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
Document No: PR/SMI/1203/22
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TABLE OF CONTENTS
1.
Executive Summary ................................................................................................ .................................................................................8
1.1.
Introduction ..............................................................................................................................................................................8
1.2.
History................................................................................................................................ .....................................................11
1.3.
Geological Setting ...................................................................................................................................................................12
1.4.
Exploration ................................................................................................................................................................ ..............16
1.5.
Metallurgical Testing ..............................................................................................................................................................17
1.6.
Mineral Resource Estimation ..................................................................................................................................................17
1.7.
Mineral Reserve Estimates ................................................................ .....................................................................................18
1.8.
Mine Design and Mine Plan ....................................................................................................................................................18
1.9.
Process and Recovery Methods ..............................................................................................................................................20
1.10.
Infrastructure ................................................................................................................................................................ ..........20
1.11.
Market Studies ................................................................................................................................................................ ........23
1.12.
Environmental Permitting and Liability ................................ ..................................................................................................23
1.13.
Capital Expenditure and Operating Costs ...............................................................................................................................23
1.14.
Economic Assessment .............................................................................................................................................................25
1.15.
Concluding Comments ............................................................................................................................................................29
2.
Introduction ................................................................................................................................................................ ...........................30
2.1.
Corporate Structure and Compliance .....................................................................................................................................30
2.2.
Purpose and Terms of Reference (ToR) ................................................................................................ ..................................31
2.3.
Qualified Persons Declaration and Qualifications ...................................................................................................................31
2.4.
Units, Currencies and Survey Coordinate System ...................................................................................................................32
2.5.
Political and Economic Climate ...............................................................................................................................................32
2.6.
Minerals Industry ................................................................................................................................................................ ....33
3.
Property Description ................................................................................................................................................................ ..............34
3.1.
Property Location ................................................................................................................................ ...................................34
3.2.
Legal Tenure and Permitting ...................................................................................................................................................35
3.3.
Material Agreements, Access and Surface Rights ...................................................................................................................35
3.3.1.
Exchange Agreement .............................................................................................................................................35
3.3.2.
Use and Access Agreement ...................................................................................................................................36
3.3.3.
Leeudoorn Agreement ................................................................................................................................ ..........36
3.4.
Permitting ...............................................................................................................................................................................36
3.4.1.
Driefontein Operational Area ................................................................................................................................37
3.4.2.
Kloof Operational Area ..........................................................................................................................................37
3.5.
Driefontein Environmental Authorization Transfer ................................................................ ................................................38
3.6.
Water Use Licenses .................................................................................................................................................................38
3.7.
Other Permitting Requirements ................................................................ .............................................................................38
3.8.
Royalties ................................................................................................ .................................................................................38
3.9.
Liabilities .................................................................................................................................................................................39
3.10.
Concluding Comments ............................................................................................................................................................39
4.
Accessibility, Climate, Local Resources, Infrastructure and Physiography ............................................................................................40
5.
History ................................................................................................................................ ...................................................................44
6.
Geological Setting, Mineralization and Deposit .....................................................................................................................................46
6.1.
Regional Setting, Mineralization and Deposit .........................................................................................................................46
6.2.
Local Geological Setting, Deposit and Mineralization .............................................................................................................48
6.3.
Property Geology, Deposit and Mineralization .......................................................................................................................50
7.
Exploration................................................................................................ .............................................................................................52
7.1.
Methods and Databases .........................................................................................................................................................52
7.2.
Geophysical Characterization ................................................................ .................................................................................52
7.3.
Geo-hydrological Characterization ................................ .........................................................................................................52
7.4.
Geotechnical Characterization ................................................................................................................................................52
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7.5.
LIDAR and Surveying ...............................................................................................................................................................52
7.6.
Drilling ................................................................................................................................................................ .....................53
7.7.
Exploration Budget ................................................................................................................................ .................................53
8.
Sample Preparation, Analysis and Security ............................................................................................................................................54
8.1.
Sampling Method................................................................................................................................................................ ....54
8.2.
Sample Security ................................................................................................................................................................ ......54
8.3.
Analytical Laboratories ................................................................................................................................ ...........................54
8.4.
Analytical Procedures ................................................................................................................................ .............................54
8.5.
Bulk Density ............................................................................................................................................................................55
8.6.
Concluding Comments ............................................................................................................................................................55
9.
Data Verification ....................................................................................................................................................................................56
9.1.
