Simmers may close more shafts to stop ‘cash bleed' - Van der Mescht
miningweekly.com
By: Martin Creamer
19th August 2009
Updated 7 hours ago
JOHANNESBURG (miningweekly.com) – Gold junior Simmer & Jack Mines (Simmers) may close more shafts to stop "cash bleed", its gold division MD Deon van der Mescht told Mining Weekly Online on Wednesday.
Van der Mescht reported that the Buffelsfontein (Buffels) gold mine's Number 12 shaft had already been closed, as had the company's TGME underground operations in the Mpumalanga province.
"We have embarked on a more intensive rationalisation process, and we'll stop other shafts if need be, to ensure that we don't bleed unnecessary cash," he told Mining Weekly Online, adding that other underperforming Buffels shafts would be evaluated and, should they fail to stand up to evaluation, closed, just as Number 12 shaft had been closed.
"We'll continue to apply this principle of Buffels' shaft closures until such time as the mine returns to profitability," Van der Mescht said.
Rand strength, he added, was serious for the marginal Buffels mine, and the company had moved quickly to mitigate that risk and to ensure that the Buffels' operations returned to profitability as soon as possible through the cutting of costs and the trimming of expenditure until such time as the company's volumes picked up.
Buffels would remain in the build-up phase for another two-to-three years, he told Mining Weekly Online.
Aleviating the tight situation would be: additional surface volumes put through the newly commissioned float-technology plant; the high-grade Number Five shaft and the Tau Lekoa mine, which Van der Mescht said were all important to the sustainability of the marginal Buffels.
The use of float technology was expected to reduce total processing costs by 35% a ton compared to conventional processing, and was expected to increase surface production by 37% in the second half of the calendar year, running from July to December 2009.
The mini-float plant would allow Buffels to treat 16-million tons of surface waste rock of 0,52 g/t grade at a rate of at 150 000 t/m, at a cash operating cost of below R150 00/kg. It would add 200 000 oz to Buffels' life-of-mine over the next 11 years.
From January 2010, the mill capacity at Buffels' south plant, currently used for surface material, would be used to process ore from the newly acquired Tau Lekoa mine.
In order to continue to process low-risk surface material, the now-idle Buffels north plant would be recommissioned.
Surface ore would be milled at the north plant and pumped to the south plant to be floated and treated.
Van der Mescht said that the "next weapon" in the company's arsenal to protect Buffels from the impact of the strong rand was the completion of the Number Five shaft rehabilitation project, which was on track for the end of next month.
At that point, new rock-handling facilities and refrigeration in the Number Five A shaft would facilitate access to higher-grade face length, which, in turn, was expected to impact positively on underground production from the December quarter onwards.
The final element would come with the transfer of Tau Lekoa to Buffels, which was scheduled to take place in January, assuming the mining right had been ceded.
This would feed high-grade material to the Buffels' plant and help to spread Buffels' fixed costs over a far greater volume. |
