Geological Setting
The assets of FWGR are derived from the West Rand Goldfield of the gold-bearing, late Archaean (2.7Ga to 3.2Ga), Witwatersrand
Supergroup (Witwatersrand Basin). The Witwatersrand Basin is a roughly oval-shaped sedimentary basin, filled with approximately
14,000m of sedimentary and subordinate volcanic units, of which only small portions outcrop to the south and west of Johannesburg
(Figure C).
Figure C: Regional Geological Setting of the Witwatersrand Supergroup
Source: Sound Mining, 2022
Far West Gold Recoveries (Proprietary) Limited
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The basin hosts vast auriferous and uraniferous deposits which have been grouped into geographically distinct sub-basins or goldfields,
which are separated by stratigraphy where no economic mineralization has been discovered (Figure D).
Figure D: Local Geological Setting
Source: Sound Mining, 2022
Far West Gold Recoveries (Proprietary) Limited
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Recent studies consider the deposition in the Witwatersrand sediments to have taken place along the interface between a fluvial system
and a major body of still water or an inland sea. Specifically, this body of water is considered to be a retro-arc-foreland basin which formed
in response to crustal thickening on the northern edge of the Kaapvaal Craton, during a collision with the Zimbabwe Craton to the north.
The varying stratigraphic position of the narrow, 0.1m to 2.0m thick quartz-pebble conglomerate reefs are interpreted to represent major,
diachronous, entry points of coarse-grained sediment into the basin. Complex patterns of syn-depositional faulting and folding have
caused significant variations in sediment thickness and sub-vertical to over-folded reef structures are characteristic of the basin margins.
Later faulting and folding of the sequence determined which parts of the Witwatersrand Basin remained buried, as well as the depth
extent of mineable horizons, relative to the present-day surface.
The FWGR assets (Figure E) are derived from the Driefontein, Kloof, Libanon and Venterspost mining operations located in the West Rand
Goldfield, on the north-western rim of the Witwatersrand Basin.
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Figure E: Property Geology
Source: Sound Mining, 2022
Far West Gold Recoveries (Proprietary) Limited
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These operations exploit three primary reefs, namely the Ventersdorp Contact Reef (VCR) located at the top of the Central Rand Group,
the Carbon Leader Reef (CLR) near the base of the Central Rand Group and the Middelvlei Reef (MR), which stratigraphically occurs 50m
to 75m above the Carbon Leader. Additional minor reefs including the Kloof, Elsburg, Kimberley and Libanon Reefs are exploited at some
operations.
The TSFs to be reclaimed are located in the Western Witwatersrand Basin, within the West Rand and Carletonville goldfields. The TSFs
contain the processed waste from the mining of auriferous and uraniferous ores from Driefontein, Kloof, Libanon and Venterspost
underground mining operations. The mining operations have targeted different reefs and as a result the TSFs have developed from the
following:
●
the Driefontein TSFs comprise primarily processed VCR, CLR and Middelvlei Reef;
●
the Kloof TSFs comprise primarily processed VCR, Middelvlei Reef and to a lesser extent the Kloof Reef;
●
the Venterspost TSFs comprise primarily processed Middelvlei Reef and VCR; and
●
the Libanon TSFs comprises material from the VCR, Libanon Reef, Kloof Reef and Middelvlei Reef.
The composition of a TSF depends on the geochemical make-up of the material being mined and the chemicals used in the mining and
extraction process. In addition to the internal structure, the TSF reflects the mining strategy and depositional methodologies employed
at each operation. Variations in the density of tailings material is a critical factor in the accurate estimation of quantities as these factors
can result in a considerable variation in gold content and distribution throughout a TSF where such variation has an impact on final
recoveries and projected revenues for the operation. In addition, secondary processes such as metal re-mobilization, erosion, weathering,
leaching and acid mine drainage can further affect the geochemical characteristics of a TSF.
These processes tend to progress faster in a TSF compared to a primary ore body as weathering, erosion and oxidation are accelerated
by the fine particle size of the material. Gold can undergo mobilization within the TSF with time and hence may exhibit areas of re-
concentration and even be present in the sub-structure soil. Although exceptions occur, the TSFs generally show an increase in grade
towards the base of the TSF.
1.4.
Exploration
The extent, morphology and structure of a TSF is relatively simplistic compared to conventional mineral deposits, and so the exploration
programs were also simple, comprising:
●
surveying to determine physical dimensions and volumes;
●
auger drilling programs to permit sampling for gold content and mapping of the gold distribution;
●
metallurgical and flow sheet development test work; and
●
tailings toxicity tests and specific gravity determination.
The QPs have concluded that the drilling programs were suitable for the type of deposits and that the drilling and sampling techniques
were of a high standard, with sample contamination and losses kept to a minimum. The drilling and sampling programs were conducted
to industry standards and the results are considered reliable and suitable for incorporation into a Mineral Resource estimate.
The analytical laboratories used in the exploration program are all ISO certified for gold analysis and all of them follow best practice
principles of quality management. The Quality Assurance and Quality Control (QA/QC) of the field and laboratory verification procedures
were independently audited and are considered appropriate.
Full length samples were taken and are considered representative of the disseminated mineralization which has no orientation or
structural control other than grade variations due to deposition variations and secondary remobilization of the gold. This gold distribution
within the TSFs is adequately understood from the geological modelling.
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The Driefontein TSFs, Venterspost TSFs and Libanon TSF are located on Malmani Subgroup dolomites (Figure D) with the remainder
located on non-dolomitic argillaceous and arenaceous sediments of the Timeball Hill and Hekpoort Formations. An independent density
study by Geostrada concluded that the basement lithology does not significantly impact the density of the tailings material.
A bulk density of 1.42g/cm
3
a dry density in the estimation of an in situ Mineral Resource is standard best practice and the dry density value has been applied to the
Mineral Resource estimate.
1.5.
Metallurgical Testing
Test work has been performed on Driefontein 3 TSF, Driefontein 5 TSF, Libanon TSF, Kloof 1 TSF and Venterspost North TSF. Less test
work has been performed on the Venterspost South TSF. The metallurgical data that was originally available for the Driefontein 5 TSF
was subsequently supported by the results of full-scale processing at DP2 during Phase 1. Based on the test work, the QPs are comfortable
that the following processing recoveries are achievable for the respective TSFs (Table B).
Table B: Summary of Process Recovery Potential
TSF Recovery
Process
(%)
Driefontein 5
49.8%
Driefontein 3
56.6%
Kloof 1
50.5%
Libanon
47.2%
Venterspost North
54.7%
Venterspost South
62.5%
Source: Sound Mining, 2022; and FWGR, 2020
1.6.
Mineral Resource Estimation
The original Mineral Resource estimates of 2009 were confirmed by Sound Mining in 2020. Sound Mining independently reviewed the
database, geological models, estimation methodology and classification criteria. Sound Mining concluded that the estimations are based
on a suitable database of reliable information and that no material issues were found which could affect the overall estimate.
The exploration database is comprised of analytical data from reliable laboratory assays of samples obtained from sampling and drilling
programs based on industry best practice. The drillhole grid spacing is comparatively close for typical TSF drilling programs and the entire
depth of each TSF was sampled. The data density is considered sufficient to assure continuity of mineralization and structure and provides
an adequate basis for estimation.
The exploration database was imported into DataMineTM Studio 3 software and data validation was undertaken to ensure the integrity
and validity of the imported data. The samples for Driefontein 3 TSF and Driefontein 5 TSFs represent 3.0m composite samples and not
1.5m composites. The samples from all of the other TSFs were 1.5m in length. The end of the drillhole sample, where it contained footwall
material, was separated into tailings and footwall material and treated separately by the laboratory.
Ordinary Kriging was undertaken for the gold grade estimation which allows for testing of the accuracy and efficiency of the estimation.
Due to the construction of the TSFs and potential gold remobilization, a spatial grade distribution was anticipated and since Kriging is
based on modelling the spatial variances within an orebody, it was considered the most reliable and accurate methodology for the task.
The economic assessment provided in this TRS demonstrates positive margins and confirms reasonable prospects for eventual economic
extraction. The applied Mineral Resource classification is a function of the confidence of the asset tenure and the entire process from
drilling, sampling, geological understanding and geostatistical relationships. The latest Mineral Resources are all in the Measured category
(Table C).
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Table C: Mineral Resource Estimate for FWGR as at 30 June 2022
TSF
Volume
('000m
3
)
Density
(t/m
3
)
Quantity
(Mt)
Grade
(g/t)
Content
(t)
Content
(koz)
Driefontein 5
5,685
1.42
8.07
0.48
3.85
124
Driefontein 3
35,540
1.42
50.47
0.47
23.71
762
Kloof 1
19,931
1.42
28.30
0.33
9.20
296
Libanon
52,351
1.42
74.34
0.27
20.23
650
Venterspost North
38,954
1.42
55.31
0.27
15.16
487
Venterspost South
9,068
1.42
12.88
0.33
4.24
136
Total Mineral Resource Estimate
161,529
1.42
229.37
0.33
76.39
2,456
Source: Sound Mining, 2022
Notes: Apparent computational errors due to rounding
1.7.
Mineral Reserve Estimates
A LoM plan and mining schedule was developed by FWGR as outlined in Item
. The LoM plan was tested for economic viability in the
DCF model which indicated a positive cashflow through to the end of LoM.
The Mineral Reserves were prepared in accordance with the requirements of S-K 1300 (Table D). No mining losses or dilution are applied
in determining the Mineral Reserve estimates because the TSFs are re-mined and re-processed in their entirety. All other modifying factors
are captured in the mine design together with all of the associated technical aspects that inform the capital and operating cost estimates.
FWGR’s six TSF assets convert to a total Mineral Reserve of 229.37Mt with a gold content of 76.39t.
Table D: S-K 1300 Compliant Mineral Reserve Estimate as at 30 June 2022
TSF
Volume
('000m
3
)
Density
(t/m
3
)
Quantity
(Mt)
Grade
(g/t)
Content
(t)
Content
(koz)
Driefontein 5
5,685
1.42
8.07
0.48
3.85
124
Driefontein 3
35,540
1.42
50.47
0.47
23.71
762
Kloof 1
19,931
1.42
28.30
0.33
9.20
296
Libanon
52,351
1.42
74.34
0.27
20.23
650
Venterspost North
38,954
1.42
55.32
0.27
15.16
487
Total Proved Mineral Reserve
152,461
1.42
216.49
0.33
72.15
2,320
Venterspost South
9,068
1.42
12.88
0.33
4.24
136
Total Probable Mineral Reserve
9,068
1.42
12.88
0.33
4.24
136
Total Mineral Reserve Estimate
161,529
1.42
229.37
0.33
76.39
2,456
Source: Sound Mining, 2022
Notes: Apparent computational errors due to rounding and are not considered significant
3
potential development of such Mineral Reserves
1.8.
Mine Design and Mine Plan
FWGR exploits TSFs through hydro-mining using high-pressure jets of water to dislodge tailings material or move sediment for
transportation as a slurry to processing plants. The hydro-mining removes the tailings material from the top of a TSF to the natural ground
level in 15m layers (Figure F).
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Figure F: Mining Methodology
Source: Sound Mining, 2022
A safe bench height is dependent upon the material strength which is influenced by the phreatic surface within a dump. The TSFs have
been dormant for a number of years and so the phreatic surface is expected to be well below the surface of the dumps. The drilling
program to define the Mineral Resource did not encounter saturated zones or phreatic surfaces and so the risk of slope failure or
liquefaction is low.
Horizontal benches of 100m to 200m, inclusive of the face angles (45° to 50°), are created to maintain safe working distances between
simultaneous operations at different bench elevations (Figure G).
Figure G: Mining Widths
Source: Sound Mining, 2022
Hydro-mining and the re-deposition of tailings is a specialized activity, and is outsourced to competent and experienced service providers.
The hydro-mining performance assumptions used for the LoM planning are based on the current reclamation operations where the
method has been successfully “tried and tested“.
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The operating cost and capital expenditure assumptions are supported by actual operational figures rather than being only based on
computations from “zero based” cost models or feasibility studies. Similarly, the equipment requirements, manning complements and
necessary supporting infrastructure, in terms of water and power supply, are well understood by FWGR. There have been no untested
technical assumptions made with regards to the mining design criteria.
The cost and maintenance of the mining equipment, and employees are paid for by the mining contractors. The pipeline and pumping
design and associated capital expenditure estimate has been undertaken by independent specialists familiar with the mining operations.
Specific mining schedules were developed for each TSF based on the grade distribution of the Mineral Resource block models. These
schedules were integrated into a production plan that exhausts FWGR’s current Mineral Reserves (Graph A).
Graph A: LoM Production Forecast
Source: Sound Mining, 2022
Given the nature of the hydraulic mining operation, no selective mining, other than very broad rejection of sections of the TSFs, is possible
and the mine scheduling has shown that this is unnecessary. No geotechnical constraints have been applied and hydrological aspects
affecting the surface deposits are not significant to the operation. A mining contractor using its own equipment (i.e., “mining units”) is
responsible for the reclamation activities, and so no provision has been made in the initial capital estimate for mining equipment.
Sound Mining is satisfied that the LoM schedule is reasonable and appropriate for the operation.
1.9.
Process and Recovery Methods
Sound Mining is of the opinion that there is sufficient test work available to support the metallurgical performance anticipated for the
current and future processing facilities. The LoM plan relies on the currently operating DP2 processing plant (~600ktpm) and an expansion
thereof to 1,200ktpm.
FWGRs Phase 1 entailed a modification and refurbishment of the old DP2 plant to accommodate a nameplate throughput of 600ktpm,
albeit that a constraint currently exists with the prevailing deposition capacity of 500ktpm for new arisings onto the Driefontein 4 TSF.
While at current depositional rates, the plan is to exhaust the storage capacity of this TSF by the end of 2025, however, it may be possible
for FWGR to exceed this capacity for some years thereafter by continuing to deposit new arisings but at a materially reduced rate.
A detailed design to expand DP2 to accommodate a throughput of 1.2Mtpm was prepared by external specialists with appropriate capital
cost estimates. There is no change to the process flow and the QP is satisfied that the metallurgical characterization of the TSFs has been
sufficiently catered for in the design. These were reviewed by Sound Mining and are considered to be appropriate and in-line with industry
standards.
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1.10.
Infrastructure
Sound Mining has inspected the existing infrastructure which comprises DP2, the Driefontein 4 TSF, and all associated pumping and piping
installations. The QP is of the opinion that this infrastructure has been correctly planned, properly installed to date, fully functional and
well maintained.
Electricity is currently supplied from Eskom’s 132kV and 44kV grid to various Sibanye owned gold mines in the vicinity of FWGR’s
operations. The power requirement of FWGR remains within the current surplus capacity to the Driefontein, Kloof and Cooke and mining
complexes. Power supply remains a material risk to all mining operations in South Africa including FWGRs operations.
A closed water system has been designed to avoid having to treat water or having to discharge into surface water courses (Figure H).
Figure H: TSF Location, Make-up Water Shafts, Processing Plants and Pipeline Layouts
Source: Sound Mining, 2022
Water use licenses are available for the pumping of water from underground workings at Kloof 10 shaft and Driefontein 10 shaft, and
the consumption planned from these shafts will not exceed the pumping rates approved in the respective WULs. Water will also be
reclaimed from the Leeudoorn TSF and RTSF in due course and Sound Mining is satisfied that there is more than enough water to meet
the requirements of the operation as currently planned.
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The hydro-mining, reprocessing and re-deposition of tailings material requires a network of pipes. Slurry pipelines will be needed from
the hydro-mining sites at the TSFs to DP2 and tailings pipelines from DP2 to the respective deposition facilities. High pressure water
pipelines are necessary to supply the mining operations while separate low-pressure water pipes are needed for returning water to DP2
from water dams at the various TSFs. These have all been adequately designed and included in the LoM planning.
FWGR requires the RTSF to ensure adequate storage facilities for the long-term deposition of all tailings arising from FWGR operations.
It will be built on Transvaal Supergroup lithology (Figure D), to mitigate any risk of dolomite related sink holes. The design and cost
estimate caters for a storage capacity of 800Mt and a potential disposal rate of up to 2.4Mtpm. It will cover an area of approximately
1,000ha with a final top surface area of around 600ha at a maximum height of 100m. The selected site of approximately 1,500ha is shown
in Figure I.
Figure I: RTSF Layout
Source: Beric Robertson Tailings, 2020
A key design consideration has been the management of ground water through the use of a scavenger well system that will capture and
recycle future leachable pollution plumes. In the context of risk, this is believed to be a viable solution to a previously considered
geomembrane barrier approach. The permitting for this site has been approved based on the initial design with the geomembrane barrier
and FWGR are pursuing approval of the more recent scavenger well design.
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Sound Mining is of the opinion that the selected site is appropriate for the intended construction and operation of the RTSF and endorses
the proposed scavenger well solution for ground water as this can provide a sustainable solution to the RTSF’s future plume management
requirements.
FWGR have received in principle permission from Sibanye Gold to co-deposit tailings on the Leeudoorn TSF. This will allow FWGR to
increase production to 750ktpm while also mitigating against the risk of an interruption to the planned production in the event that the
approval sought for the RTSF is delayed. The depositional requirements for the new arisings will now be shared between the Driefontein
4 TSF and Leeudoorn TSF, until such a time that the RTSF is approved, constructed and ready to receive these new arisings.
In addition, FWGR have commissioned further study work on the RTSF design to investigate the potential for the soil conditions at this
site to accommodate the compaction of the associated clay layer to act as an alternative or additional barrier system in support of the
scavenger well design.
1.11.
Market Studies
Gold is a precious metal, refined and sold as bullion on the international market. It is traded globally on financial markets almost
continuously and traditionally used for jewelry, bartering or storing wealth. Aside from the gold holdings of central banks, current uses
of gold include jewelry, private investment, dentistry, medicine and technology (Table E).
Table E: Above Ground Gold Stocks in 2022
Description
Quantity
(t)
Contribution
(%)
Jewelry
94,464
46.0%
Private Investment
45,456
22.2%
Bank Holdings
34,592
16.9%
Other
30,726
15.0%
Source: World Gold Council, 2022
DRDGOLD has a long-standing off take agreement with the Rand Refinery who refine the gold produced by FWGR. DRDGOLD uses an
agent to sell FWGR’s gold to South Africa bullion banks and once sold, Rand Refinery will transfer the gold to the purchasers’ bullion bank
depository.
1.12.
Environmental Permitting and Liability
A review of the environmental status was undertaken by an independent environmental specialist. The authorizations required for the
“listed activities” under NEMA, NEM:WA, NEM:AQA and NWA were reviewed in detail. EIA, EMPrs and environmental authorizations exist
for the Kloof and Driefontein mining areas. Areas requiring amendments have been cited. Environmental permitting is underway and at
an appropriate stage for the planned expansions. There is enough time for approval of amendment applications and no fatal flaw exist
from a compliance perspective. Some heritage and culturally significant areas have been identified and these are accommodated in the
construction plans.
The activities of FWGR already contribute to the socio-economic environment on the West Rand. The operation will further enhance the
situation by reducing unemployment and investing capital for an extended LoM which will contribute to the national GDP. The operation
also provides long-term positive impacts in terms of employment creation, skills development, local procurement of goods and services,
as well as local and regional economic development. The Social Impact Assessment notes that informal settlements in close proximity to
the operation may pose a risk in terms of community stability. The concerns of local farmers may also need to be addressed. Sound Mining
believes that these concerns can be managed, and that the positive impacts will benefit the surrounding communities.
The closure liability is assessed annually to maintain environmental compliance. These constitute the quantum of the financial obligation
and guarantees required by the Department of Mineral Resources and Energy (DMRE). They have been determined on both an
“unscheduled” and “scheduled” basis. The unscheduled estimate is based on the costs of rehabilitating the TSFs in their present state
without any mining activity having taken place. The disclosure to the DMRE and the quantum of financial guarantees required is based on
the unscheduled estimate.
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The closure liability bank guarantees under Regulation 7 of the NEMA Financial Provision Regulations (2015) must ensure that the financial
provision is, at any given time, equal to the sum of the actual costs of implementing the plans for a period of at least ten years forthwith
(this includes the annual rehabilitation, final, decommissioning and closure plans). This figure is required to be updated annually and
adjusted. In the case of the FWGR the annual updates will show reduced amounts as the tailing’s facilities decrease to only footprint
rehabilitation. The scheduled estimate assumes that mining takes place and that the final rehabilitation will be confined to rehabilitation
of the TSF footprints and the RTSF.
Guardrisk has issued financial guarantees in favor of the DMRE of ZAR169.0 M. An amount of ZAR444.1 M is also invested in Guardrisk
Cell Captive under a ring-fenced environmental rehabilitation policy. The financial guarantees and funds held with the Guardrisk Cell
Captive (30 June 2022) are sufficient to cover the 2022 estimated unscheduled liability of ZAR309.69 M as estimated for the operation.
1.13.
Capital Expenditure and Operating Costs
The capital and operating cost estimates used to examine the viability of the estimated Mineral Reserve were informed by current
operations and recent feasibility study work (i.e., 2020 and 2021) on processing, the RTSF and associated pumping and piping
infrastructure. The operating cost estimates are supported by actual on mine invoices received and paid, while the capital estimates have
been determined using unit rates (obtained from quotations or bench marked against recent installations) and design quantities.
Although the previous feasibility study work was in most instances to a definitive level of accuracy, the estimates are no longer current
and therefore deemed to be at a preliminary feasibility level of accuracy (i.e., +/-25%). Where necessary estimates have been appropriately
inflated to June 2022 real terms and Sound Mining has included a 15% contingency on all costs to reflect the confidence expected for a
PFS level of study.
An annual Stay-in-Business (SiB) provision of ZAR8.7 M is considered until 2030 after which it is increased to ZAR16.0 M for the rest of the
LoM. This provision covers maintenance and the replacement of equipment across the operation. The Guardrisk Cell Captive exceeds the
current environmental liability and so no additional provision has been made in the capital estimate. Graph B presents the annual capital
expenditure forecast for the operation.
Graph B: Capital Expenditure Forecast
Source: Sound Mining, 2022
Early capital will be required to access the Leeudoorn TSF, whereafter, DP2 will be expanded (i.e., FY2025 and FY2026). The RTSF is
scheduled to be constructed over four years (i.e., FY2027 to FY2030) with the remaining capital expenditure largely earmarked for piping
and pumping infrastructure.
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The DP2 operating cost estimate (Table F) are based on the actual costs being incurred by the current operation. Economies of scale were
taken into consideration by applying a factor to the escalated budget as DP2 increases its throughput.
Table F: Average DP2 Operating Cost over LoM
Description
Unit Costs
(ZAR/t)
Salaries and Wages
10.40
Contractors
8.89
Reagents
20.63
Other Engineering Stores
6.20
Electricity
15.56
Water
0.46
Machine Hire
1.51
Other
8.15
Other Corporate Costs
3.23
Contingency (15%)
10.20
DP2 Operating Costs
85.23
Source: Sound Mining, 2022; and FWGR, 2020
A contingency of 15% was included for the assessment of economic viability.
1.14.
Economic Assessment
A Discounted Cashflow (DCF) modelling approach was adopted to assess the economic viability of the Mineral Reserves as stated.
Considering the stage of development of the operation and the uncertainties of future global economics, as well as exchange rate,
interest rate and gold price uncertainties, a real DCF model is deemed more appropriate than a nominal DCF model. The DCF model was
generated in June 2022 real South African Rand (ZAR) terms and is based on the revenue forecast, associated capital and operating cost
forecasts, and on appropriate and reasonable economic assumptions (Table G).
Table G: Inputs to the DCF Model
Description
Quantum
Unit
Key Dates
Money Terms
30 June 2022
Phase Description
Phase 2 Includes:
DP2 Expansion
Mtpm
1.2
LoM
Phase 2
Years
20
Contingencies
Contingency
%
15%
Gold Price
ZAR/USD
ZAR/USD
15.60
USD/oz Gold
USD/oz
1,823
ZAR/kg Gold
ZAR/kg
914,294
Source: Sound Mining, 2022; and FWGR, 2022
These assumptions are based on information received from FWGR and from the various consultants who contributed to the Mineral
Resources, LoM planning and technical study work that underpin this Mineral Reserve estimate. The economic assessment assumes a
100% equity-based business and does not consider the effect of working capital changes. The QP is satisfied with the quality of this
information, including the revenue and cost forecasts, and considers the inputs to the DCF model to constitute an overall PFS level of
accuracy (i.e., +/-25%).
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The revenue forecast is a function of gold sales and the pricing assumptions used for the economic analysis. The commissioning of an
expanded DP2 enables an increase in gold sales (Graph C).
The revenue forecast is a function of gold sales and the pricing assumptions used for the economic assessment. The following processing
recoveries, which are supported by test work and current plant performance data, were applied to the material from the respective TSFs
to compute the amount of gold sold:
●
49.8% for Driefontein 5 TSF material;
●
56.6% for Driefontein 3 TSF material;
●
50.5% for Kloof 1 TSF material;
●
47.2% Libanon TSF material;
●
62.5% for Venterspost South TSF material; and
●
54.7% for Venterspost North TSF material.
Graph C shows the expansion of DP2 facilitates an increase in gold sales over time (refer to
).
Graph C: Gold Sales Forecast
Source: Sound Mining, 2022
Processing throughput can continue after 2042 when the available TSFs are likely to be incorporated into the operation. At this stage, the
economic assessment has only considered the depletion of the TSFs that comprise the current Mineral Reserves. The gold sold from these
TSFs equate to approximately 1.3Moz.
The real revenue forecast relies on a gold price of ZAR914,294 (i.e., USD1,823/oz at ZAR15.60/USD). Taxes would be determined using
the gold mining tax formula with all unredeemed capital taken into account. The assets are part of the ongoing business of FWGR, which
is not subject to the Mineral and Petroleum Resources Royalty Act, 2008 (Act No. 28 of 2008) and so the royalty formula for unrefined
metals was not included in the revenue determination.
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Graph D presents the post-tax cashflow for an operation that excludes the benefits that would eventually be derived from the available
TSFs (refer to
.
Graph D: Post-tax Discounted Cashflows
Source: Sound Mining, 2022
The cumulative post-tax cashflows over the LoM remain positive. When assuming a discount rate of 10% for the unleveraged operation,
a Net Present Value (NPV) of ZAR2.32 Billion is computed. FWGR is an ongoing operation and thus the Internal Rate of Return (IRR) and
a capital payback period are not applicable.
The achievability of the LoM plans, budgets and forecasts cannot be assured as they are based on economic assumptions, many of which
are beyond the control of the company. Future cashflows and profits derived from such forecasts are inherently uncertain and actual
results may be significantly more or less favorable. The technical risks as identified by Sound Mining are provided in Item
. These and
other environmental risks can impact the anticipated revenue and cost forecasts and accordingly have been assessed against upside or
downside changes of between -20% and +20%. The consequential potential impacts are presented in Table H and are illustrated
graphically in Graph E.
Table H: Sensitivity of Post-tax NPV
Variance
NPV
10
(ZAR Billion)
80%
90%
100%
110%
120%
Revenue (ZAR Billion)
0.12
1.23
2.32
3.36
4.41
Capital Expenditure (ZAR Billion)
3.11
2.71
2.32
1.92
1.53
Operating Costs (ZAR Billion)
3.81
3.06
2.32
1.57
0.83
Source: Sound Mining, 2022
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Graph E shows that changes to the revenue forecast will impact margins the most.
Graph E: Sensitivity to Expected Revenue and Costs
Source: Sound Mining, 2022
Table I shows the materiality of changes in the gold price.
Table I: Sensitivity of Gold Price
Gold Price
ZAR/kg
700,000
800,000
900,000
1,000,000
1,100,000
NPV (ZAR Billion)
(0.27)
0.96
2.15
3.30
4.45
Source: Sound Mining, 2022
The operation is economically viable above a gold price of ZAR721,264/kg. The impact of changes to the operating cost forecast is
materially less, and any variance in capital expenditure being relatively insensitive.
As a final sensitivity, the QP has tested the impact of FWGR having to revert to the use of a synthetic liner for the RTSF as opposed to the
design currently included in the LoM plan. The impact of this expenditure on the discounted post-tax cashflows is shown in Graph F.
Graph F: Post-tax Discounted Cashflows (including liner)
Source: Sound Mining, 2022
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The NPV
10
The QP is satisfied that the Mineral Reserves as stated are all economically viable. Indeed, the economic assessment of viability includes
substantial additional capital for a growing business while not capturing the potential benefits of the envisaged long term revenue
potential.
1.15.
Concluding Comments
Despite the usual existence of environmental, political, social and infrastructural risks the QP’s are satisfied that the FWGR operation is a
relatively low risk business in the context of the broader South African mining industry.
FWGR’s legal tenure is underpinned by the amended EMPs and access and usage rights to exploit the moveable assets. The assets held
by FWGR were acquired from Sibanye Gold Limited, a subsidiary of Sibanye-Stillwater Limited, in a transaction in which common law
ownership was established over the various TSFs containing the Mineral Resources and Mineral Reserves. A Use and Access Agreement
with Sibanye Gold articulates the various rights, permits and licenses held by Sibanye Gold in terms of which FWGR operates, pending the
transfer to FWGR of those that are transferable. FWGR conducts its activities inter alia in accordance with Environmental Approvals (EAs)
and the provisions of the Mine Health and Safety Act and regulations.
Most of the land on which the RTSF is to be constructed has been purchased by FWGR with a final outstanding property secured through
an option agreement.
The drilling, sampling, analytical processes and governance of the exploration programs are appropriate and in-line with industry best
practice. They are considered to be of high confidence. The density used to determine quantities from volumes has been determined
from both in situ measured values and empirical data and is considered reliable. The QPs conclude that the estimations are based on a
suitable database of code compliant information.
TSFs constructed from the tailings of Witwatersrand gold mining operations have been successfully and economically exploited for
several decades and the geotechnical and geometallurgical characteristics are well understood from experience and from test work on
the FWGR assets themselves. Notwithstanding the risks identified herein, which can be managed, no material factors of a geotechnical
or geometallurgical nature, for example, have been identified that would have a significant effect on the prospects for eventual economic
extraction.
The DP2 plant has performed in-line with expectations and the design for its expansion to 1.2Mtpm is based on representative and
adequate metallurgical test work. The mass balance for the plant is appropriate. Scrutiny of the LoM plan reveals that recoveries currently
being achieved coincide with expectations from metallurgical test work and that the quantities and grades reported are consistent with
forecasts from the Mineral Resource estimation.
New arisings will eventually be stored in the RTSF which will have excess capacity from both a depositional rate (2.4Mtpm) and final
capacity perspective (800Mt). All the necessary infrastructure requirements have been reviewed and are considered appropriate. Sound
Mining has reviewed the design for the RTSF prepared by FWGR’s specialists and has concluded that the detailed design report provides
the framework and guidelines for the future safe development of the RTSF.
The estimated capital expenditure and operational costs are aligned with actual operational data from current operations and considered
appropriate and in-line with industry standards.
The operation is robust, the Mineral Reserves are economically viable, and the QP considers the LoM plan to be sufficient for the Mineral
Reserve estimate. The QPs note the necessity for FWGR to acquire the necessary regulatory approvals for the RTSF timeously to achieve
the production as forecast.
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2.
INTRODUCTION
Item 2 - (i); (ii); (iii); (iv) and (v)
DRDGOLD Limited (DRDGOLD) is a tailings retreatment company located near Johannesburg, South Africa. It has a primary listing on the
Johannesburg Stock Exchange (JSE) and a secondary listing on the New York Stock Exchange (NYSE). The DRDGOLD operations are
comprised of two wholly owned entities covering their East Rand (east of Johannesburg) and far West Rand (far west of Johannesburg)
businesses. The East Rand operations are run by Ergo Mining (Proprietary) Limited (Ergo) and the West rand operations by Far West Gold
Recoveries (Proprietary) Limited (FWGR). FWGR currently own six Tailings Storage Facilities (TSFs) with additional TSFs, although not
owned by FWGR, potentially available in the area for future reclamation (Available TSFs).
This Technical Report Summary (TRS) was prepared for DRDGOLD as the registrant. It has been compiled to align with the requirements
of Subpart 1300 of Regulation S-K under the U.S. Securities Exchange Act of 1934 (Regulation S-K) and Item 601(b)(96) of Regulation S-K
(Item 601(b)(96)) (S-K 1300). It is a first submission to the Securities Exchange Commission (SEC) and presents DRDGOLD’s Mineral
Resources and Mineral Reserves of FWGR.
