Engineering & Mining Journal

MAY 2019

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Page 17 of 83

REGIONAL NEWS - AFRICA 16 E&MJ • MAY 2019 B2Gold Expanding Fekola Mine in Mali B2Gold has started a project to increase processing throughput at its Fekola gold mine in southwest Mali from the current base rate of 6 million metric tons per year (mt/y) to 7.5 million mt/y. The expansion is based on an "Expansion Study Pre- liminary Economic Assessment" (PEA) conducted to evaluate the life-of-mine options for expanded mining and process- ing to maximize the value of substantially increased indicated and inferred mineral resources at the mine. Based on a new optimized mine plan, the mining rate at Fekola will also be in- creased, and the mining equipment fleet will be expanded to accelerate the supply of higher-grade ore to the expanded plant. As a result of the project, the Fekola mine will produce more gold over a longer life, with more robust economics and higher average annual gold production, revenues, and cash flows than it would have produced under the previous life-of-mine plan. Assuming an effective date of Janu- ary 1, 2019, a gold price of $1,300 per ounce (oz), and a discount rate of 5%, highlights of the PEA include estimated optimized mine life extended into 2030, including significant estimated increases in average annual gold production to more than 550,000 oz per year (oz/y) during the five-year period, 2020 to 2024, and more than 400,000 oz/y over the mine life from 2019 to 2030. Total gold pro- duction over the 12-year mine life is esti- mated at about 5 million oz. Revised projected life-of-mine operat- ing cash costs and all-in sustaining costs remain low, below $500 and $700/oz, respectively, despite mining a larger open pit at a slightly lower gold grade. This re- sults from economies of scale arising from increased mining and processing rates and the new optimized mining schedule. Processing plant expansion and upgrade capital costs are estimated at approximately $50 million over a period of approximately 18 months. The forecast expansion capital payback period is less than one year. The projected annual mining rate will increase to a baseline of approximately 54 million mt/y and subsequently will be stepped up to approximately 76 million mt/y to support the increased processing and stockpiling necessary to maintain plant feed grade. Current production av- erages about 36 million mt/y. Total life-of-mine processed tonnage is estimated at about 84 million mt at a grade of 1.9 g/mt gold. The project schedule indicates that the processing expansion will be fully op- erational by the fourth quarter of 2020. B2Gold is investigating the potential to accelerate this schedule based on the availability of long-lead items. Vale Files $2B Lawsuit Against BSGR Over Simandou On April 23, a lawsuit was filed by Vale against BSG Resources Ltd. (BSGR) in the United States District Court for the Southern District of New York to enforce Vale's arbitral award against BSGR, to- taling more than US$1.2 billion — with interest and costs exceeding US$2 billion — which was issued on April 4 by an ar- bitral tribunal with the London Court of International Arbitration. The award arose out of alleged fraud and breach of representations and war- ranties committed by BSGR, a company owned by billionaire Beny Steinmetz, to persuade Vale to purchase a 51% interest in concessions held by BSGR to develop an iron ore deposit in Simandou in the Republic of Guinea, and the adjacent Zogota concession. Vale paid BSGR an initial price of US$500 million, and invested more than US$700 million, principally in Zogota, before the Guinean government withdrew the concessions when it found that BSGR obtained its rights to Simandou as a re- sult of bribery of Guinean officials. Vale said the government found Vale had no connection to the corruption activities. Rio Tinto Approves $463M Investment in Zulti South Rio Tinto has approved the next stage in the development of Richards Bay Min- erals (RBM) in South Africa through the construction of the Zulti South project. The $463 million — including Rio Tin- to's share of $343 million — investment will sustain RBM's current capacity and extend the mine life. RBM currently operates four mines in the Zulti North lease area, a mineral sepa- ration plant and smelting facility. The Zulti North orebody grade is declining, hence the Zulti South mine is required to maintain the output of high-margin zircon and rutile, and provide sufficient ore to support TiO 2 sales. The Zulti South mine (Phase 1) will underpin RBM's supply of zircon and il- menite over the life of mine. Construc- tion is scheduled to start in mid-2019, subject to the granting of all necessary permits, with first commercial production expected in late 2021. The expansion plans at the Fekola gold mine inlude adding more mining equipment to account for the 1.5-million-metric-ton-per-year increase in throughput. (Photo: B2Gold)

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