| Mon 28 Jan 2008, 11:21 | | SIM - Simmers Operations Update |
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SIM
SIIF
SIM - Simmers Operations Update
SIMMER AND JACK MINES, LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1924/007778/06)
Share code: SIM
ISIN: ZAE000006722
("Simmers")
SIMMER & JACK MINES, LIMITED - OPERATIONS UPDATE
Simmer & Jack`s Buffelsfontein Gold Mine received a communique from Eskom on
Friday afternoon (25 January 2008) advising that electric power could not be
guaranteed to the operation.
In the interests of health and safety, management took the decision to withdraw
the workforce and cancel the weekend shifts at Buffelsfontein Gold Mine.
Following negotiations with Eskom on the weekend, it has been agreed that the
mine may resume basic operations required to ensure the ongoing safety
requirements of the workings until further industry discussions on Tuesday, 29
January 2008.
The Buffelsfontein mine complex has a historic installed Eskom supply capacity
of 435 MW of which the mine`s current electricity maximum demand under normal
conditions is approximately 115 MW to ensure safe production. The mine has 5 MVA
of emergency diesel electric generating capacity which is insufficient to ensure
ongoing operations in the event of a national electricity grid power failure.
The impact of this stoppage on Buffelsfontein mine is a loss of production in
the order of 500 ounces of gold per day.
With respect to the fatality that occurred at Buffelsfontein on Thursday 24
January, the Number Two shaft has been temporarily stopped by the Department of
Minerals and Energy (DME) to allow reassessment of the seismic risk management
system. Other seismic areas were re-evaluated during the course of the weekend
of which 80% of these areas have been found to be safe to continue. On
completion of the reassessment of the systems, the mine will present its action
plan to the DME during this week.
Under a directive issued by the Department of Water Affairs and Forestry,
Simmers, in conjunction with AngloGold Ashanti and Harmony is responsible for
the operation of the Margaret shaft at the dormant Stilfontein mine. Margaret
Shaft is operated as a pumping facility for all mines in the region. Failure to
supply power to this shaft would have dire consequences for all mines in the
region; in particular the deeper neighbouring mines which would be the first
recipients of flood waters as they are interconnected to Margaret Shaft via
underground tunnels.
Operations at TGME`s Frankfort mine are unaffected as it is powered by its own
diesel electric generator that is independent of the Eskom grid. The gold plant
at Pilgrim`s Rest is however being severely affected by intermittent power
failures caused by load shedding.
Simmer and Jack`s 62.4% held subsidiary, First Uranium received a similar
communique on Friday 25 January. The Ezulwini Mine has a historic installed
Eskom supply capacity of 120 MW of which the mine`s maximum electricity demand
for safe production is expected to be of the order of 75 MW. Ezulwini is a
critical pumping shaft for mines in the region and it is also required to keep
its ventilation system fully operational in order to keep the dispersion of
radon gas emissions from uranium bearing reefs at a safe level. The Ezulwini
mine has 13.6 MVA of emergency diesel electric generating capacity which is
sufficient to keep the shaft system, pumps and ventilation system operable for
short periods in the event of a national electricity grid power failure. Current
operations have been limited to shaft rehabilitation until clarity is gained
from Tuesday`s industry meetings with Eskom.
First Uranium`s Mine Waste Solutions, a surface tailings recovery operation, has
continued to operate due to its relatively small electricity requirement of 14
MW against an installed capacity of 34 MW. The low power draw relative to
tonnage throughput is due to the fact that the operation does not run large
mills to process the majority of its ore.
CEO of Simmers and President of First Uranium, Gordon Miller said, "We will do
all in our power to accommodate Eskom`s request to reduce our electricity
consumption as best we can and we urge Eskom to explain to the public what they
are doing to deal with the deterioration of existing systems that have led to
this situation. Between Simmers and First Uranium, we employ almost 7 000
people and we need to understand what measures will be put in place to avert the
potentially severe unintended consequences of this system failure. We will be
working with organised labour and the Department of Minerals and Energy to
explore other alternatives of low energy requirement surface production,
particularly at TGME where permits continue to be delayed."
Simmers and First Uranium are monitoring the situation and will update
shareholders accordingly.
Johannesburg
28 January 2008
Enquiries: Gail Strauss +2784 777 4060
gail@simmers.co.za
Date: 28/01/2008 11:21:58 Produced by the JSE SENS Department.
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