mining work programme - jones and wagener - … ceir empr/f052-01-nte-001-r… · mining work...
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NAME OF APPLICANT: ERA STENE (PTY) LTD
REFERENCE NUMBER: MP30/5/1/2/3/2/1 135
MINING WORK PROGRAMME
SUBMITTED FOR A MINING RIGHT
APPLICATION
AS REQUIRED IN TERMS OF SECTION 23 (a), (b) AND (c) READ
TOGETHER WITH REGULATION 11(1) (g) OF THE MINERAL AND
PETROLEUM RESOURCES DEVELOPMENT ACT (ACT 28 of 2002)
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STANDARD DIRECTIVE
All applicants for mining rights are herewith, in terms of the provisions of Section
23 (a), (b) and (c) and in terms of Regulation 11 (1) (g) of the Mineral and Petroleum
Resources Development Act, directed to submit a Mining Work Programme, strictly
under the following headings and in the following format together with the application
for a mining right.
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1. REGULATION 11.1.(a): FULL PARTICULARS OF THE APPLICANT
ITEM COMPANY CONTACT DETAILS
Name Era Stene (Pty) Ltd
Tel no (012) 460 2211
Fax no: (012) 346 1447
Cellular no 083 450 3958
E-mail address [email protected]
Postal address P.O. Box 25001 Monumentpark
0105
ITEM CONSULTANT CONTACT DETAILS (If applicable)
Name Rudi Aschenborn
Tel no (011) 519 0200
Fax no: (011) 519 0201
Cellular no 082 331 7567
E-mail address [email protected]
Postal address P.O. Box 1434 Rivonia 2128
2. REGULATION 11(1)(b) PLAN SHOWING THE LAND AND MINING AREA TO WHICH THE APPLICATION RELATES (the plan require in terms of Regulation 2(2))
Refer to the plan attached in Appendix A.
3. REGULATION 11(1)(c): THE REGISTERED DESCRIPTION OF THE LAND
TO WHICH THE APPLICATION RELATES
The current mine is located on Portion 9 (a portion of Portion 7) of the farm Rietvalei 195 IR, in Mpumalanga. Era Stene (Pty) Ltd want to extend the current pit into a portion of the Remaining extent of Portion 7 (a portion of Portion 3) of the farm Rietvalei 195 IR, in Mpumalanga. Refer to the title deeds attached in Appendix B.
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4. REGULATION 11(1)(d): THE DETAILS OF THE IDENTIFIED MINERAL DEPOSIT
4.1 Resource particulars
ITEM DETAIL
Type of mineral Clay
Locality (Direction and distance from nearest
town)
15 km north west of the town Delmas, located in the Victor Khanye Local Municipality of the Nkangala District Municipality
Extent of the area required for mining
128 ha (current) 60 ha (new)
Extent of the area required for infrastructure, roads, servitudes etc.
None, no new infrastructure is required.
Depth of the mineral below surface Horizontal deposit of 8 m thickness, from 3 m below the overburden down to 15 m.
Geological formation Refer to geological report by Louis Kruger Geotechnics CC titled Report on the Engineering Geological investigation of the remaining extent of Portion 7 (a portion of Portion 3) of the farm Rietvalei 195 IR, dated September 2015, attached in Appendix C .
4.2 Detail of person who compiled the resource statement
ITEM DETAILS
Name Louis Johannes Kruger (Louis Kruger Geotechnics CC)
Qualification/s BSc (Hons) Engineering Geology, Pr. Sci. Nat
Profession Engineering Geologist
Experience 25 years (since 1991)
Professional Body (If registered) SACNASP
Registration number (if applicable): 400055/91
4.3 Locality specific geological map (in colour) The locality of the proposed mine superimposed onto the regional geological map is shown in Figure 2 of the geological report attached in Appendix C.
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4.4 Exploration results (supporting geological reports to be listed and appended) Refer to the geological report by Louis Kruger Geotechnics CC titled Report on the Engineering Geological investigation of the remaining extent of Portion 7 (a portion of Portion 3) of the farm Rietvalei 195 IR, dated September 2015, attached in Appendix C .
4.5 Information required in terms of Regulation 8 (in cases where the application was preceded by a prospecting right. Not applicable.
