Isabella-McCays-Bubi Sulphide Complex

RESERVE & RESOURCE UTILISATION WHEN EXPLORATION CAPITAL IS SCARCE
“Desperate times call for desperate measures”. No one knows who first said this –
it is just a proverb that has been passed down to modern times.
At the end of 2002, Bilboes had treated 9.5 Mt grading at 1.27g/t to produce
235koz of gold from its small low grade oxide heap leach open pit mines over a 13
year period with a cumulative exploration expenditure of $10million over that
period. Between 2003 and 2013, the company’s average annual production was
4,200oz dropping to a low of 350oz with “all in sustaining costs” at 90% of
prevailing gold price. During the period, the company operated on a short term
mining plan of 2 years. In 2014, after only spending a cumulative $650,000 in
exploration capital including administration costs since 2003, the company has a
10 year Life of Mine at an annual production rate of 15,000oz with “all in
sustaining costs at 70% of current gold price” from the same assets. How is this?
Company Overview
–
Privately owned Zimbabwean gold exploration and development company formed in 2003 through Management
buyout from Anglo American’s Zimbabwean gold assets
–
Complimentary mix of Brownfield and Greenfield assets with near term to long term production potential
– Raised US$7 million debt facility in December 2012 from IDC of South Africa to recapitalise the Oxide Mines
Isabella-McCays-Bubi Oxide Complex (100% Bilboes)
- Previous production of 240,000 oz over a 20 year period to 2009
- Production underway with target to increase production rate to 11,000 to 15,000 oz pa by Q1 2014 over a 10
year life
- Significant ground secured around the existing mines in the form of exploration licenses (11,000ha of mining
claims and 160,000ha Exclusive Prospecting Orders)
–
Raised US$16m in two private placements, in June 2011 and January 2013 for Definitive Feasibility Studies and on
two key projects
Isabella-McCays -Bubi Sulphide Complex - Sulphide (100% Bilboes)
- SRK Consulting assessed JORC resource of 4 moz to 200m depth
- Potential on down dip and strike extensions
- In fill drilling and Pre-Feasibility study underway with Definitive Feasibility Study completion targeted for Q4
2014
Gold Quarry (100% Bilboes)
- SRK derived resource potential of 0.5 to 1.5 moz to 300m within claims environs
- First phase Resource definition review underway with completion targeted for Q1 2014
3
Project Locations
– Isabella-McCays-Bubi Oxide Complex
(100% Bilboes)
- Located on the Bulawayo Bubi
Greenstone belt
- Includes existing Bubi, Isabella, &
McCays and Mines
– Isabella-McCays-Bubi Sulphide
Complex - (100% Bilboes)
Harare
- Located on the Bulawayo Bubi
Greenstone belt
- Underlying existing oxide mines
– Gold Quarry (100% Bilboes)
- Located on the Odzi Mutare Greenstone
belt
Gold
Quarry
Isabella-McCays-Bubi
Complex
– Exploration Projects (100% Bilboes)
- Located around the existing mines and in
the various Zimbabwean Greenstone
belts
Bilboes project locations
4
Bilboes Properties in Zim
Background
–
Anglo American Corporation exploited shallow low grade gold deposits in Zimbabwe
–
Low cost mining and process method
–
Open pit drill, blast, heap leach process
–
Gold Recovery of 60% from +/-1.50g/t from ore particle sizes of max. 300mm
–
Mining depth of +/-24m from surface to exploit “true oxides”
–
Cumulative mining of 10Mt with in situ gold content of 400koz
–
Only 235koz Au recovered over the years
–
Tests confirm gold recovery increase to 90% after crushing to 80% passing 20mm for “true oxides”
–
Mining depth can be increased to 40m by including the “transitional zone” at the base of the oxides ~ 16m
–
Tests on old leach pads confirmed 50% recoverable gold from remnant
–
Tests confirm gold recovery increase to 60-70% after crushing to 80% passing 20mm for “transitional oxides”
–
New mining thinking - blending the “old leach pads material’’ plus “transitional zone ore”
6
Current Work
• Auguring and grid sampling of all old leach
pads
• Confirmatory drilling of the transitional zone
• Re-modelling of resources