Quality Assurance and Quality Control (QA/QC) ................................................................................................ ....................56
9.2.
Independent Verification ........................................................................................................................................................56
10.
Mineral Processing and Metallurgical Testing ................................ .......................................................................................................57
10.1.
Metallurgical Test Work ..........................................................................................................................................................57
10.2.
Concluding Comments ............................................................................................................................................................58
11.
Mineral Resource Estimates ................................................................................................ ..................................................................59
11.1.
Geological Models and Interpretation ....................................................................................................................................59
11.2.
Estimation Methodology ................................................................................................................................ ........................59
11.3.
Mineral Resource Classification ..............................................................................................................................................60
11.4.
Mineral Resource Verification ................................ ................................................................................................................61
11.5.
Cross-sections and Grade Distribution ................................................................ ...................................................................61
11.6.
Reasonable and Realistic Prospects for Economic Extraction .................................................................................................68
11.7.
Mineral Resource Estimation ..................................................................................................................................................68
11.8.
Additional Mineral Resources .................................................................................................................................................69
11.9.
Concluding Comments ............................................................................................................................................................69
12.
Mineral Reserve Estimates ................................................................................................ ....................................................................70
12.1.
Risk to the Mineral Reserve Estimate ................................................................................................................................ .....70
13.
Mining Method ................................................................................................................................................................ ......................72
13.1.
Mining Plan and Layout ................................................................................................................................ ..........................74
13.2.
Modifying Factors and Mining Schedule .................................................................................................................................75
13.3.
Cut-off Grade ................................................................................................................................................................ ..........76
13.4.
Mining Contractor ................................................................................................................................................................ ...77
13.5.
Concluding Comments ............................................................................................................................................................77
14.
Process and Recovery Methods .............................................................................................................................................................78
14.1.
Existing DP2 Processing Facility ................................................................................................ ..............................................78
14.2.
Planned Expansion of DP2 ......................................................................................................................................................79
14.3.
Concluding Comments ............................................................................................................................................................81
15.
Infrastructure ................................................................................................................................................................ .........................82
15.1.
Leeudoorn Facility ................................................................................................................................................................ ...82
15.1.1.
Geotechnical, Hydrological and Geohydrological Considerations .........................................................................84
15.1.2.
Leeudoorn Design ..................................................................................................................................................86
15.1.3.
Conclusions............................................................................................................................................................88
15.2.
Regional Tailings Storage Facility ............................................................................................................................................88
15.2.1.
Geotechnical, Hydrological and Geohydrological Considerations .........................................................................90
15.2.2.
The RTSF Design ................................................................................................................................ ....................92
15.2.3.
Concluding Comments ................................................................................................................................ ..........95
15.2.4.
Technical Studies - Water ................................................................................................................................ ......97
15.2.5.
Technical Studies - Power ......................................................................................................................................99
15.2.6.
Technical Studies - Pipelines and Pumping ..........................................................................................................100
16.
Gold Market ................................................................................................................................................................ .........................102
16.1.
Gold Price Trends ..................................................................................................................................................................102
16.2.
Exchange Rate Forecast ................................................................................................................................ ........................102
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16.3.
Global Demand .....................................................................................................................................................................104
16.4.
Global Supply ........................................................................................................................................................................104
16.5.
Concluding Comments ..........................................................................................................................................................105
17.
Environmental Studies, Permitting, or Agreements with Local Individuals or Groups ........................................................................106
17.1.
Permitting Status ................................................................................................................................ ..................................106
17.1.1.
The National Environmental Management Act (NEMA) ......................................................................................106
17.1.2.
National Environmental Waste Management Act (NEM:WA) .............................................................................107
17.1.3.
National Water Act (NWA) ................................................................ ..................................................................108
17.2.
Environmental Considerations ..............................................................................................................................................108
17.3.
Social and Political Considerations ................................................................ .......................................................................109
17.3.1.
Discussions with Local Individuals or Groups ......................................................................................................109
17.4.
Environmental Closure Liability Estimate ................................................................ .............................................................110
17.4.1.
Basis of the Closure Liability Estimate .................................................................................................................110
17.4.2.
Quantum of the Closure Liability .........................................................................................................................110
17.5.
Concluding Comments ..........................................................................................................................................................112
18.
Capital and Operating Costs ................................................................................................ ................................................................113
18.1.
Capital Expenditure................................................................................................................................ ...............................113
18.2.