FWGR completed various studies to examine the techno economic merits of a phased approach to expanding the current operations:
●
Phase 1 is the current operations which involved upgrading the Driefontein Processing Plant 2 (DP2) to process tailings from the
closest TSF at a planned throughput of around 500ktpm. This Phase was successfully commissioned and the operation reached steady
state production in 2019; and
●
Phase 2 involves building additional processing capacity through the expansion of DP2 rather than the construction of a Central
Processing Plant (CPP) which will remain part of FWGR’s strategic options. The DP2 expansion will facilitate an eventual DP2
throughput of 1.2Mtpm. Only 750ktpm of this capacity will be utilized from January 2026 to December 2029 because of the prevailing
depositional constraints. The new arisings (i.e., retreated tailings) will initially be redeposited onto the Driefontein 4 TSF (at 250ktpm)
and the Leeudoorn TSF (at 500ktpm) between January 2026 and December 2029, whereafter a newly constructed Regional Tailings
Storage Facility (RTSF) will be commissioned in 2030. The RTSF will have sufficient storage capacity to also accommodate new arisings
at a rate of 1.2Mtpm from the mining of available TSFs in the area well into the future. Examples of these include the Driefontein 1
TSF, Driefontein 2 TSF and Kloof 2 TSF, which, once decommissioned are to be transferred to FWGR from Sibanye Gold Limited (Sibanye
Gold).
2.1.
Corporate Structure and Compliance
Figure 1: DRDGOLD Corporate Structure
Source: Sound Mining, 2022
Sibanye Gold owns a 50.1% shareholding of DRDGOLD. DRDGOLD’s non-public ownership which includes shareholding by subsidiary, Ergo
Mining Operations (Proprietary) Limited, of 0.8% and 0.1% shareholding by directors. Such shareholding is classified as non-public.
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2.2.
Purpose and Terms of Reference (ToR)
FWGR commissioned Sound Mining International SA (Proprietary) Limited (Sound Mining) to compile a SEC S-K 1300 compliant TRS that
describes the Mineral Resource and Mineral Reserve estimates as at 30 June 2022. The document date is 28 October 2022 and there are
no material chances in the period between these dates.
The Qualified Person (QP) has relied on information provided by FWGR for this purpose with respect to legal matters (Item
), the gold
price (Item
), environmental or social and labor planning aspects (Item
) and economic assumptions (Item
).
Sound Mining is an independent advisory company. The ToR required an independent technical review of FWGR in order to identify factors
of a technical and strategic nature that would influence the future viability of the Mineral Reserves. The review accords with the principles
of open and transparent disclosure that are embodied in internationally accepted Codes for Corporate Governance. It has been based
upon technical information supplied by FWGR and its appointed consultants. The contractual agreement with FWGR, for the preparation
of the TRS, was with Sound Mining and not with the QP as an individual. The QPs provide independent opinions and conclusions
throughout this TRS.
The estimation of Mineral Resources and Mineral Reserves is inherently subject to some level of uncertainty and inaccuracy, because they
are based on analytical results of samples that commonly represent only a small portion of a mineral deposit. The uncertainty of the
estimates, where material, are explained in this TRS and are reflected in the choice of Mineral Resource and Mineral Reserve categories.
2.3.
Qualified Persons Declaration and Qualifications
The signatories to this TRS are qualified to express their professional opinions on the technical aspects and value of the mineral assets
described. The technical and economic information provided are correct to the best of the QPs’ knowledge, having followed best
endeavors. The QPs responsible for this TRS and the Mineral Resource and Mineral Reserves as stated are:
●
Mr V Duke is the designated QP responsible for the compilation and reporting of FWGR’s Mineral Reserves. He is a partner of Sound
Mining located at 2A Fifth Avenue, Rivonia, South Africa. He holds a B.Sc. Mining Engineering (Hons.), is registered with the Engineering
Council of South Africa (ECSA) and is a Fellow of the Southern African Institute of Mining and Metallurgy (FSAIMM) (Membership No.:
37179). He has over 35 years' experience in the minerals industry, specializing in engineering studies, due diligence audits and
valuations. Mr Duke has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration.
The QP is recognized by ECSA located at Lake Office Park, 1st Floor, Waterview Corner Building, 2 Ernest Oppenheimer Avenue, Bruma,
Johannesburg, South Africa;
●
Mrs D van Buren is the designated QP responsible for the compilation and reporting of FWGR’s Mineral Resources. Mrs van Buren who
holds a B.Sc. (Hons.) in geology and is registered with the South African Council for Natural Scientific Professions (Pr. Sci. Nat. No.:
440107/14), and the Geological Society of South Africa (GSSA) located on the corner of Carlow Road and Rustenburg Road, Auckland
Park, Johannesburg, South Africa. She is a principal geologist with over twelve years' experience in mining, geology and consulting;
and
●
Mr K Raine is the designated QP responsible for the compilation reporting of the environmental and permitting requirements of
FWGR. Mr Raine holds a B.Sc. (Hons.), B.Sc. (Zoology) and is registered with the South African Council for Natural Scientific Professions
(Pr. Sci. Nat. No.: 114290). He is a consultant with more than ten years’ experience in mining projects, environmental legal compliance,
sustainability, construction and wildlife preservation. The QP is recognized by the South African Council for Natural Scientific
Professions (SACNASP) located at Management Enterprise Building, Mark Shuttleworth Street, Innovation Hub, Pretoria, Gauteng,
South Africa.
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The QPs were assisted by the following specialists:
●
Mr M Nasiri - Mining Engineer for the mining and production scheduling;
●
Mr R Spargo - Metallurgist for the DP2 and RTSF;
●
Mr N Weeks - Geologist for the background and modelling of the Mineral Resource estimate;
●
Mr M Turnbull - Financial Modeler for the discounted cashflow (DCF) modelling.
The QPs also relied on reports from:
●
DRA SA (Proprietary) Limited (DRA);
●
Geo Tail SA (Proprietary) Limited’s (GTSA);
●
Beric Robinson Tailings (Proprietary) Limited (Beric Robinson Tailings); and
●
Digby Wells Environmental (South Africa) (Proprietary) Limited (Digby Wells).
Detailed references and sources of information and data contained in this TRS is presented in Item
The Sound Mining QPs and other specialists visited FWGR in 2019, 2020 and 2022 and examined the operations as shown in
During the site visit, the infrastructure, TSFs and the proposed RTSF and DP2 sites were inspected.
Table 1: Personal Inspection
Professional
Site Visit
V Duke
Visited in 2019, 2020 and 2022 as a QP
D van Buren
Visited in 2019 and 2020 as a QP
K Raine
Visited in 2020 as a QP
M Nasiri
No site visit
R Spargo
Visited DP2 in 2020
N Weeks
Visited in 2020 and 2022
M Turnbull
Visited in 2020
Source: Sound Mining, 2022
2.4.
Units, Currencies and Survey Coordinate System
The economic assessment in this TRS have all been carried out in South African Rands (ZAR). All other units used in this TRS are defined
in the text or in the Glossary (Item
). All references to tonnage are in metric tonnes; gold ounces (oz Au) are troy ounces (oz) and the
conversion factor used for conversion to troy ounces is 31.10348. Unless explicitly stated, all units presented in this TRS are in the Système
Internationale (SI) - i.e., metric tonnes (t), kilometers (km), metres (m), and centimeters (cm). Throughout the technical studies relating to
the FWGR numerous acronyms have been used but for reporting purposes, the use of acronyms has been kept to a minimum, with the
convention being definition of the acronym in the first usage. However, where required throughout the document the full term may be
used for clarity and ease of reading.
The coordinate system employed by the surface surveys at the operation is based on the Gauss Conform Projection (UTM), Hartebeeshoek
94 Datum, Ellipsoid WGS84, Central Meridian WG27. Some regional scale maps in this Technical Summary may be referenced with Latitude
and Longitude coordinates for ease of reading.
2.5.
Political and Economic Climate
South Africa gained independence from Britain on 31 May 1961, and was declared a republic. From 1948 until 1990, the South African
political and legal systems were based upon the concept of apartheid. South Africa became a constitutional democracy in 1994, and the
first democratic elections brought an end to apartheid and ushered in majority rule under the African National Congress (ANC) political
party, with a number of different political parties participating in the elections. The country continues to hold democratic, peaceful, free
and fair elections, the last of which was won by the ANC in 2019, who appointed Mr Cyril Ramaphosa as President.
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2.6.
Minerals Industry
South Africa has a mature minerals industry developed from gold and diamond discoveries in the late 1800s. It is the world's largest
producer of platinum and chrome and ranks highly in the production of diamonds, coal, iron ore, vanadium and base metals. GDP
generated by the South African Mining industry has averaged ZAR223 Billion per quarter between 1993 and 2022, reaching an all-time
high of ZAR240 Billion in the fourth quarter of 2006 and a record low of ZAR147 Billion in the second quarter of 2020.
One of the greatest challenges associated with the minerals and mining industry in South Africa is the political instability, concerns over
the reliability of legal tenure, rising costs of labor, electricity, diesel and steel, among other costs. Labor and community unrest caused by
low wages, particularly among contract workers and under-resourced communities has proved problematic in recent years and
exacerbated municipalities’ inability to provide adequate infrastructure to communities.
Other important concerns for the mining industry are the effect of diseases (i.e., HIV/Aids and Covid-19) on the workforce and the recent
downgrading of the country’s credit risk rating to junk status. Although the South African political system has credibility, the political risk
index, indicates that factors such as the country’s high degree of unionization, the threat of industrial action and the disruption to
economic activity are a constant concern to investors.
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3.
PROPERTY DESCRIPTION
Item 3 (i); (ii); (iii); (iv), (v) and (vi)
3.1.
Property Location
The FWGR operations are located in the Gauteng province of South Africa, approximately 70km South West of the city of Johannesburg
(
). The operations can be accessed from Johannesburg by traveling for approximately one hour along tarred roads. The operations
which are located between the latitudes and longitudes 26°32'34.90"S and 26° 5'32.68"S, and 27°24'6.49"E and 27°49'4.84"E, and cover
an area of 29,577.62ha.
Figure 2: Location of the FWGR Operations
Source: Sound Mining, 2022
FWGR is located in an area with a long history of gold mining and as a consequence the region is disseminated with TSFs and supporting
mining infrastructure. The operation’s infrastructure and current TSFs lie across two mining rights which stretch from Westonaria to
Carletonville (
).
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Figure 3: FWGR Operations
Source: Sound Mining, 2022
3.2.
Legal Tenure and Permitting
Sound Mining’s environmental and permitting specialist has undertaken a review of the legal aspects of the assets. This review has been
based on information provided by DRDGOLD and FWGR. DRDGOLD is a subsidiary of Sibanye Gold and FWGR operates within the
extensive framework of legal tenure held by Sibanye Gold.
3.3.
Material Agreements, Access and Surface Rights
3.3.1.
Exchange Agreement
Sibanye Gold and DRDGOLD signed an Exchange Agreement on 22 November 2017. The agreement contains terms in
connection with FWGR which was established specifically to house the intended TSF reclamation activities. The agreement
provided that Sibanye Gold initially obtained a 38,05% stake in DRDGOLD in exchange for the FWGR assets, with the option
to increase it to 50,1% by way of a cash subscription. Sibanye Gold currently holds a 50.1% equity in DRDGOLD meaning that
Sibanye Gold is now the ultimate holding company of FWGR.
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3.3.2.
Use and Access Agreement
A “Use and Access Agreement” signed in November 2017, grants FWGR the rights to following:
●
access to Kloof 10 shaft located in the Kloof Mining Right area and Driefontein 10 shaft located in the Driefontein Mining
Right area for the purpose of pumping and supplying the required quantities of water to FWGR;
●
agreements for the installation, supply and distribution of power;
●
existing and proposed pipeline routes;
●
servitudes, wayleaves and surface right permits; and
●
access to the Driefontein 1 Gold Plant.
The agreement stipulates that it will endure until the end of FWGR’s business and that FWGR is to give Sibanye Gold at least
18 months’ prior written notice of the anticipated end of life of the business.
The surface rights agreements over both the Driefontein and Kloof Mining Rights (held by Sibanye Gold) for the TSFs and
processing plant sites are adequate for the current Sibanye Gold operations and would therefore also be applicable to FWGR's
operations. FWGR will secure servitudes for all of its infrastructure located on Sibanye Gold land.
FWGR owns the majority of the land on which the RTSF will be constructed. FWGR has an option agreement with the
landowner for the purchase of the remaining land still required for the RTSF. FWGR is in the process of complying with the
requirements of the Spatial Planning and Land Use Management Act, 2016 (Act No. 13 of 2016) (SPLUMA) and is having the
land rezoned from agricultural use to that of mining.
3.3.3.
Leeudoorn Agreement
The QP has had sight of a document describing DRDGOLD’s requirement with regard to the use of the Leeudoorn TSF for a
period to the point that the RTSF is commissioned (i.e., 2030). This document also initiated negotiations between DRDGOLD
and Sibanye Gold for such access to the Leeudoorn TSF which at this stage, will remain the property of Sibanye Gold.
Accordingly, the associated liabilities will also remain with Sibanye Gold.
3.4.
Permitting
The permitting associated with the different Mining Right (MR) areas (
) are commented on below.
The minerals in tailings fall outside the definition of ‘mineral’ in the Mineral and Petroleum Resources Development Act’ (MPRDA), where
a MR as defined in this act is technically not a requirement, and the operations of FWGR are conducted in terms of Environmental
Authorizations (“EA”). In 2016, Sibanye Gold applied and received an EA which incorporated an Environmental Impact Assessment (EIA)
and Environmental Management Programs report (EMPr) for their West Rand Tailings Retreatment Project (WRTRP). FWGR applied to
the Department of Mineral Resources and Energy (DMRE) for Sibanye Gold’s EAs to be transferred to FWGR. As part of its expansion
plans, FWGR will be required to make similar applications for appropriate EAs.
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Figure 4: Sibanye Gold Mining Rights
Source: Sound Mining, 2022
3.4.1.
Driefontein Operational Area
The DMRE granted Sibanye Gold an EA under the 2014 EIA Regulations (GNR 983 and GNR 984) (the 2014 Regulations) on
11 May 2018. The approval is recorded in GP 30/5/1/2/3/2/1 (51) EM.
Driefontein MR:
9,490.62ha. Sibanye Gold is entitled to mine all declared material situated within this MR and has all the necessary statutory
requirements in place.
3.4.2.
Kloof Operational Area
In 2016, Sibanye Gold also applied for an Integrated Environmental Authorization (IEA) which includes a waste management
license for Kloof to undertake various listed activities, which the DMRE equally granted on 11 May 2018. The grant is recorded
under GP 30/5/1/2/3/2/1 (66) EM and the IEA remains valid until the end of Life-of-Mine (LoM). This IEA was transferred to
FWGR in January 2022.
Kloof MR:
entitled to mine all declared material falling within this MR and has all the necessary statutory requirements in place.
Two Section 102 amendments were submitted in 2015 to extend the Kloof MR to include the Venterspost North, Venterspost
South TSFs and RTSF. The Section 102 amendment for Venterspost North and Venterspost South TSFs was granted at the end
of 2021. The RTSF Section 102 amendment was granted but has not been executed by Sibanye Gold as yet.
A Section 102 is an application to the Minister of the DMRE to amend the rights permits, programs or plans. Sound Mining
notes that FWGR is not involved with any legal proceedings that may have an influence on the rights to extract minerals nor
on the legal ownership of all mining and surface rights.
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Neither Sibanye Gold nor FWGR are aware of any outstanding legal disputes that are applicable to FWGR as stated in the
Exchange Agreement signed on 22 November 2017 and effective at the end of July 2018. To the best of Sibanye Gold’s and
FWGR’s knowledge no land claims exist over the relevant properties and no outstanding legal disputes exist that could affect
FWGR right to further develop the assets. To the best of the Sound Mining’s legal specialist's knowledge, all statutory permits
have either been approved or are in the process of being approved.
In summary, the security of tenure for the FWGR is considered to be intact. The transfer of the TSFs by Sibanye Gold to FWGR
involved the transfer of moveable assets; and therefore, are not subject to the transfer of the associated MRs to FWGR. In
terms of the Exchange Agreement all risks and benefits of the business, passed from Sibanye Gold to FWGR including the
rehabilitation liability of the TSFs. The portion of the Sibanye Gold’s rehabilitation trust fund related to these assets was
transferred to an environmental trust fund. In 2022, these funds were subsequently transferred to a Guardrisk Cell Captive,
under a ring-fenced environmental rehabilitation insurance policy for the sole use of the rehabilitation liability.
3.5.
Driefontein Environmental Authorization Transfer
Sibanye Gold’s Driefontein EA still needs to be transferred to FWGR. An Amendment Application was filed at the DMRE (on
18 August 2020), for the following purposes:
●
application with a request that the scope of FWGR be expanded by including DP2 for tailings processing and Driefontein 4 TSF as a
deposition site as well as amending the sequence of reprocessing and disposal of residue tailings of Driefontein 3 TSF and 5 TSF; and
●
application for the transfer of EA (Reference No.: GP 30/5/1/2/2 (51) EM to FWGR.
3.6.
Water Use Licenses
Two Water Use Licenses (WUL) were granted to Sibanye Gold in terms of Section 21 of the National Water Act, 1998 (Act No. 36 of 1998)
(NWA) over the Driefontein and Kloof mining areas on 9 March 2017 with Reference numbers: 10/C22B/ACFG/496 and
10/C23E/ACEFGJ4527 respectively. The WUL’s are valid for a period of twenty years, from the date of issuance and thus expire on
9 March 2037.
Sibanye Gold is permitted to reclaim TSFs through hydraulic mining following which, retreatment takes place in and at the process plants.
All the water comes from Driefontein’s underground works at Driefontein 10 shaft and from Kloof 10 shaft.
Currently, residue from DP2 is disposed at Driefontein 4 TSF, however when the RTSF has been constructed and is operational, the residue
will be disposed of at this facility. A return water dam will receive water from the RTSF where it will be recycled and reused in the
reclamation operations.
FWGR has chosen to use a closed water reticulation system to reduce its water consumption needs by recycling process water.
The Dam Safety Regulations, under the NWA, require a Dam Safety License for the construction of the RTSF. The overarching WRTRP
WUL has been successfully transferred to FWGR. In addition, an application has been submitted for the transfer of applicable water uses
from the Driefontein WUL to FWGR. This application is yet to be granted by the Department of Water Affairs and Sanitation.
3.7.
Other Permitting Requirements
A Refinery License has been issued to FWGR by the South African Diamond and Precious Metals Regulator (SADPMR) to deal in unwrought
precious metals.
A Heritage Impact Assessment (HIA) covering Driefontein and Kloof was prepared and submitted to The South African Heritage Resource
Agency (SAHRA). SAHRA responded by means of a Final Statutory Comment in letters dated 22 April 2016, granting conditional approval
regarding the heritage sites at Driefontein and Kloof.
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FWGR is the holder of Certificates of Registration 281 (CoR) issued in July 2019, in terms of the National Nuclear Regulator (NNR) for
Driefontein 3 TSF, Driefontein 4 TSF, Driefontein 5 TSF, Kloof 1 TSF, Venterspost South TSF, Venterspost North TSF, Driefontein Plant 2
(DP2) Driefontein Plant 3 (DP3) and the RTSF.
FWGR’s operations are governed by the Mine Health and Safety Act, 1996 (Act No. 29 of 1996) (MHSA).
3.8.
Royalties
Under the MPRDA, no Mineral Royalties are payable on the reprocessing of TSFs for gold.
3.9.
Liabilities
The Driefontein and Kloof EAs contain stipulative clauses as to what mitigatory and rehabilitative obligations exist and explicitly states
that the rehabilitation requirements must be adhered to. Financial provision for remediation of environmental damage is stipulated in
Section 24P of the National Environmental Management Act, 1998 (Act No. 107 of 1998) (NEMA) (as amended). FWGR obtained a Closure
Cost Assessment from Digby Wells in June 2022 for two gold processing plants and seven TSFs.
Currently, FWGR has sufficient rehabilitation guarantees and funds in place for all of its assets to satisfy the DMRE. The closure and
rehabilitation liability for the operation is updated annually at the end of the financial year (FY).
3.10.
Concluding Comments
In terms of the Exchange Agreement all risks and benefits of the operation passed from Sibanye Gold to FWGR. In particular, the
rehabilitation liability of the TSFs and associated infrastructure have been transferred to FWGR. The portion of the Sibanye Gold’s
rehabilitation trust fund related to these assets has been transferred to the Guardrisk Cell Captive, under a ring-fenced environmental
rehabilitation insurance policy for the sole use for environmental rehabilitation activities, with any shortfall covered by an insurance policy
taken out by FWGR.
FWGR owns the majority of the land on which the RTSF will be constructed. FWGR has an option agreement with the landowner for the
purchase of the remaining land still required for the RTSF. Provision has been made for this within the cashflow model.
There are no significant factors or material risks to the access, title or ability to perform work on the property. A consequence of the Use
and Access Agreement is that there are no significant encumbrances to the property with regard to current and future permitting
requirements. Outstanding permitting conditions are being proactively managed in line with the required timeframes (Item 17). FWGR
has not been served with any fines for violations.
The QP notes that the Dam Safety Regulations, under the NWA, require a Dam Safety License for the construction of the RTSF. The
existing and overarching WRTRP WUL has been successfully transferred to FWGR.
As an administrative matter, an application has also been submitted for the transfer of the water uses from the Driefontein WUL to FWGR.
Approval of this application by the Department of Water Affairs and Sanitation is pending. This is not deemed a material risk to the
ongoing operations.
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4.
ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND PHYSIOGRAPHY
Item 4 (i); (ii); (iii) and (iv)
The FWGR operations are 70km west of Johannesburg from where they can be accessed by travelling for approximately one hour along
tarred roads. The TSFs are located at elevations between 1,570mamsl and 1,720mamsl (
).
Figure 5: Topography of Southern Africa
Source: Sound Mining, 2022
The area which forms part of the South African inland plateau region is typical of a mature landscape with gentle rolling undulations and
shallow sided river valleys as shown in the topographic map (
).
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Figure 6: Topography Map of FWGR
Source: Sound Mining, 2022
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Climatically, the area is classified as ‘moderate eastern plateau’ with by well-defined seasons characterized by warm to hot, moist summers
and cool dry winters, often accompanied by frost (
).
Figure 7: Climate and Rainfall of South Africa
Source: Sound Mining, 2022
The temperate climate has an average ambient temperature of 20°C with dry winters between May and July (0°C to 18°C) and wet, warm
summers from September to March (0°C to 27°C). The daily mean temperatures in January and July are 21.2°C and 9.8°C respectively. The
Randfontein area, on average, receives 571mm of rain per year, with most rainfall occurring during summer in the form of thunderstorms.
The highest rainfall occurs in January (107mm) and the lowest in June (0mm) where the wet season occurs from November to April. With
the exception of summer thunderstorms, the climatic conditions have little to no effect on the mining operations at FWGR where work
is done at all times of the year and where there is no operating season.
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The vegetation of the region is typical savannah grassland (
) but most of the area comprises disturbed grazing land and minor
crop production. The major land uses in the area include agriculture in the form of maize and soya production as well as livestock grazing,
formal and informal residential, mining and business uses.
Figure 8: Vegetation of South Africa
Source: Sound Mining, 2022
The area developed on the back of gold mining and is now well serviced with schools, suburbs, medical facilities, a rail network and other
supporting infrastructure. The operation lies across the Randfontein and Merafong City Local Municipalities which provide potable water
with the national electricity supplier - Electricity Supply Commission (Eskom), suppling the operation with power (see Item
).
Infrastructure includes formal and informal dwellings, buildings, commercial farming infrastructure, roadside shops, privately owned
infrastructure such as access roads, boreholes and dams, public infrastructure (roads and transmission lines) and mine accommodation.
Personnel and supplies, from the surrounding areas, make use of both tarred and gravel roads connecting farms, mines and urban centers
such as Carletonville and Fochville.
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5.
HISTORY
Item 5 (i) and (ii)
Gold and uranium mining operations commenced in the late 1800s in the Witwatersrand Basin goldfields of South Africa, and have
resulted in the accumulation of substantial amounts of surface tailings and other mine residues. The possible re-treatment of TSFs in the
West Rand area has a long and complex history with Gold Fields Limited (Gold Fields), Rand Uranium Limited (Rand Uranium), Harmony
Gold Mining Company Limited (Harmony), Gold One International Limited (Gold One) and Sibanye Gold completing a number of parallel,
independent studies relating to the retreatment of these TSFs. There is an approximate fifteen-year history of metallurgical test work
and process design which has been undertaken for a variety of combinations of assets and products recovered, as summarized in
Whilst these historical studies were for specific combinations of assets, they are not all relevant to FWGR in its current form.
Prior to 2009, Gold Fields embarked on a project known as the West Wits Project (WWP) aimed at retreating several TSFs on its four
mining complexes: Kloof, Driefontein, Venterspost and South Deep (
) to recover residual gold, uranium and sulfur and storing the
tailings on a new Central Tailings Storage Facility (CTSF). Similarly, Rand Uranium had embarked on the Cooke Uranium Project (CUP),
which endeavored to treat the Cooke TSF for gold, uranium and sulfur and ultimately deposit the tailings onto the Geluksdal TSF, located
very close to the CTSF. The two independent projects had similar operational and environmental mandates, within a 25km radius of each
other.
In 2009, Gold Fields and Rand Uranium evaluated the potential synergy of an integrated retreatment plan for TSFs located within the
South Deep, Cooke, Kloof, Driefontein and Venterspost mining complexes.
In 2012, Gold One acquired Rand Uranium and in the same year acquired the Ezulwini Mining Company (Proprietary) Limited (Ezulwini) in
an agreement with First Uranium Corporation. During the same year Gold One, revived the tailings retreatment project and Gold Fields
entered into a joint venture (JV) partnership with Gold One to investigate the economic viability of concurrently reprocessing current
arisings and historical tailings from a number of sites situated in the greater Carletonville/Westonaria/Randfontein area. A scoping study
was concluded in 2012.
In early 2013, Gold Fields unbundled its Kloof and Driefontein Complex and Beatrix gold mines in the Free State Province to create a
separate entity in Sibanye Gold and listed Sibanye Gold as a fully independent company on both the JSE and the NYSE stock exchanges.
Subsequently, in October 2013, Sibanye Gold Limited purchased the interest held by Gold One in Rand Uranium and Ezulwini. The
Gold One assets which became part of Sibanye Gold included the Cooke operations (underground mining and surface reclamation
operations) for gold and uranium production. This transaction gave Sibanye Gold control of a substantial portion of the surface mineral
resources in the region. A Preliminary Feasibility Study (PFS) was completed during 2013 and confirmed that there is a significant
opportunity to extract value from the surface Mineral Resources. Subsequently, a number of Definitive Feasibility Studies (DFSs) have
been completed on various combinations of TSFs as shown in
Sibanye Gold’s TSF reclamation assets were housed in a special
purpose vehicle (SPV) called WRTRP.
In 2018, Sibanye Gold vended its interest in WRTRP to DRDGOLD for an equity stake of 38.05% and an option to subscribe for additional
shares for cash to take its stake to 50.1%. In mid-2018, FWGR initiated Phase 1 of a phased approach to its growing reclamation operations.
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Table 2: Historical Development of FWGR
Owner/Operator
Period
Project and/or Transaction
Properties
Activity
Comment
Gold Fields Group Limited
WWP
Driefontein Complex (Driefontein 1, 2, 3, 4 and
5 TSFs); Kloof Complex (Kloof 1 and 2 TSFs,
Libanon and Leeudoorn TSFs; Venterspost
Complex (Venterspost North and Venterspost
South); and the South Deep Complex
Aimed at retreating several West Rand TSFs to
recover gold, uranium and sulfur and storing
the tailings on a new CTSF
Gold Fields - subsidiary
GFI Mining South Africa
(Proprietary) Limited
2009
West Wits Tailings Treatment Project
(WWTTP)
Driefontein Complex, Kloof Complex, Libanon,
Leeudoorn, Venterspost Complex and South
Deep Complex
WWTTP Feasibility Study near completion
Rand Uranium Limited
(Rand Uranium)
2009
CUP
Cooke mining Complex
CUP Feasibility Study near completion
Treatment of the Cooke TSF for gold, uranium
and sulfur. Arising tailings would be deposited
onto the Geluksdal TSF located near the CTSF
Gold Fields and Rand
Uranium
Late 2009
Discussion of synergy of WWTTP and
CUP - combination of WWTTP and CUP
Evaluation of a combined project
Significant re-engineering and metallurgical test
work required and the project was put on hold
Rand Uranium
2010 to
2012
Completed the CUP and the Cooke
Optimization Project (COP)
CUP and COP Feasibility Study completed
Applications for authorizations partially
complete
Gold One International
Limited (Gold One)
2012
Acquisition of Rand Uranium and
Ezulwini
Revived the surface retreatment
integration discussions - update CUP DFS
Gold One JV with Gold
Fields
2012 to
2013
JV to investigate economic potential of
concurrently re-processing current
arisings and TSFs
TSFs and current arisings in the
Carletonville/Westonaria/Randfontein region
Gold One/Gold Fields JV Scoping Study
completed end 2012
Gold Fields unbundled
GFI Mining South Africa
(Proprietary) Limited and
created Sibanye Gold
Limited
Early 2013
Unbundling of the Kloof-Driefontein
Complex and Beatrix Gold Mines and
listing of Sibanye Gold on the JSE
Limited and NYSE
Unbundling of the Kloof-Driefontein Complex
and Beatrix Gold Mines
Sibanye Gold Limited
2013
Acquisition from Gold One of the Rand
Uranium and Ezulwini assets
As a result of the transaction, Sibanye Gold held
most of the surface resources in the region
Gold One/Gold Fields JV Scoping Study
completed a PFS
PFS showed significant opportunity to extract
value from the surface resources
Sibanye Gold
2015
Study initiated for the original
Version 1 West Rand Tailings
Retreatment Project (V1-WRTRP)
Treatment of the Driefontein 3 and 5 TSFs using
Ezulwini uranium process plant
DFS for the first phase of the
V1-WRTRP
Sibanye Gold
December
2015
Integrated study on Version 2 of the
WRTRP (V2-WRTRP)
Cooke, Driefontein 3, Driefontein 5 and Cooke 4
South TSFs
Integrated study for the production of
gold, uranium and sulfuric acid - DFS for
V2-WRTRP
DFS for V2 - WRTRP. On completion of the DFS,
the project progressed to Front End
Engineering Design (FEED) level of accuracy
whilst funding and permitting was sought
Sibanye Gold
2016
Decision to close Cooke No 4 shaft
DFS to determine economic viability of
using existing infrastructure including
DP2 and Ezulwini uranium process plant
DRDGOLD
2018
DRDGOLD acquired 100% of Sibanye
Gold’s SPV (WRTRP) for a now 50.1%
equity in DRDGOLD
Driefontein 3, Driefontein 4, Driefontein 5,
Kloof 1, Libanon, Venterspost North,
Venterspost South, TSFs, DP2 and land for a
RTSF and CPP
2017 Competent Persons Report,
required in terms of Chapter 12 of the
JSE listing requirements, outlining
category one transaction
DRDGOLD renamed the WRTRP to FWGR
Source: DRDGOLD, 2022
Far West Gold Recoveries (Proprietary) Limited
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6.
GEOLOGICAL SETTING, MINERALIZATION AND DEPOSIT
Item 6 (i); (ii) and (iii)
6.1.
Regional Setting, Mineralization and Deposit
The mineral assets considered in this TRS are the tailings derived through the mining and processing of the Driefontein, Kloof, Libanon
and Venterspost mines of the Witwatersrand Gold Fields. As such the mineralization of the mined material which produced the tailings,
now being processed by FWGR, is described in this TRS. Whereas the nature of the underlying geology is not of direct relevance, an
understanding of the scale and nature of the gold mineralization that was targeted in the historical mining operations provides insight
into the structure and composition of the mineral assets.
The assets of FWGR are derived from the West Rand and Carletonville Goldfields of the gold-bearing, late Archaean (2.7Ga to 3.2Ga),
Witwatersrand Supergroup (Witwatersrand Basin). The Witwatersrand Basin is the largest gold bearing metallogenic province globally
and is a roughly oval-shaped sedimentary basin, elongated in a northeast-southwest direction. The major north-south axis of the basin is
approximately 160km long, stretching from Welkom to Johannesburg and where the minor, east-west axis, spans approximately 80km.
The Witwatersrand Basin is filled with approximately 14,000m of sedimentary and subordinate volcanic units, of which only small portions
outcrop to the south and west of Johannesburg. The Witwatersrand Supergroup overlies an Archaean (>3.1Ga) granite-greenstone
basement and the 3.08Ga to 3.07Ga Dominion Group and is subsequently uncomfortably overlain, by units of the Ventersdorp (~2.7Ga),
Transvaal (~2.6Ga) and Karoo (~280Ma) Supergroups (
).
The basin hosts vast auriferous and uraniferous deposits which have been grouped into geographically distinct sub-basins or goldfields
(
). The goldfields are separated by stratigraphy where no economic mineralization has been discovered. The stratigraphy of the
Witwatersrand Supergroup is broadly split into two Groups, namely the Central Rand and the West Rand Groups, which in turn are split
into a series of subgroups, formations and members
). The stratigraphic structure of the Witwatersrand Supergroup is well
understood at subgroup level, however at formation level, correlation problems are encountered between the defined goldfields. The
recognition of basin-wide disconformities, can be used as a basis for stratigraphic correlation and thus permits the correlation of
formations between the various goldfields to higher comfort levels (McCarthy and Rubidge, 2006). The principal economic reefs have
been correlated across various goldfields and do not occur at the same stratigraphic level.
