New life for old - rebirth of a tailings retreatment pioneer
March 2008 Who we are
• 50/50 JV between DRDGOLD SA and Mintails SA • Objective: ― refurbish former AngloGold Ashanti Ergo tailings retreatment plant at Brakpan ― retreat up to 1 700m t of East Rand-located tailings ― recover up to 15m oz of gold ― also uranium and sulphuric acid pending feasibility study outcome
2 Who we are, cont'd
• DRDGOLD SA • Mintails SA ― 74% owned by JSE-, NASDAQ- ― wholly owned subsidiary of ASX- listed DRDGOLD Ltd, 26% by BEE listed Mintails Limited partner Khumo Gold SPV (Pty) ― Mintails SA on track for West Ltd and employee trust Rand tailings retreatment by Q4, ― experienced SA gold producer 2008 ― two deep-level underground gold, uranium mines (Blyvooruitzicht, ERPM) ― Mint ail s Limit ed cap ita lise d a t ― one of world’s largest current A$400m tailings retreatment operations (()Crown) ― 2007 gold production: 334 496 oz ― DRDGOLD Limited capitalised at R3.6 billion
3 JV management structure
DRDGOLD SA Mintails SA
Ergo steering committee
Crown Gold AngloGold Ashanti Project RiRecoveries team
Crown Mines
Construction City Deep and commission
Knights
Services Ergo Ergo
4 Ergggpo Mining's new potential
• Gold ― sustained high gold price ― ‘lean-and-mean’ management ― 15m oz estimated resource ― 25-year life financial ppglanning based on 12 years • Uranium, sulphuric acid ― buoyant markets • Proppyerty develo pment
5 Ergggo Mining's advantag es
• Compared with deep-level underground mines: ― greater certainty IRO tonnages, grades Elsburg Tailings Complex (five dumps) 171.6m t 0.30g/t 1.67m oz Au half recoverable with existing technology ― lower unit costs ― lower pppower consumption • Compared with other surface retreatment operations: ― two deposition sites ― servitude rights ― water attractive to other owners of tailings
6 The location, resources and pipelines
5L22 5L26 5L21 5L23 5L24 5A9 Johannesburg Knights Benoni 5L4 5A1 5L30 5L3 1 3L38 5L5 5L25 3A13A 5L6 4L27 4A6 4L23 6A1 4L43 5L7 6L2 4L17E 4/A/8 South West Vaal Boksburg 5L27 6L14 4L8 Shaft (E.R.P.M) Germiston 6L13 6L16 4L87 Benoni tailings 6L17 dam Brakpan
Springs
5L29 Elsburg Complex Brakpan plant Tailings Alberton Tailings Kwa-Thema dam DAGGAFONTEIN PLANT 5L32 N 7L15 7L5 7L6 Brakpan tailings dam 7L7
Withok Silmes Dam
Rooikraal Duduza
Nigel
Reference
Ergo resources Feed pipelines Tailings dams Tailings pipelines Pump stations / plants Water pipelines Railways 7 Erggggo Mining's logistics
• Conservative investment and strategic planning • Investment returns calculated on: ― 12-year operating life ― Benoni, Elsburg tailings only ― gold recovery only • 15Mt of tailings pa ― 75 000 oz Au • Blue sky uranium, sulphuric acid, property development not included
8 Whyyg Ergo Minin g will succeed
• Five pillars of the dump retreatment business ― resource ― plant ― deposition site ― servitudes ― water
• Gold, uranium prices at near-historic highs
• Planning based on a conservative gold price
9 Five-year gold London fix pm daily with 60- and 200-day moving averages
US$ per ounce Daily Five-year gold Lond on fix pm dildaily Hig h 945. 00 Low 319. 90 SMA (200) 960 SMA (60)
824
688
552
416
280 Feb 03 Oct 03 May 04 Jan 05 Aug 05 Apr 06 Nov 06 Jul 07 Feb 08
Source: Global Insight
10 The price in Rands
Gold price, Rand per ounce, London pm fix
8 000
7 000
6 000
5 000
4 000
3 000
2 000