Operating Costs ................................................................................................ ....................................................................114
18.2.1.
Concluding Comments ................................................................................................................................ ........115
19.
Economic Assessment................................................................................................................................ ..........................................116
19.1.
Revenue Forecast ................................ .................................................................................................................................116
19.2.
Cashflows ................................................................................................................................................................ ..............117
19.3.
Sensitivities ...........................................................................................................................................................................118
19.4.
Concluding Comments ..........................................................................................................................................................119
20.
Adjacent Properties .............................................................................................................................................................................119
21.
Other Relevant Data and Information ................................................................................................ .................................................120
21.1.
South African Minerals Policy and Legislative Framework ................................ ...................................................................120
21.2.
South African Legislative Framework ....................................................................................................................................121
22.
Interpretations and Conclusions ..........................................................................................................................................................124
23.
Recommendations ................................................................................................................................................................ ...............125
24.
References ...........................................................................................................................................................................................126
25.
Reliance on Information Provided by the Registrant ...........................................................................................................................136
26.
Qualified Persons Disclosure Consent ................................................................................................ .................................................137
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List of Figures
Figure 1: DRDGOLD Corporate Structure .........................................................................................................................................................30
Figure 2: Location of the FWGR Operations ................................................................................................ ....................................................34
Figure 3: FWGR Operations ................................................................................................................................ .............................................35
Figure 4: Sibanye Gold Mining Rights ................................................................................................................................ ..............................37
Figure 5: Topography of Southern Africa .........................................................................................................................................................40
Figure 6: Topography Map of FWGR................................................................................................................................ ................................41
Figure 7: Climate and Rainfall of South Africa ................................................................................................ .................................................42
Figure 8: Vegetation of South Africa ................................................................................................................................................................43
Figure 9: Regional Geological Setting of the Witwatersrand Supergroup .......................................................................................................47
Figure 10: Geology of the Witwatersrand Basin ..............................................................................................................................................48
Figure 11: Witwatersrand Supergroup Stratigraphic Section ..........................................................................................................................49
Figure 12: Property Geology ............................................................................................................................................................................51
Figure 13: Cross-sections and Grade Distribution - Driefontein 5 TSF .............................................................................................................62
Figure 14: Cross-sections and Grade Distribution - Driefontein 3 TSF .............................................................................................................63
Figure 15: Cross-sections and Grade Distribution - Kloof 1 TSF .......................................................................................................................64
Figure 16: Cross-sections and Grade Distribution - Libanon TSF ................................................................................................ .....................65
Figure 17: Cross-sections and Grade Distribution - Venterspost North TSF ....................................................................................................66
Figure 18: Cross-sections and Grade Distributions - Venterspost South TSF ...................................................................................................67
Figure 19: Mining Methodology ................................................................................................................................................................ ......73
Figure 20: Mining Widths ................................................................................................ ................................................................................73
Figure 21: Mining Sequencing ................................................................................................................................ .........................................75
Figure 22: DP2 Revised Block Plan ...................................................................................................................................................................79
Figure 23: Driefontein 4 TSF Location and Infrastructure ................................................................................................................................82
Figure 24: Leeudoorn TSF Layout................................................................................................ .....................................................................83
Figure 25: Final Layout of Airspace Model .......................................................................................................................................................86
Figure 26: Position of the Elevated Drain Filter ................................................................................................ ...............................................87
Figure 27: Cyclone Layout ................................................................................................................................................................ ................87
Figure 28: Geo-hydrological Regime at the RTSF Site ......................................................................................................................................91
Figure 29: Geo-hydrological Effects of Scavenger Wells beneath the RTSF .....................................................................................................92
Figure 30: RTSF Layout ................................................................................................................................................................ .....................95
Figure 31: TSF Location, Make-up Water Shafts, Processing Plants and Pipeline Layouts ................................................................ ..............98
List of Tables
Table 1: Personal Inspection ............................................................................................................................................................................32
Table 2: Historical Development of FWGR................................................................................................................................ .......................45
Table 3: Dry Densities used by Other Re-treatment Companies for the Witwatersrand Operations ..............................................................55
Table 4: Full Diagnostic Leach Results on Un-milled Feed Samples .................................................................................................................57
Table 5: Driefontein 5 TSF Feed Sample Assay by Size ................................................................ ....................................................................57
