| Wed 23 Jan 2008, 17:13 | | SIM - Simmers` Strathmore Project Has Potential To Treble Buffelsfontein`s |
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SIM
SIIF
SIM - Simmers` Strathmore Project Has Potential To Treble Buffelsfontein`s
Resource
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")
NEWS RELEASE
SIMMERS` STRATHMORE PROJECT HAS POTENTIAL TO TREBLE BUFFELSFONTEIN`S
RESOURCE
Johannesburg - Simmer and Jack Mines, Limited ("Simmers") (JSE:SIM,
ISIN:ZAE00006722) today announced that a pre-feasibility study for an
exploration drilling programme in the vicinity of Buffelsfontein Gold Mine`s
(Buffels) Strathmore shaft, indicated the potential to treble the mine`s
gold and uranium resource base. Buffels currently has Measured and Indicated
Resources of 11.2 million ounces of gold and 15.5 million pounds of uranium.
The pre-feasibility study comes on the back of the results of an independent
technical assessment to review a full stand-alone concept study and capital
cost estimate of the Strathmore project compiled in 1989 by previous owners,
Genmin, using current cost and gold price assumptions.
The latest report, compiled by TWP Consulting (Pty) Ltd, recommends that
funds be made available to complete a full feasibility study for an
exploration programme, to conduct a drilling programme in order to confirm
the opportunity to exploit the extensive conceptual resource in the target
area.
"The consultants approached the project from the point of view of looking at
the capital costs required, and then ascertaining what resource base is
required to support that capital. Their conclusion is that the conceptual
resource has the potential to support a capital project in excess of R10
billion and still realise an NPV return of R4 billion over the project life
of 21 years, at a discount rate of 8%," said Simmers` chief executive,
Gordon Miller.
"The challenge will be to ensure sufficient reserve tonnages are converted
from the extensive conceptual resource to sustain a mining rate of 160 000
tonnes per month for a period of at least 20 years, in order to justify the
risk and cost of the project," said Miller.
Miller added that of particular interest is the fact that 30 million tonnes
of the Strathmore resource is estimated to lie within 3.5km of the
Strathmore shaft system at less than 4 000 metres depth.
"This presents an option to commence rehabilitation, dewatering and
commissioning of the current Strathmore tertiary shaft to enable gold
production concurrently with the deepening of the proposed new shaft system.
It is therefore possible that the first phase of the project would allow
mining to take place at depths of between 2900 and 4000 metres below
surface, thereby reducing cash flow requirements and risk for the project."
The recommended drilling programme, comprising approximately 43 500 metres
of exploration holes at an estimated cost of R167.4 million, would be
conducted over a period of two to three years. Buffels currently holds the
rights to the area under consideration.
The estimated economic parameters are summarised in table one below, which
is extracted from the TWP report:
Table One
METRICS TOTAL TARGET COMMENTS
Gold (oz) Produced: Assumes gold
recovery of 96%
Monthly 43 200 At steady state
full production
Annually 518 500
Life of Mine 11 900 000
U3O8 (lbs) Assumes uranium
Produced: recovery of 73%
Monthly 176 600
Annually 2 118 800
Life of Mine 48 700 000
Reserve:
Million Tonne 44 209 000 Reef tonne has been
discounted by 60%
for geology,
support etc
Resource:
Million Tonne 110 523 000
Cash costs: Gold equivalent
$/oz 313 (256)
R1000/Kg 90.1 (73.5)
Phase 1 Capex (R`m) 167,4 For 43 500m of
exploration
drilling
Project Capex (R`m) 10 741
Life of Mine (Yrs) 21 At 160ktpm ROM in
both cases
NPV (R`m) 4 066
Concept Confidence:
Technical 70% Supported by
practice and
research
Commercial 60% Investor
perceptions of
safety
The TWP report is based on technical parameters achieved in current mining
activities in South Africa, as well as technical work done by the CSIR
(Council for Scientific and Industrial Research) on behalf of the South
African mining industry ("Project Deep Mine") which concluded that it is
technically feasible to mine at depths in excess of 4 500 metres.
"These are conceptual numbers but they`re well backed up with technical
data, including capital and cost numbers currently valid for operations
mining at below 3 500 metres. The recommended exploration work is critical
to provide the appropriate level of information necessary to advance to a
pre-feasibility study for the establishment of a new shaft system to access
the entire target area," said Miller.
The target area is based on a 4.5 kilometre radius around the centre of the
proposed new Strathmore Shaft system some 1.5 kilometres to the South East
of the current Strathmore Shaft system.