4.6 Mineral resource map
Refer to the geological report by Louis Kruger Geotechnics CC titled Report on the Engineering Geological investigation of the remaining extent of Portion 7 (a portion of Portion 3) of the farm Rietvalei 195 IR, dated September 2015, attached in Appendix C .
4.7 Resource statement Refer to the geological report by Louis Kruger Geotechnics CC titled Report on the Engineering Geological investigation of the remaining extent of Portion 7 (a portion of Portion 3) of the farm Rietvalei 195 IR, dated September 2015, attached in Appendix C .
5. REGULATION 11(1)(e): THE DETAILS OF THE MARKET FOR, THE MARKETS REQUIREMENTS AND PRICING IN RESPECT OF THE MINERAL CONCERNED
5.3 A list of products and their proportionate quantities
100% of the clay resource mined will be used by local clay brick manufacturers.
5.4 Market for each specific product in terms of Local, Regional or International
The market is local brick manufacturers within 100 km of the mine.
5.5 Summary of product consumers Era Stene (Pty) Ltd is the primary consumer of the clay resource and uses it to manufacture clay bricks.
5.6 Summary of customer specifications and details of any proposed beneficiation of the products
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The mine produces stockpiled clay which is used for brick manufacturing. No further beneficiation takes place at the mine.
5.7 Summary of infrastructure requirements such as roads, rail, electricity and water The clay resource is opencast mined by means of a truck and shovel operation and stockpiled. This application is for extending the existing pit which allows for the existing infrastructure of the current operation to be utilised. No additional infrastructure is required for this application. Customers collect and arrange their own transport for the clay resource. No additional transportation infrastructure is required.
5.8 Summary of other information applied that may influence price, e.g. exchange rate, duties, tariff barriers etc. The cost of mining is influenced by the following factors:
1) Fluctuation in exchange rate which has an impact on the price of diesel, equipment and hence ultimately the labour costs.
2) Labour relations issues such as strikes that could have an impact on the productivity of the operation.
3) Future changes in environmental legislative requirements.
5.9 The price to be used in the cash flow forecast. The selling price for the clay resource used is R 36.00 per ton. The rate is derived as discussed in Section 5.10 below.
5.10 Confirmation that a specialist market analysis is attached as an
appendix which explains the assumptions made and how the price was determined. No significant active market for the clay resource exists in South Africa and hence no formal market analysis was conducted which can be attached. The market analysis is based on current and historic sales. Most brick manufacturers mine and consume their own clay resource to manufacture bricks. The price of R 36.00 per ton is based on the actual selling price of a local clay mine that does sell stockpiled clay to other brick manufacturers within the region.
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6. REGULATION 11(1)(f): THE DETAILS WITH REGARD TO THE APPLICABLE TIMEFRAMES AND SCHEDULING OF THE VARIOUS IMPLEMENTATION PHASES AND A TECHNICALLY JUSTIFIED ESTIMATE OF THE PERIOD REQUIRED
6.1 Timeframes and scheduling of implementation Phases
6.1.1 Explanation of time taken to develop the mine and commence
production. The current mine (on Portion 9 of the farm Rietvalei 195 IR) is in full production. The applicant intends to extend the current pit onto a portion of the remaining extent of Portion 7 of the farm Rietvalei 195 IR. Production on this property can therefore start immediately, pending the approval of the mining right extension and environmental authorisations.
6.1.2 Explanation of the production build up period once production commences. The current pit will be extended into the new mining area forming part of this application. No production build-up period to achieve full production is applicable, i.e. full production will be possible immediately.
6.1.3 Explanation of production decline period (as grades deteriorate). 100% of the clay resource mined will be used to manufacture bricks. According to the geological information, the grades of the clay resource do not deteriorate, therefore no decline period is expected.
6.1.4 Production forecast for each year over the full period applied for based on the above explanations. (Not Life of Mine calculation).
The mining period applied for to mine the clay resource is 30 years. The brick manufacturer requires approximately 87 000 tons of clay resource per year from the mine. No variation in market consumption is expected, therefore the 87 000 tons per year required is expected to remain constant for the 30 years applied for.
6.2 Technically justified estimate of the period required (Description of the rate of production, estimated payable reserve ratio, efficiency factors and extraction rates, relative to available resources to justify the period applied for).