Recent studies consider the deposition in the Witwatersrand sediments to have taken place along the interface between a fluvial system
and an inland sea. Specifically, this body of water is considered to be a retroarc-foreland basin which formed in response to crustal
thickening on the northern edge of the Kaapvaal Craton, during a collision with the Zimbabwe craton to the north. The varying
stratigraphic position of the narrow, 0.1m to 2.0m thick quartz-pebble conglomerate reefs are interpreted to represent major,
diachronous, entry points of coarse-grained sediment into the basin. They appear to be laterally coalesced fluvial braid-plains, where gold
was concentrated within conglomerates which developed, primarily along erosional unconformities. The extent of the development of
the various unconformities is greatest near the basin margins and decreases towards the more distal areas. Complex patterns of syn-
depositional faulting and folding have caused significant variations in sediment thickness and sub-vertical to over-folded reef structures
are characteristic of the basin margins.
Structurally, the Witwatersrand Basin has experienced a long and complex history, affected by several superimposed structural events,
differentiated as syn- and post-depositional deformations. Syn-depositional deformation played a key role in the original distribution of
sediments which controlled the locality of auriferous conglomerates and the thickness of enclosing sedimentary sequences. Later faulting
and folding of the sequence determined which parts of the Witwatersrand Basin remained buried, as well as the depth extent of mineable
horizons, relative to the present-day surface.
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Figure 9: Regional Geological Setting of the Witwatersrand Supergroup
Source: Sound Mining, 2022
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6.2.
Local Geological Setting, Deposit and Mineralization
In terms of a more local description, the FWGR assets comprise of TSFs of tailings material derived from the mining and processing of ore
from the Driefontein, Kloof, Libanon and Venterspost mining operations, located in the West Rand and Carletonville Goldfields, on the
north-western rim of the Witwatersrand Basin (
).
Figure 10: Geology of the Witwatersrand Basin
Source: Sound Mining, 2022
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These operations exploit the Ventersdorp Contact Reef (VCR) located at the top of the Central Rand Group, the Carbon Leader Reef (CLR)
near the base of the Central Rand Group and the Middelvlei Reef, which stratigraphically occurs 50m to 75m above the Carbon Leader.
Additional minor reefs including the Kloof, Elsburg, Kimberley and Libanon Reefs are exploited at some operations (
). The Central
Rand Group, is dominated by course-grained siliciclastic metasedimentary facies with subordinate fine grained (mudstone) facies. Its
depositional environment is interpreted as alluvial deltas and braided streams which formed at the fluvial - shallow marine interface. The
proximal, high energy, facies are directly linked with the concentration of detrital gold, pyrite and uraninite and thus the Central Rand
Group accounts for 95% of the gold production from the Witwatersrand Basin.
Figure 11: Witwatersrand Supergroup Stratigraphic Section
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Source: Frimmel et al, 2005
The gold bearing reefs are fundamentally distinguished by their association with quartz-pebble conglomerates, which are confined by a
basal angular unconformity and an upper planar bedding surface separating it from an overlying quartz wacke or siltstone unit. The extent
of the unconformable surfaces is typically greatest at the basin margins and decreases towards the distal areas of the basin. The
Witwatersrand Supergroup is poorly exposed in outcrop due to the overlying, younger cover sequences. The surface geology of the
mining area comprises outliers of Karoo Supergroup shales and sandstones, followed by Pretoria Group sediments and the Chuniespoort
Group dolomites of the Transvaal Supergroup. In the center of the Witwatersrand Basin, units of the Witwatersrand Supergroup have
been upturned and exposed in the Vredefort meteorite impact crater which is dated at 2,023Ma.
The region is structurally complicated with a major structural fault, the West Rand Fault, separating the West Rand Goldfield operations
from the South Deep Gold Mine to the east (
). Additional horst structures are superimposed upon the southeast plunging West
Rand Syncline including the Bank Fault (
), a large west dipping fault with a down-throw to the west. The structural features
affect the preservation, depth and length of the economic reefs. In the area east of the Bank Fault the majority of mining exploits the
VCR, with minor contributions from the Middelvlei Reef and the Kloof Reefs (Gold Fields). West of the Bank Break the CLR is generally a
high-grade reef and represents the major source of Run-of-Mine (RoM) with minor contributions from the VCR and Middelvlei Reef.
6.3.
Property Geology, Deposit and Mineralization
FWGR TSFs are located on two mining rights (
) within the West Rand and Carletonville Goldfields. As stated above, they are the
processed waste derived from the mining and processing of auriferous and uraniferous ores from Driefontein, Kloof, Libanon and
Venterspost mining operations. The mining operations targeted different reefs, namely:
●
the Driefontein TSFs comprise primarily processed VCR, CLR and Middelvlei Reef;
●
the Kloof TSF comprises primarily processed VCR, Middelvlei Reef and the Kloof Reef;
●
the Venterspost TSFs comprise primarily processed Middelvlei Reef and VCR; and
●
the Libanon TSF comprises material from the VCR, Libanon Reef, Kloof Reef and Middelvlei Reef.
The composition of a TSF depends on the geochemical make-up of the material being mined and the chemicals used in the mining and
extraction process. In addition to the internal structure, the TSF reflects the mining strategy and depositional methodologies employed
at each operation. A single TSF can have portions of different composition and specific gravity (SG) due to changes in underlying orebody
contribution, the deposition of tailings arising from different operations and differing depositional strategies.
The bulk density of tailings material is a critical factor in the accurate estimation of quantities and thus an investigation into the lateral
and vertical variation was conducted. These factors can result in a considerable variation in gold content and distribution throughout a
TSF where such variation has an impact on final recoveries and projected revenues for the operation. Various exploration programs and
subsequent geological modelling has enabled the classification of FWGR TSFs as Mineral Resources with a bulk density ranging from
1.40g/cm
3
3
.
In addition, secondary processes such as metal re-mobilization, erosion, weathering, leaching and acid mine drainage can further affect
the geochemical characteristics of a TSF. These processes tend to progress faster in a TSF compared to a primary ore body as weathering,
erosion and oxidation are accelerated by the fine particle size of the material, and leaching together with acid mine drainage occur due
the large amount of water associated with TSFs. Gold can undergo mobilization within the TSF with time and hence may exhibit areas of
re-concentration and even be present in the sub-structure soil. The geochemical characteristics of the footprint geology, such as
dolomites, granites, quartzites, has a bearing on the mobilization dynamics of a TSF. Hence, depending on several factors such as
footprint, age of deposition, beneficiation and primary reef origin of slimes, a TSF may exhibit areas/layers of differing grade profiles. The
modelled dumps show vertical and lateral variation in gold grade and although exceptions occur, in general, the grade tends to increase
towards the bottom of the dump and into the footwall. Detailed exploration results and geological modelling is outlined in Item
Item
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Figure 12: Property Geology
Source: Sound Mining, 2022
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7.
EXPLORATION
Item 7 (i); (ii); (iii); (iv); (v) and (vi)
7.1.
Methods and Databases
The extent, morphology and structure of the TSFs is relatively simple when compared to conventional mineral deposits. Consequently,
the exploration programs are also simple and straightforward. Exploration of the FWGR’s assets comprised:
●
auger drilling programs to permit sampling for gold content and mapping of the gold distribution undertaken in drilling campaigns by
Gold Fields in 2007, 2008 and 2009 for the Driefontein, Kloof, Libanon and Venterspost TSFs;
●
surveying of the borehole collars undertaken by Gold Fields in-house surveyors to determine physical dimensions and volumes verified
independently by Light Detection and Ranging (LIDAR) consultants;
●
metallurgical and flow sheet development test work including historical studies by SGS South Africa (Proprietary) Limited (SGS) and
recent test work by Mintek; and
●
tailings toxicity tests and SG determination - undertaken by SLR Consulting (Africa) (Proprietary) Limited and The RVN Group
(Proprietary) Limited (The RVN Group).
7.2.
Geophysical Characterization
No geophysical investigation of the TSFs has been undertaken as part of the exploration programs.
7.3.
Geo-hydrological Characterization
A geohydrological investigation of the TSFs did not form part of the exploration programs. It is not required for the determination and
classification of FWGR’s Mineral Resources. The handling of surface water is described in the mining and processing Items (Item
Item
). Hydrological and geohydrological considerations for the Leeudoorn TSF and RTSF are discussed in Item
7.4.
Geotechnical Characterization
A geotechnical investigation of the TSFs did not form part of the exploration programs. It is not required for hydro-mining of the
unconsolidated tailings material. The slope angles and bench widths do not pose a risk to the mine design (Item
). Geotechnical
assessments were performed for the design of the Leeudoorn TSF and RTSF (Item
). The auger drilling method
performed during exploration does not allow for the orientation of samples. Geotechnical characterization is not applicable to the
determination and classification of FWGR’s Mineral Resources.
7.5.
LIDAR and Surveying
A detailed helicopter-based LIDAR survey was undertaken by Gold Fields in late 2008. The survey was conducted by Southern Mapping
Company (Proprietary) Limited and the total area surveyed was approximately 44,000ha. The aerial survey was conducted using an aircraft
mounted LIDAR system which scanned the ground below with a 70kHz laser. Digital color images were also gathered to produce color
orthophotos. The survey was conducted at a height of 1,100m above datum with an image pixel size of 15cm. The vertical accuracy was
10cm and the horizontal accuracy was 20cm. The survey was calculated in Hartebeesthoek94, LO27 projection with ellipsoidal heights.
The data was supplied to Gold Fields in CAPE LO27 with orthometric heights. The LIDAR survey provided surface data from which three-
dimensional (3D) models of the TSFs were constructed.
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The Driefontein 5 TSF and Driefontein 3 TSFs were surveyed in 2004 and 2006 respectively by Gold Fields, using differential Global
Positioning System (GPS) methodology. In all instances it was found that the vertical positioning of the drillhole collars were offset from
the surface of the TSFs as determined from the LIDAR survey. The offset ranges from approximately 0.5m to several metres. It was
assumed that the LIDAR survey was the more accurate of the two surveys and the drillhole positions were moved to intersect the top of
the TSF wireframes.
7.6.
Drilling
Historical exploration programs and Mineral Resource estimates that have contributed to the overall exploration database include:
●
a Mineral Resource estimate (Minxcon 2008); and
●
Gold Fields (2007) undertook an initial drilling campaign on Driefontein 3 TSF and Driefontein 5 TSF. The Mineral Resources were
reported in Minxcon (Proprietary) Limited (Minxcon) report R2008-14 (2008). The drilling continued in 2008 to cover 13 TSFs in the
Kloof, Driefontein, and Venterspost areas.
The drilling was done on either a 100m-by-100m or a 200m-by-200m grid. All drillholes were vertical and downhole surveys were
considered unnecessary as the drillholes were shallow, generally <70m deep. The drillhole grid and downhole sampling density are
sufficient to establish both grade and geological continuity.
The drilling was undertaken using a fully portable hydraulic drill rig comprising a rotating spiral auger drill encased in a stainless-steel core
barrel/rod. The rod comprises a 50mm nominal bore drill rod and inner spiral, with the inner spiral rotating in the opposite direction to
the outer casing whilst advancing into the tailings material. The drilling is performed dry and due to the nature of the drilling the resultant
samples are not oriented. Orientation is not relevant to mining methodologies of the TSFs.
Samples have been described and assayed appropriately to support a Mineral Resource estimation.
Two drilling contractors were utilized, namely Dump and Dune Drillers (Proprietary) Limited and Gold Mine Sands and Slime Dam Drillers
(Proprietary) Limited. Both companies have experience in the drilling of tailings material and comply with industry practices.
Auger and sonic drilling of tailings material by its nature is intrinsically open to contamination and therefore requires particular care to
ensure the results are adequate for use in a Mineral Resource estimate. The drilling programs were supervised by in-house qualified
geologists and a high degree of corporate governance is evident. The drilling methodologies were independently audited by SRK
Consulting (Proprietary) Limited (SRK) in 2008 for Driefontein 3 TSF, Driefontein 5 TSF, Kloof 1 TSF, Libanon TSF, Venterspost North TSF
and Venterspost South TSF.
Drilling logs were kept by the drilling foreman but no sample photographs were kept. Given the drilling methodology, this is not
considered inappropriate.
Overall conclusions for each drilling campaign suggest that the drilling and sampling programs were conducted to industry standards and
suitable for incorporation into a Mineral Resource estimate.
The location of the drillhole collars for the TSFs are shown in
. The total number of drill holes is 1,180 with an
approximate length of 72km.
7.7.
Exploration Budget
Numerous historical exploration activities now contribute to the FWGR’s overall exploration database and it is anticipated that FWGR will
continue to conduct exploration activities which are necessary to keep ahead of recoveries and to update knowledge of the content
within the TSFs. Provisions for future exploration are included in the DCF model.
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8.
SAMPLE PREPARATION, ANALYSIS AND SECURITY
Item 8 (i); (ii); (iii); (iv) and (v)
8.1.
Sampling Method
Auger Drilling:
the auger drill comprises a rotating spiral auger drill bit encased in a stainless-steel core barrel. The core barrel comprises
a 50mm drill rod and inner spiral, with the inner spiral rotating in the opposite direction to the outer casing as the tailings material is
penetrated. The extension rods and spiral augers have three lengths; namely 1.5m, 3.0m and 4.5m. The typical drilling cycle comprised
the following sequence, repeated until the floor of the TSF was intersected:
●
an initial sample was drilled with a 1.5m spiral auger/sample tube, after which the first sample was extracted;
●
the subsequent sample was drilled with a 3.0m auger/sample tube and the 1.5m sample extracted;
●
thereafter, a 4.5m spiral auger/sample tube was used and the sample extracted; and
●
the succeeding samples were extracted from the 4.5m spiral auger plus a 1.5m extension rod, followed by a 3.0m extension rod and
then a 4.5m drill rod.
The first two samples were extracted directly into new sample bags by using the drill rig to reverse the rotation of the spiral within the
1.5m and 3.0m auger/sample tubes. The sample bag was placed over the end of the tube to collect the sample following which the spiral
auger and interior of the barrel were cleaned by using a cloth and a steel brush to remove the tailings material.
Subsequent samples were extracted by removing the spiral auger and the sample collected in a rubber trough. The first 10cm to 15cm of
the sample were discarded as they would be the most likely to have contamination and the remainder of the sample was transferred into
the bag at the end of the rubber trough. The sample bag was then closed, placed in sequence and the tickets added. The sample at the
floor of the TSF is collected into two separate bags containing the soil/footprint sample and the lowermost tailings sample.
The entire sample was collected and consequently the full length of the TSF was sampled, ensuring representivity. No relationship exists
between sample recovery and grade as the material is fine grained and the entire sample was collected so no preferential loss of fines is
anticipated. Each resulting sampled weighed between 2kg and 4kg and is considered suitable for the fine grain size of the tailings. No
selective sampling was undertaken.
The drilling sites were visited by independent consultants who concluded the sampling and management of samples by the drillers was
of a high quality, well controlled and from the evaluation of the quality control data, the number of errors made by the drillers was very
small.
The samples were not geologically nor geotechnically logged as these criteria cannot be obtained from an auger sample.
8.2.
Sample Security
The database used for the Mineral Resource estimation was thoroughly reviewed and found to be reliable.
8.3.
Analytical Laboratories
Four independent laboratories were used for sample analysis, namely SGS, Set Point Laboratories (Set Point), ALS Chemex South Africa
(Proprietary) Limited (ALS) and Performance Laboratories (Proprietary) Limited (Performance Laboratories). All except for Performance
Laboratories, are accredited by the South African National Accreditation System (SANAS) for gold assay. At the time of work, Performance
Laboratories did meet the requirements of ISO/IEC 17025:2005 for gold assay which accreditation was valid until February 2015.
Set Point and ALS were independently inspected and found to follow best practice principles of quality management. They have
procedures of chemical analysis and assay that meet the requirements for code compliance. They use sample preparation equipment that
complies with international accepted practices and laboratory information management systems with sample tracking. Quality
management systems exist with quality checks throughout the entire assay and analytical process.
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8.4.
Analytical Procedures
Gold analysis was undertaken using standard fire assay methodology with gravimetric finish which is considered entirely appropriate for
the sample type.
The laboratory sample preparation was standard for auger drill samples and included drying, jaw crushing to a nominal 10mm if
compacted, pulverizing with a disc pulverizer and manual homogenization. The final sample size submitted for assay was 500g and the
likelihood the samples being non-representative is low.
8.5.
Bulk Density
In general, the conversion from volume to quantity in the case of mineral deposits is undertaken by the application of a density or the SG
determined experimentally on dry samples. Density is the mass per unit volume e.g., t/m
3
, whilst SG is the ratio of the density of a
substance to the density of a reference substance (usually water); and is a unitless ratio of the mass of a substance to the mass of a
reference substance for the same given volume. Wet density measurements can be undertaken for samples with moisture content.
Bulk density, however is defined as the dry weight of a material per unit volume of that material. Bulk density considers both the solids
and the pore space; whereas, density and SG consider only the solids.
The density throughout the various TSFs will vary marginally depending on the original reefs mined. An average density of 1.40t/m
3
used in the 2018 Mineral Resource estimate but this Mineral Resource has now been updated using a density of 1.42t/m
3
subsequently available to FWGR from the current operations and from recent test work performed by The RVN Group. This compares
favorably with the average densities reported by other companies in the business of retreating Witwatersrand tailings (
).
Table 3: Dry Densities used by Other Re-treatment Companies for the Witwatersrand Operations
Company
TSF
Dry Density
(t/m
3
)
Rand Uranium
West Rand Operations
1.45
Anglo Gold Ashanti
Vaal River Operations
1.45
Ergo Mining (Proprietary) Limited
Elsburg Tailings Complex
1.42
Mintails SA
West Rand Projects
1.40
Source: Sound Mining, 2022
The QP has therefore assumed a consistent density of 1.42t/m
3
The use of a dry density in the estimation of an in situ Mineral Resource is standard best practice and the dry density value has been
applied to the Mineral Resource estimate.
8.6.
Concluding Comments
The QP considers the sampling method and preparation adequate for this type of mineralization. Sample security is considered adequate
and the resulting database reliable. Standard analytical processes were used for sample grade determination with Quality Assurance and
Quality Control (QA/QC) (Item
) providing confidence in the results.
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9.
DATA VERIFICATION
Item 9 (i); (ii) and (iii)
9.1.
Quality Assurance and Quality Control (QA/QC)
The internal laboratory standards and blanks (between two and four per fifty) were inserted in every batch. Internal standards with a blind
standard were used on all instruments. The laboratories undertake regular evaluation of overall performance by statistical evaluation of
all QC data.
The laboratory internal checking processes were independently checked and found to be standard and reliable. Several checks were
undertaken on the importation of data into the Mineral Resource estimation software with no issues highlighted.
Laboratory reports suggest that blanks and Certified Reference Materials (CRM) were included for every 100 samples. The CRMs
submitted were African Mineral Standards (AMIS) AMS0046 at 0.67g/t Au; AMIS AMS0080 at 1.14g/t Au and accredited blank AMIS
AMS0069 <0.002g/t Au. The spread of gold grades in the CRM is appropriate and the review of the quality control and quality assurance
data concluded that 13.7% of the total population of samples (13,000 samples) were outside of the two standard deviation limits allowed
and were re-analyzed.
9.2.
Independent Verification
The TSFs exploration programs were conducted during 2007 to 2009 with independent oversight and review provided by Minxcon
(Proprietary) Limited, with auditing of the results by SRK Consulting (Proprietary) Limited. The overall conclusions for each drilling
campaign suggests that the drilling and sampling programs were conducted to industry standards and are acceptable for a Mineral
Resource estimate. The TSF volumes were independently verified by Southern Mapping Company Limited.
Sound Mining has since completed an independent review of the available information and a verification of the data used for the LoM
plan to exploit FWGR’s assets. This involved integrity checks on the capturing of data and interviews with the specialists involved in the
original exploration programs. The QP is satisfied with the accuracy and integrity of the Mineral Resource estimate. The QP is further
comforted by the fact that mining of the Driefontein 5 TSF (December 2018 to current) has confirmed both the volume and grade
estimates of the TSF.
It should also be noted that the type and style of mineralization of the original reefs exploited during the establishment of the TSF assets
are not relevant to the Mineral Resource estimate.
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10.
MINERAL PROCESSING AND METALLURGICAL TESTING
Item 10 (i); (ii); (iii); (iv) and (v)
10.1.
Metallurgical Test Work
The test work described here under relates to understanding recoveries applicable to the TSF mineral deposits. The metallurgical
characterization of the TSFs in the area have been covered by numerous techno-economic studies from 2000 to date. These have ranged
from Scoping Studies through PFS work to DFS levels of accuracy. The metallurgical test work covered various processing options
including direct leach, grinding, ultra-fine grinding and flotation.
Metallurgical test work, on the FWGR’s TSFs, was completed by three independent laboratories, namely SGS Lakefield (SA), Mintek, and
Patterson & Cooke. Results were independently review by ENC Minerals (Proprietary) Limited and are considered acceptable by the QP.
These laboratories are all accredited by the SANAS for gold assay. All three laboratories were independently inspected. They follow
conventional best practice principles of quality management and have procedures of chemical analysis and assay that are accepted as
fulfilling the requirements of compliancy demanded of modern mining companies. They use sample preparation equipment that complies
with international accepted practice. They have installed well developed laboratory information management systems with sample
tracking. They have evolved quality management systems in place with quality checks through the entire assay and analytical process.
Test work has been performed on Driefontein 3 TSF, Driefontein 5 TSF, Libanon TSF, Kloof 1 TSF and Venterspost North TSF. Less test
work was performed on the Venterspost South TSF. The diagnostic leach results as well as gold deportment per size fraction of the
Driefontein TSFs are included in
Table 4: Full Diagnostic Leach Results on Un-milled Feed Samples
Diagnostic Results Un-Milled Feed Sample Association
Driefontein 3 TSF
Driefontein 5 TSF
(g/t Au)
(% Au)
(g/t Au)
(% Au)
Gold Available to Direct Cyanidation
0.24
54.7
0.22
52.4
Gold that is Preg-robbed Carbon-in-Leach (CIL)
0.02
3.5
0.00
0.0
Gold Associated with GCI Digestible Minerals
0.06
14.9
0.05
11.4
Gold Associated with HNO₃ Digestible Minerals
0.03
6.9
0.04
10.3
Gold Associated with Carbonaceous Matter
0.02
4.1
0.00
0.0
Gold Associated with Quartz (balance)
0.07
16.0
0.11
25.9
Total
0.43
100.0
0.41
100.0
Source: Mintek, 2015
Table 5: Driefontein 5 TSF Feed Sample Assay by Size
Particle
Size
(µm)
Mass
(%)
Cumulative
Mass
(% mass)
Discrete
Grade Au
(g/t)
Discrete Distribution
(%)
Cumulative Distribution
(%)
Au
U
3
O
8
S
2
Au
U
3
O
8
S
2
150
5.5
94.5
1.13
15.2
4.1
0.9
100.0
100.0
100.0
106
10.8
83.6
0.62
16.3
4.8
1.9
84.8
95.9
99.1
75
15.1
68.5
0.34
12.4
7.9
6.1
68.6
91.0
97.2
53
10.6
58.0
0.27
6.9
6.3
11.9
56.1
83.2
91.1
38
8.7
49.3
0.32
6.7
6.4
16.1
49.2
76.9
79.2
25
9.0
40.3
0.31
6.8
7.9
17.6
42.5
70.5
63.1
15
22.0
18.3
0.23
12.3
36.9
33.6
35.7
62.6
45.5
-15
18.3
0.53
23.4
25.7
11.9
23.4
25.7
11.9
Total
100.0
100.0
100.0
100.0
Head Grade (calculated)
0.41
Head Grade (measured)
0.41
Variance
0.70%
Source: Mintek, 2015
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Table 6: Driefontein 3 TSF Feed Sample Assay by Size
Particle
Size
(
µm)
Mass
(%)
Cumulative
Mass
(% mass)
Discrete
Grade Au
(g/t)
Discrete Distribution
(%)
Cumulative Distribution
(%)
Au
U
3
O
8
S
2
Au
U
3
O
8
S
2
150
5.0
95.0
1.48
18.0
5.5
0.08
100.0
100.0
100.0
106
12.9
82.0
0.39
12.2
5.9
1.8
82.0
94.5
99.2
75
17.0
65.0
0.37
15.3
8.9
7.9
69.8
88.6
97.5
53
10.5
54.6
0.34
8.6
6.8
12.6
54.5
79.8
89.5
38
8.4
46.2
0.34
6.9
6.3
16.1
45.9
72.9
76.9
25
7.8
38.4
0.27
5.1
6.1
14.7
38.9
66.7
60.7
15
24.9
13.5
0.29
17.5
40.2
38.8
33.8
60.5
46.1
-15
13.5
0.50
16.3
20.3
7.3
16.3
20.3
7.3
Total
100.0
100.0
100.0
100.0
Head Grade (calculated)
0.41
Head Grade (measured)
0.43
Variance
4.10%
Source: Mintek, 2015
The presence of preg-robbers in the tailings material can be ascertained from the above results. Preg-robbing is the phenomenon
whereby the gold cyanide complex, Au(CN)
2
, is removed from solution by the constituents of the ore. The preg-robbing components may
be the carbonaceous matter present in the ore, such as wood chips, organic carbon, or other impurities, such as elemental carbon.
The actual content of the preg-robbers in the samples seems to vary from 0% up to 10% in certain samples. This pattern is consistent with
results from similar operations and is a function of the nature of the material being re-mined. In particular, areas on a TSF which contain
organic matter and plants (i.e., side walls, reed beds etc.) will have elevated preg-robbing content. It is therefore an established practice
to design a plant with a Carbon-in-Leach (CIL) system and not a Carbon-in-Pulp (CIP) system. The process design does allow for CIL to
mitigate the impact of preg-robbers on recovery potential.
The recoveries in
also actively try to liberate addition gold locked in silicates through additional fine grinding at DP2 to enhance overall recoveries. This
possibility for improved recoveries is supported by the fact that approximately 30% of the contained gold is found in the coarse fractions
(>106µm). Historically the most favorable liberation on Witwatersrand Basin gold bearing ores have been achieved at grind sizes of
<75µm. Both the diagnostic leach and assay by size results confirm the need to mill the coarse fractions in order to improve recovery.
Based on the test work, Sound Mining’s QP is comfortable that the following processing recoveries are achievable on the various TSF feed
sources (
).
Table 7: Summary of Process Recovery Potential
TSF
Process Recovery
(%)
Driefontein 5
49.8
Driefontein 3
56.6
Kloof 1
50.5
Libanon
47.2
Venterspost North
54.7
Venterspost South
62.5
Source: Sound Mining, 2022; and FWGR, 2020
10.2.
Concluding Comments
The initial metallurgical test work, sampling and bulk sample trials used to support the Mineral Resource estimates and feasibility study
work is considered by the QP to reasonably represent the deposit as a whole. The processing of the Driefontein 5 TSF has provided the
QP with further confidence in that the actual metallurgical recoveries have been consistent with the initial forecast.
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11.
MINERAL RESOURCE ESTIMATES
Item 11 (i); (ii); (iii); (iv); (v); (vi) and (vii)
The original Mineral Resource estimates of 2009 were confirmed by Sound Mining in 2020. Sound Mining independently reviewed the
database, geological models, estimation methodology and classification criteria. Sound Mining concluded that the estimations are based
on a suitable database of reliable information and that no material issues were found which could affect the overall estimate. The density
assumption used for the various TSFs in the 2018 Mineral Resources estimate was 1.40t/m
3
. It has since been revised to 1.42t/m
3
FWGRs data from the mining of the Driefontein 5 TSF. Geological losses are not applied because the entire volume of a TSF will be
processed once included into FWGR’s Mineral Resource base for future exploitation.
11.1.
Geological Models and Interpretation
TSFs constructed from the tailings of Witwatersrand gold mining operations have been successfully and economically exploited for
decades and the geotechnical and geometallurgical characteristics are well understood from experience and test work on the FWGR
assets themselves. Apart from the potential risks identified in Item
, no factors of a geotechnical or geometallurgical nature have
been identified that would have a significant effect on the prospects for eventual economic extraction.
The exploration database has been demonstrated to comprise analytical data obtained from reliable laboratory assays on samples
obtained from sampling and drilling programs based on industry best practice. The drillhole grid spacing is comparatively close for typical
TSF drilling programs and the entire depth of each TSF was sampled. The data density is therefore considered sufficient to assure
continuity of mineralization and structure and provides an adequate basis for estimation.
The exploration database was imported into DataMineTM Studio 3 software and data validation was undertaken to ensure the integrity
and validity of the imported data. The samples for Driefontein 3 TSF and Driefontein 5 TSFs represent 3.0m composite samples and not
1.5m composites. The samples from all of the other TSFs were 1.5m in length. The end of the drillhole sample, where it contained footwall
material, was separated into tailings and footwall material and treated separately by the laboratory.
Three dimensional wireframes were constructed from surveyed data and drillhole information. The top wireframe surface for the
Driefontein 3, Driefontein 5, Kloof 1, Libanon, Venterspost North and South TSFs were constructed from LIDAR data. The base/footprint
wireframe was constructed from the soil intercept depths from the drillhole data and the footprint perimeter. The wireframes comprised
simple 3D representations of the volume of the TSFs and as such are not open to alternative interpretations.
11.2.
Estimation Methodology
Ordinary Kriging was undertaken for the gold grade estimation which allows for testing of the accuracy and efficiency of the estimation.
Due to the construction of the TSFs and potential gold remobilization, a spatial grade distribution was anticipated and since Kriging is
based on modelling the spatial variances within an orebody, this method was considered the most reliable and accurate.
The capping of anomalously high-grade values was only applied to Driefontein 5 TSF and Kloof 1 TSF These capping values were
determined from the probability plots generated for each TSF. Capping in the variography stage of the estimation limits the excessive
variances of the anomalously high grade from skewing the distribution away from the representative variance of the data distribution.
Capping in the Kriging stage limits the zone of influence that the ultrahigh grades have on the estimation of the surrounding areas. This
is considered an appropriate method of data handling.
The following parameters were applied in the Kriging process:
●
50m-by-50m-by-3m block size as derived from 100m-by-100m drillhole spacing and 1.5m sample lengths for Driefontein 5,
Driefontein 3, Kloof 1, Libanon, Venterspost North and South TSFs;
●
sub-cells employed at a minimum of 10m-by-10m (X and Y) for each TSF;
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●
first search volume (SVOL1):
X and Y at approximately the variogram range;
Z search volume was in general the downhole variogram range equating to a search of 6m. Given the stratified nature of the TSFs
an excessive search in the vertical direction could result in smearing of grades vertically;
minimum of 12 samples within the search volume one (SVOL1); and
maximum of 40 samples within the search volume one (SVOL1).
●
second search volume (SVOL2):
approximately 1.5 times the first search volume;
minimum of four samples within the search volume; and
maximum of 40 samples within the search volume.
The spatial relationships of the sample grades were investigated with variograms. Both downhole and planar variograms were calculated
and modelled. The aim of the downhole variograms was to determine a nugget value and the applicable vertical range of continuity,
whilst the planar variogram used the nugget value determined from the downhole variogram. The anisotropy (the difference, when
measured along different axes, in a material's physical or mechanical properties) for gold in each TSF was investigated. The variograms
were deemed best represented by omni-directional models and the variogram parameters are shown in
The vertical (i.e., Z) range of the planar variogram model is replaced by the range determined from the downhole variogram. Where
necessary (Driefontein 5 TSF and Kloof 1 TSF) both the downhole and planar variograms were conducted using top-cuts, determined from
the probability plots generated for each element for each TSF.
11.3.
Mineral Resource Classification
The applied Mineral Resource classification is a function of the confidence of the asset tenure and consideration of the entire process
from drilling, sampling, geological understanding and geostatistical relationships. FWGR’s legal tenure is secured through the necessary
permitting required to access and exploit the moveable assets. The drilling, sampling, analytical processes and governance of the
exploration programs have been appropriate and in-line with industry best practice and are considered to be of high confidence. The
density used in the conversion from volume to tonnage has been determined from both in situ measured values and empirical data and
is considered reliable. In addition, the following statistical criteria were applied to the Mineral Resource classification:
●
number of samples used to estimate a specific block:
Measured - at least four drillholes within the variogram range and minimum of twenty 1.5m composited samples;
Indicated - at least three drillholes within the variogram range and a minimum of twelve 1.5m composite samples;
Inferred - less than three drillholes within the variogram range.
●
distance to sample (variogram range):
Measured - within at least 60% of variogram range;
Indicated - within variogram range;
Inferred - further than variogram range.
●
lower confidence limit (blocks):
Measured - less than 20% from mean (80% confidence);
Indicated - 20% to 40% from mean (80% to 60% confidence);
Inferred - more than 40% (less than 60% confidence).
●
Kriging efficiency:
Measured - more than 40%;
Indicated - 20% to 40%;
Inferred - less than 20%.