The TWP report estimates the Strathmore non-compliant conceptual resource to
be as follows:
Resource Reserve
Maximum depth 5 km
considered
Maximum distance 4.5 km
from shaft
Total tonnes 110, 523,000 44,209,000
Au grade (g/t) 9.91 8.39
U3O8 grade 3.6 0.5
(kg/tonne)
Au content (million 35,2 11,93
ounces)
The conceptual reserve tonnages at various depths are estimated to be as
follows:
Depth* Conceptual reserve tonnes
Less than 4 km deep 13, 582 463
4 to 4.5 km deep 13, 869 573
4.5 to 5 km deep 16 757 288
TOTAL 44, 209, 325
* Assumes:
A tramming grade of 8.39 g/t
Tramming width of 177 cm, and
Channel width of 21 cm
The full TWP report, entitled `Strathmore deeps - pre-feasibility study for
Simmer & Jack Mines Limited Exploration Drilling Programme` is available on
the Simmers website, www.simmers.co.za, under the heading Plans &Reports.
Cautionary Language Regarding Forward-Looking Information
This news release contains certain forward-looking statements. Forward-
looking statements include but are not limited to those with respect to the
price of uranium and gold, the estimation of mineral resources and reserves,
the realization of mineral reserve estimates, the timing and amount of
estimated future production, costs of production, capital expenditures,
costs and timing of development of new deposits, success of exploration
activities, permitting time lines, currency fluctuations, requirements for
additional capital, government regulation of mining operations,
environmental risks, unanticipated reclamation expenses, title disputes or
claims and limitations on insurance coverage and the timing and possible
outcome of pending litigation. In certain cases, forward-looking statements
can be identified by the use of words such as "plans", "expects" or "does
not expect", "is expected", "budget", "scheduled", "estimates", "forecasts",
"intends", "anticipates", or "does not anticipate", or "believes" or
variations of such words and phrases, or state that certain actions, events
or results "may", "could", "would", "might" or "will" be taken, occur or be
achieved. Forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results,
performance or achievements of Simmer & Jack Mines, Limited to be materially
different from any future results, performance or achievement expressed or
implied by the forward-looking statements. Such risks and uncertainties
include, among others, the actual results of current exploration activities,
conclusions of economic evaluations, changes in project parameters as plans
continue to be refined, possible variations in grade and ore densities or
recovery rates, failure of plant, equipment or processes to operate as
anticipated, accidents, labour disputes or other risks of the mining
industry, delays in obtaining government approvals or financing or in
completion of development or construction activities, risks relating to the
integration of acquisitions, to international operations, to prices of
uranium and gold. Although Simmer & Jack has attempted to identify
important factors that could cause actual actions, events or results to
differ materially from those described in forward-looking statements, there
may be other factors that cause actions, events or results not to be as
anticipated, estimated or intended. It is important to note, that: (i)
unless otherwise indicated, forward-looking statements indicate the
Company`s expectations as at January 2008; (ii) actual results may differ
materially from the Company`s expectations if known and unknown risks or
uncertainties affect its business, or if estimates or assumptions prove
inaccurate; (iii) the Company cannot guarantee that any forward-looking
statement will materialize and, accordingly, readers are cautioned not to
place undue reliance on these forward-looking statements; and (iv) the
Company disclaims any intention and assumes no obligation to update or
revise any forward-looking statement even if new information becomes
available, as a result of future events or for any other reason.
In making the forward-looking statements in this news release, Simmer & Jack
has made several material assumptions, including but not limited to, the
assumption that: (i) approvals to transfer or grant, as the case may be,
mining rights will be obtained; (ii) metal prices, exchange rates and
discount rates applied in the preliminary economic assessments are achieved;
(iii) mineral resource estimates are accurate; (iv) the technology used to
develop and operate its two projects has, for the most part, been proven and
will work effectively; (v) labour and materials will be sufficiently
plentiful as to not impede the projects or add significantly to the
estimated cash costs of operations; (vi) outstanding approvals for the
completion of an acquisition, the transfer of mining rights and the approval
of mining rights will be granted; and (vii) black economic empowerment
("BEE") investors will maintain their interest in the Company and their
investment in the Company`s common shares to a sufficient level to continue
to support the Company`s compliance with 2014 BEE requirements.
About Simmer and Jack Mines, Limited
Simmer & Jack Mines, Limited (Simmers) is a gold and uranium company listed
on the JSE. A development company with the aim of becoming a tier one, low-
cost gold and uranium producer, Simmers` focus is on sustainable expansion
through the organic growth of its large resource base, coupled with a
targeted exploration programme. It has a 62.4% stake in TSX and JSE-listed
First Uranium Corporation.
Contacts:
Simmer and Jack Mines Limited
5 Press Avenue, Selby, South Africa, 2025
www.simmers.co.za
For further information, please contact:
Gail Strauss, Group Communications at +27 11 830 0390 or 084 777 4060
gail@simmers.co.za
Johannesburg
23 January 2008
Date: 23/01/2008 17:13:28 Produced by the JSE SENS Department.
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