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Mintails Hopes That The Worst Is Now Behind It, As It Looks To Develop Its West Rand Tailings Dumps
Mintails has been through a pretty torrid time of late, but maybe, just maybe, the worst is now behind it. According to chief executive Dick van der Walt, the company is on track to produce 50 kilogrammes of gold this month from its Mogale operation on the West Rand. While this is a lot less than he was hoping for, it does at least provide some cash flow. The original plan was for the output from Mogale to be augmented by new production from the Elsburg tailings retreatment joint venture that Mintails has with DRD Gold. However, the 50 per cent stake Mintails had in this venture was sold in two tranches last autumn. The deals were done while the company’s shares were suspended, but the completion of the second deal provided working capital for the group to carry on, and thus enabled the shares to be re-listed. The transaction took place in two stages, a 15 per cent stake in the Elsburg gold project went first, followed by a deal to sell the remaining 35 per cent interest, all to partner DRD, for a total of R177 million.
But this deal is a little more complex that it might initially appear. The 300 million tonnes in the Elsburg dumps are part of the much larger East Rand Gold and Uranium dump retreatment project (Ergo), which is still officially a 50:50 joint venture. But the plan has always been, and remains, to treat the Elsburg dumps first, and this is expected to take up the first 12 years of the project life of Ergo. All of the revenue from that will now go straight into DRD’s coffers, and as the sole beneficiary of the Elsburg operations DRD also gets sole use of one of the two carbon-in-leach gold processing circuits in the project’s Brakpan plant.
All being well, the Elsburg joint venture will be starting soon, although that will no longer be of benefit to Mintails. But on a positifve note, the larger, and longer-term Ergo joint venture is still intact. That entity owns 1.5 billion tonnes of tailings in the East Rand, which contains significant gold, uranium and sulphur credits. It also owns the Brakpan plant with its carbon circuits, one of which is still available for use by Mintails. For its part Mintails is using the cash from the sale of the Elsburg interests to fund its share of a R50 million bankable feasibility study that will examine the possibility of re-commissioning the second carbon-in-leach circuit at Brakpan with a view to treating this 1.5 billion tonnes of tailings. Part of that study will also evaluate the economics of extracting uranium from the resource as well.
In the meantime Mintails is still a gold producer in a small way from the Mogale site on the West Rand. This plant can treat 140,000 tonnes of sand a month, and at that rate is expected to generate 50 kilos of gold. The scope of this operation might very well be expanded if the company’s West Rand Gold and Uranium operation (Wergo) could be completed. But alas, this project has run into major problems. This is the most important asset for Mr van der Walt because it is still 100 per cent owned by Mintails. The plan here is relocate the East Dagga treatment plant from Ergo to Wergo to treat the vast tonnage of slimes that Wergo owns on the West Rand. Unfortunately work on this project has stalled as Mintails has been unable to get environmental permits to dump the reprocessed material. There are also other issues that concern the authorities, such as dust and the use of cyanide treatment.
If it could be completed Wergo could treat 9.6 million tonnes of slimes a year to produce 60,000 ounces of gold. And on top of that there is the potential for uranium production as well. But quite how Mintails will unlock the value of the three million ounces of gold in the Wergo tails is unclear. Anyone looking for enlightenment - or indeed a bit of clarity on the difference between Wergo, Ergo and all the rest - on the company’s website will sorely be disappointed, since although all the pages of the old website show up on Google, the links are broken. Click on the Google link labelled “Mintails highlights” and you get a page which reads “The Mintails website is currently under construction”. In these markets it’s hard to know whether that may actually be a highlight, good news being so thin on the ground nowadays. But fear not, all the salient background details are available on Mintails’ own profile page on Minesite.com, which you can access by clicking on any of the highlighted links on this page. We will also be carrying all of Mintails press releases on our home page as they come out, as we do for all our subscribing companies. Assuming that Wergo does eventually get off the ground, these should hopefully show a company in the completion stages of a radical transformation.