●
Kriged variance a relative parameter used in conjunction with the other criteria.
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●
deviation from lower 90% confidence limit (data distribution within the Mineral Resource area considered for classification):
Measured - less than 10% deviation from the mean;
Indicated - 10% to 20%;
Inferred - more than 20%.
In accordance with the criteria noted above, all of the TSF Mineral Resources were classified as Measured Mineral Resources.
11.4.
Mineral Resource Verification
The following data was received, interrogated, and verified by Sound Mining (
).
Table 8: Data Interrogated per TSF
TSF
De-surveyed DataMine
TM
Borehole File
Final Block Model
Report
Driefontein 5
compall1_au_u_s.dm
dr5_krig_all fin.dm
Minxcon 2009 updated by Sound Mining 30 June 2022
Driefontein 3
compall.dm
drth_krig_allfinal2b.dm
Minxcon 2009
Kloof 1
compall.dm
kl1_krig_all_final3c.dm
Minxcon 2009
Libanon
compall1.dm
lib_krigall1_2010c.dm
Minxcon 2009
Venterspost North
BHA.dm
vn_krig_all1_fin2d.dm
Minxcon 2009
Venterspost South
COMPALL1.dm
vs_krig_all1_final2c.dm
Minxcon 2009
Source: Sound Mining, 2022
No original laboratory assay reports were received for the TSFs for verification of the assay results; however, it must be noted that head
grade assays of the Driefontein 5 TSF correspond with that expected from the Mineral Resource model. An interrogation of the stated
modelling parameters yielded acceptable results and demonstrate that the variography and parameters used in the Kriging process are
reasonable (
). The QP concludes that the reported Mineral Resource estimation methodologies and interpretations are reasonable
and can be relied upon to reflect the Mineral Resource base for FWGR.
Table 9: Variogram Parameters
TSF
Parameter
Domain
Sill
Nugget
Sill 1
X1 Range
Driefontein 5
Au
1
0.029
0.180
68.51
124
Driefontein 3
Au
1
0.024
0.280
91.47
134
Kloof 1
Au
1
0.008
0.560
82.82
120
Libanon
Au
1
0.018
0.450
91.59
130
Venterspost North
Au
1
0.025
0.290
90.98
123
Venterspost South
Au
1
0.020
0.290
75.80
117
TSF
Y1 Range
Z1 Range
Sill 2
X2 Range
Y2 Range
Z2 Range
Driefontein 5
124
6
100
545
545
6
Driefontein 3
134
6
100
655
655
6
Kloof 1
120
6
100
406
406
6
Libanon
130
10
100
522
522
10
Venterspost North
123
10
100
385
385
10
Venterspost South
117
6
100
272
272
6
Source: Minxcon, 2009
11.5.
Cross-sections and Grade Distribution
Cross-sections and grade distribution through each TSF are provided in
The Driefontein 5 TSF has been reclaimed
since December 2018 and the cross-section presents the depleted TSF as at 30 June 2022. The other TSFs have not yet been reclaimed.
Driefontein 5 TSF and Driefontein 3 TSFs have the highest average grade of 0.47g/t Au, with isolated sections up to 0.80g/t Au to
1.05g/t Au. Driefontein 3 TSF and Venterspost North TSF show a clear trend where grade increases with depth, whilst Driefontein 5 TSF
appears to have no such pattern. Kloof 1 TSF and Libanon TSF show a slight increase in grade with depth, whilst the opposite is the case
for Venterspost South TSF where grades increase quite markedly towards the surface. Libanon TSF and Venterspost North TSF display
the lowest average grades but are both fairly large deposits of 74.3Mt and 55.3Mt respectively.
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Figure 13: Cross-sections and Grade Distribution - Driefontein 5 TSF
Source: Sound Mining, 2022
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Figure 14: Cross-sections and Grade Distribution - Driefontein 3 TSF
Source: Sound Mining, 2022
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Figure 15: Cross-sections and Grade Distribution - Kloof 1 TSF
Source: Sound Mining, 2022
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Figure 16: Cross-sections and Grade Distribution - Libanon TSF
Source: Sound Mining, 2022
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Figure 17: Cross-sections and Grade Distribution - Venterspost North TSF
Source: Sound Mining, 2022
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Figure 18: Cross-sections and Grade Distributions - Venterspost South TSF
Source: Sound Mining, 2022
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11.6.
Reasonable and Realistic Prospects for Economic Extraction
Both Mineral Resources and Mineral Reserves for FWGR are determined by the average grade of a TSF which must be above or equal to
a plant feed cut-off grade. The assumptions on a Mineral Resource cut-off include working costs, the average plant recovery, the expected
residue grade, the required yield based on working cost and gold price.
The cut-off assumptions for FWGR (Item
) have been based on the experience of FWGR from its current (i.e., Phase 1) operations. The
capital and operational costs of the infrastructure and mining equipment have been estimated at a PFS level of accuracy and all services
including water and power are current and appropriately priced.
A real gold price of ZAR914,294/kg was used in the estimation of the Mineral Resources and Mineral Reserves as of June 2022. The QP is
comfortable with this price assumption in the context of the long-term consensus pricing used by FWGR for its LoM and annual business
planning. These prices are based on information received from various independent sources.
The economic assessment provided in this TRS demonstrates positive margins and confirms reasonable prospects for eventual economic
extraction for all FWGRs TSFs at an average cut-off grade of 0.15g/t. The average grades of the TSFs included in the Mineral Resource
statement are therefore all above 0.15g/t. This means that the Mineral Resources when stated exclusive of Mineral Reserves will amount
to zero because all of the Mineral Resources will be exploited and converted to Mineral Reserves.
The QP is of the opinion that reasonable technical and economic factors have been considered and that there are reasonable and realistic
prospects for economic extraction of the Mineral Resources as at 30 June 2022.
There are no permitting risks in relation to mineral title with regard to eventual extraction. Security of tenure for eventual extraction is
premised on common law ownership and EAs. Access to the moveable assets has been provided in the “Use and Access Agreement” with
Sibanye Gold. The granting of the necessary environmental authorizations and permits to continue operations are in place.
11.7.
Mineral Resource Estimation
FWGR currently owns six TSF assets totaling 229.4Mt with a total gold content of 76.39t. All Mineral Resources estimates fall within the
Measured Mineral Resource category.
Table 10: Mineral Resource Estimate for FWGR as at 30 June 2022
TSF
Volume
('000m
3
)
Density
(t/m
3
)
Quantity
(Mt)
Grade
(g/t)
Content
(t)
Content
(koz)
Driefontein 5
5,685
1.42
8.07
0.48
3.85
124
Driefontein 3
35,540
1.42
50.47
0.47
23.71
762
Kloof 1
19,931
1.42
28.30
0.33
9.20
296
Libanon
52,351
1.42
74.34
0.27
20.23
650
Venterspost North
38,954
1.42
55.31
0.27
15.16
487
Venterspost South
9,068
1.42
12.88
0.33
4.24
136
Total Mineral Resource Estimate
161,529
1.42
229.37
0.33
76.39
2,456
Source: Sound Mining, 2022
Notes: Apparent computational errors due to rounding
The Mineral Resources in
Reserves will be zero. It accounts for the revised bulk density of 1.42t/m
3
hydro-mining from December 2018 until 30 June 2022.
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11.8.
Additional Mineral Resources
Once decommissioned, FWGR is contractually entitled to receive the Driefontein 1, Driefontein 2 and Kloof 2 TSFs from Sibanye Gold as
a part of the 2018 Exchange Agreement. These represent growth options available for FWGR to extend the LoM, but do not form part of
FWGR’s current Mineral Resource. In addition to these currently available TSFs, the area hosts other potentially available TSFs.
11.9.
Concluding Comments
Upon interrogation of borehole and production data, Sound Mining observes the continuation of gold grade beyond the TSF material and
into the footwall. This grade does not form part of the Mineral Resource estimation.
No geological losses have been applied as the entire volume of the TSF will be mined.
The initial TSF Mineral Resources were estimated by Minxcon 2009, confirmed by Sound Mining through remodeling of the TSFs in 2018
and then updated and now restated in 2022. The Driefontein 5 TSF has been depleted through reclamation and Sound Mining has updated
the Mineral Resource estimate as at 30 June 2022.
The QP is of the opinion that there are no material risks which are expected to hinder the prospects for reasonable and realistic economic
extraction of the Mineral Resources. Both the actual recoveries and grades may differ to those used for the Mineral Resource estimate
during exploitation of the TSFs, but experience from the reclamation of the Driefontein 5 TSF suggests that in that these variations are
unlikely to be material. The QP also notes that the underlying geology from which the TSFs are comprised, is similar and does not expect
significant variation.
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12.
MINERAL RESERVE ESTIMATES
Item 12 (i); (ii); (iii); (iv); (v) and (vi)
The Mineral Reserves were prepared in accordance with the requirements of S-K 1300 (
) and at a real gold price of
ZAR914,294/kg.
The QP is comfortable with the use of this long-term pricing assumption of FWGR which it has used for both LoM and annual business
planning. The forecast price assumption is based on information provided by various independent institutions that do commodity
forecasting. ZAR914,294/kg is considered a reasonable representation of the price to be expected over the 20-year LoM in real 30 June
2022 terms. The operation remains economically viable above a gold price of ZAR721,264/kg (Item
).
A LoM plan and mining schedule was developed by FWGR and modified by Sound Mining, as outlined Item
. The LoM plan was tested
for economic viability in the DCF model which indicated a positive cashflow through to the end of LoM.
No mining losses or dilution are applied in determining the Mineral Reserve estimates because the TSFs are re-mined and re-processed in
their entirety. All other modifying factors are captured in the mine design together with all of the associated technical aspects that inform
the capital and operating cost estimates.
FWGR’s six TSF assets convert to a total Mineral Reserve of 229.4Mt with a gold content of 76.39t.
Table 11: S-K 1300 Compliant Mineral Reserve Estimate as at 30 June 2022
TSF
Volume
('000m
3
)
Density
(t/m
3
)
Quantity
(Mt)
Grade
(g/t)
Content
(t)
Content
(koz)
Driefontein 5
5,685
1.42
8.07
0.48
3.85
124
Driefontein 3
35,540
1.42
50.47
0.47
23.71
762
Kloof 1
19,931
1.42
28.30
0.33
9.20
296
Libanon
52,351
1.42
74.34
0.27
20.23
650
Venterspost North
38,954
1.42
55.32
0.27
15.16
487
Total Proved Mineral Reserve
152,461
1.42
216.49
0.33
72.15
2,320
Venterspost South
9,068
1.42
12.88
0.33
4.24
136
Total Probable Mineral Reserve
9,068
1.42
12.88
0.33
4.24
136
Total Mineral Reserve Estimate
161,529
1.42
229.37
0.33
76.39
2,456
Source: Sound Mining, 2022
Notes: Apparent computational errors due to rounding and are not considered significant
3
potential development of such Mineral Reserves
12.1.
Risk to the Mineral Reserve Estimate
Uncertainties associated with the FWGR operations, and therefore the Mineral Resource and Mineral Reserve estimates, are can be
mitigated. Sound Mining has not exposed any fatal flaws or technical risks to the successful execution of the LoM plan and the QP does
not anticipate any material changes to the associated modifying factors. The uncertainties requiring comment in the context of their
impact on these estimates are:
●
Mining:
be affected by a variety of issues, including, but not limited to availability of electricity and water.
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●
Quality of the Mineral Assets:
the six TSFs that comprise the Mineral Reserve have all been adequately drilled, their likely content
adequately assessed and recovery test work satisfactorily completed. The actual recoveries will be influenced by the actual RoM grade
entering DP2 and the amount of carbon (elemental and/or organic) in the RoM. This risk could be managed by blending material from
different TSFs’, where possible.
●
Plant Performance:
the management of the risk of a lower-than-expected overall throughput recovery can be mitigated by ensuring
optimal grind sizes at the DP2 facility.
●
RTSF Design Risk:
the QP considers the main design risk of the RTSF to be the effectiveness of the proposed scavenger well system to
contain future groundwater plumes. This system replaces the use of a synthetic liner, installed at the base of the RTSF to create a third
‘perched’ aquifer above the current weathered zone aquifer. It provides an elegant solution to pollution containment and has been
demonstrated to operate successfully on other South African TSFs.
●
Delayed Commissioning of Key Infrastructure:
processing capacity of DP2 will impact on the proposed production forecast and anticipated revenues. Sound Mining is of the opinion,
with the exception of the permitting and licensing process currently underway for the RTSF, that in the absence of unforeseen
circumstances, delays to key infrastructure are unlikely and notes that the current LoM plan only requires the RTSF by 2030.
●
Water Supply:
to transport material over large distances and for processing. FWGR uses potable water for potable usage and not mining operations.
Process water is secured through a combination of harvested return water from the treated tailings and dewatering from local shaft
systems and local wellfields.
●
Power Supply:
severely destressed and this results in frequent disruptions to the power delivered to the South African mining industry. There is a
curtailment agreement in place with Eskom which requires that during black-outs electricity use is to be curtailed, which is typically
achieved by shutting down the milling section. Diesel generators are used to restart the plant.
Sound Mining understands that no alternative power supply arrangements are currently in place at FWGR and as such consider the
threat of production losses resulting from power disruption to represent a significant production risk.
●
Grave Relocation:
the process of grave relocation is well understood in the South African mining industry and supported by
comprehensive statutory guidelines. It will be managed by FWGR specialists who will ensure that full consultation with next of kin is
undertaken and that appropriate compensation is realized.
●
Long-term Sustainability:
increase in production rates above 1.2Mtpm. Continued production beyond the current LoM plan and Mineral Reserve estimate relies
on available TSFs that can be brought on line in the future. There is ample time for additional sampling and resource modelling to
confirm their extent and content prior to production and the three currently available TSFs envisaged by FWGR’s long-term operational
aspirations, are controlled by Sibanye Gold. Sound Mining do not envisage any future security of tenure complications arising from the
inclusion of these TSFs in the overall LoM plan.
●
Extreme Weather:
are on the increase. Specifically, the increase in intensity of events, such as thunderstorms on the Highveld, where the operations are
situated, will impact operations. Major property, infrastructure and/or environmental damage as well as loss of human life could also
be caused by extreme weather events.
●
Rising Costs:
inflationary increases in production costs as well as an unavailability of critical material such as reagents and critical equipment which
effects production and operating costs. FWGR remains a relatively low-cost operation however a pro-longed period of high inflation
will erode financial value over time.
●
Gold Price:
operations making a loss.
For additional information regarding the Company’s risks, see Item 3D of the Form 20-F.
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13.
MINING METHOD
Item 13 (i); (ii); (iii); (iv) and (v)
The mining method is hydro-mining (or hydraulic mining), which uses high-pressure water monitors to deliver a high-pressure water jet to
hydraulically repulp and mobilize tailings material within the TSFs. The water from the monitors mixes with the tailings and forms a slurry
with a high solids content. The slurry flows under gravity along channels at the base of the dump to a collection sump at the lowest
elevation of the bench being mined. Screens are installed to remove debris, which must be cleaned regularly to prevent an impact on the
pumping operations.
The monitors comprise of 200mm self-propelled track monitor guns (
), each with production rates of up to 300ktpm. They
discharge approximately 500m
3
/hr of water at pressures up to 30bar through a variable sized nozzle depending on the hardness of the
material being slurried, and can be controlled remotely by the operator. In order to minimize hydraulic pressure losses and poor
reclamation gun efficiencies, water pressure is designed to reach the monitor guns at a minimum pressure of 25bar.
Photograph 1: Monitor Gun
Source: FWGR, 2020
The prerequisites for hydro mining are limited to the infrastructure discussed in Item
. Pre-stripping and backfilling
processes are not applicable to this mining method.
Early forms of hydraulic mining were adapted from methods developed in the United Kingdom for the mining of primary kaolin deposits.
These early attempts used a high-pressure monitor located at the base of the TSF to wash material from the base of the slope. A
disadvantage of this approach is that by directing the water jet at the base of the slope, the slope is undercut and can become unstable,
leading to uncontrolled slope failure. With sufficient off-set distance between the slope and the monitor and/or monitor operator, this is
not necessarily a problem, however, given that many of the tailings dams that are available for reprocessing are located in urban locations,
a safer system of monitor operation has subsequently been developed. The majority of tailings dams that have been mined in the last
20 years have utilized a monitor located on the upper bench of the tailings dam, directing a water jet downwards to cut a stable slope
surface into the face of the TSF. This approach has been successfully applied within densely populated urban areas. It is considered safer
and allows for rapid changes in slope angles to cope with any operational variances that may be encountered. The resulting slopes usually
consists of a 15m high bench with a 45º to 50º slope angle. High faces with consistent slope angles can be formed using the top-down
hydraulic mining technique as shown in
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Figure 19: Mining Methodology
Source: Sound Mining, 2022
Figure 20: Mining Widths
Source: Sound Mining, 2022
Increased production is achieved by the inclusion of additional units and this modular approach provides a high degree of flexibility that
allows simultaneous mining at a number of points over a wide range of production rates and consequently, grade blending is readily
achievable if required.
The slurry density produced by the monitors is controlled by the operator. Actively moving the monitor and consistently cutting the face
results in a slurry with relatively high solids content. Experience from FWGR’s ongoing operations has demonstrated that slurries with
35% to 50% solids can consistently be achieved. The monitor guns seek to maintain optimal slurry densities in the region of 1.42t/m
3
.
The TSFs consist of fine tailings material, with a typical particle size of 70% <75µm. Relatively flat flow channels will develop with gradients
in the order of 1:100m. The position of the sump will change as mining proceeds along a bench, to limit the distance between the monitor
and the sump. If too far from the active face, tailings material may drop out of suspension and reduce the solids content of the slurry
pumped to the plant. However, the slurry tends to flow at a natural beaching angle which is generally self-correcting. If the slope gets too
steep, flow velocities increase in the channels causing erosion until the equilibrium slope is attained. If the slope is too flat the solids settle
out reducing the height of the mining face until the equilibrium slope is achieved (
). A monitor gun dislodges the in situ material
which washes into slurry channels (
).
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Photograph 2: Monitor Gun in Operation
Source: FWGR, 2022
The slurry flows through the channel and passes through screens to remove debris which may cause blockages in the pipeline. After
screening, the slurry collects in the sump and is pumped to the plant for processing. Slurry densities are maintained at approximately
1.42t/m
3
, for optimal pipeline performance.
13.1.
Mining Plan and Layout
Hydro-mining and the re-deposition of tailings is a specialized activity and is accordingly outsourced by FWGR to competent and
experienced service providers. The hydro-mining performance assumptions used are based on the current operations where the method
has been successfully “tried and tested”. The equipment requirements, manning complements and necessary supporting infrastructure,
in terms of water and power supply, are well understood and have been accurately planned by both FWGR and their current service
provider. No untested technical assumptions with regards to the mining have been made.
Monitors remove the tailings material from the top of a TSF to the natural ground level in 15m layers. The monitor is positioned on the
top of the working bench to direct the water jet down into the TSF. It will work the face in one direction along the front edge of the dam
before returning in the opposite direction when it reaches the far end of the dam. As the mining faces advance, slurry is directed via
launders to a pit pump which then transfers the slurry to a fixed transfer pump station that includes a vibrating trash screen.
A stepped bench approach is adopted to most efficiently reclaim the TSF while maintaining slope stability. Horizontal benches of 100m
to 200m, inclusive of the face angle, are created to maintain safe working distances between simultaneous operations at different bench
elevations. The layout is illustrated in a schematic cross-section (
).
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Figure 21: Mining Sequencing
Source: Sound Mining, 2022
The top and second layers progress simultaneously until a safe distance (~200m) for the third 15m layer is reached, and so forth until
ground level is reached and the entire TSF is reclaimed. As mining progresses and the footprint is exposed, the final layer is cleared,
prepared and rehabilitated.
13.2.
Modifying Factors and Mining Schedule
No mining losses or dilution are applied in determining the Mineral Reserve estimates because the TSFs are re-mined and re-processed in
their entirety. All other modifying factors are captured in the mine design together with all of the associated technical aspects that inform
the capital and operating cost estimates.
However, the QP has observed from on-site inspections of the mining process that FWGR also reclaims footwall material, where deemed
economically viable. This practice could imply the application of an appropriate modifying factor in the derivation of Mineral Reserves
when not part of the Mineral Resource estimate. FWGR are keeping suitable records to assess the materiality of this practice on the
Mineral Reserve estimate and if material may be included in future mineral Reserve estimates.
average head grade of 0.33g/t.
Table 12: Scheduled RoM Production
TSF
Mineral Resource Category
RoM Quantity
(Mt)
In situ Grade
(g/t Au)
Recovery
(%)
Driefontein 5
Measured
8.07
0.48
49.9
Driefontein 3
Measured
50.47
0.47
56.6
Kloof 1
Measured
28.30
0.33
50.5
Libanon
Measured
74.34
0.27
47.2
Venterspost North
Measured
55.32
0.27
54.7
Venterspost South
Measured
12.88
0.33
62.5
Total
229.37
0.33
-
Source: Sound Mining, 2022; and FWGR, 2020
The reclamation sequencing was designed in line with FWGR’s phased approach to increase production (
).
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Graph 1: LoM Production Forecast
Source: Sound Mining, 2022
RTSF capacity and planned DP2 upgrade.
Graph 2: Potential LoM Production Forecast
Source: Sound Mining, 2022
13.3.
Cut-off Grade
A cut-off grade has been computed for each of FWGR’s TSFs considering the assumed gold price, anticipated recovery through the
planned plant and the expected operating costs. The results are presented in
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Table 13: Calculated Cut-off Grades
TSF
Cut-off Grade
(g/t)
Driefontein 5
0.19
Driefontein 3
0.16
Kloof 1
0.18
Libanon
0.20
Venterspost North
0.17
Venterspost South
0.15
Source: Sound Mining, 2022
The cut-off grades for the respective dumps range from 0.15g/t to 0.20g/t with an average of 0.18g/t. A cut-off grade of 0.15g/t is
applicable to the FWGR LoM plan.
13.4.
Mining Contractor
The cost and maintenance of the mining equipment at reclamation sites, employees and other operational resources are for the operating
contractor’s account. They are the subject of contractual agreements with FWGR. Initial capital is not required for the mining. The
equipment (i.e., monitor guns) supplied by the contractor is shown in
Table 14: Mining Equipment Planned for each TSF
TSF
Steady State Production
(ktpm)
Required Units
(Number)
Driefontein 5
520
2
Driefontein 3
600
2
Kloof 1
600
2
Libanon
600
2
Venterspost North
600
2
Venterspost South
600
2
Source: Sound Mining, 2022
The mining contractor currently relies on two active mining units with a third unit in transit to the next planned set-up position.
The operating cost estimate for the mining and re-deposition of tailings is supported by actual operational figures. They are presented in
the working cost estimates as “contractor costs”.
The capital expenditure estimates for the pipeline and pumping design to move the RoM material to the respective plants for processing
and for the return of the processed material (new arisings) for re-deposition, is provided in Item
13.5.
Concluding Comments
Hydro-mining is an existing “tried and tested” process which is well understood. The contractor is entitled to decide on various operational
alternatives and to deploy capital equipment and manage costs. The QP has checked the integrity of the mine design and associated costs
and is satisfied with the level of detail and accuracy of the study work completed. The selective mining of portions of a TSFs is not
considered an option by Sound Mining.
From a health and safety perspective, hydro-mining does not create, but rather ameliorates the airborne dust problem often associated
with fine tailings material. Safe bench heights are governed by the material’s strength which is influenced by the phreatic surface within
a TSF. These have been dormant for many years and the phreatic surface is expected to be well below the surface of the dumps. The
drilling program to define the Mineral Resource did not encounter saturated zones or phreatic surfaces and so the risk of slope failure or
liquefaction is considered to be low. Slope stability is however managed and the hydrological aspects affecting the TSFs are not
considered significant to the operation. There is a clean/dirty water separation system with emergency paddocks to prevent any spillage
or run-off from the facilities. These assist in preventing chocked screens from vegetation or heavy rainstorm events, where the runoff
needs to be contained prior being pumped through the circuit back to the TSF.
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14.
PROCESS AND RECOVERY METHODS
Item 14 (i); (ii); (iii) and (iv)
An expansion of the currently operating DP2 processing plant is planned to facilitate an increase in processing throughput from the
current TSF Mineral Reserve inventory. DRA were responsible for the detailed design and associated cost estimates for the expansion of
DP2 as well as the piping and pumping infrastructure. The QPs appointed Spargo Consult, as an independent expert, to assist with the
review of the metallurgical aspects.
14.1.
Existing DP2 Processing Facility
Phase 1 of FWGR’s long-term growth strategy required that the original Driefontein Plant 2 (DP2) be modified and refurbished to
accommodate up to 600ktpm of RoM slime from the TSFs. This has been accomplished but with a throughput constraint of approximately
500ktpm imposed by the maximum deposition rate for new arisings onto the Driefontein 4 TSF. Based on current deposition rates, this
TSF is due to reach its storage capacity at the end of 2025. The Phase 1 work on the plant included a refurbishment of the conventional
CIL plant and modifications to the milling and cyclone circuits to ensure the production of a finer grind for gold liberation as suggested
by metallurgical test work. The existing primary ball mill design was modified to incorporate an overflow discharge rather than the grate
discharge and the use of a 30mm ball charge instead of the 50mm ball size that was included in the original mill design. This improved
contact between grinding media and gold ore particles for increased grinding efficiency in gold liberation. A new 45m diameter hi-rate
thickener was also installed. The achievable grind of 70% <75µm proved to be satisfactory for current gold recoveries, however, closed
circuit milling with cyclones was introduced for an improved grind of between 75% and 80% <75µm to improve the liberation of gold
locked within coarser silicates. Further revisions to the process flow have since included a copper elution step on the loaded carbon, which
delivers a higher-grade gold bar and an improved efficiency of gold removal from cathodes, by improving the gold to copper ratio in the
RoM feed.
capacity improvements over the period analyzed show a gradual improvement of 4.2% when comparing FY2021 (average of 513ktpm)
against FY2022 (average of 506ktpm). Plant metallurgical recoveries over the period FY2021 to FY2022 range between 49.0% to 49.8%
and report lower than metallurgical test work forecasts. However, it should be noted that the metallurgical plant recoveries will be
materially affected by plant head grade feed.
Graph 3: Actual Production Capacity of DP2 for FY2020, FY2021 and FY2022
Source: FWGR, 2022
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Graph 4: Actual Plant Recovery for DP2 versus Forecast Recovery for FY2020, FY2021 and FY2022
Source: FWGR, 2022
The process flow is now as follows:
●
the slurry from the hydro-mining operation is pumped to a surge tank via a 25m
2
contract supplier as milk of lime, is added directly into a receiving tank for pH control;
●
from the receiving surge tank, the slurry is pumped to the milling and classification section from where the cyclone overflow reports
to the thickener for thickening to 1.45t/m
3
●
the CIL section comprises seven tank stages of 1,600m
3
is fitted with carbon retaining screens and a recessed impeller vertical spindle carbon transfer pump. Sodium cyanide solution is added
to CIL Tank 1 and Tank 2 in order to maintain the required concentration for the leach reaction. Slurry flows downstream through the
screens and via launders from CIL Tank 1 to CIL Tank 7 from where it exits to the 25m
2
from the screen overflow while the underflow is pumped by the CIL tailings pump to the tailings tank at the slurry receiving area;
●
loaded carbon flows upstream from CIL Tank 7 to CIL Tank 1 and is recovered daily from the CIL tank 1 by batch transferring of carbon
slurry to the loaded carbon screen and into a holding tank for transfer to the elution circuit after undergoing copper elution;
●
loaded carbon is batch processed through a 9t elution circuit for gold stripping with the stripped solution reporting to 128m
3
tanks;
●
the solution is passed through an electrowinning circuit for cleaning. The sludge is then calcined and smelted into doré bars;
●
the doré bars are dispatched to Rand Refinery Limited for final refining;
●
the eluted carbon is thermally regenerated in a horizontal kiln at 700°C and returned to DP2 for re-use in the CIL circuit. Fresh carbon
is added to the circuit as required; and
●
CIL tailings and oversize waste from the incoming TSF re-mined slurry is stored in a mechanically agitated surge tank and pumped by
the final tailings pumps to the Driefontein 4 TSF.
14.2.
Planned Expansion of DP2
The latest LoM plan requires an expansion of DP2 rather than the construction of a CPP facility which had been a part of FWGR’s strategic
plans. DP2 will be expanded from its current production capacity of 600ktpm to a higher throughput rate of 1.2Mtpm, while the CPP will
remain an option for future strategic planning. The DP2 expansion scheduled to occur during FY2025 and FY2026, although the plant will
only be required to treat 750ktpm until January 2030 when the new RTSF is planned to be fully commissioned and operational. The design
approach to the DP2 expansion design has been to modify existing ball milling capacity and duplicate existing processing circuits. The
process flow block plan shown in
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Figure 22: DP2 Revised Block Plan
Source: DRA, 2022
Historically achievable plant gold recoveries are expected to be realized from the expanded DP2 plant with gold recoveries being
principally driven by the plant feed head grade. A provision of ZAR1,283.20M (excluding contingencies) has been included in the LoM plan
for this expansion. The principal areas of capital expenditure covered by this provision are:
●
Slurry Receiving and Trash Screening (ZAR64.19 M):
the hydraulically mined material is pumped over trash screens before entering the
respective receiving tanks. Lime can be added in the receiving tank for pH correction. From the slurry receiving tanks the material is
pumped either to the classification and milling circuit or can be bypassed directly to the CIL or pre-leach thickeners.
The provision addresses process design screen changes and the tank volume adjustments necessary to address the increased
production capacity.
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●
Milling and Thickening (ZAR146.81 M):
prior to milling the material passes through a primary classification stage, via cycloning, where
after the coarser material is closed circuit milled and the finer material from the milling circuit directed to the pre-leach thickeners.
Thickener underflow is pumped to a second set of trash linear screens prior to CIL.
The provision addresses the newly designed cyclone cluster installations, the new 45m diameter thickener circuit, along with all the
adjustments and modifications necessary to the current ball milling circuit.
●
Leach and Adsorption (ZAR231.70 M):
reclamation slurry is either pumped directly to the CIL or first passes through the classification,
milling and thickening circuits before passing through the CIL trash screens and into the CIL. Each circuit consists of one stage of pre-
oxidation and seven stages of CIL where gold is leached and adsorbed onto activated carbon, which flows counter-currently to gold-
bearing slurry. Loaded carbon is directed to elutriation and elution circuits while tailings pass over carbon safety screens before being
pumped to the final tailings tank.
The provision provides for the installation of a new CIL section which will duplicate the currently installed capacity.
●
Tailings Disposal (ZAR86.70 M):
CIL tails gravitate through to carbon safety screens. The screen oversize is pumped to the fine carbon
handling circuit ensuring that any carbon passing through the CIL circuit is recovered. The screen undersize is sampled before being
collected in the final tailings tank and then pumped to the TSF.
The provision recognizes the requirement for additional pumping infrastructure to deliver the increased throughput capacity to the
future identified TSF sites at Leeudoorn and the RTSF.
●
Services and Distribution (ZAR193.01 M):
this provision considers all of the supporting bulk services required for the plant expansion
and includes the necessary road access construction for the expanded plant site.
●
Water and Air Services (ZAR57.97 M):
the requirements for process water and compressed air services at the increased production
capacity are covered by this provision.
●
Reagents (ZAR52.14 M):
this provision covers the infrastructure necessary to ensure correct reagent dosage in the duplicated
processing circuits.
●
Elution and Carbon Handling (ZAR175.09 M):
loaded carbon from the CIL circuit is elutriated to remove any foreign particles prior to
elution. Adsorbed gold will be eluted from the activated carbon by means of a heated solution of sodium cyanide and caustic soda.
This elution process is followed by rinsing and cooling stages. Barren carbon from the batch elution process will be directed to carbon
regeneration while the pregnant leach solution will be routed to pregnant solution tanks for zinc precipitation. The barren carbon
from the elution circuits passes through carbon regeneration kilns to volatilize off impurities and reactivate the carbon where after it
is acid washed and transferred back to the last CIL tank of each circuit. Regenerated carbon is pumped into an acid wash hopper where
it undergoes acid wash to remove precipitated material (inorganic and organic) to restore additional carbon activity prior to being
pumped back to the respective CIL circuit. The provision addresses the requirement for the installation of a new elution and carbon
handling circuit which will duplicate the currently installed capacity.
●
Zinc Precipitation and Smelting (ZAR81.42 M):
Gold in solution from the elution circuit will be recovered by zinc precipitation in plate
and frame filters. The provision addresses the requirement for the installation of a new zinc precipitation and smelting circuit which
will enable the production of doré to match the currently installed capacity.
●
Indirect Capital (ZAR194.16):
which is comprised of Construction Costs (ZAR4.79 M), First Fill Consumables (ZAR0.18 M),
Commissioning and Spares (ZAR10.96 M) and Project Services (ZAR178.23 M).
14.3.
Concluding Comments
The current DP2 process performance and subsequent modifications to the original DP2 plant circuit, along with the supporting
metallurgical test work have indicated that the forecast DP2 expansion will be capable of meeting the expected financial forecasting.