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Table 6: Driefontein 3 TSF Feed Sample Assay by Size ................................................................ ....................................................................58
Table 7: Summary of Process Recovery Potential ............................................................................................................................................58
Table 8: Data Interrogated per TSF ................................................................................................................................................................ ..61
Table 9: Variogram Parameters ................................................................................................................................................................ .......61
Table 10: Mineral Resource Estimate for FWGR as at 30 June 2022 ................................................................................................ ...............68
Table 11: S-K 1300 Compliant Mineral Reserve Estimate as at 30 June 2022 ................................................................ .................................70
Table 12: Scheduled RoM Production ..............................................................................................................................................................75
Table 13: Calculated Cut-off Grades ................................................................................................................................................................77
Table 14: Mining Equipment Planned for each TSF ................................................................ .........................................................................77
Table 15: Design Criteria and Assumptions ................................................................ .....................................................................................84
Table 16: Changes in Parameters ................................................................................................................................................................ ....89
Table 17: Environmental Elements under Consideration for RTSF Design and Disposal Method ................................ ...................................89
Table 18: Engineering Elements under Consideration for RTSF Design and Disposal Method ........................................................................90
Table 19: RTSF Design Criteria ................................................................................................ .........................................................................90
Table 20: Underground Water Sources ...........................................................................................................................................................98
Table 21: Power Requirements for FWGR Operations ................................ ....................................................................................................99
Table 22: Eskom Points of Delivery ................................................................................................................................................................100
Table 23: Existing Pipeline and Pumping Infrastructure ................................................................ ................................................................101
Table 24: Phase 2 Pipeline and Pumping Infrastructure ................................................................................................................................101
Table 25: Above Ground Gold Stocks in 2021 ................................................................................................................................................102
Table 26: Long Term Consensus Forecasts in Nominal Terms ................................................................................................ .......................103
Table 27: Global Gold Production ..................................................................................................................................................................105
Table 28: Required Environmental Legislation and the Status for the Driefontein Mining Area ...................................................................107
Table 29: Activities for Phase 2 Requiring a Waste Management License (WML) .........................................................................................107
Table 30: Current Closure Cost Estimates for FWGR ................................................................................................................................ .....111
Table 31: Closure Cost Estimates from Kloof EIA and Guaranteed through Guardrisk ..................................................................................111
Table 32: Summary of Capital Expenditure ...................................................................................................................................................113
Table 33: Average DP2 Operating Cost over LoM ..........................................................................................................................................114
Table 34: Inputs to the DCF Model ................................................................................................................................................................116
Table 35: Sensitivity of Post -tax NPV .............................................................................................................................................................118
Table 36: Sensitivity of Gold Price ................................................................ .................................................................................................118
Table 37: Sensitivity of the Discount Rate ................................................................ .....................................................................................118
Table 38: TRS Data and Information Sources.................................................................................................................................................126
Table 39: Glossary and Abbreviations................................ ............................................................................................................................129
Table 40: QP Area of Responsibility and Disclosure Consent ........................................................................................................................137
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List of Graphs
Graph 1: LoM Production Forecast ..................................................................................................................................................................76
Graph 2: Potential LoM Production Forecast ..................................................................................................................................................76
Graph 3: Actual Production Capacity of DP2 for FY2020, FY2021 and FY2022 ................................................................................................78
Graph 4: Actual Plant Recovery for DP2 versus Forecast Recovery for FY2020, FY2021 and FY2022.............................................................. 79
Graph 7: Gold Price Historical Trendline ........................................................................................................................................................102
Graph 8: Exchange Rate Historical Trendline .................................................................................................................................................103
Graph 6: Global Gold Demand from 2012 to 2021 ........................................................................................................................................104
Graph 5: Global Gold Supply from 2012 to 2021 ...........................................................................................................................................104
Graph 9: Capital Expenditure Forecast ................................................................................................................................ ..........................114
Graph 10: Operating Cost Forecast................................ ................................................................................................................................115
Graph 11: Gold Sales Forecast .......................................................................................................................................................................117
Graph 12: Post-tax Discounted Cashflows .....................................................................................................................................................117
Graph 13: Sensitivity to Expected Revenue and Costs ...................................................................................................................................118
Graph 14: Post-tax Discounted Cashflows (including liner) ...........................................................................................................................119
List of Photographs
Photograph 1: Monitor Gun ................................................................................................ ............................................................................72
Photograph 2: Monitor Gun in Operation ................................................................................................ .......................................................74
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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.