minesite.com
Mintails has been through a pretty torrid time of late, but maybe, just maybe, the worst is now behind it. According to chief executive Dick van der Walt, the company is on track to produce 50 kilogrammes of gold this month from its Mogale operation on the West Rand. While this is a lot less than he was hoping for, it does at least provide some cash flow. The original plan was for the output from Mogale to be augmented by new production from the Elsburg tailings retreatment joint venture that Mintails has with DRD Gold. However, the 50 per cent stake Mintails had in this venture was sold in two tranches last autumn. The deals were done while the company’s shares were suspended, but the completion of the second deal provided working capital for the group to carry on, and thus enabled the shares to be re-listed. The transaction took place in two stages, a 15 per cent stake in the Elsburg gold project went first, followed by a deal to sell the remaining 35 per cent interest, all to partner DRD, for a total of R177 million.
But this deal is a little more complex that it might initially appear. The 300 million tonnes in the Elsburg dumps are part of the much larger East Rand Gold and Uranium dump retreatment project (Ergo), which is still officially a 50:50 joint venture. But the plan has always been, and remains, to treat the Elsburg dumps first, and this is expected to take up the first 12 years of the project life of Ergo. All of the revenue from that will now go straight into DRD’s coffers, and as the sole beneficiary of the Elsburg operations DRD also gets sole use of one of the two carbon-in-leach gold processing circuits in the project’s Brakpan plant.
All being well, the Elsburg joint venture will be starting soon, although that will no longer be of benefit to Mintails. But on a positifve note, the larger, and longer-term Ergo joint venture is still intact. That entity owns 1.5 billion tonnes of tailings in the East Rand, which contains significant gold, uranium and sulphur credits. It also owns the Brakpan plant with its carbon circuits, one of which is still available for use by Mintails. For its part Mintails is using the cash from the sale of the Elsburg interests to fund its share of a R50 million bankable feasibility study that will examine the possibility of re-commissioning the second carbon-in-leach circuit at Brakpan with a view to treating this 1.5 billion tonnes of tailings. Part of that study will also evaluate the economics of extracting uranium from the resource as well.
In the meantime Mintails is still a gold producer in a small way from the Mogale site on the West Rand. This plant can treat 140,000 tonnes of sand a month, and at that rate is expected to generate 50 kilos of gold. The scope of this operation might very well be expanded if the company’s West Rand Gold and Uranium operation (Wergo) could be completed. But alas, this project has run into major problems. This is the most important asset for Mr van der Walt because it is still 100 per cent owned by Mintails. The plan here is relocate the East Dagga treatment plant from Ergo to Wergo to treat the vast tonnage of slimes that Wergo owns on the West Rand. Unfortunately work on this project has stalled as Mintails has been unable to get environmental permits to dump the reprocessed material. There are also other issues that concern the authorities, such as dust and the use of cyanide treatment.
If it could be completed Wergo could treat 9.6 million tonnes of slimes a year to produce 60,000 ounces of gold. And on top of that there is the potential for uranium production as well. But quite how Mintails will unlock the value of the three million ounces of gold in the Wergo tails is unclear. Anyone looking for enlightenment - or indeed a bit of clarity on the difference between Wergo, Ergo and all the rest - on the company’s website will sorely be disappointed, since although all the pages of the old website show up on Google, the links are broken. Click on the Google link labelled “Mintails highlights” and you get a page which reads “The Mintails website is currently under construction”. In these markets it’s hard to know whether that may actually be a highlight, good news being so thin on the ground nowadays. But fear not, all the salient background details are available on Mintails’ own profile page on Minesite.com, which you can access by clicking on any of the highlighted links on this page. We will also be carrying all of Mintails press releases on our home page as they come out, as we do for all our subscribing companies. Assuming that Wergo does eventually get off the ground, these should hopefully show a company in the completion stages of a radical transformation.
minesite.com