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15.
INFRASTRUCTURE
Item 15 (i); (ii); (iii); (iv); (v); (vi); (vii); (viii); (ix) and (x)
Phase 1 capital expenditure on surface infrastructure was mostly on pump stations, pipelines and a cyclone deposition system at the
Driefontein 4 TSF to facilitate the storage of tailings derived from the initial reclamation and processing of the Driefontein 5 TSF. The
Driefontein 4 TSF provides a current depositional capacity of 500ktpm. Phase 1 capital expenditure on surface infrastructure was mostly
on pump stations, pipelines and a cyclone deposition system at the Driefontein 4 TSF to facilitate the storage of tailings derived from the
initial reclamation and processing of the Driefontein 5 TSF. The Driefontein 4 TSF provides a current depositional capacity of 500ktpm,
which will reduce to 250ktpm from December 2025, when additional depositional capacity of 500ktpm at the Leeudoorn TSF will become
available in terms of an in-principle agreement with Sibanye Gold. The Leeudoorn TSF will be converted from a day-wall design to a cyclone
deposition design and the processing at DP2 is planned to increase in to 750ktpm. This depositional arrangement is scheduled to carry
on until January 2030 when the RTSF is planned to be operational at a deposition rate of 1.2Mtpm.
existing Driefontein 4 TSF and the DP2 plant.
Figure 23: Driefontein 4 TSF Location and Infrastructure
Source: FWGR, 2020
15.1.
Leeudoorn Facility
The Leeudoorn TSF is located 7km north-east of Fochville on the West Rand, Gauteng Province. Sibanye Gold have, after a detailed, joint
technical review, agreed in principle that FWGR may, with effect from January 2026, deposit up to 500ktm of tailings onto the Leeudoorn
TSF provided FWGR paid the capital cost to convert the TSF to cyclone depositioning.
The QPs have relied on the findings of Geo Tail SA (Proprietary) Limited’s (GTSA) Leeudoorn TSF Cyclone Conversion Design and technical
evaluation for an understanding of the planned conversion of the current day wall TSF to a cyclone-based deposition system. The design
has been developed to accommodate the required deposition plan. While the QP has not interrogated the voracity of this work in detail,
it has been benchmarked against other similar conversion projects and has been found to be within proven operational practice and
acceptable risk levels.
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FWGR intends to use this TSF for a period of four years, until the RTSF is constructed. The TSF incorporates two independent and active
compartments namely the western (lower) compartment and the eastern (upper) compartment.
A return water dam (RWD) and storm water dam (SWD) are located to the west of the lower TSF compartment. The upper and lower
compartments were commissioned in 1991 and 1990 respectively. The TSF footprint is 189ha with a lower compartment footprint of
108ha and an upper compartment footprint of 81ha. Underdrains are installed at the base of the TSF which discharge into an unlined
solution trench. Sibanye Gold, the current TSF operator are presently installing two floating penstocks on the lower and upper
compartments.
Water from the TSFs is diverted to the RWD through the unlined solution trench. A spillway links water from the RWD to the SWD with a
pumping system which returns water back to the TSF compartments. A further spillway allows the release of water from the SWD into
the environment. Both TSF compartments are unlined.
Figure 24: Leeudoorn TSF Layout
Source: Geo Tail, 2022
Table 15: Design Criteria and Assumptions
Description
Value/Output
Source
General
Topographical Survey
A Lidar survey dated May 2021
Sibanye Gold
Residue Materials
Gold tailings
FWGR
Legal Framework
South Africa and benchmarking against good practice international standards i.e., GISTM
FWGR
Process Criteria
Tailings Deposition Rate
Deposition strategy
FWGR
Slurry Density
Average Relative Density = 1.38
FWGR
Design Life
Deposition strategy
FWGR
Water Management
Objectives
•
Minimize usage
•
Encourage drying and consolidation of the tailings
•
Separate clean run-off from potentially contaminated process water
•
Prevent uncontrolled dirty surface water discharge to the environment
GTSA
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Description
Value/Output
Source
Principles
•
Divert clean storm water run-off away from the facility
•
Minimize the storage of water on the facility
•
Contain and re-use the water emanating from the facility
•
Discharge excess water from the facility to the environment only if the structural stability of
the facility is compromised
GTSA
Water Balance
A continuous daily time step water balance (GoldSim)
iLanda
Climatic Data
MAP = 624 mm
MAE: 1,670 mm (S-Pan)
iLanda
Storm Event
1 in 50-year, 24-hour = 119 mm
1 in 10,000-year, 24-hour, or PMP = 248 mm
iLanda
Decant Rate
•
Decant slurry water daily to ensure that the average pool volume is maintained as small as
possible
•
Transfer the design storm from the storage facility basin to the return water dam within an
acceptable period
GTSA
Water Storage and Return
Pumping Capacity
•
The objective will be to create adequate water storage and water return pumping capacity to
prevent uncontrolled discharge of dirty surface water to the environment. The water balance
will confirm the frequency for controlled discharges, if necessary
•
The return water pumping system will be designed to return 100% of the process demand
from the return water dam to the process
GTSA
Lining Requirement
No lining required
FWGR
Structural Stability
Objective
To create a safe and stable tailings storage complex and to minimize the risk to human lives,
health, and property
GTSA
Design Storm
1 in 50-year, 24-hour (minimum)
1 in 10,000-year, 24-hour (maximum)
GTSA
Freeboard Target
The minimum freeboard target will be to accommodate the 1 in 50-year, 24-hour storm volume
plus 0.8m dry freeboard on top of the normal operating level (excluding decant return) or the 1
in 10,000-year, 24-hour storm volume on top of the normal operating level (excluding decant
return). The most conservative storm event will be utilized for freeboard analysis
GTSA
Side Slope Stability
•
The minimum factor of safety will be 1.5 for drained conditions at peak strength
•
The minimum factor of safety will be 1.1 for seismic loading (drained analysis)
•
The minimum factor of safety will be 1.3 for undrained conditions at peak strength
•
The minimum factor of safety will be 1.1 for undrained conditions at residual strength
GTSA
Source: Geo Tail, 2022
15.1.1.
Geotechnical, Hydrological and Geohydrological Considerations
The area to be covered by the TSF overlies mostly an andesitic volcanic intrusive with typically fine and expansive soil profiles.
While the weathering profiles are highly variable within this host formation, no dolomite has been identified within the TSF
footprint. There is a single north-south striking linear structural feature (possible dyke or fault) located east of the upper
compartment.
It is noted from geotechnical observations that the TSF comprises sand and silty sand grading to clay and silty sand within the
middle region of the TSF profile and clay along the base. Clayey and silty layers occur within the upper regions as thin cohesive
lenses, associated with a reduction in the cone resistance. The tailings appear to be stiff across both compartments of the TSF
and the underlying basement materials also exhibit very stiff consistencies. Overall, the observations made along the surface
of each section on both the Upper and Lower Compartments presents evidence of cementation and densification of tailings
materials with depth.
A geo-hydrological study was completed in 2019 regarding the impact of the Leeudoorn RWD and the Leeudoorn TSF on the
ground water. The TSF contributes the majority of the contamination to the ground water, with the rest being from the
Leeudoorn RWD. When using sulphate as an indicator leachate concentration in the pollution plume are in the order of
50,000m
3
/month from the Leeudoorn TSF and only 60m
3
/month Leeudoorn RWD.
An independent risk assessment was completed on the possibility of a dam breach using a 2020 as-built survey. The most
critical failure scenario recorded was a rainy-day cascade failure at the western wall of the lower compartment, with an
estimated Population at Risk (PAR) of 2,570 people and a Potential Loss of Life (PLL) of between 13 and 400 people and when
classified by the Global Industry Standard for Tailings Management (GISTM) Classification system, was reported as an Extreme
Consequence Classification.
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15.1.2.
Leeudoorn Design
Figure 25: Final Layout of Airspace Model
Source: Geo Tail, 2022
The elements of the proposed Leeudoorn design are described further:
Transport System:
A booster pump station located at the existing Leeudoorn Process plant will pump slurry to the cyclone
delivery stations located on the TSF. The supernatant water will decant via the existing gravity penstock systems to the new
silt traps which will overflow to the solution trench. The solution trench reports to the return water dam from where the water
will be pumped to the operating plant for re-use in the process. Excess water from the return water dam will spill to the SWD.
Elevated Filter Drain:
The elevated filter drains will be installed during the operation ahead of the development of the
underflow wall. The outflow collection system must be pre-installed as part of the construction works. The drain outflow
collection system comprises HDPE manholes at the end of the outlet pipes from the filter drains. These are located on the
newly formed step-in. Outlet pipes from the manholes will divert the water down the side slope to the solution trench.
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Figure 26: Position of the Elevated Drain Filter
Source Geo Tail, 2022
Cyclone Set-up:
The cyclone layouts for the two compartments are shown in
Figure 27: Cyclone Layout
Source: Geo Tail, 2022
Engineered Benches:
Engineered benches will collect surface run-off and silt load. Bench penstocks will be utilized to divert
excess water to the solution trench from where the flow will be diverted to the RWD. The in-line bench penstocks will be linked
with a single downpipe with a maximum of five bench penstocks feeding into each downpipe. Run-off will be temporarily
stored on the benches during high rainfall events and to accommodate this, benches will be sloped inwards and a bund wall
will be constructed.
Wall Development:
The 250mm, 30tph, cyclones will be 24m apart along the complete perimeter. There will be no
disconnecting and relocating of cyclones from one point to another on the wall with every cyclone being required to develop
a 24m section of wall. The cyclone is used to create a trapezoidal wall cross-section with anticipated approximate 1v:3h side
slopes and a 1.0m to 1.5m wide crest. The outcome of the cyclone deposition operation must be a smooth consistent outer
profile, conforming to the specified profile with a level crest.
The TSF Contractor shall regularly take feed, under and overflow density measurements to calculate the cyclone split. In
addition, a monthly survey shall be conducted to allow a volumetric reconciliation and calculation of under/overflow split to
be determined at the same time checking the wall geometry and freeboard.
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Pool and Decant Management:
penstock intakes. Given the high deposition rate and the expected increased vertical freeboard, the pool will be larger than
with the day wall operation and likely to be permanent. Decanting will be continuous with no stacking of night rings. The
decant return should always be maximized to ensure minimum storage of supernatant and storm water with excess water
only being temporarily stored in the TSF basin during high rainfall periods.
Silt Trap:
The elevated penstocks discharge directly into the new lined silt traps before it overflows into the solution trench.
Discharge into the silt traps should be regularly stopped to allow the silt to settle and be measured.
15.1.3.
Conclusions
The stability assessment of the proposed conversion has demonstrated factors of safety which exceed the design targets and
therefore considered satisfactory for normal operating conditions. This assumes that the TSF operation will be properly
managed and that all the identified critical parameters will be monitored.
A water balance has been developed for the proposed changes to the current conventional TSF design.
This water balance demonstrates the expected improvements in water recovery resulting from the increased rate of rise and
greater water recovery efficiency of the cyclone system.
The forecast returns from the Leeudoorn TSF are expected to be approximately 50% of slurry water. Modelling has
demonstrated that the current penstock arrangement on both compartments is adequate to maintain pool control within
both basins.
In order to ensure compliance with the Government Notice (GN) 704 (Regulations on Use of Mining and Related Activities
Aimed at the Protection of Water Resources - published in the Government Gazette 20119) the RWD will require a capacity of
56,000m
3
3
deposition rate). The water balance indicates that during storm conditions up to 90% of the slurry water is likely to be returned
to the system.
15.2.
Regional Tailings Storage Facility
The LoM planning by FWGR includes the establishment of a RTSF on a site 10km east of Fochville.
The RTSF site consists of an area of approximately 1,000ha. It is located between two water courses, the Leeuspruit to the north east and
an un-named ephemeral stream/wetland to the south west, both merging south east of the site. FWGR owns most of the land on which
the RTSF will be constructed, with the balance covered by way of an option agreement. Topographically this creates a slightly convex
spur. Elevations in the area vary between around 1,540mamsl along the northern extremity to around 1,500mamsl in the south east over
a distance of some 6km. This results in typically gentle slopes of around 0.7% with some localized variations in gradient.
FWGR has a development plan for the RTSF which incorporates the following changes to the WUL as originally approved:
●
the inclusion of an alternative barrier system to the previously proposed synthetic barrier for groundwater protection; and
●
the submission of a detailed design to the Department of Water and Sanitation (DWS) for approval.
larger capacity of 800Mt compared to an earlier 290Mt, along with a correspondingly higher disposal rate which is ramped up in phases
to 2.4Mtpm compared to 1.4Mtpm. In the revised design, the overall percentage of slurry solids is reduced to a 50% segregating slurry
compared to an earlier 65% non-segregating slurry.
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Table 16: Changes in Parameters
Criteria/Parameter
Sibanye Gold FS
FWGR FS
LoM
Phase 1 only - 17 years
Complete life 25 years
Processing Plant
Au, U, H
2
SO
4
, roaster
Gold only
Total Disposal Quantity
FS only 290Mt
800Mt
Disposal Rate
1.4Mtpm
1.2Mtpm, increasing to 1.8Mtpm,
then 2.4Mtpm
Slurry Delivery
Single Pipe
2 to 5 pipes
Slurry Percentage Solids
65% - non-segregating
50% - segregating
Surface Water Management
Treat and discharge
Collect and re-cycle
Ground Water Protection
Synthetic barrier
Scavenger wells
Tailings Dam Development Method
Untried spigotting of a non-segregating
slurry at <3m/yr
Proven on-wall cyclones at 4m/yr to 6m/yr
Source: Beric Robertson Tailings, 2020
Coupled to the deployment of this lower density slurry is the use of proven on-wall cyclones. The water treatment approach for the
revised design is to consider a closed circuit, which collects and re-cycles the water load. FWGR proposed amended designed provides
that groundwater is to be managed by way of a network of interception scavenger wells positioned to capture and recycle the pollution
plume. It is proposed that this replaces the previously considered method of a synthetic barrier. It is noted that the impact of adopting a
disposal method which generates a higher rate of rise per annum is to promote a smaller environmental footprint.
The approach to the RTSF design and disposal policy has been guided by the FWGR policy, the objective of which is “to develop an
indefinitely sustainable landscape that, at worst, has a benign, but preferably positive socio-environmental impact”.
The following has been referenced in developing the RTSF design:
●
the Chamber of Mines Guide to the Design of Metalliferous Tailings Dams 1972, as revised; and
●
SABS 0286; Mine Residue standard (now SANS 10286) (1998).
Following the headline TSF failures in Brazil at Samarco (2015) and Brumadinho (2019) a number of initiatives have been promulgated in
the international mining community. The International Council for Mining and Minerals (ICMM) developed a Global Industry Standard for
Tailings Management (GISTM) (2020). The GISTM is a guide with no regulatory jurisdiction outside of the membership articles of the ICMM
and consists of fifteen principles which can be adopted voluntarily by mining companies. In March 2020, the International Council for
Large Dams (ICOLD) published a draft bulletin on Tailings Dam Safety.
The RTSF design adopted by FWGR has taken reference from SANS 10286 and all other relevant South African legislation including the
National Environmental Management: Waste Act, 2008 (Act No. 59 of 2008) (NEM:WA), the NWA, the MHSA and their associated
regulations. All of this work has been undertaken in the context of the FWGR Tailings Disposal Policy.
The RTSF design approach has undertaken a rigorous iterative examination of an appropriate tailing disposal method, for the class,
quantity and quality of tailings under consideration. Throughout the design process, cognizance has been taken of the potentiality of
catastrophic or consequential failure resulting from the following two most commonly responsible mechanisms:
●
hydraulic over topping leading to erosion of the containment wall with consequent collapse; and
●
geotechnical instability as a result of insufficient shear strength resulting in a collapse of a portion of the outer wall.
The iterative examination process has considered the following environmental and engineering elements (
).
Table 17: Environmental Elements under Consideration for RTSF Design and Disposal Method
Criteria/Parameter
Description
Topography
i.e., Mountainous, hilly or planar
Climate
i.e., Arid, semi-arid, temperate, sub-tropical, tropical, monsoon
Seismicity
Low, medium or high
Geochemistry
Low, moderate, severe
Tailings SG
High, average, low
Source: Beric Robertson Tailings, 2020
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Table 18: Engineering Elements under Consideration for RTSF Design and Disposal Method
Criteria/Parameter
Description
Disposal
Wet or Dry
Generation Type
1st, 2nd, 3rd or 4th
PSD
CC, FC, CF or FF*
Slurry Density
Low, Ave, High (up to paste)
Wall Development Method
Downstream, centerline or upstream
Deposition Method
Open-end, spigot, on-wall cyclones
Decant System
Gravity, pumped, siphon
Ground Water Protection
Synthetic liner or scavenger wells
Air and Surface Water quality Protection
Various options
Post-closure Options
Various approaches
Source: Beric Robertson Tailings, 2020
Note: * C=coarse, F=fine
Based on the above criteria, the design for the RTSF includes the following attributes (
):
Table 19: RTSF Design Criteria
Design Criteria
A 4th generation TSF
Low density slurry feed to an on wall upstream ring dyke dam
A pumped decant system
The abstraction containment of the leachate plume
The progressive cladding and vegetation of the outer slopes
Post closure water treatment designed for a non-consumable agricultural product farming business
Source: Beric Robertson Tailings, 2020
The proposed RTSF will cover an area of approximately 1,000ha with a final surface top area of around 600ha. The RTSF has been planned
within the original demarcated and authorised site area.
15.2.1.
Geotechnical, Hydrological and Geohydrological Considerations
Geotechnical investigations have confirmed that there are no related fatal flaws. They demonstrate that the RTSF site is
suitable for the construction of a RTSF and its related infrastructure. The natural material available on site is suitable, both
qualitatively and quantitatively, for the construction of the various structures including embankments, canals, foundations,
roadways, compacted clay liners and for use as cover placement. In areas with collapsible topsoil an allowance was made to
excavate and use this material for general compacted fill, and to use an impact roller to compact the remaining material from
surface in order to reduce its collapse potential to acceptable levels thereby forming a suitable foundation in these areas.
The current legislation contains mechanisms for the classification of processed tailings, which in the case of the approved
RTSF, called for the use of a liner (Class C barrier or equivalent). This legislation has been reviewed by the legislature to address
various shortcomings with one material change being that the remediation requirements will be informed by the outcome of
a comprehensive hazard identification and risk assessment approach, subject to final approval of this legislation. The latest
design of the RTSF is aligned with the requirements of the pending changes to the legislation.
Hydrological studies have assessed the impact of the RTSF on the hydrology of the local area. Mean average rainfall of around
600mm is noted. The area has exceptionally high evaporation rates of around 2,000mm and this will assist in removing water
content from the tailings which will aid tailings stability. It is expected that climate change impacts are unlikely to be material
over the next decade.
A consequence of the ring dyke dam design and the hydrological setting is that surface water will tend to flow away from the
RTSF surface footprint. As a consequence, the RTSF has no direct riverine impact being well above the 1:100-year flood lines
as confirmed in the most recent hydrological assessment.
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RTSF run-off impacts will be managed through the progressive soil cladding and grassing of the slopes with clear water run-
off forecast after some four years from commissioning.
Overall water management has been assessed through the use of a dynamic water simulation model over the LoM. The model
as expected confirms low average monthly returns as the return water pumping rate is controlled. This results in seasonal
fluctuations in the RTSF pond volume driven principally by reduced winter evaporation. The model outcomes imply that due
to the relatively high basin capacity of the RTSF, the risk of over topping due to hydro-meteorological events and operational
practices is considered to be low.
Storm water management on the RTSF slopes between the crest of the basin and the perimeter toe is managed through the
implementation of the following design approach:
●
the slope is divided into 400m wide segments around the perimeter;
●
each 400m wide segment has a centrally located outlet down the slope consisting of precast concrete chutes;
●
the cross-section comprises a series of 10m high, 35m wide scallops forming a 1.6m high (but could be reduced to 1.4m)
bund along the lower edge of each;
●
the scallops temporary buffer create capacity for run-off prior to discharge down the chutes; and
●
the scalloped benches are divided into paddocks by cross-walls or bunds with hydraulic links to control flow between
paddocks.
The concrete chute system has been successfully used at other TSFs.
The geo-hydrological impacts of the RTSF will be managed through the installation of a network of abstraction wells. The
regional water table is found at relatively shallow depths across the RTSF site of 3m to 8m. The impact of tailings deposition
will be that a phreatic surface will merge between the original water table setting and the TSF. Seepage modelling has been
used to analyze the impacts on the geo-hydrology. Input requirements into this modelling include, the site geological structure
and the topology of all the materials in the TSF. Each material type or zone is assigned appropriate permeability properties
along with other factors such as slurry water inflow, rainfall, evaporation and run-off rates. Further modelling describes the
proposed zoning of the under and overflow from the cyclone disposal positions during the TSF operation.
The seepage modelling has confirmed that the stability of the RTSF can be enhanced through the construction of filter drains
integrated into the underflow tailings walls which protrude into the basin of the RTSF. These underflow curtains which are
described as similar to the “fins of a radiator”, draw down the phreatic surface of the underflow which contributes to the
enhancement of the wall stability.
Post closure modelling indicates that drain flows of up to 700m
3
/d may need will need to be treated through a small
sustainable water treatment facility.
The primary purpose of the ground water modelling has been to validate the use of a scavenger well network to control
pollution impacts on the local aquifer system. This modelling has been developed from calibrating existing boreholes and
using an historical database established by the earlier investigators.
The geo-hydrological regime at the RTSF site consists of the stacking of a weathered aquifer over a deeper fractured aquifer
(
).
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Figure 28: Geo-hydrological Regime at the RTSF Site
Source: Beric Robinson Tailings, 2020
The water table approximates the topography at a depth of 3m to 8m and the general ground water flow is from north west
to south east with local south and eastward flows to the adjacent streams. Earlier studies promoted the use of a synthetic liner
for ground water protection. The use of a synthetic liner, installed at the base of the RTSF would be to create a third ‘perched’
aquifer above the current weathered zone aquifer. Installing such a barrier over a 1,000ha footprint could result in a design
which will ultimately end up with a compromised liner integrity, requiring the eventual implementation of a well system to
contain the contaminant plume. In addition to this, the inclusion of a liner in the design significantly raises RTSF geotechnical
risk.
The scavenger well system generates a hydraulic barrier around the RTSF by directing ground water flow towards the RTSF
footprint (
).
Figure 29: Geo-hydrological Effects of Scavenger Wells beneath the RTSF
Source: Beric Robinson Tailings, 2020
The deeper fractured aquifer exhibits low permeability characteristics which promote the flow of the contaminated plume
towards the peripheral abstraction wells which recover the polluted ground water and contain the plume dispersion. All the
dirty water from these scavenger wells accumulates in large concrete sumps before being pumped back into the operational
circuit whilst operating and post closure will be treated for either disposal or utilization.
Ground water modelling was carried out in an appropriate software package and confirmed the effectiveness of the
abstraction well system methodology. Numerous modelling iterations were carried out to identify optimal borehole spacing
and localities. The modelling has indicated that a series of abstraction wells drilled into the weathered aquifer to a depth of
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around 20m, arranged in three rows around the perimeter should effectively prevent the lateral spread of any contaminant
plume. Vertical containment is effectively achieved at the base of the weathered aquifer, the underlying fractured aquifer
exhibiting low permeability characteristics.
A critical feature of the implementation of the scavenger well system methodology will be the practice of systematic water
quality sampling and it is proposed that 25% of all wells are tested on a monthly basis. This will be used for the regular updating
and calibrating of the ground water model which will enable, where necessary, practical interventions into the well field design
to be implemented.
15.2.2.
The RTSF Design
The RTSF design has been configured by assembling the following components or design elements:
Toe Wall Embankment and Cladding Stockpile:
by 6m wide). This serves as a containment barrier and as a perimeter access road. The tailings placement has been planned to
fill within 1.5 to 2.0m of the Toe Wall crest. Compacted material for the Toe Wall will be borrowed from a 2m deep trench
excavated within the Toe Wall perimeter. This trench will form a paddock for tailings run-off material at the toe of the slope.
A temporary cladding stockpile will be formed outside the Toe Wall.
Heel Wall Embankment:
needs to be established on a stable platform for the tailings placement to be ultimately stable. The overflow is therefore
contained behind an embankment upstream of the intended wall footprint and is called a Heel Wall. The Heel Wall therefore
defines the initial division or separation of the under and overflow with the overflow area termed the Basin.
The height of the Heel Wall changes progressively as the dam is developed and is determined from the availability of underflow
and the relative rates of rise of the over and underflow. The determination of the expected height and position of the Heel
Wall is an iterative process of trial and optimization with the base of the wall being typically selected at approximately one
third of the horizontal distance of the base length of the final slope.
Heel Wall structure on a dam the size of the RTSF represents a substantial embankment structure with a correspondingly high
level of material requirements. This material has been sourced within the RTSF footprint which reduces further environmental
degradation from external borrow pits and reduces haul distance costs. A further feature to assist construction material
placement is the incorporation of access ramps onto the Heel Wall at 400m centers. Geotechnical site investigations have
verified the suitability and availability of material excavated from within the RTSF footprint for Heel Wall construction.
Miscellaneous Embankments:
side of the RTSF and prevent an overtopping of the Toe Wall, it is necessary to construct a series of radial cross walls at
approximately 400m centers. These compartments serve to spread the containment of run-off material over a broader area
and reduce the depth of material around the RTSF perimeter.
Where necessary, low embankments will be constructed to correct the gradients of filter drains. The decant pumping
arrangement will require an embankment on which the pumps can stand, which will also provide an access road facility.
Filter Drain System:
surface levels and improved tailings strength development, along with a reduction in the risk of slope undercutting at the
slope toe. This is achieved through the use of a filter drain network which promotes high permeability conducts which
evacuates pore water while holding back solid particles. The impact of an effective drainage system is to activate the radial
flow of water towards the drain centers. Various drain configurations have been incorporated into the RTSF design. These
variations have been optimised through iterative stages of numerical seepage analysis.
Scavenger Well System:
financial burden of a synthetic barrier. The system exploits the existing geo-hydrological regime beneath the proposed RTSF,
which consists of an aquifer comprising of two horizons; the upper 20m to 30m a weathered aquifer and an underlying
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fractured aquifer. The transmissivity of the fractured aquifer is limited to discontinuities in the rock mass. This confines ground
water flow almost entirely to the upper weathered aquifer.
A well system of three rows of scavenger wells is envisaged, consisting of an outer row along the Toe Wall of the facility, the
Toe Wall Scavenger Wells (TWSWs), a middle row along the line of the Heel Wall Scavenger Wells (HWSWs) and an inner third
row to be drilled after the fourth bench of the RTSF.
The HWSW and TWSW wells would be installed from the outset, with the TWSW wells being used initially as monitoring wells.
As and where necessary, additional boreholes will be established downstream for additional scavenger well purposes.
Deposition System:
through 500mm high-density polyethylene (HDPE) lined steel pipelines. A relatively low target slurry density of 1.38t/m
3
been stipulated for the RTSF.
The slurry is pumped in trains of 600ktpm per pipeline, starting with two pipelines to accommodate the production rate of
1.2Mtpm. The pipe servitude enters the RTSF site from the north-east where the pipes will be taken through the pre-cast box
culverts to the inside of the Toe Wall. One pipe will continue straight onto the dam with the pipe being extended up the side
of the dam, suitably profiled across the benches, as the dam develops in height. Two of the slurry pipes will be directed
clockwise along the inside of the Toe Wall, one extending 20% and the second 40% around the perimeter. The other two slurry
pipes will be similarly routed, but anti-clockwise.
For the first three years of operation, 250mm cyclones will be deployed so as to ensure a maximum split of underflow during
the period when underflow demand is greatest due to wall construction requirements. This cyclone arrangement has been
deployed in the South African tailings environment since the 1980s.
A 600ktpm slurry stream will require some 20 to 25 cyclones to deposit material based on a cyclone throughput of 40tph to
45tph. The eventual layout of cyclones will consider some 37 to 41 cyclones per dam sector of around 1,000m to 1,100m. This
is estimated to service approximately 25% to 30% of the dam perimeter with all five slurry streams operating (5% to 6% per
pipeline). This is expected to deliver a deposition to drying ratio of 1.3 to 1.4 which is considered acceptable for sustainable
underflow consolidation.
Once the underflow wall has been established, consideration may be given to changing from the Multiple Deposition Point
(MDP) 250mm cyclones to the less efficient, but more economic Single Deposition Point (SDP) system, in this case in the form
of Self-Propelled Cyclone Units (SPCUs). This system has been successfully deployed on an East Rand TSF for the last eight
years.
Decant System:
saturated solids on the TSF. The clear water accumulates in a supernatant pond or pool in the basin which becomes available
for decanting and re-cycling through the process. The selected decant system is a series of pumps which are commonly used
globally. In the South African mining space, gravity penstocks predominate in decanting solutions, however this would not
provide the optimal solution for the RTSF case.
The pumping system to be deployed at the basin pond at RTSF will consist of a skid-mounted land-based pump with ancillary
power and control equipment which will be intermittently moved across the basin from south east to the middle and raised
vertically as the dam develops.
Return Water System:
The return water system comprises a decant water receiving stilling chamber that overflows into twin concrete lined silt traps
that in turn spill over into twin HDPE lined RWDs. Return water pumps at the RWDs, pump water back to DP2 through twin
overland pipes following the same servitude as the slurry delivery pipes.
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Other Supporting Infrastructure:
Kloof. The power is first stepped to 11kV prior to transmission to required locations via overhead bundled lines. Numerous
pole transformers step down the power to 3.3kV for distribution to the scavenger wells. Diesel back-up power generators are
placed to sustain critical operability of seepage recycling as well as alternate powering of the decant pumps and return water
pumps. Solar energy will be utilized to power the administrative buildings and external ergonomic lighting.
For security against theft and destruction against infrastructure, the entire RTSF complex will be surrounded by a 2.1m tall
shotcrete wall with razor coil on the top. Tamper sensors will be placed on the wall that are wirelessly linked to a permanently
manned security control room.
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Figure 30: RTSF Layout
Source: Beric Robertson Tailings, 2020
The revised design of the RTSF was undertaken by Beric Robinson Tailings for the current configuration of the FWGR
operations. This study was independently reviewed by a Sound Mining appointed specialists who concluded that there are no
fatal flaws in the design.
15.2.3.
Concluding Comments
Sound Mining has reviewed the FWGR Regional Tailings Dam Report and design prepared by Beric Robinson Tailings (2020)
(costed by DRA) and has concluded that the report provides a solid basis for the future development of a safe RTSF. Sound
Mining believes that by following the principles and design strategy outlined in the report, the chances of a TSF failure will be
unlikely. However, cognizance needs to be taken of the uncertainties discussed subjectively below.
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There are concept risks associated with the recommended RTSF tailings disposal solution which proposes the implementation
of a fourth Generation, unlined, ring-dyke, upstream, on-wall cyclone dam with a pumped decant system, on a site with poor
to moderate soils and a high-water table. Furthermore, for risk analysis purposes it is noted that there is an absence of water
courses over the intended RTSF site area and that the operation of the on-wall cyclone disposal method will initially be
relatively labor intensive.
Based on the proposed RTSF solution, the following inherent risks are apparent:
●
the stability of upstream development;
●
the sufficiency of underflow to form an adequate wall around the perimeter ring dyke;
●
the capability of the management and labor force to perform as required;
●
the ability of a pumped system to decant adequately; and
●
undue impacts on the environment.
The proposed solution has been operated on a number of South African TSFs over the last three to four decades. Each TSF has
performed as expected, demonstrating stability with the underflow arisings. All these TSFs have and in some cases still operate
without evidence of overtopping with pumped decants. In these cases, while water contaminant plumes have been generated,
their impact has not been shown to be significant.
The RTSF design has been undertaken by a team of assembled experts who are familiar with the application of an upstream
cyclone method delivering relatively uniform sized tailings in the South African context. The lead RTSF designer has over
30 years’ experience in similar local installations and operations. The design work has also been independently reviewed by
two local tailings engineering specialists.
The effectiveness of the proposed RTSF is dependent on the delivery of acceptable underflow particle quality and quantity.
Failure to deliver on either of these parameters will compromise wall development and stability. Historical observations of a
number of similar TSFs have shown that TSF development has progressed adequately with no significant design risks realized.
Underflow demand is high during the initial development phase and increases as the dam elevation is increased and the dam
perimeter is subsequently decreased. This has been accommodated in the RTSF design with the decision to deploy the more
efficient 250mm cyclones during the start-up period.
It is noted that the RTSF design is based on underflow splits currently achieved at the Driefontein 4 TSF. Although in the early
years, the RTSF design underflow demand is close to these levels, this demand drops in the later years proving an acceptable
error margin.
Hydrological risk is managed through the provision of a substantial freeboard over the LoM and the verification through
modelling that the storm water capacity of the dam is in excess of 20Mm
3
Precipitation (PMP) event of around 1,600Mm
3
.
