| Tue 22 Jan 2008, 12:37 | | SIM - Simmer And Jack Mines - Production Update For The Third Quarter |
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SIM
SIIF
SIM - Simmer And Jack Mines - Production Update For The Third Quarter
Ending 31 December 2007
SIMMER AND JACK MINES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1924/007778/06)
Share code: SIM
ISIN: ZAE000006722
("Simmers" or "the company")
PRODUCTION UPDATE FOR THE THIRD QUARTER ENDING 31 DECEMBER 2007
Simmer & Jack Mines Limited (Simmers) announced a 16% increase in gold
production for the quarter ended 31 December 2007, compared to the
corresponding period in the previous financial year. Simmers` attributable
gold production went from 35 406 ounces in Q3 F2007 to 41 046 ounces in Q3
F2008. This increase would have been as much as 30% higher were it not for the
fact that Buffelsfontein Gold Mine`s production for the third quarter was
affected by the lock-up of 151kg of gold as a result of the commissioning of
its new CIP plant. This `lock-up` of gold is common when commissioning new
plant and milling equipment and refers to gold that goes through the system
but is locked as a temporary inventory within the new processing plant. It can
be accessed when the plant is cleaned or decommissioned at a later stage.
The increase in gold production is largely as a result of the company`s growth
and development strategy which has seen two new projects - the Ezulwini Mine
and the Buffelsfontein Tailings Recovery Project - come on stream during that
period. Substantially improved infrastructure at Buffelsfontein Gold Mine
(Buffels) aimed at improving the production profile in a sustainable manner,
and better recoveries at TGME, have also contributed to the increase in
production.
"We have been through a period of intense rehabilitation and re-structuring
at Buffels, which currently produces the bulk of Simmers` gold. The ramp-up
strategy involved a substantial capital expenditure programme which is now
almost complete. The next step is the introduction of a very specific
programme to improve the margins. These factors, combined with the fact that
both First Uranium`s operations are now in production will have a very
substantial impact on the business over the next few quarters," said Gordon
Miller, chief executive of Simmers.
In addition to the new CIP plant at Buffels and the mining of gold at First
Uranium Corporation`s (FIU) Ezulwini Mine, the third quarter also saw the
commissioning of the new monitoring station and the 10.5km pipeline at FIU`s
Buffelsfontein Tailings Recovery Project.
Buffelsfontein Gold Mine (Buffels)
The CIP plant came on stream in October 2007, increasing throughput from
140 000 tpm to 170 000 tpm and recoveries from 92.5% to 94% for the December
quarter. An estimated lock-up of 151kg of gold in the new gold plant circuit
resulted from the commissioning of the plant.
As a result, production for Q3 F2008 was 30 170 ounces, down 9.9%from Q2 F2008
(33 488 ounces). Excluding the once-off lock-up factor, production would have
exceeded the second quarter results by 4.6%.
The full effect of the new CIP plant, which by January was exceeding its
nameplate capacity of 170 000 tonnes per month by 10 000 tpm, will become
apparent in Q4.
The successful commissioning of the CIP plant paves the way for optimising the
treatment of the substantial surface waste rock dumps at Buffels. It is
currently the subject of an independent technical report that is expected to
be complete by the end of January 2008.
The effect of the lock-up on the Q3 Buffelsfontein production profile is
illustrated in the table below:
Q2 Q3 Variance Q3 variance
F2008 F2008 F2007
Production kg 1041.59 1089.68 4.6% 1023.85 6.4%
Including oz 33488 35034 4.6% 32918 6.4%
lock-up
Production kg 1041.59 938.68 -9.9% 1023.85 -8.3%
Excluding oz 33488 30179 -9.9% 32918 -8.3%
lock-up
TGME
TGME produced 97,3kg of gold; 7,3kg more than was forecast for the third
quarter. The operation of the CIL plant has allowed the company to evaluate
various metallurgical solutions to deal with the refractory nature of the
underground ore. The results of the metallurgical feasibility study which was
concluded in December 2007 are very encouraging and show that it is possible
to achieve an overall recovery rate of 80% using Biox technology. The company
is now in a position to reassess the Beta and Rietfontein Mine projects.