The QP has relied on information provided by FWGR with respect to legal matters (Item 3), the gold price (Item 16.1), environmental or social and
labor planning aspects (Item 17) and economic assumptions (Item 19).
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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
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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
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
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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
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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
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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
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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.
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
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.
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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 13.2. 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
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).
Figure F: Mining Methodology
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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“.
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
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0
1,000
2,000
3,000
4,000
5,000
6,000
0
2
4
6
8
10
12
14
16
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
Financial Year
Gold Content (kg)
Production (Mt)
Financial Year
Driefontein No 5 Dump
Driefontein No 3 Dump
Kloof 1
Libanon
Venterspost North
Venterspost South
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.
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.
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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.
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.
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0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
20232024202520262027202820292030203120322033203420352036203720382039204020412042
ZAR M
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.
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
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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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0
500
1,000
1,500
2,000
2,500
3,000
20232024202520262027202820292030203120322033203420352036203720382039204020412042
Gold Sold (kg)
Financial Year
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.
The expansion of DP2 facilitates an increase in gold sales over time (Graph C).
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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-1,000
-500
0
500
1,000
1,500
2,000
2,500
20232024202520262027202820292030203120322033203420352036203720382039204020412042
NPV
10
(ZAR M)
Financial Year
Post Tax Discounted Cashflow
Cumulative Cashflow
Graph D presents the post-tax cashflow for an operation that excludes the benefits that would eventually be derived from the available TSFs.
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.
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 12.1. 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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0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
80%
90%
100%
110%
120%
NPV
10
(ZAR M)
Net Revenue
Capital Expenditure
Operating Costs
-1,000
-500
0
500
1,000
1,500
2,000
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
NPV
10
(ZAR M)
Financial Year
Post Tax Discounted Cashflow
Cumulative Cashflow
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)
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Source: Sound Mining, 2022
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 presents FWGR’s corporate structure.
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 3), the gold price (Item
16.1), environmental or social and labor planning aspects (Item 17) and economic assumptions (Item 19).
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;
●
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 24.
The Sound Mining QPs and other specialists visited FWGR in 2019, 2020 and 2022 and examined the operations as shown in Table 1. 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 24). 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 (Figure 2).
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 (Figure 3).
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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 (Figure 4) 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:
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:
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.
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
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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.
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).
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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).
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 (Figure 6).
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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).
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.
The vegetation of the region is typical savannah grassland (Figure 8) 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.
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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 15).
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
Table 2. 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 (Table 2) 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 Table 2. 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
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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 (Figure 9).
The basin hosts vast auriferous and uraniferou s deposits which have been grouped into geographically distinct sub-basins or goldfields (Figure 10).
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 (Figure 11). 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 Minerali zation
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).
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 (Figure 11). 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
Source: Frimmel et al, 2005
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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 (Figure 10). Additional horst structures are superimposed upon the southeast plunging West Rand Syncline including
the Bank Fault (Figure 10), 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 (Figure 12) 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 7 and Item 11 respectively.
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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 Characteri zation
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 13 and Item 14). Hydrological and
geohydrological considerations for the Leeudoorn TSF and RTSF are discussed in Item 15.1.1 and Item 15.2.1.
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 13.1). Geotechnical assessments were performed for
the design of the Leeudoorn TSF and RTSF (Item 15.1.1 and Item 15.2.1). 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 Figure 13 to Figure 18. 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.
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.
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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
2018 Mineral Resource estimate but this Mineral Resource has now been updated using a density of 1.42t/m
3
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).
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 9) 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, Table 5 and Table 6.
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 Table 7 are underpinned by test work and records from the currently throughput of Driefontein 5 at the DP2. FWGR 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).
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
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 12.1, 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;
●
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
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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 Table 9.
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.
●
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.
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11.4. Mineral Resource Verification
The following data was received, interrogated, and verified by Sound Mining (Table 8).
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 (Table 9). 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 Figure 13 to Figure 18. 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 13.2) 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 presents the Mineral Resource estimate for FWGR as at 30 June 2022.
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 Table 10 are inclusive of Mineral Reserves. As the entire TSF is mined, Mineral Resources exclusive of Mineral Reserves will
be zero. It accounts for the revised bulk density of 1.42t/m
3
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 (Table 11) 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 16.1).
A LoM plan and mining schedule was developed by FWGR and modified by Sound Mining, as outlined Item 13.2. 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
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:
by a variety of issues, including, but not limited to availability of electricity and water.