The requirement for the management of tailings disposal operations is stipulated in SANS 10286 which was initially published
in 1998. Recent initiatives through ICMM and ICOLD have provided guidelines for corporate management. Despite this, it is a
recognized fact that most TSF disasters have been attributable to management failures.
FWGR’s approach to the management of surface mining risk has been to adopt a pro-active strategy, whereby maintenance
and risk-reducing activities are carried out timeously. This operating philosophy is now being formalized and outlined in their
management system.
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Effective operational performance will deliver into the achievement of the necessary targets of appropriate underflow
characteristics, wall geometry and consistently acceptable freeboard. For this risk to be managed it is imperative that all
involved operational parties including specialist support services and equipment suppliers, are appointed on the basis of their
appropriate experience, capacity and competency.
Based on FWGR’s extensive history of operational experience in surface mining and tailings disposal, it is Sound Mining’s
opinion that operational risks can be adequately controlled.
The current DP2 deposition at Driefontein 4 TSF (0.5Mtpm) can only continue until 31 December 2025, at current deposition
rates. The commissioning of the RTSF has been delayed until January 2030 while approval for the amended design is being
sought from the authorities. Due to this delay, the Leeudoorn TSF has to be converted to a cyclone depositioning system to
accommodate FWGR deposition requirement between January 2026 and December 2029. Any delay in the RTSF
commissioning may result in reduced production until such time as full capacity of the RTSF is available.
Sound Mining is of the opinion that the selected site is appropriate for the intended construction and operation of the RTSF
and endorses the proposed scavenger well solution for ground water as this can provide a sustainable solution to the RTSF’s
future plume management requirements.
15.2.4.
Technical Studies - Water
Water is required for the hydro-mining of the TSF’s and for the processing of the reclaimed material. FWGR commissioned an
external assessment of the water requirement for an expanded operation in 2020. The work involved modelling the
waterflows to establish a water balance for the operation at steady state. The inputs to the model were examined by Sound
Mining and found to be appropriate.
The planned water supply will primarily be from the RTSF return water and from underground water sources (
).
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Figure 31: TSF Location, Make-up Water Shafts, Processing Plants and Pipeline Layouts
Source: Sound Mining, 2022
Kloof 10 shaft, which is located at the Libanon TSF, will supply make-up water for the hydro-mining of Kloof 1 TSF, Libanon
TSF, Venterspost North TSF and Venterspost South TSF. Two WULs have been granted for the Kloof and Driefontein operating
areas, which permit the pumping of water from nearby underground workings as presented in
Table 20: Underground Water Sources
Facility
Permitted Quantity
(m
3
/a)
Kloof 10 Shaft
9,487,500
Driefontein 10 Shaft
2,555,000
Source: Sound Mining, 2022; and FWGR, 2020
Return water from Driefontein 4 TSF is currently re-used for the reclamation of the Driefontein 5 TSF and associated
processing at DP2. Make-up water is sourced from Driefontein 10 shaft (~6,000m
3
/d).
Water from DP2, the Leeudoorn TSF, RTSF and Kloof 10 shaft will be pumped to a Central Water Facility (CWF). There are
currently four water tanks at the CWF used for water storage. Water will be pumped from the CWF to the necessary sites for
hydro-mining and processing.
Water and slurry from the hydro-mining of distal TSFs will be pumped to the pumping stations closer to the hydro-mining sites
to piggy-back off these sites to avoid having to use additional Booster Pump Stations (BPS). The water pumps at DP2 supply
sufficient pressure for the Driefontein 5 TSF hydro-mining operation.
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High-pressure water pumps will be placed at the various TSFs (i.e., excluding Driefontein 3 TSF) to avoid having high-pressure
water pipelines between the hydro-mining sites and the processing plant. They will be utilized in series to deliver the required
pressure of 25bar to 30bar, for hydro-mining.
The mining operation will pump approximately 42,000m
3
/d of water from the various mining sites to feed the DP2 expansion
facility. Each production unit (or monitor) requires in the order of 10,500m
3
/d for the hydro-mining of TSF material and each
site will have two monitor units running and one on standby during steady state operations. Water will be recovered from the
various deposition facilities and returned to the system.
Make-up water (i.e., 30% - 40% of the total water requirement) will be required to compensate after accounting for losses and
rainfall (~18,000m
3
/d), with Kloof 10 shaft alone, having ample available capacity (~36,000m
3
/d).
15.2.4.1.
Concluding Comments
The available water supply more than adequately meets the FWGR requirements including the make-up water during the dry
season. The supply from Driefontein 10 shaft and Kloof 10 shaft do not exceed the permissible pumping rates approved in the
WULs.
According to the WULs the return water will be treated in an advanced water treatment facility and discharged into Leeuspruit
or disposed to dust suppression. Instead of this open configuration FWGR has opted for a closed water system throughout
the LoM so no water treatment or discharge into the surface water courses will occur. The final water still in use at the point
of closure will be deposited onto the RTSF for evaporation, or an alternative water treatment and use will be considered.
15.2.5.
Technical Studies - Power
The power supply and Point of Delivery (PoD) for the operations has been determined by independent specialists. These have
been reviewed and are deemed appropriate for the operation. Power is currently supplied to transformers at the various sites
(
) from Eskom’s 132kV and 44kV grid, where the voltage is reduced to 6.6kV.
Table 21: Power Requirements for FWGR Operations
Site
Installed
(kVA)
Used
(kVA)
Available
(kVA)
Comments
Driefontein 8 Shaft
20,000
11,000
9,000
Sufficient for reclamation operations
Driefontein 13 Shaft
10,000
6,600
3,400
DP2
40,000
-
40,000
18,000kVA required by DP2 at 1.2Mtpm capacity
Libanon
40,000
22,000
18,000
Sufficient for reclamation operations
Kloof 4 Shaft
80,000
64,000
16,000
3,500kVA required by RTSF
Kloof Main Complex
140,000
81,000
59,000
Leeudoorn Shaft
100,000
61,000
39,000
2,500kVA required by Leeudoorn TSF
Total
430,000
245,600
184,400
Source: FWGR, 2022; and Sound Mining, 2022
The capital estimates take account of the available equipment at the respective substations and routing from the substations.
The PoDs feeding the substations are shown in
Table 22: Eskom Points of Delivery
Eskom PoD
NMD
Maximum
Utilized NMD
Transformer Size
Comments
Driefontein 8 Shaft
14.0MVA
11.0MVA
4 by 5MVA
Driefontein 13 Shaft
4.3MVA
6.6MVA
4 by 5MVA
There are sufficient transformers
Kloof 1 Shaft (132kV)
81MVA
81MVA
7 by 20MVA
Libanon Shaft
5.2MVA
6.92MVA
1 by 20MVA
FWGR to install 1 by 20MVA transformer
Libanon Gold
22MVA
19.3MVA
2 by 20MVA
Source: FWGR, 2022; and Sound Mining, 2022
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Suitable PoDs have been identified for the FWGR operations, as shown in
. Eskom will be notified of the increased
load - Nominal Maximum Demand (NMD) to be catered for within the existing contracts - at the appropriate time. Overhead
lines will be utilized as far as possible to reduce the installation costs and reduce the risk of cable theft. The aggregate load
requirement has been based on a conservative diversity factor of 0.8 for the low voltage loads, which represents a relatively
flat load profile.
The current Eskom supply is stable in that it is linked to the main ring feed. There is a curtailment agreement in place and only
under severe power disruption, would the area lose supply. In this case there is still sufficient capacity to run the vital plant
areas by shutting down the milling section and using diesel generators which will provide enough emergency power to ensure
that selected critical process plant equipment is able to re-start immediately in the event of a power failure.
15.2.5.1.
Concluding Comment
It is noted by Sound Mining that the power estimates determined are considered appropriate for the planned operations. The
power requirement to the various components of the FWGR operation is within the spare capacity available to the related
ongoing and current underground mining and processing operations. Management will need to ensure timely modifications
to the agreements with Eskom and sufficient allowance for the rising cost of power.
15.2.6.
Technical Studies - Pipelines and Pumping
FWGR’s expansion planning requires a network of slurry pipelines from the TSF sites to DP2, and tailings pipelines from DP2
to the Leeudoorn TSF and to the RTSF. Low-pressure return water pipelines will be required from the RTSF to the CWF and
from the CWF back to the TSF sites. High pressure pumps will provide the mining operations with the pressures they require
(25bar to 30bar). This eliminates having to install high-pressure pipelines from the processing plants to the TSF sites.
FWGR worked with specialists on the design and cost estimates for the pipelines. Cognizance was also taken of the
environment, mine owned land and already disturbed areas. The pipeline layout has been designed to make use of the shortest
possible routes, while also using existing mine servitudes as far as possible. Use was made of the road servitudes to prevent
additional impacts associated with the clearing and construction of the pipelines, and to ensure that the pipelines are easily
accessed for maintenance. Alternative routes were also considered to avoid wetland areas; and existing impacted land, in the
context of the effect on operating costs due to the influence of topographical and pumping costs. A summary of the current
pipeline and pumping infrastructure
, is provided in
Table 23: Existing Pipeline and Pumping Infrastructure
Existing Pipeline and Pumping Infrastructure
Approvals
Pre-screening and Slurry Pumping Reclamation Station at Driefontein 5 TSF
Hydraulic Mining Site
Approved EA and Environmental Management
Plan (EMP)
Fine Screening and Slurry Transfer Pump Station at Mining Site
Approved EA and EMP
Slurry Pipeline between Driefontein 5 TSF and DP2
Approved EA and EMP
Tailings Pipeline from DP2 to Driefontein 4 TSF
Approved EA and EMP
Return Water Dam at Driefontein 4 TSF and Process Water Supply to DP2
Approved EA and EMP
Process Water Make-up Storage and Pump Station at Driefontein 10 Shaft
Approved EA, Integrated Water Use Licenses
(IWUL) and EMP
Process Water from Driefontein 10 Shaft to DP2
Approved EA, IWUL and EMP
Source: Sound Mining, 2022
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A summary of the additional piping requirements is presented in
Table 24: Phase 2 Pipeline and Pumping Infrastructure
Planned Pipeline and Pumping Infrastructure
Approvals
Pre-screening and Slurry Pumping Reclamation Stations at Driefontein 3 TSF
Approved EA and EMP
Pre-screening and Slurry Pumping Reclamation Stations at Kloof 1 TSF
Approved IEA and EMP
Pre-screening and Slurry Pumping Reclamation Stations at Libanon TSF
Approved IEA and EMP
Pre-screening and Slurry Pumping Reclamation Stations at Venterspost
North TSF
Approved IEA and EMP
Pre-screening and Slurry Pumping Reclamation Stations at Venterspost
South TSF
Approved IEA and EMP
Slurry Pipeline from Libanon TSF to DP2
Approved IEA and EMP
Slurry Pipeline from Venterspost South TSF to Libanon TSF
Approved IEA and EMP
Slurry Pipeline from Kloof 1 TSF to DP2
Approved IEA and EMP
Return Water Pipeline from CWF to DP2
Approved IEA and EMP
Water Pipeline from DP2 to Driefontein 3 TSF
Approved EA and EMP
Return Water Pipeline from CWF to Libanon TSF
Approved IEA and EMP
Return Water Pipeline from CWF to Venterspost South TSF
Approved IEA and EMP
Process Water Make-up Storage and Pump Station at Kloof 10 Shaft
Approved IEA, IWUL and EMP
Process Water from Kloof 10 Shaft to DP2
Approved IEA, IWUL and EMP
Slurry Pipeline from DP2 to the RTSF
Approved IEA and EMP
Slurry Pipeline from Libanon TSF to DP2
Approved IEA and EMP
Source: Sound Mining, 2022
The civil infrastructure requirements for pipeline crossings of road/rail, pipe jack culverts, open/minor culverts have been
considered and amount to around 65 installations.
15.2.6.1.
Concluding Comments
The QP considers the pipeline infrastructure design to be well-engineered and underpinned by practical experience. There
appear to be no fatal flaws in the thinking behind amendments to various EIAs and EMPs to accommodate the changes to the
pipeline and pumping infrastructure.
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16.
GOLD MARKET
Item 16 (i) and (ii)
All gold produced is delivered to the Rand Refinery for refining with no restrictions on the quantity or time frame. DRDGOLD has a long-
standing off take agreement with the Rand Refinery according to which gold is sold on the prevailing spot in South African Rands. When
applying the 30 June 2022 spot exchange rate (ZAR16.29/USD) to the associated gold price of USD1,819.06/oz Au, a real gold price of
ZAR952,721.20/kg is computed.
Gold is a precious metal, refined and sold as bullion on the international market. It is traded on the global financial markets and has
traditionally been used for jewelry, bartering or storing wealth. Aside from the gold holdings of central banks, current uses of gold include
jewelry, private investment, dentistry, medicine and technology (
).
Table 25: Above Ground Gold Stocks in 2021
Description
Quantity
(t)
Contribution
(%)
Jewelry
94,464.0
46%
Private Investment
45,456.0
22%
Bank Holdings
34,592.3
17%
Other
30,726.0
15%
Source: GoldHub, 2022
The largest use of gold is in jewelry, accounting for approximately 46% of the above-ground gold. Gold does not follow the usual supply
and demand logic because it is virtually indestructible and can easily be recycled. In addition, gold stored in the vaults of banks is relatively
illiquid and subject to the vagaries of global economies. These characteristics of the gold market make it challenging to forecast the gold
price.
16.1.
Gold Price Trends
The QP considered a five-year period of historical analysis to form an opinion of the gold price and exchange rate to be expected going
forward because the QP is of the opinion that a five-year period sufficiently covers the market volatility seen in the international gold
market. This is also consistent with the five-year period of consensus pricing relied on for the price forecast. The gold price increased in
2020 due to uncertainties related to the outbreak of Covid-19. It then steadily declined to a spot price of ~ZAR945,295/kg (i.e.,
USD1,806.89/oz at ZAR16.27/USD) as at 30 June 2022 (
). After interrogating the gold price, the QPs are of the opinion that a gold
price of ZAR914,294/kg, provided by FWGR, is appropriate for use in the economic assessment.
Graph 5: Gold Price Historical Trendline
Source: Sound Mining, 2022
The linear trendline indicates robust gold price potential over the near to medium-term.
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16.2.
Exchange Rate Forecast
The ZAR to USD exchange rate saw record breaking highs in the second quarter of 2020 (ZAR19.35/USD) but has subsequently dropped
back to ZAR16.27/USD as at 30 June 2022. A factor in the deterioration of the local currency in 2020 was the lockdowns and economic
volatility brought on by Covid-19.
The spot exchange rate of ZAR16.27/USD compares well with the six-year historical trendline as visually displayed in
Graph 6: Exchange Rate Historical Trendline
Source: Sound Mining, 2022
Various service providers and financial institutions are consulted to determine consensus forecasts of the gold price (
).
Table 26: Long Term Consensus Forecasts in Nominal Terms
Description
Year 1
(FY2023)
Year 2
(FY2024)
Year 3
(FY2025)
Year 4
(FY2026)
Year 5
(FY2027)
Gold Price (USD/oz)
1,823
1,799
1,751
1,724
1,496
Exchange Rate (ZAR/USD)
15.60
15.74
15.77
15.79
15.20
Gold Price (ZAR/kg)
914,294
910,051
888,083
875,474
731,081
Source: DRDGOLD, 2022
The economic assessment for the Mineral Reserve estimate relies on a real price of ZAR914,294/kg (i.e., USD1,823/oz at ZAR15.60/USD)
in 30 June 2022 terms as provided by FWGR. The QP has considered the consensus forecasts supplied by FWGR against linear trends in
the demand and supply of gold as recorded over the period from 2012 to 2021 to examine whether these forecasts are reasonable.
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16.3.
Global Demand
Graph 7: Global Gold Demand from 2012 to 2021
Source: GoldHub, 2022
16.4.
Global Supply
The global gold supply from mining and recycling activities over the same period is presented in
Graph 8: Global Gold Supply from 2012 to 2021
Source: GoldHub, 2022
While the graph suggests an overall upward trend from 2012 to 2021 (~2.6%), the supply generally levelled out over the past five years.
The supply from mining satisfied some 76% of the demand in 2021, with the balance met by recycled gold.
Gold supply from mining increased by approximately 106t during 2021 (3,582t) when compared with 2020 (3,476t) despite an overall
drop in supply since 2019 (GoldHub, 2022). Below are the top ten gold producing countries in 2021
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Table 27: Global Gold Production
Rank
Country
Production
(t)
2016
2017
2018
2019
2020
2021
1
China
464
429
404
383
368
332
2
Russia
262
281
295
330
331
331
3
Australia
288
293
313
325
328
315
4
Canada
163
171
189
183
171
193
5
United States of America
229
236
225
200
190
187
6
Ghana
131
133
149
142
139
129
7
Peru
166
167
163
143
98
127
8
Mexico
131
120
118
109
102
125
9
Indonesia
118
118
153
92
101
118
10
South Africa
163
154
128
111
99
114
Source: GoldHub, 2022
Even though China has experienced five years of consecutive decline in annual gold production, it remains the largest producer of gold
(~10% of global gold production in 2021).
16.5.
Concluding Comments
The QP notes a short term up-tick despite the long-term reduction in demand together with an essentially constant supply over the past
five years. These trends are not inconsistent with the forecast price trend in
. The QP is satisfied that a real 30 June 2022 gold
price of ZAR914,294/kg is a reasonably conservative assumption for examining the economic viability of the Mineral Reserve estimate.
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17.
ENVIRONMENTAL STUDIES, PERMITTING, OR AGREEMENTS WITH LOCALS, INDIVIDUALS OR
GROUPS
Item 17 (i); (ii); (iii); (iv); (v); (vi) and (vii)
A review of the environmental status was undertaken by Sound Mining. It relies on information provided by DRDGOLD and FWGR. The
key environmental aspects are discussed below, along with any associated liabilities and risks. Risks or liabilities, that would generally be
addressed in terms of accepted environmental practice and which do not have significant cost implications, have not been discussed.
17.1.
Permitting Status
The environmental and social compliance status in relation to South African legislation is summarised in Item
. The following expands
on the relevant authorizations or permits required.
17.1.1.
The National Environmental Management Act (NEMA)
EAs have been granted in terms of NEMA and the Environmental Impact Assessment (EIA) Regulations of 2014 as described
below.
Driefontein Mining Right Area:
Waste Management License (WML) for the proposed activities on the Driefontein Mining Right area (DMRE Ref. No.:
GP 30/5/1/2/2 (51) MR. The DMRE granted the EA Ref. No.: GP 30/5/1/2/3/2/1 (51) EM on 11 May 2018.
The Driefontein MR and EA are in good legal standing. Sibanye Gold applied for a Section 102 amendment to the MR to include
the Driefontein 4 TSF, which has been granted. FWGR has submitted an application to the DMRE for the transfer of the existing
Driefontein EA (Ref. No.: GP 30/5/1/2/3/2/1 (51) EM) as well as the inclusion of related activities covered by the existing
Driefontein EMP relevant to the FWGR operation. The amendment was for the following:
●
the transfer of the Driefontein EA to FWGR;
●
a modification to scope of how the Phase 1 operations are currently being executed; and
●
to include DP2, DP3 and Driefontein 4 TSF.
Permission for depositing onto the Driefontein 4 TSF is contained in the original Driefontein EMP associated with the MR. This
EMP is needed for the operation’s waste management obligations. The pipelines fall within the scope of the existing
infrastructure recorded in the current EA and EMP.
Driefontein mining area.
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Table 28: Required Environmental Legislation and the Status for the Driefontein Mining Area
Act, Regulation or By-Law
Requirements
Status - Driefontein Area
MPRDA, 2002 (Act No. 28 of 2002)
Mining Right
This is currently in place.
Social and Labor Plan (SLP)
FWGR has an internally signed-off SLP,
however, an SLP is not required for FWGR.
NEMA, 1998 (Act No. 107 of 1998):
Environmental Impact Assessment
Regulations 2014 (GNR 982)
EA
This is currently in place; an application has
been submitted for a name change to FWGR
and for the inclusion of the Driefontein 4 TSF.
EMPr/EIA
Forms part of the Driefontein EMPr/EIA.
The Rehabilitation and Closure Cost plan
must be annually adjusted.
This is guaranteed through a Guardrisk Cell
Captive.
National Environmental
Management: Air Quality Act, 2004
(Act No. 39 of 2004) (NEM:AQA)
An Atmospheric Emissions License (AEL) is
required for any listed activity within this
Act.
N/A
NEM:WA, 2008 (Act No. 59 of
2008)
A WML is required for any listed activities
within the Act.
There is an EA in place for Driefontein. The
TSFs are currently managed under Sibanye
Gold’s existing EMPs which were in operation
prior to the legislation coming into effect.
National Heritage Resources Act,
1999 (Act No. 25 of 1999) (NHRA)
Permission from SAHRA is required for the
removal of graves.
This area is currently operational, and all
correct process have been followed.
NWA, 1998 (Act No. 36 of 1998)
Any abstraction, storage, diversion, flow
reduction and disposal of water and effluent
requires an IWUL.
This is included in the IWUL. An application was
submitted for a name change and the transfer
of applicable water uses to FWGR.
The application to change the name from
WRTRP to FWGR has been approved.
Source: FWGR, 2020; and Sound Mining, 2022
Kloof Mining Right Area: in March 2016, Sibanye Gold submitted an application for an IEA including a WML for the proposed
activities on the Kloof Mining Right area (DMRE Ref. No.: GP 30/5/1/2/2 (66) MR). The DMRE granted the IEA (Ref. No.: GP
30/5/1/2/3/2/1 (66) EM on 11 May 2018.
area which includes the new pipelines and the RTSF.
The Kloof MR is in good legal standing and its IEA has been transferred to FWGR. Sibanye Gold has applied for two Section 102
amendments to the Kloof MR for the inclusion of the Venterspost North and South TSFs as well as land for the RTSF. The
Section 102 amendment for Venterspost North and Venterspost South TSFs was granted at the end of 2021. The RTSF
Section 102 amendment was granted but has not been executed by Sibanye Gold as yet.
17.1.2.
National Environmental Waste Management Act (NEM:WA)
FWGR has confirmed that their TSFs have an approved Code of Practice (CoP) on Mine Residue Deposits in terms of the
MPRDA. The TSFs on the Driefontein MR and Kloof MR are covered under this CoP. For Phase 2, the following waste
management activities have been granted in terms of GNR 921 of 13 November 2013 (as amended) under the NEM:WA, 2008
(Act No. 59 of 2008) (
). The DMRE granted the IEA Ref. No.: GP 30/5/1/2/3/2/1 (66) EM on 11 May 2018. The waste
management activities in Table 30 allow FWGR to construct the RTSF and associated infrastructure. The requirements under
NEM:WA have been covered.
Table 29: Activities for Phase 2 Requiring a Waste Management License (WML)
Number of the Relevant
Government Notice
Listed Activity Number
Authorised
Description of Activity
GNR 921
Activity B (1)
Construction and operation of the RTSF and the sewage treatment plant
GNR 921
Activity B (7)
Operation of RTSF
GNR 921
Activity B (11)
Establishment of the RTSF
Source: FWGR, 2020
17.1.3.
National Water Act (NWA)
FWGR is operating under two authorised IWUL, FWGR License No.: 10/C22B/ACFGI/4976 and Driefontein License No.:
10/C23E/ACEFGJ4527 both issued 9 March 2017.
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The FWGR IWUL is valid for a period of twenty years from the date of issuance and may be reviewed at intervals of not more
than five years. The Driefontein IWUL is valid for a period of fourteen years from the date of issuance and may be reviewed at
intervals of not more than five years. An application to transfer the applicable Driefontein uses to FWGR has been submitted.
Compliance is also required with the general provisions of the regulations on the use of water for mining and related activities
published under the NWA in GN 704 of 1999. Storm water needs to be managed in line with GN 704 of 1999.
FWGR has proposed an amendment to the conditions of the WUL based on a design that includes a network of intercept wells,
in lieu of a synthetic liner, and will apply for approval in terms of the Dam Safety Regulations (GNR 139 of 24 February 2012).
This approval will be required before FWGR can construct the RTSF and approval for this has to date, not been forthcoming. It
is in this context that the LoM plans now include interim deposition onto the Leeudoorn TSF, to allow time to obtain the
requisite amendment of the Leeudoorn TSF, incorporated, to reduce the load on the Driefontein 4 TSF and to allow more time
for this approval to be obtained.
17.2.
Environmental Considerations
The EIAs for the Kloof and Driefontein operation areas state that the TSFs are permanent sources of pollution. Dust from the TSFs impact
on the ambient air quality, the surrounding soils and the wetlands and surface water resources. Ground water is also significantly affected
by leaching and the seepage of pollutants from the TSFs that are located over dolomitic aquifers. Any seepage from the Driefontein 3
TSF, Driefontein 4 TSF, Libanon TSF, Venterspost North TSF, Venterspost South TSF and Driefontein 5 TSF is expected to migrate
downwards into the aquifers. Monitoring data indicates elevated concentrations of sulphate, total dissolved solids (TDS) and nitrate in
the groundwater which are all typical constituents associated with contamination emanating from gold mining areas. The pH ranges from
4.1 to 8.0 and is indicative of acid mine drainage, which is associated with seepage from existing tailings and surface mining facilities.
Underground mining in these areas have significantly dewatered the dolomitic systems which have resulted in numerous sinkhole
formations. Dewatering reduces pressure within the dolomite and this encourages drainage from the overlying TSFs. The removal of
these TSFs in the region will result in long-term positive benefits to the region. It is expected that the removal of the TSFs off the
underlying dolomite will improve the ground water quality near the TSFs. There is no dolomitic risk in the area of the RTSF. The RTSF site
is underlain by Transvaal Supergroup Strubenkop shale, Daspoort quartzite and Silverton shale units. The baseline groundwater quality is
good. However, there will be contamination of the ground water quality in the area. The main elements of concern are sulphate and
manganese, and to a lesser extent arsenic, uranium and iron. These could potentially impact private boreholes and the Leeuspruit or its
tributary. TSFs will be relocated to the new RTSF which is more suitably located with respect to ground water. New environmental impacts
and risks associated with the RTSF will need to be adequately mitigated and appropriate measures implemented.
Dust measurements from the TSFs are generally within the limits specified by the National Dust Control Regulations. However, the EIA
found some sites to be a problem during the dry winter months.
Land is used in the region for mining activities, the cultivation of crops, and for grazing. The pipeline routes will utilize existing servitudes
and mine owned land.
Prior to final rehabilitation of reclaimed TSFs, and any subsequent development thereafter, a radiation assessment will be completed to
determine if any radioactive hotspots exist on the site. Should any exist, they will be excavated and taken to the RTSF. If a site falls within
the clearance requirements of the NNRs, for the proposed land use, a report will need to be submitted to the NNR for approval. Once
approved, the site will be rehabilitated with indigenous vegetation and handed back to the landowner.
The RTSF is planned on agricultural land over a small wetland area. The EA state that a wetland offset strategy must be implemented
within one year of the wetland being impacted. These impacts will be mitigated through the correct and careful stripping, stockpiling and
use of the soil resources. The impacts due to contaminated water run-off and windblown dust, will be mitigated through the use of wind
breaks, concurrent rehabilitation of the RTSF and the installation of silt traps.
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Clearing and grubbing of the vegetation for construction will leave the soils open to erosion which could lead to sedimentation of surface
water, wetlands, and the deterioration of aquatic habitats. These impacts will be mitigated through either silt curtains, cut off drains or
siltation ponds.
Fauna and Flora Impact Assessments formed part of the EIAs. The vegetation comprises of Carletonville Dolomite Grassland and Gauteng
Shale Mountain Bushveld (both with a vulnerable conservation status), as well as Rand Highveld Grassland (Endangered) and Soweto
Highveld Grassland (Endangered). There is also other vegetation namely: grasslands, ridges and wetland vegetation of high-ecological
importance due to their influence on the overall ecosystem. They are seen to be valuable to maintain the biodiversity balance and
therefore, should be conservation priorities.
Fauna expected to occur within the area include mammals, birds, reptiles, amphibians and invertebrates. Fauna species of importance are
the White-Tailed Mouse (Endangered) and Rough Haired Golden Mole (Vulnerable). Some thirty-seven bird species were identified with
some of them being the “Listed Red Data” bird species. However, the Grass Owl (Vulnerable) is expected to occur within the wetland
habitats. Red Data reptile species that have a low probability of occurring within the operation area include the Giant Girdled Lizard
(Vulnerable) and the Striped Harlequin Snake (Rare). None of the identified amphibians are of concern. Red Data butterfly species
expected to occur on site are the Marsh sylph, Roodepoort Copper and Highveld Blue.
A consolidated Heritage Resources Management process was completed in 2016 for the Driefontein and Kloof Mining Right areas. No
fatal flaws were identified despite the fact that the operation is situated within a sensitive cultural landscape. An environmental
compliance audit of the 2019 EA and the Driefontein EMPr in September 2020 recorded no major issues with an overall compliance of
88%. Construction on the Kloof area has not commenced, and so environmental compliance audits are not available.
17.3.
Social and Political Considerations
The operation is located in the vicinity of the following four local municipalities: Mogale City, Westonaria, Randfontein and Merafong City.
The RTSF is in the Westonaria and Merafong City Local Municipalities. Local towns include Fochville, Carletonville, Westonaria and
Venterspost. The land is used for mining, agriculture, residential and businesses. Agriculture covers the largest portion of the area,
followed by mining and residential uses. Human settlements are relatively scattered due to the mining activities and impact of dolomite.
Two thirds of the local GDP is from finance, personal services and government services. The Westonaria and Merafong City economies
are more dependent on the mining industry than the district in general. Merafong City has an unemployment rate of over 21%, while the
Westonaria unemployment rate exceeds 42%. The expansion is expected to improve the socio-economic status with new jobs will be
created during construction. Capital investment and contributions to the GDP as a consequence of the FWGR operations, and the obvious
multiplier effect, will have a positive impact in the area. Employment opportunities include direct employment by the operation, indirect
employment will be created by procuring local goods and services, induced employment generated through spending and associated job
creation in the economy. Operation related employment has the potential to considerably improve the livelihoods and income stability
of employees and their dependents.
17.3.1.
Discussions with Local Individuals or Groups
Interested and Affected Parties (I&APs) raised concerns during the public participation phase of the Kloof EIA process. A
petition of 793 signatories was compiled in this regard by the “No for Mega Dump Forum” representing the community
(farmers, business owners and residential areas). The concerns raised included:
●
environmental impacts from the existing TSFs and whether the FWGR operation would worsen the conditions;
●
dust being a major concern for health reasons;
●
safety and security on surrounding farms;
●
water quality;
●
population influx; and
●
reduced economic activity within the local community after the LoM.
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Some of the I&APs acknowledged that the FWGR operation would have a long-term positive impact by removing TSFs. Other
positive impacts expected skills development, employment creation and the benefits of the multiplier effect where, local
procurement of goods and services, as well as local and regional economic development would benefit.
Improved quality of life and increased availabilities of land were also cited as positive impacts. These will be managed by the
FWGR Social and Labor Plan.
The Social Impact Assessment (SIA) revealed political and community expectations for sharing in the benefits by local
communities. Local municipalities sometimes claim that they are disproportionally benefiting, or not benefitting at all, from
mining when compared with district municipalities and the provinces at large. It is not the responsibility of FWGR to control
informal settlements or to provide public services and facilities. However, the existence of informal settlements near the
operations poses a risk to the operation in terms of political stability and community relations/support. FWGR’s internal
controls state that the operation has a shared responsibility (together with the relevant local authorities and key stakeholders)
to address operational induced in-migration to affected communities. Farmers in the area are more hostile towards the mining
industry and they contribute to poor community relations.
A social and labor plan exists to address any negative social impacts of the operation on host communities. Potential positive
impacts on host communities will be optimized and enhanced in a sustainable manner. Emphasis will be placed on skills
development and local economic development as these aspects would constitute the foundation for enhancing the
operation’s social capital. Moreover, negative impacts, such as increased pressure on infrastructure and services, and economic
dependence on FWGR can be more effectively mitigated when the social capital of the operations are enhanced. It is
anticipated that the consequence and/or probability of most negative impacts can be reduced to acceptable levels and that
the positive impacts of the operations will outweigh the negative effect.
17.4.
Environmental Closure Liability Estimate
Sound Mining has relied on environmental closure liability estimates provided by Digby Wells. They are experts in this field and were
commissioned for the purpose. A review of the closure estimate and associated plans covered the following aspects:
●
discussion of the methodology used to derive the costs for demolition, closure and rehabilitation; and
●
comment on the adequacy of the financial provisions made for the operation.
17.4.1.
Basis of the Closure Liability Estimate
The closure cost assessment was conducted according to the requirements of NEMA as amended (refer to Section 13), by
Digby Wells in June 2022. The purpose of the financial provision assessment was to revise the existing estimate for closure
and rehabilitation to reflect current conditions as of June 2022.
17.4.2.
Quantum of the Closure Liability
The closure cost estimate is for the purpose of reporting the liability in the annual financial statements of FWGR.
