OWN CORRESPONDENT, Johannesburg | Tuesday
AVGOLD, the local gold producer, is evaluating three alternatives for the development of an ore body in the Free State, north of its Target project, which would cost between R1bn and R3bn, the daily Business Report said.
Julian Gwillim, an Avgold spokesman, said they were mulling over three development options for the ore body and would deliver a recommendation to the board on the optimal route within the next four months, after which a year-long feasibility study could be commissioned.
The first alternative was the construction of a service shaft at the new workings, which would increase Target’s mining volumes from the projected 100 000 tons a month to about 140000 tons.
The second was a production shaft, which would increase mining throughput by 60 000 to 80 000 tons and would cost about R2bn.
“The third option open to us would be the development of a completely independent mine, which could cost upward of R3bn,” said Gwillim.
Mineral resources at the Target North and Sun South areas had been gauged at about 54,7m ounces, an increase on previous estimates of just over 42m ounces.
The company said in its annual report that 10,9m ounces of resources were within 2,5km from the surface and 5km from the Target Mine.
Rick Menell, the chief executive of Avmin, the mining house which holds 60% of Avgold, said earlier this year that another shaft development to the north of Target “could be quite an expensive venture and we may look for partners”.
Gwillim said: “With the three options likely to cost between R1bn and R3bn, it would be difficult for Avgold or Avmin to go it alone. So, pending the results of the initial study, a partner could be brought in.”
He said it was still too early to identify any potential candidates to help bankroll and operate the new mine.
Anglo American, the resource group, has a 12% stake in Avgold.