2014

Geotechnical drilling completed at Wits Gold's DBM Project

Witwatersrand Consolidated Gold Resources Limited
(Incorporated in the Republic of South Africa)
Register Number 2002/031365/06
JSE Code: WGR
ISIN: ZAE000079703
TSX Code: WGR
CUSIP Number: S98297104
('Wits Gold' or 'the Company')

JOHANNESBURG, Dec. 13, 2012 /CNW/ - Wits Gold is pleased to announce that the Company has successfully completed an initial three borehole geotechnical drilling programme for the positioning of shafts at its advanced DBM Project in the southern Free State goldfield. Drilling commenced during October 2012 and was completed on time and budget, with a total of 1918 meters of diamond core drilled at a cost of R2.4 million.

This drilling programme, as part of the DBM final Feasibility Study, aimed to obtain geotechnical data with respect to underground conditions through which the shafts would traverse, as well as to detect possible hazardous flammable gas and water occurrences.

All objectives of the drilling programme were achieved, as summarised below:

  1. The first borehole (DWN 35) intersected the Leader Reef within 12 metres of its subcrop against the Karoo Unconformity, accurately locating the position of the subcrop.
  2. The Main and Ventilation shaft locations could therefore be optimally positioned beyond the subcrop in order for the shaft pillar areas not to sterilise any of the shallow Mineral Reserve.
  3. The two subsequent boreholes were then drilled at the proposed shaft positions to depths greater than the planned shaft bottoms of 660 metres below surface. Independent specialist geotechnical studies conducted during this drilling found that rock conditions range from very good to fair, implying that normal shaft sinking rates can be applied.
  4. None of the boreholes drilled encountered flammable gas or a significant influx of water.

Drilling activities by Wits Gold at the DBM Project have been conducted under the supervision of Mr Dirk Muntingh, the Company's Qualified Person and Exploration Manager and who has verified the contents of this news release. Mr Muntingh (M.Sc Geology) is a registered Pr.Sci.Nat with SACNASP and has over 20 years of experience in gold exploration.

Surface geotechnical studies are currently underway for plant infrastructure establishment, while environmental studies continue on schedule in terms of the requirements of the Company's accepted Mining Rights Application. Detailed design on shafts and related infrastructure at the DBM Project is on track to take place towards mid-2013, while mine development is expected to commence during the 1st half of 2014.

Wits Gold CEO Philip Kotze said: "The successful outcome of this current drilling program continues to highlight the merits of developing a mine at DBM, where it is anticipated to create more than 1 000 new employment opportunities for people in the region. Our new development, along with the Company's anticipated social and labour plan commitments in terms of its Mining Right Application, will give a new lease of life to this renowned gold mining district."

Background to the DBM Project

The DBM Project area comprises a triangular block measuring some 22km², located between the main Welkom goldfield to the north and the Beatrix and Joel gold mines to the south, which are operated by Gold Fields and Harmony respectively. The DBM Project area contains four gold bearing conglomerates. These comprise the Beatrix, Kalkoenkrans, B and Leader Reefs, all of which occur at the relatively shallow depths of between 480m and 1 250m below surface and which are all well understood as a result of previous mining within the regional area.

Following the completion of the Pre-feasibility Study (PFS) in July 2012, Wits Gold announced that international consultant Royal Haskoning DHV (RHDHV) and MDM Engineering (MDM) were appointed to complete the final Feasibility Study for the DBM Project. RHDHV will be responsible for the detailed mine and associated infrastructure designs, while MDM will focus on the metallurgical plant and related design aspects. The detailed Study is expected to be completed during the third quarter of 2013.

DBM will be a shallow underground mine comprising a vertical twin shaft system to 660 metres, with average gold production expected to be 200 000oz/year over an 18 year life-of-mine. Production is expected to peak at 246 777oz at 5.5g/t during year nine, and first gold production is expected 47 months after shaft sinking commences. The PFS estimates production cash costs of US$628/oz with peak capital funding of ZAR2.37 billion (US$296 million at ZAR8/US$). At a gold price of ZAR R400 000/kg (US$1 555/oz & ZAR8/US$), DBM has a pre-tax NPV(5%) of ZAR7.3 billion (US$909 million) and an IRR of 28.0%. The Feasibility Study will further refine certain aspects identified in the PFS that will aim to improve mining efficiencies by introducing safer, semi-mechanised mining equipment and down-dip mining methodologies. The PFS showed that the semi-mechanised option increases IRR to 30.9% (at the above prices) and the pre-tax NPV (5%) to ZAR 10.2 billion (US$1.3 billion).

For more detailed information on the results of the PFS, please consult the Wits Gold website at www.witsgold.com. The Technical Report on the PFS by Turgis, dated 26 July 2012 is available on the Wits Gold website and at www.sedar.com. The PFS was completed under the guidelines of the South African Code for Reporting of Mineral Resources and Mineral Reserves ("SAMREC Code") as well as the Canadian National Instrument 43-101, and was undertaken by the independent consultants, Jim Pooley and Jon Hudson ("the Qualified/Competent Persons"), from Turgis Mining Consultants ("Turgis") and independent of Wits Gold. These independent Qualified/Competent Persons have approved the technical contents of the news release pertaining to the PFS results.

FORWARD LOOKING STATEMENTS

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", "likely", "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 final Feasibility Study and development of the mine at the DBM Project, the timing of drilling and shaft sinking, the required capital expenditures, the time required for the mine at the DBM Project to enter production, the length of time the mine at the DBM Project will operate at full production, the number of employment opportunities created by the DBM Project, the annual production of gold at the DBM Mine and other related statements concerning development, social and labour plan commitments, operations and production at the DBM Mine 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; labour 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.

SOURCE Wits Gold



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