Witwatersrand Consolidated Gold Resources Limited
(Incorporated in the Republic of South Africa)
Register Number 2002/031365/06
JSE Code: WGR
TSX Code: WGR
CUSIP Number: S98297104
('Wits Gold' or 'the Company')
JOHANNESBURG, Aug. 21, 2012 /CNW/ - Wits Gold (JSE, TSX: WGR) is pleased to announce that Turgis Consulting (Pty) Ltd (Turgis) and MDM Engineering have been appointed to complete the final Feasibility Study at the Company's shallow DBM Project (DBM) in the southern Free State goldfield, South Africa. Turgis will be responsible for the detailed engineering and mine designs, while MDM Engineering will focus on the metallurgical plant and related design aspects. The appointments are effective immediately and the detailed study is expected to be completed during the third quarter of 2013. Turgis recently completed the positive Pre-feasibility Study (PFS) at DBM on time and budget, and the study confirmed that a mine at DBM was both technically and economically viable.
Wits Gold CEO Philip Kotze said: "We are pleased to continue our solid working relationship with Turgis, who have developed a thorough knowledge of the DBM orebody since their involvement began at scoping study level. The specialist expertise brought in by MDM Engineering to provide the detailed plant design, will result in the fast-tracking of the final Feasibility Study. It is an exciting stage in the development of the Company when its first project is taken to such an advanced stage, and we look forward to commencing with the construction of South Africa's next shallow gold mine".
The PFS delineated a Probable gold Reserve of 23.5Mt at a grade of 4.1g/t Au (3.1Moz), which is contained within that portion of the Resource at DBM which occurs at depths shallower than 1 000 metres and which contains an Indicated Mineral Resource of 26.7Mt at 5.8g/t Au (4.99Moz).
DBM will be a shallow underground mine comprising a planned 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 9, 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). In addition, further upside exists by the study investigating the inclusion, through additional drilling, of the existing shallow Inferred Resources of 5.97Mt at 5.7g/t Au (1.1Moz) that is readily mineable from the current mine design. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
On 22 February 2012 the Department of Mineral Resources accepted the Company's application for a Mining Right for gold, silver and uranium over its advanced Prospecting Rights areas in the southern Free State goldfield, which includes the DBM, Bloemhoek, Robijn and Hakkies Project areas. The granting of the Mining Right is expected in the second half of 2013, once the Company complies with requirements in terms of the Minerals Act, such as obligations in terms of feasibility studies, environmental impact assessment as well as Social and Labour Plan commitments. Once granted, a Mining Right is valid for a period of 30 years and renewable for a further period as required.
For more detailed information on the results of the PFS, please consult the SENS announcement entitled WITS GOLD COMPLETES POSITIVE PRE-FEASIBILITY STUDY ON THE DE BRON-MERRIESPRUIT ("DBM") PROJECT, SOUTHERN FREE STATE GOLDFIELD released on 13 June 2012, which is also available on the Wits Gold website at www.witsgold.com. The Technical Report on the Pre-feasibility study by Turgis, dated 26 July 2012 is also available on the Company's website and on 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.
ABOUT WITS GOLD
Wits Gold holds 14 new order Prospecting Rights over 1 195km2 in the southern Free State, Potchefstroom and Klerksdorp goldfields. The Company is currently focused on fast-tracking two advanced projects, DBM and Bloemhoek, located next to each other in the southern Free State goldfield and adjacent to the Beatrix gold mine operated by Gold Fields, and the Joel gold mine operated by Harmony.
21 August 2012
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 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 annual production of gold at the DBM Mine and other related statements concerning development, operations and production at the DBM Mine, as well as the granting of the Mining Right over the Company's advanced Prospecting Rights areas, 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