As a result, the drilling programme at Frankfort has been extended to Beta
Mine. These drill results, together with the results of the metallurgical test-
work, will enable Simmers to make a decision regarding the future of the
underground resource at TGME.
The pre-feasibility study to confirm TGME`s surface potential is on track for
March 2008 and the exploration status for drilling during Q3 is as follows:
Core 5 499 m Frankfort underground
resources
Reverse Circulation 3 875 m Surface Resources
(Hermansburg)
Total 9374m
Test Pitting 102 pits Surface Resources
An additional 6 461 code compliant resource ounces were added to the 126
851 ounces reported as at the end of Q2 F2008, making total surface compliant
resources of 133 312 ounces.
First Uranium`s Ezulwini Mine
First Uranium`s Ezulwini Mine produced 157.2kgs (5 055 ounces of gold) at an
average grade of 5.6g/t in its first quarter of gold production. Of this,
98kgs is attributable to Simmers. The mine began toll-treating underground ore
in November 2007, an arrangement that will continue until the first module of
Ezulwini Mine`s gold plant is commissioned in April 2008. The operation is
ramping up rapidly, with gold production rates in December exceeding the
Ezulwini mine plan due to higher than expected grades.
Buffelsfontein Tailings Recovery Project (also referred to as Mine Waste
Solutions or MWS)
Rain and the late delivery of pumps delayed the commissioning of the
monitoring station and 10.5 kilometre pipeline essential to hydraulically mine
the new Buffelsfontein Number 2 tailings dams. This resulted in a lower than
anticipated production rate of 229kgs (7 357 ounces). Of this, 143kgs is
attributable to Simmers.
The initial train of pumps located at Buffelsfontein No. 2 tailings dam is
however achieving designed performance throughput, despite having a low
utilization of 75% during the quarter while the second train of standby pumps
were being installed. Once the second train of standby pumps is commissioned
during February 2008, the utilization is expected to increase to 95%, which
will sustain production at or better than the planned 20,800 tonnes per day
production rate. Despite lower than planned utilization, production rates are
currently being sustained at 20,000 tonnes per day, having averaged 9043
tonnes per day during last quarter when commissioning was underway
The initial grades mined from the Buffelsfontein No.2 tailings dam are as per
the resource estimates for the initial mining benches and the gold plant is
achieving slightly better than planned recoveries for production from this
newly commissioned long-life resource.
Capital Projects going forward
Simmers is currently in the process of concluding independent technical work
on several projects, all of which have the potential to add significantly to
the resources and the value of Simmers` gold operations. These include:
-The Strathmore pre-feasibility study for a Phase One exploration programme
which will enable the project to be taken to feasibility study level to
develop mineral resources that are currently not part of Simmers` resource
statement. A report by independent consultants indicates that 12 million
ounces of gold and 48 million pounds of uranium could potentially be added to
the resource at Buffelsfontein Gold Mine.
- The Mega Float project to treat Buffels` surface waste rock dumps which
has the potential to add to Buffelsfontein Gold Mine`s production
profile.
- The TGME underground expansion programme on the back of a metallurgical
solution for the economic extraction of gold from refractory underground
ore.
- TGME`s heap leach projects aimed at extracting value from surface
deposits.
For further information please contact:
Simmer & Jack: Gail Strauss at +27847774060 or gail@simmers.co.za
www.simmers.co.za
First Uranium: Bob Tait at + 1 416 558 3858 or bob@firsturanium.com
www.firsturanium.com
22 January 2008
Johannesburg
Sponsor
Sasfin Capital
(A division of Sasfin Bank Limited)
Date: 22/01/2008 12:37:01 Produced by the JSE SENS Department.
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