●
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.
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●
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:
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:
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:
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:
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:
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:
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:
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 (Photograph 1), 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 14 and Item 15. 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
Figure 19 and Figure 20.
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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 (Figure 20). A monitor gun dislodges the in situ material which washes into slurry channels (Photograph 2).
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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 (Figure 21).
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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.
Table 12 reports the production as scheduled from the FWGR’s owned TSFs. It reveals a total recovered RoM quantity of 229.37Mt at an average head
grade of 0.33g/t. Table 12 also presents the average metallurgical recovery anticipated from each TSF.
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 (Graph 1).
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0
1,000
2,000
3,000
4,000
5,000
6,000
0
2
4
6
8
10
12
14
16
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
Financial Year
Gold Content (kg)
Production (Mt)
Financial Year
Driefontein No 5 Dump
Driefontein No 3 Dump
Kloof 1
Libanon
Venterspost North
Venterspost South
0
2
4
6
8
10
12
14
16
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
2043
2045
2047
2049
2051
Production (Mt)
Financial Year
Driefontein No 5 Dump
Driefontein No 3 Dump
Kloof 1
Libanon
Venterspost North
Venterspost South
Available TSFs
Graph 1: LoM Production Forecast
Source: Sound Mining, 2022
Graph 2 demonstrates an the Available TSFs which are included in FWGR’s longer-term growth strategy and which justifies the envisaged 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 Table 13.
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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.
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 18.
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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0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Production (tpm)
Month
Production (FY 2022)
Production (FY 2021)
Production (FY 2020)
Capacity
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.
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.
Graph 3 and Graph 4 show actual DP2 plant production capacity and plant recoveries over the period FY2020 to FY2022. DP2 Plant 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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0%
10%
20%
30%
40%
50%
60%
70%
Jul-19
Oct-19
Jan-20
Apr-20
Jul-20
Oct-20
Jan-21
Apr-21
Jul-21
Oct-21
Jan-22
Apr-22
Plant Recovery (%)
Month
Actual Recovery
Forecast Recovery
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
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
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
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
●
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 Figure 22 depicts the
changed DP2 plant layout planned from the plant expansion.
Figure 22: DP2 Revised Block Plan
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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:
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●
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.
●
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 (194.16):
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.
Figure 23 shows the locality of the 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.
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.
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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 shows the current layout of the Leeudoorn TSF.
Figure 24: Leeudoorn TSF Layout
Source: Geo Tail, 2022
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Table 15 presents a summary of the design criteria and assumptions used for the Leeudoorn TSF design.
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
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.
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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 shows the final layout for the Leeudoorn TSF.
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.
Figure 26 shows the position of the elevated drain filter.
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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.
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.
Pool and Decant Management:
intakes. Given the high deposition rate and the expected increased vertical freeboard, the pool will be larger than with the day wall
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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
A Leeudoorn TSF design has been completed to enable the conversion of the current day wall TSF to a cyclone-based deposition system.
The design has been developed to accommodate the required deposition plan. It has been benchmarked against other similar conversion
projects and has been found to be within proven operational practice and acceptable risk levels.
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
and 2029 (period of high deposition rate) and a capacity of 107,000m
3
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.
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Table 16 outlines the main differences between the earlier RTSF design and the revised design. These differences include a significantly 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.
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 and Table 18).
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
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Seismicity
Low, medium or high
Geochemistry
Low, moderate, severe
Tailings SG
High, average, low
Source: Beric Robertson Tailings, 2020
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):
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 averag e 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 (Figure 28).
Figure 28: Geo-hydrological Regime at the RTSF Site
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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).
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 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.
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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: the perimeter boundary of the RTSF is defined by a single Toe Wall (3m high 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: in the case of RTSF, an upstream cyclone dam, the containment wall formed from the underflow 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: in order to control the run-off harvested between the Heel Wall and Toe Wall on the low south 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: the beneficial reduction of pore water pressure in the underflow results in a lowering of the phreatic 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: the scavenger well system is a viable alternative to managing the inherent geotechnical risks and 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 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.
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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:
500mm high-density polyethylene (HDPE) lined steel pipelines. A relatively low target slurry density of 1.38t/m
3
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: the decanting system handles the clear water from the deposited slurry which separates into clear water and 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:
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.
Other Supporting Infrastructure: power will be delivered to the RTSF complex via a 10km 33kV overhead powerlines from 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 shows the layout of the RTSF.