NEMA as amended, requires the holder of a MR to make full financial provision for the rehabilitation of negative environmental
impacts. This liability is required to be updated annually and adjusted.
The closure costs are determined on both an “unscheduled” and “scheduled” basis. Scheduled costs assume that mining
continues and that the final rehabilitation will be confined to the rehabilitation of the TSF footprints. Unscheduled costs
assume the immediate termination of mining and provide for rehabilitation of the area in its current condition. The detailed
closure cost model calculates the cost of demolishing, removing and rehabilitating each infrastructure component which may
include (but is not limited to):
●
rehabilitation of the pump station and pipeline footprints;
●
generalized rehabilitation and vegetation management strategies;
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●
ensuring the reclaimed footprints are free draining;
●
vegetating the TSFs that will remain post closure;
●
radiation clearance for each rehabilitated footprint; and
●
post-closure maintenance and monitoring costs.
●
FWGR has provided for the quantum of the financial guarantees on an unscheduled estimate basis.
Table 30: Current Closure Cost Estimates for FWGR
Asset
Unscheduled Cost 2022
(ZAR M)
Scheduled Cost 2022
(ZAR M)
Driefontein 5 TSF
9.61
9.61
Driefontein 3 TSF
27.61
11.61
Kloof 1 TSF
14.71
11.87
Libanon TSF
21.03
14.84
Venterspost North TSF
23.59
12.33
Venterspost South TSF
6.87
4.82
DP2
14.36
14.36
DP3
11.54
11.54
Driefontein 4 TSF
19.87
20.38
Pipelines
3.35
3.35
Post Closure Aspects Driefontein 5 TSF
2.85
2.85
Post Closure Aspects Driefontein 3 TSF
9.17
3.62
Post Closure Aspects Kloof 1 TSF
24.45
3.70
Post Closure Aspects Libanon TSF
7.53
4.60
Post Closure Aspects Venterspost North TSF
41.16
3.84
Post Closure Aspects Venterspost South TSF
12.25
1.56
Post Closure Aspects DP2
2.42
2.42
Post Closure Aspects DP3
0.24
0.24
Post Closure Aspects Driefontein 4 TSF
14.34
6.35
Project Management
16.09
8.71
Contingency
26.82
14.51
Total
309.69
166.90
Source: Digby Wells, 2022
Note: Apparent computational errors due to rounding
As mining of the TSFs progress, the liability for rehabilitation and closure will decrease from the current unscheduled cost of
ZAR309.69 M to a final scheduled cost of ZAR166.90 M. FWGR will make appropriate application to the DMRE for adjustments
to the closure obligation to cater for this decreasing liability.
Guardrisk Insurance Company Limited (GICL) has issued financial guarantees in favor of the DMRE of ZAR169.0 M. An amount
of ZAR444.1 M is also invested in Guardrisk Cell Captive under the ring-fenced environmental rehabilitation insurance policy.
The funds are ring-fenced for the sole objective of future rehabilitation activities during and at the end of the LoM. The
financial guarantees and funds held with the Guardrisk Cell Captive (30 June 2022) is sufficient to cover the 2022 estimated
unscheduled liability of ZAR309.69 M as estimated for the operation.
Program Report Under Regulation 7 of the NEMA Financial Provision Regulations (2015) which states that the financial
provision is, at any given time, equal to the sum of the actual costs of implementing the plans for a period of at least ten years
forthwith (this includes the annual rehabilitation, final, decommissioning and closure plans). Sound Mining has been informed
by FWGR that a ZAR169.0 M of the closure cost estimate for the RTSF has been guaranteed by FWGR through Guardrisk and
satisfies the IEA requirements. The 2022 closure cost estimate was normalized by inflating the 2016 estimate by 6%.
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Table 31: Closure Cost Estimates from Kloof EIA and Guaranteed through Guardrisk
Asset
Unscheduled Costs after
One Year 2016
(ZAR M)
Scheduled Costs 2016
(ZAR M)
Unscheduled Costs
30 June 2022
(ZAR M)
Scheduled Costs
30 June 2022
(ZAR M)
RTSF
77.17
172.31
116.04
259.09
Source: Digby Wells, 2016
17.5.
Concluding Comments
The FWGR IWUL of 9 March 2017 provides for this facility to be constructed on a synthetic liner. FWGR is pursuing an amendment of this
condition following its latest design specification.
It is noted that the SAHRA issued a Final Statutory Comment supporting the requirements and conditions contained in the HIA Reports.
It is the opinion of the environmental specialist that the FWGR operations have been well planned and executed thus far. The legislative
requirements have been identified and addressed and where there are gaps, measures are being taken to address them. The identified
risks are well understood by FWGR and at the time of this TRS are being addressed to avoid any significant impact to the operations. No
fatal flaws were identified during this review.
An insurance policy through Guardrisk of ZAR169.0 M, combined with the current balance in the Guardrisk Cell Captive of ZAR444.1 M (30
June 2022) is sufficient to cover the 2022 unscheduled liability of ZAR309.69 M as estimated for the operation.
Cognizance needs to be taken of the following:
●
a risk assessment should be completed as per Government Gazette No.: GNR 1147 the NEMA Financial Provision Regulations (2015)
(as amended January 2020) to determine any residual or latent costs to be included;
●
FWGR has applied for amendments to the Driefontein EA, and is awaiting a response;
●
FWGR is in the process of amending and transferring its Driefontein IWUL to FWGR;
●
FWGR is in the process of confirming the RTSF design, if it is not approved by Department of Water Affairs (DWA) or if further
amendment to the FWGR’s IWUL or IEA are required it could impact the proposed timing of the operations;
●
numerous heritage sites and grave sites have been identified across the scope of the operations, which require appropriate attention;
●
illegal mining activities, and nearby informal settlements may encroach on the operations. In terms of the Extension of Security of
Tenure Act, 1997 (Act No. 62 of 1997) (ESTA), any illegal land occupiers may also be entitled to certain tenure rights, which could
prevent landowners and government from evicting them unless the provisions of ESTA have been met. This may have been
exacerbated during the Covid-19 restrictions as no evictions were allowed during this period;
●
dust resulting from the TSFs and the mining activities needs to be managed; and
●
the quality or quantity of water available to agricultural activities needs to be preserved.
These are being addressed according to the required timelines.
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18.
CAPITAL AND OPERATING COSTS
Item 18 (i) and (ii)
The capital and operating cost estimates used to examine the viability of the estimated Mineral Reserve were informed by current
operations and recent feasibility study work (i.e., 2020 and 2021) on processing, the RTSF and associated pumping and piping
infrastructure. The operating cost estimates are supported by actual on mine invoices received and paid, while the capital estimates have
been determined using unit rates (obtained from quotations or bench marked against recent installations) and design quantities.
Although the previous feasibility study work was in most instances to a definitive level of accuracy, the estimates are no longer current
and therefore deemed to be at a preliminary feasibility level of accuracy (i.e., +/-25%). Where necessary estimates have been appropriately
inflated to June 2022 real terms and Sound Mining has included a 15% contingency on all costs to reflect the confidence expected for a
PFS level of study.
18.1.
Capital Expenditure
The capital expenditure is estimated in 30 June 2022 real terms and is summarized in
Table 32: Summary of Capital Expenditure
Description
June 2022
(ZAR M)
Property Purchases
Land (RTSF and Pipelines)
71
Total for Property Purchasing
71
DP2 Expansion
Equipment and Infrastructure
1,283
Total for DP2 Expansion
1,283
RTSF
RTSF Construction*
1,511
Total for RTSF
1,511
Pumping and Piping
RTSF
776
Driefontein 3
151
Kloof 1
444
Libanon
406
Venterspost South
462
Leeudoorn
525
Total for Pumping and Piping Capital Expenditure
2,765
Total Direct Capital Expenditure
5,630
Indirect Capital Expenditure
Rehabilitation Provision**
-
Stay-in-Business (SiB)
254
Total Indirect Capital Expenditure
254
Contingency
Contingency (15%)
883
Total Capital Expenditure
6,767
Source: Sound Mining, 2022; and FWGR, 2020
Note: * RTSF Provision does not cater for a liner which could amount to approximately ZAR1.5 Billion
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An annual Stay-in-Business (SiB) provision of ZAR8.7 M is considered until 2030 after which it is increased to ZAR16.0 M for the rest of the
LoM. This provision covers maintenance and the replacement of equipment across the operation. Sound Mining has noted that the
Guardrisk Cell Captive is in excess of the environmental liability and therefore no provision was included.
annual capital expenditure requirement for the operation.
Graph 9: Capital Expenditure Forecast
Source: Sound Mining, 2022
Early capital will be required to access the Leeudoorn TSF, whereafter, DP2 will be expanded (i.e., FY2025 and FY2026). The RTSF is
scheduled to be constructed over four years (i.e., FY2027 to FY2030) with the remaining capital expenditure largely earmarked for piping
and pumping infrastructure.
18.2.
Operating Costs
The DP2 operating cost estimate (
) and forecast (
) are based on the actual costs being incurred by the current operation.
Economies of scale were taken into consideration by applying a factor to the escalated budget as DP2 increases its throughput.
Table 33: Average DP2 Operating Cost over LoM
Description
Unit Costs
(ZAR/t)
Salaries and Wages
10.40
Contractors
8.89
Reagents
20.63
Other Engineering Stores
6.20
Electricity
15.56
Water
0.46
Machine Hire
1.51
Other
8.15
Other Corporate Costs
3.23
Contingency (15%)
10.20
DP2 Operating Costs
85.23
Source: Sound Mining, 2022; and FWGR, 2022
A contingency of 15% was included for the assessment of economic viability.
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Graph 10: Operating Cost Forecast
Source: Sound Mining, 2022
18.2.1.
Concluding Comments
The impact of a change in the pumping costs for longer average distances between the deposition sites, current TSFs, available
TSFs and DP2, is not fully captured in the operating cost estimates over the LoM. There is a risk that the operating costs may
prove to be higher over time, but these are not expected to be material.
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19.
ECONOMIC ASSESSMENT
Item 19 (i); (ii); (iii) and (iv)
A Discounted Cashflow (DCF) modelling approach was adopted to assess the economic viability of the Mineral Reserves as stated.
Considering the stage of development of the operation and the uncertainties of future global economics, as well as exchange rate,
interest rate and gold price uncertainties, a real DCF model is deemed more appropriate than a nominal DCF model. The DCF model was
generated in June 2022 South African Rand (ZAR) real terms and is based on the revenue forecast, associated capital and operating cost
forecasts, and on appropriate and reasonable economic assumptions (
).
Table 34: Inputs to the DCF Model
Description
Quantum
Unit
Key Dates
Money Terms
30 June 2022
Phase Description
Phase 2 Includes:
DP2 Expansion
Mtpm
1.2
LoM
Phase 2
Years
20
Contingencies
Contingency
%
15%
Gold Price
ZAR/USD
ZAR/USD
15.60
USD/oz Gold
USD/oz
1,823
ZAR/kg Gold
ZAR/kg
914,294
Source: Sound Mining, 2022; and FWGR, 2022
These assumptions are based on information received from FWGR and from the various consultants who contributed to the Mineral
Resources, LoM planning and technical study work that underpin this Mineral Reserve estimate. The economic assessment assumes a
100% equity-based business and ignores the effect of working capital changes. The QP is satisfied with the quality of this information,
including the revenue and cost forecasts, and considers the inputs to the DCF model to constitute an overall PFS level of accuracy
(i.e., +/-25%).
19.1.
Revenue Forecast
The revenue forecast is a function of gold sales and the pricing assumptions used for the economic assessment. The following processing
recoveries, which are supported by test work and current plant performance data, were applied to the material from the respective TSFs
to compute the amount of gold sold:
●
49.8% for Driefontein 5 TSF material;
●
56.6% for Driefontein 3 TSF material;
●
50.5% for Kloof 1 TSF material;
●
47.2% Libanon TSF material;
●
62.5% for Venterspost South TSF material; and
●
54.7% for Venterspost North TSF material.
.
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Graph 11: Gold Sales Forecast
Source: Sound Mining, 2022
Processing throughput can continue after 2042 when the available TSFs are likely to be incorporated into the operation. At this stage, the
economic assessment has only considered the depletion of the TSFs that comprise the current Mineral Reserves. The gold sold from these
TSFs equate to approximately 1.3Moz.
The real revenue forecast relies on a gold price of ZAR914,294 (i.e., USD1,823/oz at ZAR15.60/USD). Taxes would be determined using
the gold mining tax formula with all unredeemed capital taken into account. The assets are part of the ongoing business of FWGR, which
fall outside the ambit of the provision of the MPRDA that would place an obligation to pay royalties on the proceeds of the operations.
19.2.
Cashflows
TSFs (refer to
.
Graph 12: Post-tax Discounted Cashflows
Source: Sound Mining, 2022
The cumulative post-tax cashflows over the LoM remain positive. When assuming a discount rate of 10% the unleveraged operation
reflects a Net Present Value (NPV) of ZAR2.32 Billion with. FWGR is an ongoing operation and thus the Internal Rate of Return (IRR) and
a capital payback period are not applicable.
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19.3.
Sensitivities
The achievability of the LoM plans, budgets and forecasts cannot be assured as they are based on economic assumptions, many of which
are beyond the control of the company. Future cashflows and profits derived from such forecasts are inherently uncertain and actual
results may be significantly more or less favorable. The technical risks as identified by Sound Mining are provided in Item
. These and
other environmental risks can impact the anticipated revenue and cost forecasts and accordingly have been assessed against upside or
downside changes of between -20% and +20%. The consequential potential impacts are presented in
in
Table 35: Sensitivity of Post-tax NPV
Variance
NPV
10
(ZAR Billion)
80%
90%
100%
110%
120%
Revenue (ZAR Billion)
0.12
1.23
2.32
3.36
4.41
Capital Expenditure (ZAR Billion)
3.11
2.71
2.32
1.92
1.53
Operating Costs (ZAR Billion)
3.81
3.06
2.32
1.57
0.83
Source: Sound Mining, 2022
Graph 13: Sensitivity to Expected Revenue and Costs
Source: Sound Mining, 2022
Table 36: Sensitivity of Gold Price
Gold Price
ZAR/kg
700,000
800,000
900,000
1,000,000
1,100,000
NPV (ZAR Billion)
(0.27)
0.96
2.15
3.30
4.45
Source: Sound Mining, 2022
The operation is economically viable above a gold price of ZAR721,264/kg. The impact of changes to the operating cost forecast is
materially less, and any variance in capital expenditure being relatively insensitive.
A sensitivity on the discount rate is displayed in
Table 37: Sensitivity of the Discount Rate
Discount Rate
0%
5%
8%
10%
13%
NPV (ZAR Billion)
7.34
3.97
2.85
2.32
1.74
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Source: Sound Mining, 2022
As a final sensitivity, the QP has tested the impact of FWGR having to revert to the use of a liner for the RTSF as opposed to the design
currently included in the LoM plan. The impact of this expenditure on the discounted post-tax cashflows is shown in
Graph 14: Post-tax Discounted Cashflows (including liner)
Source: Sound Mining, 2022
The NPV
10
19.4.
Concluding Comments
The QP is satisfied that the Mineral Reserves as stated are all economically viable.
20.
ADJACENT PROPERTIES
Item 20 (i); (ii); (iii) and (iv)
A discussion of the characteristics of adjacent properties is usually relevant for in situ mineral deposits. The TSF assets are independent
from adjacent properties with no correlation in mineralization.
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21.
OTHER RELEVANT DATA AND INFORMATION
Item 21
Information relevant to the Mineral Resource and Mineral Reserve statements will certainly include the prevailing legislative framework
in South Africa.
21.1.
South African Minerals Policy and Legislative Framework
The South African Government has an extensive legal framework within which mining, environmental and social aspects are managed.
Inclusive within the framework are international treaties and protocols, and national acts, regulations, standards, and guidelines which
address international, national, provincial and local management areas. The role of the Government and the relevant regulatory
authorities can be summarised as follows:
●
the custodian of environmental and mining legislation as a Constitutional imperative;
●
a conduit between the public and mining companies to ensure that mineral rights holders satisfy the objectives of transforming the
mining industry by, inter alia, increasing the number of black people in the industry to reflect the country’s population demographics,
to empower and enable them to meaningfully participate in and sustain the growth of the economy; thereby ensuring transparency
to achieve accelerated and shared economic growth;
●
advocate of sustainable development, from a socio-economic and environmental management perspective; and
●
ultimate custodian of historical mining legacies, inclusive of abandoned mines.
The Government has significantly reformed its environmental legislation. The driving force behind this is the need to support the overall
national objective of sustainable development. Most recently, in 2015, the government published the National Environmental
Management Laws Amendment Bill for public comment and the Draft Revised Financial Provision Regulations were published in General
Notice No.: R1228 of 10 November 2017 in Government Gazette No.: 41236 in respect of prospecting, exploration and mining or
production operations. The applicable laws are listed below:
●
The Constitution of South Africa (Act No. 108 of 1996);
●
Mines and Works Act, 1956 (Act No. 27 of 1956);
●
the Mine Health and Safety Act, 1996 (Act No. 29 of 1996);
●
the National Environmental Management Act, 1998 (Act No. 107 of 1998) (NEMA);
●
National Water Act, 1998 (Act No. 36 of 1998) (NWA);
●
National Nuclear Regulator Act, 1999 (Act No. 47 of 1999) (NNRA);
●
National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004);
●
National Environmental Management: Air Quality Act, 2004 (Act No. 39 of 2004);
●
National Environmental Management: Waste Act, 2008 (Act No. 59 of 2008) (NEM:WA);
●
the Competition Act, 1998 (Act No. 89 of 1998);
●
the Companies Act, 2008 (Act No. 71 of 2008);
●
Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002) (MPRDA);
●
Mineral and Petroleum Resources Royalty Act, 2008 (Act No. 28 of 2008) (MPRRA);
●
Mining Titles Registration Act, 1967 (Act No. 16 of 1967);
●
Mining Titles Registration Amendment Act, 2003 (Act No. 24 of 2003);
●
Broad-Based Socio-Economic Charter (and associated amendments, 2010), also known as the Mining Charter;
●
National Heritage Resources Act, 1999 (Act No. 25 of 1999) (NHRA);
●
National Environmental Management: Protected Areas Act, 2003 (Act No. 57 of 2003) (NEM:PAA);
●
National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004) (NEM:BA);
●
National Forests Act, 1998 (Act No. 30 of 1998) (NFA);
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●
Hazardous Substances Act, 1973 (Act No. 15 of 1973) (HSA);
●
Explosives Act, 1956 (Act No. 25 of 1956);
●
National Road Traffic Act, 1993 (Act No. 93 of 1996) (NRTA); and
●
New Broad-Based Black-Economic Empowerment Charter for the South African Mining Industry (also known as the New Mining
Charter) published in September 2018.
21.2.
South African Legislative Framework
South African legislation applicable to mining related activities and specifically with regard to environmental, social and community impact
issues are:
●
The Constitution of South Africa Act, 1996 (Act No. 108 of 1996);
●
Mineral and Petroleum Resources Development Act, 2008 (Act No. 28 of 2002) (MPRDA);
●
National Environmental Management Act, 1998 (Act No. 107 of 1998) (NEMA);
●
National Water Act, 1998 (Act No. 36 of 1998) (NWA);
●
National Environmental Management: Waste Act, 2008 (Act No. 59 of 2008) (NEM:WA);
●
National Environmental Management: Air Quality Act, 2004 (Act No. 39 of 2004) (NEM:AQA);
●
Hazardous Substances Act, 1973 (Act No. 15 of 1973) (HSA);
●
National Heritage Resources Act, 1999 (Act No. 25 of 1999) (NHRA);
●
National Environmental Management: Protected Areas Act, 2003 (Act No. 57 of 2003) (NEM:PAA);
●
National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004); and
●
National Forests Act, 1998 (Act No. 30 of 1998) (NFA).
A brief description of the above Acts is summarised below:
The Constitution of South Africa Act, 1996 (Act No. 108 of 1996):
by conducting their operational and closure activities with due diligence and care for the rights of others.
Section 24(a) of the Constitution states that everyone has the right to (a) an environment which is not harmful to their health or well-
being; and (b) to have the environment protected, for the benefit of present and future generations, through reasonable legislative and
other measures that:
●
prevent pollution and ecological degradation;
●
promote conservation; and
●
secure ecologically sustainable development and use of natural resources.
while promoting justifiable economic and social development.
Mineral and Petroleum Resources Development Act, 2002 (Act No. 28 of 2002) (MPRDA):
approach to prospecting and mining by fully considering economic, social and environmental costs to achieve sustainable development
of South African Mineral Resources.
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National Environmental Management Act, 1998 (Act No. 107 of 1998) (NEMA):
Environmental Conservation Act, 1989 (Act No. 73 of 1989) (ECA) as the overarching national environmental legislative framework. NEMA
was promulgated to give effect to the Environmental Management Policy (published in 2007), and has been subsequently amended,
including the National Environmental Management Amendment Act of 2003, and the National Environmental Management Second
Amendment Act, 2004 (Act No. 8 of 2004).
The requirements for financial provisions for rehabilitation and closure are evolving. Historically, closure and rehabilitation liability
calculations and financial provisions had to be determined and provided for in accordance with Regulations 53 and 54 under the MPRDA
(GN 527, April 2004), a guideline document for the evaluation of the quantum of closure-related financial provisions issued by the DMRE
in 2004/5, and a set of master rates updated from time to time by the DMRE based on inflation.
Financial provision regulations (GNR 1147) were published on November 2015 (as amended January 2020) to replace Regulations 53 and
54 under the MPRDA. The new regulations require the following:
●
annual rehabilitation, as reflected in an annual rehabilitation plan
;
●
final rehabilitation, decommissioning and closure of the prospecting, exploration, mining or production operations at the end of the
life of operations, as reflected in a final rehabilitation, decommissioning and mine closure plan
;
●
remediation of latent or residual environmental impacts which may become known in the future, including the pumping and treatment
of polluted or extraneous water; as reflected in an environmental risk assessment report; and
●
The applicant or holder of a right or permit must ensure that the financial provision is, at any given time, equal to the sum of the actual
costs of implementing the plans and report contemplated in regulation 6 and regulation 11 (1) for a period of at least 10 years
forthwith.
The NEMA Section 24P (as amended in April 2014) also applies. It requires:
●
financial provisions to be made in the prescribed manner before an environmental authorization is issued by the DMRE;
●
annual assessment of environmental liabilities; and
●
annual “increase” of available financial provisions to the satisfaction of the Minister of Mineral Resources.
National Water Act, 1998 (Act No. 36 of 1998) (NWA):
diversion, flow reduction and disposal of water and effluent in terms of Section 21 of the Act.
Use of water for mining and related activities is also regulated through regulations that were updated after the promulgation of the NWA
in 1999 - GN 704. GN 704 addresses the regulations on use of water for mining and related activities aimed at the protection of water
resources. Inclusive within GNR 704 are the control measures for activities and its regulation of the sizing, control and monitoring of water
management measures.
National Environmental Management: Waste Act, 2008 (Act No. 59 of 2008) (NEM:WA):
the NEM:WA (GN 921, 29 November 2013) include: storage of waste; the reuse, recycling and recovery of waste; treatment of waste; and
disposal of waste at specified thresholds. Historically, mine residues were managed in accordance with the MPRDA and the NEMA. This
situation changed in 2014 with the promulgation of the National Environmental Management: Waste Amendment Act of 2014 and its
inclusion of mine residue as a Category A (hazardous) waste, as well as the addition of mine residue stockpiles and residue deposits to the
list of waste management activities requiring a WML.
In 2008 the Ministers of Mineral Resources and Environmental Affairs concluded an agreement on the “One Environmental System” for
the country with respect to mining. Ministers adopted an integrated mine environmental management system and sought to align the
MPRDA, NEMA, NEM:WA, NEM:AQA and NWA. In short, the agreement implied that environmental issues resulting from mining,
prospecting, production and related activities will be regulated in terms of the NEMA, whilst the Minister of Mineral Resources will
become a competent authority in terms of NEMA.
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Following the acceptance of the above-mentioned agreement various amendments were made to environmental legislation, inter alia,
the NEMA, MPRDA and NEM:WA. Significant to these amendments were the inclusion of residue stockpiles under the NEM:WA listed
activities as well as the publication of regulations regarding the planning and management of residue stockpiles and residue deposits
from the prospecting, mining, exploration or production operation in GNR 632 of 2015 and GN 921 July 2015.
Transitional provisions specifically include the following:
●
any activity in terms of regulation 73 of the MPRDA relating to the management of residue stockpiles and residues deposits, that can
be done in terms of a provision of GNR 632 of 2015, must be regarded as having been done in terms thereof;
●
management measures of residue stockpiles and residue deposits approved in terms of the MPRDA, at the time of the coming into
operation of GNR 632 of 2015, must be regarded as having been approved in terms thereof;
●
a holder of a right or permit in terms of the MPRDA must continue the management of the residue stockpiles and residue deposits in
accordance with the approved management measures; and
●
a person who lawfully conducts a waste management activity listed in the NEM:WA Schedule on the date of the coming into effect of
this Notice may continue with the waste management activity until such time that the Minister by notice in a Gazette calls upon such
a person to apply for a WML.
National Environmental Management: Air Quality Act, 2004 (Act No. 39 of 2004) (NEM:AQA):
an Atmospheric Emissions License (AEL) is required for listed processes that may result in atmospheric emissions, which may have a
significant detrimental effect on the environment, health, social and economic conditions. These requirements apply to smelters,
refineries and certain processing plants. NEM:AQA GN 283 April 2015 requires mines to register with the Department and submit results
in line with the National Atmospheric Emission Inventory System (NAEIS) requirements. The National Dust Control Regulations (GNR 827,
1 November 2013) provides standards for dust-fall in residential and non-residential areas, and the requirements of monitoring and
reporting to the air quality officer. Mining operations have the responsibility to comply with the standards.
Hazardous Substances Act, 1973 (Act No. 15 of 1973) (HSA):
26 February 1993) in terms of the HSA apply to the use and transportation of radioactive nuclides used in metallurgical processing plants.
National Heritage Resources Act, 1999 (Act No. 25 of 1999) (NHRA):
developments listed in the Act. The Act prohibits the following: the alteration, disturbance, damage or demolishment of buildings and
structures older than 60 years; archaeological and paleontological artefacts; cultural significant graves and burial sites; and public
monuments, except for where a permit was issued by the relevant Provincial Heritage Resources Authority.
National Environmental Management: Protected Areas Act, 2003 (Act No. 57 of 2003) (NEM:PAA):
of protected areas in South Africa and their management. It distinguishes between the following types of protected areas: national parks;
nature reserves; special nature reserves; and ‘protected environments. Mining is prohibited in national parks, nature reserves and special
nature reserves, but mining in ‘protected environments’ may be allowed with the necessary permission from the Minister of
Environmental Affairs as well as the Minister of Mineral Resources.
National Environmental Management: Biodiversity Act, 2004 (Act No. 10 of 2004) (NEM:BA):
with the alien and invasive species regulations (GNR 598 of 1 August 2014) in terms of NEM:BA for species listed in GN 864, of
29 July 2016, which deal with different categories of alien and invasive plant and animal species that are prohibited, must be combatted
or eradicated, controlled, require a permit or are subject to certain exemptions and prohibitions.
National Forest Act, 1998 (Act No. 84 of 1998) (NFA):
natural forests and trees included in the lists of protected tree species published in terms of the NFA, except where a license was issued
by the Department of Agriculture Forestry and Fisheries (DAFF).
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22.
INTERPRETATIONS AND CONCLUSIONS
Item 22
A full list of all technical documents used in the compilation of the TRS is provided in Item
. The QP has interrogated all of this
information in the process of generating the Mineral Resource and Mineral Reserve estimates and remains satisfied with the
technoeconomic merits of the LoM planning and of the integrity of the information and study work performed.
The QP’s are of the opinion that the operations of FWGR are reasonably robust in the context of the current methodologies and systems.
These operations are ongoing with an experienced management team, skilled employees and a mining contractor whose track record
demonstrates the required competence. Apart from the uncertainties identified herein, which risks are manageable, no factors of an
operational or geo-metallurgical nature have been identified that could significantly impact the prospects for eventual economic
extraction, or the validity of the Mineral Reserves as stated.
The QP is comfortable with the gold price of ZAR914,294.00/kg used for the economic assessment. This price was provided by DRDGOLD
and is not inconsistent with the spot price as at 30 June 2022 of ZAR945,295/kg (i.e., USD1,806.89/oz at ZAR16.27/USD).
Sound Mining has reviewed the EIA and Environmental Management Plan (EMP) that were provided. The assets held by FWGR were
acquired from Sibanye Gold, a subsidiary of Sibanye-Stillwater, in a transaction in which common law ownership was established over the
various tailings dams containing the Mineral Resources and Mineral Reserves. FWGR conducts its activities inter alia in accordance with
EAs and the provisions of the Mine Health and Safety regulations. A Use and Access Agreement with Sibanye Gold articulates the various
rights, permits and licenses held by Sibanye Gold in terms of which FWGR operates, pending the transfer to FWGR of those that are
transferable.
The drilling, sampling, analytical processes and governance of the exploration programs are appropriate and in-line with industry best
practice. They are considered to be of high confidence. The density used to determine quantities from volumes has been determined
from both in situ measured values and empirical data and is considered reliable. Sound Mining concludes that the estimations are based
on a suitable database of reliable information.
Scrutiny of the LoM plan has shown that the recoveries coincide with the recoveries achieved in the metallurgical test work and the
quantities and grades used are consistent with those estimated in the Mineral Resource estimation. A review of the processing at DP2
reveals that the plant has performed in-line with expectations and with further modifications will adequately handle the planned increase
in throughput to 1,200ktpm for Phase 2. The design for the expansion is based on representative and adequate metallurgical data,
knowledge and insights. The mass balance for the plant is appropriate.
The tailings material arising from DP2 will be stored at the Driefontein 4 TSF and Leeudoorn TSF before being rerouted to a RTSF that will
have excess capacity from both a depositional rate (3.0Mtpm) and final capacity perspective (800Mt). Sound Mining has reviewed the
design for the RTSF prepared by FWGR’s specialists and has concluded that the detailed design report provides a solid basis for the future
development of a safe RTSF.
The capital provision for all of the necessary infrastructure requirements have been reviewed and are considered appropriate. The capital
expenditure estimates for the expansion of DP2 and the RTSF were undertaken independently and are currently presented at a PFS level
of accuracy. The operational expenditure has been estimated from actual data at the current operations. These estimates are considered
appropriate and in-line with industry standards.
The QP while cognizant of the risks identified in Item
, remains satisfied that Mineral Resources and Mineral Reserves of FWGR are
not likely to change materially as a consequence of these uncertainties.
Far West Gold Recoveries (Proprietary) Limited
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125
23.
RECOMMENDATIONS
Item 23
The QPs recommend that FWGR continues to proactively seek the necessary regulatory approvals for the RTSF timeously to ensure that
forecast production can continue uninterrupted.
Far West Gold Recoveries (Proprietary) Limited
Document No: PR/SMI/1203/22
126
24.
