| Thu 24 Apr 2008, 17:29 | | WGR - Wits Gold - Completes a positive scoping stu |
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WGR
WGR
WGR - Wits Gold - Completes a positive scoping study on the Bloemhoek Project in
the Southern Free State Goldfield
Witwatersrand Consolidated Gold Resources Limited
(Incorporated in the Republic of South Africa)
Registration Number 2002/031365/06
JSE Code: WGR
ISIN: ZAE000079703
TSX Code: WGR
CUSIP Number: S98297104
(`Wits Gold` or `the Company`)
WITS GOLD COMPLETES A POSITIVE SCOPING STUDY ON THE BLOEMHOEK PROJECT IN THE
SOUTHERN FREE STATE GOLDFIELD
Wits Gold is pleased to announce that the Company has received the results of a
scoping study on its Bloemhoek area that was completed under the guidelines of
Canadian National Instrument 43-101. The Bloemhoek area is situated adjacent to
the Beatrix Gold Mine, south of Welkom in the southern Free State Goldfield,
South Africa. This scoping study was undertaken by the independent consultant,
Gordon Cunningham (the "Qualified Person") from Turnberry Projects and is based
on an indicated mineral resource of 52.3Mt at an average grade of 6.7g/t,
containing 11.3Moz of gold. This mineral resource was estimated for the Beatrix,
Kalkoenkrans and Leader Reefs in the Bloemhoek area, where these conglomerate
reefs occur at depths of 1300 - 2400 metres below surface.
This mineral resource is disclosed in the National Instrument 43-101 technical
report entitled Witwatersrand Consolidated Gold Resources Limited: Mineral
Properties in the Southern Free State, Potchefstroom and Klerksdorp Goldfields,
South Africa. The technical report was prepared by George Gilchrist and Shaun
Hackett of Snowden Mining Industry Consultants dated November, 2007. Indicated
mineral resources are not mineral reserves and do not have demonstrated economic
viability. The samples from the Bloemhoek drilling programme were assayed at
Anglo American Research Laboratories that has recently become an ISO 17025
accredited laboratory.
The scoping study has compiled a preliminary production model for Bloemhoek,
based on similar mining operations in South Africa, using footwall haulages,
cross-cuts to reef at 180 metre intervals and breast stoping by hand held
pneumatic rock drills and scraper winches. A simplified geological model which
indicates a single reef package at a consistent dip of 20 degrees has been used
in the scoping study and no detailed mine planning nor scheduling for individual
blocks has been carried out.
This configuration will result in the hoisting of 65.6Mt at a tramming width of
135cm and a diluted gold grade of 4.81g/t including a mine call factor. The
scoping study anticipates that exploitation will require the sinking of a twin
shaft system to 2000 metres below surface with the deeper areas being accessed
by a system of declines. These declines will only become necessary in the latter
part of the mine`s estimated thirty two year production life.
Based on recent capital projects in the South African mining industry, the
Qualified Person estimates that the mine at Bloemhoek will require a life of
mine capital expenditure of R8 094 million (approximately US$1 billion) and the
first gold production will be in year nine. A five year production ramp up
period has been estimated and the mine will operate at full production for 23
years with an annual production of 380 000 oz of gold. Total gold production is
estimated to be 9.6Moz. The estimated life of mine average operating costs will
be R515/tonne (US$64/tonne) and average cash costs will be US$438/oz. All costs
are expressed in January 2008 money terms.
The scoping study has prepared a number of financial models based on different
gold price scenarios. The results of this exercise are presented as follows:
Gold Price US$800 US$900 US$1000 US$1500
Pre-Tax 9.3% 11.3% 13.0% 18.8%
IRR
NPV (5%) US$440 US$725 million US$1 009 US$2 431
million million million
At the current gold price near $900/oz, an exchange rate of R8.00 per US$ and a
state royalty of 1.5% on revenue, the project has an IRR of 11.3% and the NPV
(5%) is US$725 million. A sensitivity analysis of the major input variables
indicates that the financial model for Bloemhoek is most sensitive to gold price
and grade. Consequently, the possibility of mining a smaller but higher grade
deposit will be one of the options to be evaluated during the pre-feasibility
study that has been recommended by the Qualified Person.
Certain statements in this news release may constitute forward-looking
information within the meaning of securities laws. In some cases, forward-
looking information can be identified by use of terms such as "may", "will",
"should", "expect", "believe", "plan", "scheduled", "intend", "estimate",
"forecast", "predict", "potential", "continue", "anticipate" or other similar
expressions concerning matters that are not historical facts. Forward-looking
information may relate to management`s future outlook and anticipated events or
results, and may include statements or information regarding the future plans or
prospects of the Company. Without limitation, statements about the development
of the mine at Bloemhoek, required capital expenditures, the time required for
the mine at Bloemhoek to enter production, the length of time the mine at
Bloemhoek will operate at full production, the annual production of gold at the
Bloemhoek mine and other related statements are forward-looking information.
Forward-looking information involves known and unknown risks, uncertainties and
other important factors that could cause the actual results, performance or
achievements of the Company to be materially different from the future results,
performance or achievements expressed or implied by such forward looking
information. Such risks, uncertainties and other important factors include
among others: economic, business and political conditions in South Africa;
decreases in the market price of gold; hazards associated with underground and
surface gold mining; the ability to attract and retain qualified personnel;
labor disruptions; changes in laws and government regulations, particularly
environmental regulations and mineral rights legislation including risks
relating to the acquisition of the necessary licences and permits; changes in
exchange rates; currency devaluations and inflation and other macro-economic
factors; risk of changes in capital and operating costs, financing,
capitalization and liquidity risks, including the risk that the financing
required to fund all currently planned exploration and related activities may
not be available on satisfactory terms, or at all; the ability to maximize the
value of any economic resources. These forward-looking statements speak only as
of the date of this document.
You should not place undue importance on forward-looking information and should
not rely upon this information as of any other date. The Company undertakes no
obligation to update publicly or release any revisions to these forward-looking
statements to reflect events or circumstances after the date of this document or
to reflect the occurrence of unanticipated events except where required by
applicable laws.
For further information please contact:
Dr. Marc Watchorn
Chief Executive Officer
Tel: +27 11 832 1749
Mr. Hethen Hira
Investor Relations
Tel: +27 11 832 1749
Johannesburg
25 April 2008
Date: 24/04/2008 17:29:00 Produced by the JSE SENS Department.
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