• Optimisation and re-designing of old pits
• Dewatering of old pits for access and in pit
sampling and drilling
• Metallurgical tests “lab and pilot” scale
Isabella-McCays-Bubi Oxide Complex
– Mines have been recapitalised for near term
production
– Previous production of 233,000 oz over a 20 year
period
– US$7 million IDC debt facility utilised in 2013 to
fund redevelopment on attractive terms – interest
at LIBOR +5% per annum and 5 year repayment
timeframe
– Targeting production increase to 11,000 to 15,000
oz pa by Q1 2014
Isabella-McCays-Bubi
Complex
Isabella -Bubi Complex location
- All mines within 30km radius of central elution plant
- Estimated 120,000oz recoverable gold from current
oxides comprising dumps and shallow pits (40m)
– Near term production and attractive project
economics
- Capital costs of US$8m for plant refurbishment, new
equipment and working capital
- Operating cash costs of US$650-700 / oz
- US$2/3million cash per annum from 2014 based on gold
price of US$1,200 / oz
Isabella main process plant and elution
facility
8
Oxide Resources (Dec 2013)
Reserves
Pits
Dumps
Resources
Category
Mt
Au g/t
Au oz
Category
Mt
Au g/t
Au oz
Proved
1.09
0.70
25,786
Measured
+Indicated
0.25
0.83
6,695
Probable
0.71
1.39
31,757
Inferred
0.80
0.70
18,529
Total
1.80
0.99
57,543
Total
1.05
0.74
24,954
Proved
5.1
0.60
99,208
Measured +
Indicated
4.1
0.42
54,683
Probable
-
-
-
Inferred
-
-
-
Total
5.1
0.60
99,208
Total
4.1
0.42
54,683
Note: Bilboes estimates 120,000 oz Au recoverable from Isabella, McCays, Bubi Oxide Resources. These Resources are
based on schedules maintained by Bilboes which were originally developed by Anglo American Corporation and
are considered by the company to be JORC compliant.
9
Oxide Mines - Cash Flows
Isabella-McCays-Bubi Complex - Oxide Mining Operations - Summary Financial
Forecasts
ACTUAL
Year
FORECAST
2011
2012
2013
2014
2015
2016
2017
2018
710
192
4,077
12,659
11,286
11,825
11,825
13,390
Revenue ($'000)
1,072
588
4,599
15,190
13,543
14,190
14,190
16,067
Operating cash costs (US$/oz)
2,662
11,087
1,478
632
703
724
724
664
710
15,968
2,065
897
988
989
982
892
(2,479) (3,292)
3,836
2,387
2,501
2,574
4,120
1,200
1,200
1,200
1,200
1,200
1,200
Gold Production (oz)
Total All In Costs (US$/oz)
NPAT ($'000)
Gold Price (US$/oz)
1,072
Excess cash to be invested for oxide exploration around the existing mines and surrounding ground
McCays Mine - Old Leach Pad (1Mt @ 0.50g/t) being mined as at December 2013
11
Isabella Mine - Old Leach Pad (4Mt @ 0.60g/t) as at December 2013
12
Isabella Mine - Calcite 5 Pit (151,000t @ 0.74g/t) as at December 2013
13
Isabella Mine - (Castile Pit (285,000t @ 1.79g/t); before dewatering and as at
December 2013
14
Isabella Mine - Old Maria Pit (93,000t @ 1.10g/t) before dewatering and as at
December 2013
15
Isabella Mine - Diana (265,000t @ 1.10g/t) before dewatering
16
Isabella Mine - Calcite Pit as at December 2013. Under investigation
17
18
McCays Mine - McCays Main Pit (250,000t @ 0.70g/t) before dewatering
19
McCays Mine - McCays Extension Pit (83,000t @ 1.32g/t) before dewatering
Isabella Mine - New Leach Pad as at December 2013
20
McCays Mine - New Leach Pad as at December 2013
21
Isabella Mine - 145tph 2 Stage Crushing Plant; - 60,000tpm
22
McCays Mine - 200tph, 2 Stage Crushing Plant; - 60,000tpm
23
Isabella Mine - Old & New Leach Pads at December 2013
24
McCays Mine - Old & New Leach Pads
25
Typical adsorption & elution plant at Isabella Mine with solution ponds
Typical process plant at Bubi Mine plant
Typical layout of workshops area – Isabella Mine
PFS/DFS Projects
– A total of US$16m will be utilised for
- Completion of Definitive Feasibility Study for the
Isabella-McCays-Bubi Sulphide Complex
- Commence resource definition and further work at the
Gold Quarry Prospect
29
JORC Mineral Resources
SRK Resource Statement – October 2013
Indicated
Inferred
Total
Mt
Au
g/t
Ounces
Mt
Au
g/t
Ounces
Mt
Au
g/t
Ounces
Bubi - Sulphide
13.3
1.67
713,030
14.4
1.84
851,960
27.7
1.75
1,564,990
Isabella North Sulphide
6.4
2.60
537,200
7.9
2.46
625,650
14.3
2.52
1,162,850
Isabella South Sulphide