REFERENCES
Item 24
The sources of data and information used in preparation of this TRS are presented in
Table 38: TRS Data and Information Sources
Source
Date
File Type
Title
Engineering
Beric Robinson Tailings
(Proprietary) Limited
September
2020
pdf
FW Regional Tailings Dam Model - Detail Design Report (BRT-10-2020)
DRA SA (Proprietary) Limited
May 2011
pdf
DRDGOLD - Far West Gold Recoveries Phase 2 Expansion Project Feasibility
Study - Major Pipeline Routes
DRA SA (Proprietary) Limited
May 2011
pdf
FWGR Phase 2 Process Flow Diagrams IZADBR4544
DRA SA (Proprietary) Limited
August 2020
pdf
RTSF Hazard and Operational Study 2 Report
DRA SA (Proprietary) Limited
August 2020
pdf
Far West Gold Recoveries RTF FS RTSF Complex Infrastructure Fencing 2.1m
High Shotcrete Perimeter Wall Layout & Details
DRA SA (Proprietary) Limited
September
2020
pdf
Far West Gold Recoveries Regional Tailings Facility - Basis of Estimate
DRA SA (Proprietary) Limited
September
2020
pdf
Far West Gold Recoveries Regional Tailings Facility Basis of Estimate
DRA SA (Proprietary) Limited
June 2020
pdf
Plant layout DRD FWGR Phase 2 Expansion Project (CPP)
DRA SA (Proprietary) Limited
June 2020
pdf
DRD FWGR Phase 2 Expansion Project Feasibility Study Process Design Criteria
(CPP)
DRA SA (Proprietary) Limited
June 2020
pdf
DRD FWGR Phase 2 Expansion Project Feasibility Study Mechanical Equipment
List (CPP)
DRA SA (Proprietary) Limited
November 2020
pdf
DRD FWGR Phase 2 Expansion Project Feasibility Study Executive Summary
DRA SA (Proprietary) Limited
November 2020
pdf
DRD FWGR Phase 2 Expansion Project Feasibility Study Opex (CPP)
DRA SA (Proprietary) Limited
November 2020
xlsx
Phase 2 Expansion Project Feasibility Study Capital Cost Estimate (CPP and
Piping Rev 6)
DRA SA (Proprietary) Limited
October 2020
xlsx
Far West Gold Recoveries Regional Tailings Facility Capital Cost Estimate:
Scenario 2
DRA SA (Proprietary) Limited
October 2020
xlsx
DRDGOLD - Far West Gold Recoveries Phase 2 Expansion Project Feasibility
Study OPEX
DRA SA (Proprietary) Limited
August 2022
pdf
00301-Blockplan with Google Overlay
DRA SA (Proprietary) Limited
2022
pdf
00301-Blockplan
DRA SA (Proprietary) Limited
2022
xlsx
DP2 - expansion capital spend
DRA SA (Proprietary) Limited
March 2022
pdf
Far West Gold Recoveries DP2 Expansion Project
Feasibility Study Basis of Estimate
DRA SA (Proprietary) Limited
2022
pdf
FZADBR6245-PROC-PDC-005-Rev B_PDC
DRA SA (Proprietary) Limited
2022
xlsx
FZADBR6245-PROC-PDC-005-Rev B_PDC
DRA SA (Proprietary) Limited
May 2022
pdf
Far West Gold Recoveries Dp2 Expansion Project
Feasibility Study Process Flow Diagram
DRDGOLD Limited
August 2020
docx
Manual for the Management of the Disposal of Tailings on the Far West Gold
Recoveries Regional Tailings Facility
DRDGOLD Limited
August 2020
pdf
Electrical Point of Delivery Meeting minutes
Geo Tail SA (Proprietary) Limited
June 2022
pdf
Leeudoorn TSF Cyclone Conversion Design
Geo Pollution Technologies -
Gauteng (Proprietary) Limited
August 2021
pdf
Kloof Gold Mine Leeudoorn Return Water Dam Strategy
Highlands Hydrology
(Proprietary) Limited and Water
Hunters
August 2020
pdf
Hydrological Assessment for the Proposed Regional Tailings Facility, Far West
Gold Recoveries Version 1
Knight Piesold (South Africa)
(Proprietary) Limited
August 2021
pdf
Geotechnical Investigation for Leeudoorn Active TSF
Mintek and DRDGOLD Limited
September
2020
xlsx
Predicted yields from the various dams based on test work results at September
2020
Water Hunters
January 2020
xlsx
WRTRP Output Analysis v 0.5e2 Base Case
Water Hunters
August 2020
pdf
Far West Gold Recoveries - Regional Tailings Facility - Updated Ground Water
Model Report
Environmental/Legal
Department of Minerals
Resources and Energy
May 2018
pdf
WRTRP Driefontein Environmental Authorization GP30/5/1/2/3/2/1(51)EM
Far West Gold Recoveries (Proprietary) Limited
Document No: PR/SMI/1203/22
127
Department of Minerals
Resources and Energy
May 2018
pdf
WRTRP Kloof Integrated Environmental Authorization GP30/5/1/2/3/2/1 (66)EM
Department of Water and
Sanitation
March 2017
pdf
WRTRP Integrated Water Use License. License No.: 10/C22B/ACFGI/4976
Department of Water and
Sanitation
March 2017
pdf
Driefontein Water Use License. License No.: 10/C23E/ACEFGIJ/4527
Digby Wells Environmental
(South Africa) (Proprietary)
Limited
July 2022
pdf
Far West Gold Recoveries Closure Cost Assessment 2022. Financial Provision
Assessment Report
Digby Wells Environmental
(South Africa) (Proprietary)
Limited
March 2016
pdf
Environmental Impact Assessment and Environmental Management
Programme for the Amendment of the existing EMP and Inclusion of Listed
Activities Associated with Operations at Driefontein Mining Right Area, Sibanye
Gold Limited
Digby Wells Environmental
(South Africa) (Proprietary)
Limited
March 2016
pdf
Environmental Impact Assessment and Environmental Management
Programme for the Amendment of the existing EMP and Inclusion of Listed
Activities Associated with Operations at Kloof Mining Right Area, Sibanye Gold
Limited
Digby Wells Environmental
(South Africa) (Proprietary)
Limited
May 2020
pdf
Far West Gold Recoveries Closure Costs Assessment 2020 (ERG6453)
Digby Wells Environmental
(South Africa) (Proprietary)
Limited
September
2020
pdf
Driefontein Environmental Authorization Audit
Digby Wells Environmental
(South Africa) (Proprietary)
Limited
July 2022
pdf
Far West Gold Recoveries Closure Cost Assessment 2022
Financial Provision Assessment Report
Kongiwe Environmental
(Proprietary) Limited
October 2019
docx
The reclamation and reprocessing of the Soweto Cluster dumps in the City of
Johannesburg, Gauteng. Draft Environmental Impact Assessment Information
Malan Scholes Inc
November 2017
pdf
Due Diligence Report for DRDGOLD Limited in respect of the West Rand
Tailings Retreatment Project
National Nuclear Regulator
July 2019
pdf
Certificate of Registration in terms of the National Nuclear Regulator Act, 1999
(Act No. 4T of 1999)
Sibanye-Stillwater Limited
December 2019
xlsx
19128093_SS_RUSO CC 2019_20191118_FINAL_09_03_20 (Consolidated)
Sibanye-Stillwater Limited
December 2019
xlsx
19128093_SS_RUSO CC 2019_20191118_FINAL_V1
Werksmans Attorneys
November 2017
pdf
Exchange agreement between Sibanye Gold Limited and K2017449061 (WRTRP
to be renamed) and including DRDGOLD
Schedule and Economics
DRDGOLD Limited
2022
xlsx
SK1300 - DP2 Expansion LOM plan_13Jul22_Option 3_REAL_Blended_50_MT
Edited_Rev3
DRDGOLD Limited
July 2022
pdf
DRDGOLD Group Information Sharing Document – Financial Reporting
DRDGOLD Limited
2022
pdf
Annual Integrated Report
DRDGOLD Limited
2022
xlsx
Production information_Jun22
Financial Times
2022
https
https://www.ft.com/content/be9c5a5e-1280-4281-8b28-04717d2c7e66
GoldHub
2022
https
World Gold Council, Gold supply and demand statistics -
https://www.gold.org/goldhub/data/gold-supply-and-demand-statistics
GoldHub
2022
https
https://www.gold.org/goldhub/research/gold-demand-trends/gold-demand-
trends-q2-2022
GoldHub
2022
https
https://www.gold.org/goldhub/data/historical-mine-production
GoldHub
2022
https
Gold Supply and demand statistics 30 July
2022https://www.gold.org/goldhub/data/gold-supply-and-demand-statistics
Sibanye-Stillwater Limited
2019
pdf
Mineral Resources and Mineral Reserves Report
Sound Mining
December 2017
pdf
Competent Persons' Report on the West Rand Tailings Retreatment Project for
DRDGOLD Limited
Sound Mining
December 2020
pdf
PR SMI 0921 20 DFS Report for FWGR - Phase 2 Expansion Project
USGS
2017
https
https://s3-us-west-2.amazonaws.com/prd-
wret/assets/palladium/production/mineral-pubs/gold/mcs-2017-gold.pdf
USGS
2018
https
https://s3-us-west-2.amazonaws.com/prd-
wret/assets/palladium/production/mineral-pubs/gold/mcs-2018-gold.pdf
USGS
2019
https
https://prd-wret.s3-us-west-
2.amazonaws.com/assets/palladium/production/s3fs-public/atoms/files/mcs-
2019-gold.pdf
USGS
2020
https
https://pubs.usgs.gov/periodicals/mcs2020/mcs2020-gold.pdf
World Gold Council
2022
https
Gold Demand Trends Q2 2022 - https://www.gold.org/goldhub/research/gold-
demand-trends/gold-demand-trends-q2-2022/supply
Far West Gold Recoveries (Proprietary) Limited
Document No: PR/SMI/1203/22
128
Geology
Frimmel et al
2005
pdf
The Formation and Preservation of the Witwatersrand Goldfields, the World’s
Largest Gold Province
Geographicx Surveys CC
July 2022
dwg
Driefontein 5 02072022 Merge R1
Geographicx Surveys CC
July 2022
pdf
Quantity Report of Driefontein 5 02072022 R1
Geoplan Materials Engineering
(Proprietary) Limited
November 2020
xlsx
DRDGOLD Density Data
McCarthy and Rubidge
2005
Book
The Story of Earth and Life
Minxcon (Proprietary) Limited
June 2009
pdf
Technical Report on the Surface Mineral Resource Estimation, Scheduling and
Financial Valuation of the West Wits HTO Project, Gold Fields (Pty) Ltd. South
Africa
Minxcon (Proprietary) Limited
February 2013
pdf
A Technical Report on The Gold1 TSFs in the Gauteng Province, South Africa
Minxcon (Proprietary) Limited
2013
dm
d4_e_krig_all1
Minxcon (Proprietary) Limited
2013
dm
d4_w_krig_all1
Minxcon (Proprietary) Limited
2009
dm
drth_krig_allfinal2b
Minxcon (Proprietary) Limited
2009
dm
DTOPO_pt/tr
Minxcon (Proprietary) Limited
2009
dm
dr5_krig_all fin
Minxcon (Proprietary) Limited
2009
dm
dtopo_pt/tr
Minxcon (Proprietary) Limited
2009
dm
kl1_krig_all_final3c
Minxcon (Proprietary) Limited
2009
dm
DTOPO_pt/tr
Minxcon (Proprietary) Limited
2009
dm
lib_krig_all1_2010c
Minxcon (Proprietary) Limited
2009
dm
dtopo_pt/tr
Minxcon (Proprietary) Limited
2009
dm
vn_krig_all1_fin2d
Minxcon (Proprietary) Limited
2009
dm
vn_fin_pt/tr
Minxcon (Proprietary) Limited
2009
dm
vs_krig_all1_final2c
Minxcon (Proprietary) Limited
2009
dm
vs_fin_pt/tr
The RVN Group (Proprietary)
Limited
July 2020
pdf
Density Measurements and Supervision DRDGOLD
The glossary of terms, units and abbreviations used in this TRS are presented in
Table 39: Glossary and Abbreviations
Term
Explanation
Archaean
Geological eon from 2,500Ma - 4,000Ma
Assay
The chemical analysis of ore samples to determine their metal content
Auriferous
Containing, or producing, gold
Basin
A geological basin is a large low-lying area, often below sea level
Clastic
A rock or sediment composed principally of transported broken fragments derived from pre-existing rocks or
minerals
Conformable
A sequence of beds is said to be conformable when they represent an unbroken period of deposition
Conglomerate
A coarse-grained clastic sedimentary rock composed of rounded to subangular fragments set in a fine-grained
matrix
Craton
An old and stable section of the continental lithosphere which has survived cycles of merging and rifting
continents. Cratons are today generally found in the interior of tectonic plates
Cut-off grade
The lowest grade of mineralized rock that determines as to whether or not it is economic to recover its gold
content by further concentration
Density
Measure of the relative “heaviness” of objects with a constant volume, density = mass/volume
Deposit
Any sort of earth material that has accumulated through the action of wind, water, ice or other agents
De-survey
Mathematical reconstruction in 3D space of a borehole trace using azimuth and dip survey data
Detrital
Formed from eroded loose rock and mineral material
Dilution
Waste or material below the cut-off grade that contaminates the ore during the course of mining operations and
thereby reduces the average grade mined
Definitive Feasibility
Study (DFS)
A definitive engineering estimate of all costs, revenues, equipment requirements and production at a -5% to +10%
level of accuracy. The study is used to define the economic viability of a project and to support the search for
project financing
Distal
Relating to or denoting the outer part of an area affected by geological activity
Dolomite
Carbonate mineral, CaMg(CO
3
)
2
. The word dolomite is also used to describe the sedimentary carbonate rock,
which is composed predominantly of the mineral dolomite
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Term
Explanation
Doré
An unrefined, therefore impure, alloy of gold with variable quantities of silver and smaller quantities of base
metals, which is produced at a mine before passing on to a refinery for upgrading to London Good Delivery
standard, which usually consists of 85% gold on average
Drillhole
Exploration hole drilled for the purposes of exploring for and evaluating sub-surface geology, in this instance the
presence and distribution of gold
Dyke
A tabular vertical or near-vertical body of igneous rock formed by magmatic injection into planar zones of
weakness such as faults or fractures that is discordant to the bedding or foliation of the country rock
Estimation
The quantitative judgement of a variable
Exploration
Prospecting, sampling, mapping, drilling and other work involved in the search for mineralization
Facies
The sum total of sedimentary features that characterize a sediment as having been deposited in a given
environment; an assemblage of metamorphic rocks which are considered to have formed under similar conditions
of temperature and pressure
Fault
A fracture in earth materials, along which the opposite sides have been displaced parallel to then plane of the
movement
Fire Assay
The assaying of metallic ores by methods requiring the use of furnace heat
Fluvial
Produced by the action of a stream or river
Footwall
The underlying side of a stope or ore body
Goldfield
An auriferous deposit defined in a geographically distinct sub-basin
Granite
An intrusive felsic rock which is granular in texture
Hydrothermal
The circulation of hot water. Hydrothermal circulation occurs most often in the vicinity of sources of heat within
the Earth's crust. In general, this occurs near volcanic activity
Indicated Mineral
Resource
Is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of adequate
geological evidence and sampling. The level of geological certainty associated with an indicated Mineral Resource
is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and
evaluation of the economic viability of the deposit. Because an indicated Mineral Resource has a lower level of
confidence than the level of confidence of a measured mineral resource, an indicated Mineral Resource may only
be converted to a probable Mineral Reserve.
Inferred Mineral
Resource
Is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited
geological evidence and sampling. The level of geological uncertainty associated with an inferred Mineral Resource
is too high to apply relevant technical and economic factors likely to influence the prospects of economic
extraction in a manner useful for evaluation of economic viability. Because an inferred Mineral Resource has the
lowest level of geological confidence of all Mineral Resources, which prevents the application of the modifying
factors in a manner useful for evaluation of economic viability, an inferred Mineral Resource may not be
considered when assessing the economic viability of a mining project, and may not be converted to a Mineral
Reserve.
Karoo
A large semi-desert natural region of South Africa which lends its name to the geological Karoo Supergroup which
is often used as an age description for the eon from 145Ma - 360Ma
Kriging
An interpolation method that minimizes the estimation error in the determination of a mineral resource. Kriging is
a method of interpolation for which the interpolated values are modelled by a Gaussian process governed by prior
covariances
License, Permit, Lease or
other similar entitlement
Any form of license, permit, lease or other entitlement granted by the relevant Government department in
accordance with its mining legislation that confers on the holder certain rights to explore for and/or extract
minerals that might be contained in the land, or ownership title that may prove ownership of the minerals
Life-of-Mine (LoM)
Number of years in the current mine plan that an operation will extract and treat ore
Measured Mineral
Resource
is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of conclusive
geological evidence and sampling. The level of geological certainty associated with a measured Mineral Resource is
sufficient to allow a qualified person to apply modifying factors, in sufficient detail to support detailed mine
planning and final evaluation of the economic viability of the deposit. Because a measured Mineral Resource has a
higher level of confidence than the level of confidence of either an indicated Mineral Resource or an inferred
Mineral Resource, a measured Mineral Resource may be converted to a proven Mineral Reserve or to a probable
Mineral Reserve.
Mineable
That portion of a mineral resource for which extraction is technically and economically feasible
Mineral Asset(s)
Any right to explore and/or mine which has been granted (“property”), or entity holding such property or the
securities of such an entity, including but not limited to all corporeal and incorporeal property, mineral rights,
mining titles, mining leases, intellectual property, personal property (including plant equipment and
infrastructure), mining and exploration tenures and titles or any other right held or acquired in connection with
the finding and removing of minerals and petroleum located in, on or near the Earth’s crust. Mineral Assets can be
classified as Dormant Properties, Exploration Properties, Development Properties, Mining Properties or Defunct
Properties
Mineral Reserve
Is an estimate of tonnage and grade or quality of indicated and measured Mineral Resources that, in the opinion of
the QP, can be the basis of an economically viable project. More specifically, the economically mineable part of a
measured or indicated Mineral Resource, which includes diluting materials and allowances for losses that may
occur when the material is mined or extracted. The determination that part of a measured or indicated Mineral
Resource is economically mineable must be based on a preliminary feasibility or feasibility study conducted by a
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Term
Explanation
QP applying the modifying factors to indicated or measured Mineral Resources. The study must demonstrate that,
at the time of the reporting, extraction of the Mineral Reserve is economically viable under reasonable investment
and market assumptions. The study must establish a life of mine plan that is technically achievable and
economically viable, which will be the basis of determining the Mineral Reserve. And the term “economically
viable” means that the QP has determined, using a discounted cashflow analysis, or has otherwise analytically
determined that the extraction of the mineral reserve is economically viable under reasonable investment and
market assumptions.
Mineral Resource
Is a concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or
quality, and quantity that there are reasonable prospects for economic extraction. A Mineral Resource is a
reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining
dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is
likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization
drilled or sampled.
Modifying Factors
Are the factors that a qualified person must apply to indicated and measured Mineral Resources and then evaluate
in order to establish the economic viability of Mineral Reserves. A qualified person must apply and evaluate
modifying factors to convert measured and indicated Mineral Resources to proven and probable Mineral Reserves.
These factors include, but are not restricted to: Mining; processing; metallurgical; infrastructure; economic;
marketing; legal; environmental compliance; plans, negotiations, or agreements with local individuals or groups;
and governmental factors. The number, type and specific characteristics of the modifying factors applied will
necessarily be a function of and depend upon the mineral, mine, property, or project.
Reef
A precious metal bearing stratiform tabular ore body
Run-of-Mine (RoM)
Means the mineralized, raw unprocessed or uncrushed material obtained after blasting or excavating
Shale
A fine-grained detrital sedimentary rock formed from clay, mud or silt
Strike
Refers to the orientation of a geologic feature which is a line representing the intersection of that feature with a
horizontal plane. This is represented as a compass bearing of the strike line
Syncline
A fold with strata sloping upward on both sides from a common valley/base
Tailings
Material remaining after ore has been processed
Unconformity
A surface between successive strata representing a missing interval in the geologic record of time and produced
either by an interruption in deposition or by the erosion of lithology followed by renewed deposition
Uraninite
A black, brown or grey uranium ore mineral, UO
2
Variogram
A measure of the average variance between sample locations as a function of sample separation
Wireframe
A 3D surface constructed from vertices with connecting straight lines or curves
Term
Description
%
percentage
% Au
percentage gold
% mass
percentage mass
~
approximate
‘
minutes
‘000m
3
thousand cubic metres
“
seconds
°
Degree
°C
Degrees Celsius
µm
micrometer
3D
three dimensional
AEL
Atmospheric Emissions License
ALS
ALS Chemex South Africa (Proprietary) Limited
AMIS
African Mineral Standards
ANC
African National Congress
Au
Gold
Au(CN)
2
gold cyanide complex
bar
metric unit of pressure
Beric Robinson Tailings
Beric Robinson Tailings (Proprietary) Limited
BPS
Booster Pump Stations
CaSO
4
Calcium sulfite (gypsum)
CC
coarse coarse
CF
coarse fine
CIL
Carbon-in-Leach
CIP
Carbon-in-Pulp
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CLR
Carbon Leader Reef
cm
centimeter
CoP
Code of Practice
COP
Cooke Optimization Project
CoR
Certificate of Registration
Covid-19
Coronavirus Disease 2019
CPP
Central Processing Plant
CRM
Certified Reference Material
CTSF
Central Tailings Storage Facility
CUP
Cooke Uranium Project
CWF
Central Water Facility
DAFF
Department of Agriculture Forestry and Fisheries
DCF
Discounted Cashflow
DFS
Definitive Feasibility Study
Digby Wells
Digby Wells Environmental (South Africa) (Proprietary) Limited
DMRE
Department of Mineral Resources and Energy (Department of Mineral Resources prior to 2019)
DP2
Driefontein Plant 2
DP3
Driefontein Plant 3
DRA
DRA SA (Proprietary) Limited
DRDGOLD
DRDGOLD Limited
DWA
Department of Water Affairs
DWS
Department of Water and Sanitation
E
east
EA
Environmental Authorization under NEMA
ECA
Environmental Conservation Act
ECSA
Engineering Council of South Africa
EIA
Environmental Impact Assessment
EMP
Environmental Management Plan
EMPr
Environmental Management Program Report
EPCM
Engineering, Procurement and Construction Management
Ergo
Ergo Mining (Proprietary) Limited
Eskom
Electricity Supply Commission
ESTA
Extension of Security of Tenure Act
Ezulwini
Ezulwini Mining Company (Proprietary) Limited
FC
fine coarse
FEED
Front End Engineering Design
FF
fine fine
FSAIMM
Fellow of the Southern African Institute of Mining and Metallurgy
FW
Footwall
FWGR
Far West Gold Recoveries (Proprietary) Limited
FY
Financial Year
g
gram
g/cm
3
grams per cubic centimeter
g/t
grams per tonne
g/t Au
grams per tonne gold
Ga
Giga annum (a period of 1 billion years)
GDP
Gross Domestic Product
GICL
Guardrisk Insurance Company Limited
GISTM
Global Industry Standard on Tailings Management
GISTM
Global Industry Standard for Tailings Management
GN
Government Notice
GNR
Government Notice Regulation
Gold Fields
Gold Fields Limited
Gold One
Gold One International Limited
GPS
Global Positioning System
GSSA
Geological Society of South Africa
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GTSA
Geo Tail SA (Proprietary) Limited
H
2
SO
4
sulfuric acid
ha
Hectare
Harmony
Harmony Gold Mining Company Limited
HDPE
high-density polyethylene pipe
HIA
Heritage Impact Assessment
HIV/AIDS
Human Immunodeficiency Viruses/Acquired Immunodeficiency Syndrome
HNO
3
nitric acid
hr
Hour
HSA
Hazardous Substances Act
HWSW
Heel Wall Scavenger Wells
I&APs
Interested & Affected Parties
ICMM
International Council for Mining and Minerals
ICOLD
International Council for Large Dams
IEA
Integrated Environmental Authorization
IEC
International Electrotechnical Commission
iLanda
iLanda Water Services CC
IRR
Internal Rate of Return
ISO
International Organization for Standardization
IWUL
Integrated Water Use License
JSE
Johannesburg Stock Exchange Limited
JV
Joint Venture
kg
kilogram
kHz
kilohertz
km
kilometre
koz
kilo ounce
ktpm
kilotonne per month
kV
kilovolt
kVA
kilovolt-ampere
LIDAR
light detection and ranging
LoM
Life-of-Mine
m
metres
M
million
m/yr
metres per year
m
2
square meter
m³
cubic meter
m³/a
cubic meter per annum
m³/d
cubic metres per day
m³/hr
cubic meter per hour
Ma
Mega annum (a period of 1 million years)
mamsl
metres above mean sea level
MCNCF
Maximum Cumulative Negative Cashflow
MDP
Multiple Deposition Point
MHSA
Mine Health and Safety Act
Minxcon
Minxcon (Proprietary) Limited
mm
millimeters
Mm
3
Million cubic meters
Mm
3
/a
Million cubic meters per annum
Moz
Millions of ounces
MPRDA
Mineral and Petroleum Resources Development Act
MPRRA
Mineral and Petroleum Resources Royalty Act
MR
Mining Right
Mt
Million tonnes
Mtpm
Million tonnes per month
MVA
Mega Volt Ampere
N
north
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NAEIS
National Atmospheric Emission Inventory System
NEM:AQA
National Environmental Management Air Quality Act
NEM:BA
National Environmental Management Biodiversity Act
NEM:PAA
National Environmental Management: Protected Areas Act
NEM:WA
National Environmental Management Waste
NEMA
National Environmental Management Act
NFA
National Forests Act
NGL
Nominal Ground Level
NHRA
National Heritage Resources Act
NMD
Nominal Maximum Demand
NNR
National Nuclear Regulator
NNRA
National Nuclear Regulator Act
NPV
Net Present Value
NPV
10.17
Net Present Value at 10.17%
NRTA
National Road Traffic Act
NWA
National Water Act
NYSE
New York Stock Exchange
oz
troy ounce (conversion to troy ounces is 31.10348)
oz Au
gold ounces
PAR
Population at Risk
PFS
Preliminary Feasibility Study
pH
scale used to specify the acidity or basicity of an aqueous solution
PLL
Potential Loss of Life
PMP
Probable Maximum Precipitation
PoD
Point of Delivery
PSD
particle size distribution
QA/QC
Quality Assurance and Quality Control
QP
Qualified Person
Rand Uranium
Rand Uranium Limited
RoM
Run-of-Mine
RTSF
Regional Tailings Storage Facility
RWD
return water dams
S
south
S
2
sulfur
SABS
South African Bureau of Standards
SACNASP
South African Council for Natural Scientific Professions
SADPMR
The South African Diamond and Precious Metals Regulator
SAHRA
South African Heritage Resources Agency
SAIMM
Southern African Institute of Mining and Metallurgy
SANAS
South African National Accreditation System
SDP
Single Deposition Point
SEC
Securities Exchange Commission
Set Point
Set Point Laboratories
SG
Specific Gravity
SGS
SGS South Africa (Proprietary) Limited
SI
Système Internationale
SIA
Social Impact Assessment
SiB
Stay-in-Business
Sibanye Gold
Sibanye Gold Limited
Sibanye-Stillwater
Sibanye-Stillwater Limited
S-K 1300
Subpart 1300 of Regulation S-K under the U.S. Securities Exchange Act of 1934
SLP
Social and Labor Plan
SLR
SLR Consulting (Africa) (Proprietary) Limited
Sound Mining
Sound Mining International SA (Proprietary) Limited
SPCU
Self-Propelled Cyclone Units
SPLUMA
Spatial Planning and Land Use Management Act,
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SPV
Special Purpose Vehicle
SRK
SRK Consulting (Proprietary) Limited
SVOL1
first search volume
SVOL2
second search volume
SWD
storm water dam
t
metric tonne
t/m
3
tonnes per cubic meter
TDS
total dissolved solids
the Trust
DRDSA Empowerment Trust
ToR
Terms of Reference
tpa
tonnes per annum
tph
tonnes per hour
tpm
tonnes per month
TRS
Technical Report Summary
TSF
Tailings Storage Facility
TWSW
Toe Wall Scavenger Wells
U
uranium
U/O
Underflow/Overflow
U
3
O
8
triuranium octoxide
USD
United States Dollars
USD/oz
United States Dollars per ounce
V1
Version 1
V2
Version 2
VCR
Ventersdorp Contact Reef
W
west
Witwatersrand Basin
Witwatersrand Supergroup
WML
Waste Management License
WRTRP
West Rand Tailings Retreatment Project (Proprietary) Limited
WUL
Water Use License
WWP
West Wits Project
WWTTP
West Wits Tailings Treatment Project
ZAR
South African Rands
ZAR Billion
Billion South African Rands
ZAR M
Million South African Rands
ZAR M/yr
Millions of South African Rands per year
ZAR/kg
South African Rands per kilogram
ZAR/t
South African Rands per tonne
ZAR/USD
South African Rands and United States Dollars exchange rate
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25.
RELIANCE ON INFORMATION PROVIDED BY THE REGISTRANT
Item 25
The information and conclusions within this TRS are based on information made available to the QPs by DRDGOLD and FWGR at the time
of the preparation of this TRS as noted in this item. The QPs have relied on this information with respect to legal matters (Item
),
Environmental Studies, Permitting, or Agreements with locals or Individuals or Groups (Item
) and the economic Assessment (Item
).
The QPs have not independently conducted any title or litigation searches but have relied upon FWGR for information on the property
title, agreements and other pertinent conditions (throughout Item
.
The QPs have reviewed this information at face value and are satisfied that it is both reasonable and appropriate. The QPs believe that it
is reasonable to rely on the information provided by FWGR as identified in this item because they are intimately more familiar with the
operations and ongoing progress of FWGR since inception, and as a consequence this provides the QPs with an enhanced level of comfort
with respect to the management, processes, procedures and quality of planning at FWGR.
Far West Gold Recoveries (Proprietary) Limited
Document No: PR/SMI/1203/22
136
26.
QUALIFIED PERSONS DISCLOSURE CONSENT
Item 26
We, the signees, in our capacity as Qualified Persons in connection with the Technical Report Summary of Far West Gold Recoveries
Proprietary Limited dated 28 October 2022 (The Technical Report Summary) as required by Item 601(b)(96) of Regulation S-K and filed as
an exhibit to DRDGOLD Limited’s (DRDGOLD) annual report on Form 20-F for the year ended 30 June 2022 and any amendments or
supplements and/or exhibits thereto (collectively, the “Form 20-F”) pursuant to Subpart 1300 of Regulation S-K promulgated by the U.S.
Securities and Exchange Commission (1300 Regulation S-K), each hereby consent to:
●
the public filing and use by DRDGOLD of the Technical Report Summary for which I am responsible as an exhibit to the Form 20-F;
●
the use and reference to my name, including my status as an expert or Qualified Person (as defined by SK-1300) in connection with
the Form 20-F and Technical Report Summary for which I am responsible;
●
use of any extracts from, or summary of, the Technical Report Summary in the Form 20-F and the use of any information derived,
summarized, quoted or referenced from the Technical Report Summary, or portions thereof, that is included or incorporated by
reference into the Form 20-F; and any amendments or supplements thereto.
I am responsible for authoring, and this consent pertains to, the Technical Report Summary for which my name appears below and certify
that I have read the 20-F and that it fairly and accurately represents the information in the Technical Report Summary for which I am
responsible.
Table 40: QP Area of Responsibility and Disclosure Consent
Property Name
TRS Effective Date
QP Name
Affiliation to
Registrant
Field or Area of
Responsibility
Signature
Far West Gold Recoveries
Proprietary Limited (A subsidiary
of DRDGOLD Limited)
30 June 2022
Mr Vaughn Duke
Independent
Consultant
Mineral Reserves
/s/ Vaughn Duke
Far West Gold Recoveries
Proprietary Limited (A subsidiary
of DRDGOLD Limited)
30 June 2022
Mrs Diana van Buren
Independent
Consultant
Mineral Resources
/s/ Diana van Buren
Far West Gold Recoveries
Proprietary Limited (A subsidiary
of DRDGOLD Limited)
30 June 2022
Mr Keith Raine
Independent
Consultant
Environmental and
Social Governance
/s/ Keith Raine
Far West Gold Recoveries (Proprietary) Limited
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137
Appendix 1: Summary of the DCF Model (excluding liner)
Description
Unit
Total/
Average
2023
FY
2024
FY
2025
FY
2026
FY
2027
FY
2028
FY
2029
FY
2030
FY
2031
FY
2032
FY
2033
FY
2034
FY
2035
FY
2036
FY
2037
FY
2038
FY
2039
FY
2040
FY
2041
FY
2042
FY
Reclaimed Tonnes
kt
229.371
6,044
6,044
6,044
7,546
9,048
9,048
9,048
11,148
14,400
14,400
14,400
14,400
14,400
14,400
14,400
14,400
14,400
14,400
14,400
7,000
Head Grade
g/t
0.33
0.48
0.47
0.47
0.41
0.36
0.36
0.36
0.37
0.37
0.37
0.32
0.30
0.30
0.30
0.30
0.30
0.28
0.27
0.27
0.27
Recovery
%
53%
50%
54%
57%
55%
53%
53%
53%
53%
53%
53%
51%
49%
49%
49%
54%
58%
55%
55%
55%
55%
Gold Sold
kg
40,409
1,404
1,528
1,592
1,674
1,740
1,740
1,740
2,216
2,840
2,840
2,369
2,105
2,105
2,105
2,322
2,532
2,190
2,159
2,159
1,049
Revenue
ZAR M
36,946
1,284
1,397
1,455
1,531
1,591
1,591
1,591
2,026
2,597
2,597
2,166
1,924
1,924
1,924
2,123
2,315
2,003
1,974
1,974
959
Operating Costs
ZAR M
19,550
838
538
538
773
868
868
868
995
1,168
1,168
1,168
1,168
1,168
1,168
1,168
1,168
1,168
1,168
1,168
717
Capital Expenditure
ZAR M
6,767
326
61
1,595
957
300
589
1,120
565
18
402
146
18
18
416
152
18
18
18
18
20
Post-tax Free Cashflow
ZAR M
7,338
288
555
(678)
(199)
424
118
(397)
404
987
714
600
525
525
242
567
794
579
559
559
171
Cumulative Post-tax Free
Cashflow
ZAR M
7,338
288
843
165
(34)
389
507
110
514
1,501
2,216
2,816
3,341
3,867
4,108
4,675
5,469
6,049
6,608
7,167
7,338
Post-tax Discounted Cashflow
ZAR M
2,318
262
459
(509)
(136)
263
66
(204)
189
419
275
210
167
152
64
136
173
115
101
91
25
Cumulative Post-tax Discounted
Cashflow
ZAR M
2,318
262
721
211
75
338
405
201
389
808
1,083
1,294
1,461
1,613
1,677
1,813
1,986
2,100
2,201
2,292
2,318
Notes: Apparent computational errors due to rounding