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 Far West Gold Recoveries Regional Tailings Dam Report prepared by Beric Robinson Tailings (2020) 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
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.
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.
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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 (Figure 31).
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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.
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 (Table 21) 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.
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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
Suitable PoDs have been identified for the FWGR operations, as shown in Figure 31. 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 Figure 31, is provided in Table 23.
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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
A summary of the additional piping requirements is presented in Table 24.
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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Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Gold Price (USD/oz)
Gold's Monthly Closing Price
Trendline
Upper and Lower Standard Deviation Bands
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).
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
(Graph 5).
Graph 5: Gold Price Historical Trendline
Source: Sound Mining, 2022
The linear trendline indicates robust gold price potential over the near to medium-term.
16.2. Exchange Rate Forecast
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Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Exchange Rate (ZAR/USD)
Monthly Closing USD/ZAR Rate
Trendline
Upper and Lower Standard Deviation Bands
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.
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).
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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0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Quantity (t)
Year
4,100
4,200
4,300
4,400
4,500
4,600
4,700
4,800
4,900
5,000
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Quantity (t)
Year
16.3. Global Demand
Graph 7 reveals a gradual reduction in demand (~14.2%) over the past ten years (2012 to 2021).
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.
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 Table 27.
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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 Table 25. 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 LOCAL 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 21. 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: in March 2016, Sibanye Gold Limited submitted an application for an IEA including a
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. Table 28 summarizes the current environmental legal standing for the 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. Table 28 summarizes the current environmental legal standing of the Kloof mining 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) (Table 29). 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
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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. 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.
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.
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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.
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
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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
A review of the closure estimate and associated plans covers 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;
●
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.
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Table 30 presents the closure cost estimates of the June 2022 Digby Wells Annual Financial Provision Assessment.
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 ZAR16 6.90 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.
Table 31 shows the closure liability for the RTSF calculated in the 2016 Digby Wells EIA and Environmental and Management 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%.
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
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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.
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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0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
20232024202520262027202820292030203120322033203420352036203720382039204020412042
ZAR M
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. Graph 9 illustrates the resulting 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 (Table 33) and forecast (Graph 10) 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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0
200
400
600
800
1,000
1,200
1,400
20232024202520262027202820292030203120322033203420352036203720382039204020412042
ZAR M
Financial Year
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).
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.
The expansion of DP2 facilitates an increase in gold sales over time (Graph 11).
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0
500
1,000
1,500
2,000
2,500
3,000
20232024202520262027202820292030203120322033203420352036203720382039204020412042
Gold Sold (kg)
Financial Year
-1,000
-500
0
500
1,000
1,500
2,000
2,500
20232024202520262027202820292030203120322033203420352036203720382039204020412042
NPV
10
(ZAR M)
Financial Year
Post Tax Discounted Cashflow
Cumulative Cashflow
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
Graph 12 presents the post-tax cashflow for an operation that excludes the benefits that would eventually be derived from the Available TSFs.
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.
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0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
80%
90%
100%
110%
120%
NPV
10
(ZAR M)
Net Revenue
Capital Expenditure
Operating Costs
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 12.1. 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 35 and is illustrated graphically in Graph 13.
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 shows that changes to the revenue forecast will impact margins the most.
Graph 13: Sensitivity to Expected Revenue and Costs
Source: Sound Mining, 2022
Table 36 shows the materiality of changes in the gold price.
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.
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
Source: Sound Mining, 2022
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-1,000
-500
0
500
1,000
1,500
2,000
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
NPV
10
(ZAR M)
Financial Year
Post Tax Discounted Cashflow
Cumulative Cashflow
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.
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);
●
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
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●
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): Mines must comply with South African constitutional and common law 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): The MPRDA provides a holistic cradle-to-grave 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): NEMA was promulgated in 1998 to replace the 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; and
●
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): The NWA stipulates that a WUL is required for the abstraction, storage, use, 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): Waste management activities listed in terms of 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.
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;
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●
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): In terms of Section 21 of the 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): The regulations relating to Group IV Hazardous Substances (GNR 247 of
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): The NHRA requires that a heritage assessment be undertaken for 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): The NEM:PAA regulates the system 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): Holders of a mining right need to comply 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): The NFA prohibits the cutting, disturbance, damage or destruction of trees in 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 24. 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 12.1, remains satisfied that Mineral Resources and Mineral Reserves of FWGR are not likely to
change materially as a consequence of these uncertainties.
