Golden orebodies emerge from beneath old Agnes mine

| Friday July 16, 2010 00:00

The golden galaxy might have been consigned to oblivion were it not for mining veteran Peter Skeat and his project savvy partner, Wayne Hatton-Jones, who have introduced modern new thinking that could result in the old lady of Barberton having the last laugh over her now-depleting deep-level Witwatersrand kin.

Agnes was bought at an auction and incorporated within the new Galaxy Gold, a JSE-aspirant, which is confident of raising from R250-million to R400-million in South Africa, the UK and probably also the US for the development of the mine. The capital raised will be used to treble the tonnage at the reviving mine, where an atypical mining method is doing in the erratic greenstone belt what should probably have been done a long time ago.

The capital will be raised in a book build exercise ahead of the company's expected August 18 listing on the JSE.At the 40 capital-raising meetings held to date, the level of investor interest has been high, says Ren Hochreiter of AllanHochreiter, which is the sole book runner and lead manager.

The upbeat Galaxy team demonstrated the  massive mechanised mining method with its large-scale cut-and-fill technique that is being carried out in wide 35-m-plus Galaxy stopes that contain 4,6 g/t of gold along a 1 200 m strike length.

'It dispels the greenstone myth that you are forever searching,' Skeat tells Mining Weekly Online. Galaxy is a formerly ignored orebody within the old Agnes gold mine that was historically characterised by vein-chasing through small holes. Now Agnes has been transformed into a constellation of mass-mineable reefs, many of them thick.

The new mining method is akin to mining underground in an opencast manner, but without the overburden.Geology director Dale Richards says that a 1,1-million-ounce resource has been firmed up and additional exploration is targeting four-million ounces by 2014. Hillson Drilling CEO David Hill has been brought in to firm up the four-million ounces.

The company is fully funded to operate at its current 18 000-t/m level and is raising the additional capital to enable it to mine at a rate of 53 000 t/m by December 2011. Later, it expects to go to 100 000 t/m and beyond, which would put it on a similar tonnage level to some of the depleting Witwatersrand gold operations.

Five of the company's 21 orebodies - Galaxy, Woodbine, Giles, Golden Hill and Princeton - will be mined to provide the 53 000 t/m volume. Skeat, who is currently the biggest single investor in Galaxy, expects to bring cash costs below the $500/oz level using Australian trackless mining techniques.

The change in the fortune of the mine has come about by making it possible to have a 1 g/t cut-off grade.Galaxy mining director Steve Venn explains to Mining Weekly Online that historically Barberton greenstone mining has been carried out with conventional  jack hammers and airlegs. But with Skeat's new approach, the jack hammers and airlegs are giving way to jumbo drills, big trucks and large earthmoving haulers operating in large stopes and bringing the pay limit down.

As the orebodies do not have uniform linear grades, cutoffs are indistinct and characterised by mineralised halos.This has opened the way for mechanised mining methods, even in the narrower-vein areas. With the gold price buoyant, profit margins are promising. 'Even if the grade halves and the cost doubles, we'll still have a 40% margin,' Skeat says. Biox technology has made a non-issue of the sulphide ore that put the old-timers off and tracks and locomotives are giving way to trackless vehicles.

Galaxy is negotiating with two prospective black economic empowerment partners and expects to conclude negotiations with one of them within three months. Thereafter, it expects to obtain new-order mining rights. Two new adits are being established to accommodate the large new trucks, which will travel on a spiral ramp.

The Golden Hill adit will provide access to a gold grade of 8 g/t-plus, double the 4 g/t average, and the 22 Level adit will link all 21 gold deposits, which could take total future tonnage to 250 000 t/m using five trucks. Galaxy COO Hatton-Jones showed Mining Weekly Online the new modern R6-million variable-speed, skid-mounted mill, which is bidirectional to allow for a doubling of liner life.

With the introduction of a roll crusher, the mill's capacity can be taken up to 25 000 t/m, which will bring it into line with Galaxy's 53 000 t/m tonnage target. Galaxy's mine captain planning Phil Wikberg, who knows the 127-year-old Agnes mine well, is convinced that Galaxy will be able to mine the vast tonnage planned. Wikberg recalls that Barberton pioneer 'French Bob' - real name Auguste Robert - is credited with finding the mine on June 3, 1883.

The gold deposits were discovered in Moody's, Sheba and Saddleback faults and the pioneers mined the mountain top that hosts the faults for 15 years. It was only the Boer War and the First World War that saw mining cease. Later, the adit through which Mining Weekly Online entered, Agnes was mined up to the Woodbine shaft, which is a mere 14 000 t/m shaft.

Even though the early miners only scratched the surface, the Barberton economy was given a shot in the arm with the mining town supporting stock exchanges, music halls and canteens.

But miners started to look west when the bigger Witwatersrand goldfield caught the attention of the gold world and sulphides in the Barberton ore had diggers scratching their heads. Now Galaxy and the JSE-listed Pan African Resources activities in Barberton are resulting in gold miners looking east once more. (Mining Weekly)