5.7
2.63
484,370
2.3
2.48
185,900
8.1
2.59
670,270
McCays - Sulphide
3.9
2.14
266,610
5.4
1.72
299,050
9.3
1.89
565,660
1.6
0.80
40,375
1.6
0.80
40,375
31.6
1.97
2,002,935
60.0
2.04
4,004,145
Project
Gold Quarry - Oxide
Total
-
29.3
2.12
2,001,210
An additional potential of 745,000 oz Ag in-situ from Gold Quarry Oxides has not
been included in the above mineral resource estimate
30
Bateman - Conceptual Processing Study
 Bateman Engineering conducted a conceptual study of the processing options for refractory ore in Zimbabwe
which returned the following key results for a conceptual 30,000oz/year plant
Bateman Engineering - Conceptual Processing Options Study
Bacterial
Summary
UFM UFM Whole
Albion
Processing Method
Heap
Concentrate
Oxidisation
BIOX
POX
Ore Concentrate Concentrate Concentrate
Ore Processed (t / year)
600,000
600,000
600,000
600,000
600,000
600,000
Gold in Plant Feed (oz /
year)
43,403
39,062
43,403
39,062
39,062
39,062
70%
45%
50%
83%
83%
85%
30,382
17,578
21,701
32,344
32,344
33,047
US$51.3m
US$45.9m
US$53.3m
US$52.6m
US$56.9m
US$67.6m
US$1,307/oz
US$614/oz
US$631/oz
US$349/oz
US$402/oz
US$493/oz
Gold Recovery
Gold Produced (oz / year)
Total Capital Cost
Total Operating Cost
31
Mintek Metallurgical Testwork
Programme
 Mintek test-work programme was designed to include;
-
Mineralogical evaluation, gold deportment and chemical assessment of the ore
-
Comminution tests
-
Gravity amenability tests
-
Flotation optimisation tests
-
Diagnostic leaching tests
-
Pressure Oxidation, Bi-oxidation & Ultrafine grinding tests of flotation concentrates
-
Intensive cyanidation of flotation tails
 Programme commenced in July 2013 is scheduled to be completed by February 2014
32
Mintek Testwork Results
– Results so far
- 1.6 to 2.8 g/t Au associated with sulphides
- Gold occurs mainly as very fine sub-microscopic
particles (0-5microns) as free or electrum (alloy).
- high carbonates and ore is refractory
- Flotation tests – up to 94% Au recovery
33
Mintek – Outstanding Tests
 Flotation tests
-
Optimum grind and recovery and mass pull with cleaning stages
-
Ultra fine milling of concentrate followed by intensive cyanidation at high dissclved oxygen levels
-
Ultra fine grinding of flotation concentrates following gold recovery after partial oxidation
-
Gold recovery via gravity, flotation, gravity-flotation and gold recovery from tails
 Results expected by end of February 2014
34
MDM Engineering Programme
 The MDM Engineering programme covers the following;
-
Supervision of Mintek work
-
Evaluation and selection of process route and trade of studies to determine the preferred process route
-
Review of all available metallurgical test work results
-
Design of conceptual flow sheets for the process plant
-
Infrastructural requirements covering equipment, power and water
-
Development of capital and operating cost estimates to +/-25% accuracy for pre-feasibility study
-
Development of capital and operating cost estimates to +/-10% accuracy for definitive feasibility study
 Pre-Feasibility Study programme is scheduled to be completed by Q2 2014
 Definitive Feasibility Study is scheduled to be completed by end of Q4 2014
35
Future Funding Requirements
 Intention to raise funds for mine development at Isabella-McCays-Bubi sulphide complex
 Target of 30-50,000oz pa with capital estimated at $100million
 Financing options are outlined below;
-
Raise full amount through debt and equity
-
Financier to construct plant and Bilboes can become an anchor supplier of material (capital required can be
reduced to $50m)
36
Anticipated Sulphide Project Economics
 Potential Open Pit for 2 moz grading 2.5g/t
-
Potential vertical extent of +/-100m
-
Potential Life of Mine of 10 years at 100,000oz pa
-
Mining extraction factor of 80% and gold recovery of 85%
-
Projected all in sustaining costs of $800/oz
•
Processing $400/oz
•
Mining $100/oz
•
Administration $150/oz
•
Capital replacement $150/oz
 Underground potential
-
SRK derived potential of 1 moz grading 4.5g/t
-
Potential derived from 100 - 250m vertical extent
-
Upside potential tested to 500m
37