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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.
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24. REFERENCES
Item 24
The sources of data and information used in preparation of this TRS are presented in Table 38.
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)
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June 2020
pdf
DRD FWGR Phase 2 Expansion Project Feasibility Study
Mechanical Equipment List (CPP)
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DRD FWGR Phase 2 Expansion Project Feasibility Study Executive
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Manual for the Management of the Disposal of Tailings on the Far
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DRDGOLD Limited
August 2020
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Electrical Point of Delivery Meeting minutes
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August 2021
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Environmental/Legal
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and Energy
May 2018
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Department of Minerals Resources
and Energy
May 2018
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WRTRP Kloof Integrated Environmental Authorization
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Department of Water and
Sanitation
March 2017
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10/C22B/ACFGI/4976
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Sanitation
March 2017
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10/C23E/ACEFGIJ/4527
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July 2022
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Far West Gold Recoveries Closure Cost Assessment 2022. Financial
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Digby Wells Environmental (South
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March 2016
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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
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Africa) (Proprietary) Limited
March 2016
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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
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Africa) (Proprietary) Limited
May 2020
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Far West Gold Recoveries Closure Costs Assessment 2020
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Assessment Information
Malan Scholes Inc
November 2017
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Due Diligence Report for DRDGOLD Limited in respect of the West
Rand Tailings Retreatment Project
National Nuclear Regulator
July 2019
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Certificate of Registration in terms of the National Nuclear
Regulator Act, 1999 (Act No. 4T of 1999)
Sibanye-Stillwater Limited
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19128093_SS_RUSO CC 2019_20191118_FINAL_09_03_20
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19128093_SS_RUSO CC 2019_20191118_FINAL_V1
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Schedule and Economics
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SK1300 - DP2 Expansion LOM plan_13Jul22_Option
3_REAL_Blended_50_MT Edited_Rev3
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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
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
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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
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2013
dm
d4_w_krig_all1
Minxcon (Proprietary) Limited
2009
dm
drth_krig_allfinal2b
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DTOPO_pt/tr
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dr5_krig_all fin
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kl1_krig_all_final3c
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DTOPO_pt/tr
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lib_krig_all1_2010c
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dtopo_pt/tr
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vn_krig_all1_fin2d
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vn_fin_pt/tr
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vs_krig_all1_final2c
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vs_fin_pt/tr
The RVN Group (Proprietary)
Limited
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Density Measurements and Supervision DRDGOLD
The glossary of terms, units and abbreviations used in this TRS are presented in Table 39.
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
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
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Term
Explanation
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 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
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Term
Explanation
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
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
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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
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
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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
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)
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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,
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
Far West Gold Recoveries (Proprietary) Limited
Document No: PR/SMI/1203/22
135
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
Far West Gold Recoveries (Proprietary) Limited
Document No: PR/SMI/1203/22
136
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. The QPs have relied on this information with respect to legal matters (Item 3), the gold price (Item 16.1), environmental or
social and labor planning aspects (Item 17) and economic assumptions (Item 19). The QPs have reviewed this information at face value and are
satisfied that it is both reasonable and appropriate. QPs consider it reasonable to rely on the information provided by FWGR since they are familiar
with the operations and ongoing progress of FWGR since inception, and as a consequence enjoy an enhanced level of comfort with respect to
management integrity and the processes, procedures and quality of planning conducted at FWGR.
Additional information provided by FWGR included technical reports supplied by its consultants and associates and the relevant published data, as
listed below:
●
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;
●
these studies were undertaken by Digby Wells Environmental (South Africa) (Proprietary) Limited (Digby Wells) and Sound Mining has relied on
the findings of these studies;
●
DRA SA (Proprietary) Limited were responsible for the detailed design and associated cost estimates for the expansion of DP2 and associated
piping and pumping infrastructure. Beric Robinson Tailings (Proprietary) Limited (Beric Robinson Tailings) were responsible for the design of the
RTSF which was also costed by DRA. The QPs have relied on Spargo Consult as an independent expert for the review of this work; and
●
Geo Tail SA (Proprietary) Limited (GTSA) were responsible for the Cyclone Conversion Design and technical evaluation of the Leeudoorn TSF; and
the QPs have relied on the findings of this study.
Far West Gold Recoveries (Proprietary) Limited
Document No: PR/SMI/1203/22
137
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