1 000 Jan-00 Jul-00Jan-01Jul-01Jan-02Jul-02Jan-03Jul-03Jan-04Jul-04Jan-05Jul-05Jan-06Jul-06Jan-07Jul-07Jan-08
Source: Global Insight
11 Uranium – a hidden resource
• Growing demand worldwide ― green power generation • Newcomers’ track record ― much promise, little delivery • Not factored into current Ergo Mining financial planning ― inclusion dependent on feasibility study outcome ― mineral processing companies appointed – Batemans, EPC • Planning will be based on conservative price estimates ― although latest spot price indicates a new, positive trend
12 Ux U3O8 spot vs. 30-week moving average prices
US $/lb U3O8 Ux U308 price 30 week avg
$140 $130 $120 $110 $100 $90 $80 $70 $60 $50 $40 $30 $20 $10 $0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
13 Brakpppan plant
14 Ergggo Mining flowsheet
Sand/slime reclamation
Pump stations
Over size De-sanding Water Low SG Thickeners CIL tanks
Tailings dam Tail screen
Loaded carbon
Elution
Electro-winning
Smelt Gold product
15 Capppex committed and spent
Refurbishment/construction R
Refurbish Brakpan plant ... 62.0m Reclamation stations/pipelines/pump stations phase 1.1 ... 38.5m Reclamation stations/pipelines/pump stations phase 1.2 ... 76.1m Reclamation stations/pipelines/pump stations phase 1.3 ... 32.8m EPCM ... 12.2m Re-commission Brakpan dam ... 36.0m Initial warehouse stock take-on ... 30. 0m TOTAL ... R287.6m
Sunk costs
Purchase AngloGold Ashanti assets ... 46.4m Purchase AngloGold Ashanti Brakpan & Withok tailings dams ... 49.6m Rehabilitation liability guarantee ... 63.0m Working capital ... 30.0m TOTAL ... R189.0m
16 Capital breakdown
Reclamation stations, pipelines, pump stations EPCM 0% Brakpan dam re‐commissioning Purchase of AngloGold Ashanti assets 7% Re ha bilita tion lia bility guarantee 7% Initial warehouse stock take‐on Working capital 36%
15%
3% 23% 9%
17 Ergggpgpo Mining's operating parameters
• Treatment rate: 1.25Mt/pm
• Head grade: 0.320g/t
• Extraction efficiency: 49.8%
• Capex: R477m
• Opex: R20.39/t
18 Timeline
Elsburg
600kt/m 600kt/m Brakpan plant Benoni 600kt/m Brakpan tailings
Phase 1.1 Jan 08 Oct 08 Commission 600kt/m Benoni
Phase 1.2 Jan 08 April 09 Commission 600kt Elsburg, total 1.2Mt/m
Phase 1.3 March 10 March 11 Commission 2nd 600kt/m Elsburg, total 1.2Mt/m
19 Timeline, cont’d
2008 2009 2010 2011
• Phase 1 - Process • Phase 1.1 – • Phase 2 – • Possible gold bearing processing capacity Commission commissioning of tailings at 7.2Mtpa doubled to refurbished second uranium and acid 14.4Mtpa CIL circuit plant dependent on • Installing pipeline outcome of from Brakpan plant • Install pipeline from • Increased to 30Mtpa feasibility study of to Benoni Brakpan plant to capacity 2008 Elsburg • Exploration and • Construct Withok drilling programme • Design Withok tailings facility deposition site • Bankable study for uranium and acid • Possible start of production (nine construction of months) uranium and acid plant dependent on outcome of feasibility study
20 Environmental
• Crown’ s 25 years of dump retreatment experience ― especially environmental rehabilitation • EMPs be ing comp ile d ― close co-operation with government departments • Particular emphasis on: ― land clearing ― minimising wind-blown dust, ground water pollution
21 Whyyg Ergo Minin g stands out
Secure Conservative funding planning
Good opportunities Tried and to bring in new tested skills partners
22 Questions