The clay resource to be mined is used by the local brick manufacturers to manufacture clay bricks. The production rate of the proposed mining extension is dependent on the client’s brick manufacturing plant maximum capacity of approximately 144 000 tons of clay per year. Of the 144 000 tons only 87 000 tons (+-60%) of clay per year will be supplied from this proposed extended mining area. The available reserve of the clay resource on the extended mining area of 60 ha is estimated at 6 168 600 tons. At the required production level stated (87 000 tons per year), there is sufficient reserves for 71 years which exceeds the 30 years
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mining right applied for under this application.
7 REGULATION 11(1)(g)(i) THE DETAILS WITH REGARD TO THE COSTING OF THE MINING TECHNIQUE, MINING TECHNOLOGY AND PRODUCTION RATES (excluding labour and capital)
7.1 Mine design map (Include a high level map indicating the basic mine design and schematic mining schedule).
Refer to Appendix D showing the mine layout (mine plan).
7.2 Description of the mining method’s impact on operating cost.
7.2.1 Basic overview of the mining method
The clay resource will be mined opencast by a truck and shovel strip mining method. Topsoil and overburden to a depth of approximately 3 m will be stripped off and stockpiled, exposing the clay resource. The clay resource will be mined / quarried with an excavator who loads it onto dump trucks. The mined clay resource is stockpiled outside the pit from where the client will be collecting it. A dozer will be utilised to consolidate and shape the clay resource onto a stockpile.
7.2.2 Description of equipment and activities impacting electricity cost (excluding the processing plant) No electricity is consumed associated directly with the above mentioned mining method. The only electricity consumed on the mining site is at the workshop/offices as well as an electrical pump on a borehole.
7.2.3 Description of equipment and activities impacting on fuel cost The activities and equipment impacting on the fuel costs are as follows: 1) Topsoil and overburden stripping, mining and stockpiling of the clay
resource with typically diesel equipment including a Hitachi excavator, three Bell dump trucks, a Bell front-end loader, a Bell dozer, a CAT grader and a water tanker.
2) Pit dewatering with typical equipment including two mobile diesel driven water pumps.
7.2.4 Description of equipment and activities impacting on cost of stores and materials The only activity that may impact on costs of stores and materials is the maintenance to be undertaken on the mobile machines and equipment. Diesel for mining equipment is stored in a 14m3 fuel installation. Spares and consumables required for maintenance will be supplied on a needs basis.
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7.2.5 Description of equipment and activities impacting on the cost of water Water is used for domestic purposes, i.e. ablution facilities, as well as for dust suppression on the mine haul roads and can be summarised as follows: 1) Water for domestic purposes is obtained from groundwater by means
of an electric pump installed in a borehole. The cost of potable water will be influenced by the electricity price and pumping infrastructure, i.e. pumps, pipeline and tank.
2) Water for dust suppression is obtained from the pit dewatering. The cost of dust suppression water will be influenced by the diesel price (diesel pumps) and the pumping infrastructure, i.e. the pumps, pipelines and tanks.
7.2.6 Description of activities impacting on other cost not included above
No other activities are envisaged which may impact on costs not covered above.
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7.2.7 Operating Cost Forecast (Excluding the processing plant and Labour) For first 10 years
COST CATEGORY
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 TEAR 9 YEAR 10
Fuel 792,000 831,600 873,180 916,839 962,681 1,010,815 1,061,356 1,114,424 1,170,145 1,228,652
Electricity 24,000 26,000 28,000 30,000 32,000 34,000 36,000 38,000 40,000 42,000
Water 12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000 21,000
Stores and materials 396,000 415,800 436,590 458,420 481,341 505,408 530,678 557,212 585,073 614,326
Other (specify) 0 0 0 0 0 0 0 0 0 0
TOTAL COST (To be reflected in the cash flow forecast)
1,224,000 1,286,400 1,351,770 1,420,259 1,492,022 1,567,223 1,646,034 1,728,636 1,815,218 1,905,978
NB! The costs determined here must explain the costs used in line item 4 of the cash flow forecast required herein under Regulation 11
(1) (g ) (vi)
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8 REGULATION 11(1) (g) (ii): DETAILS AND COSTS OF THE TECHNOLOGICAL PROCESS APPLICABLE TO THE EXTRACTION AND PREPARATION OF THE MINERAL OR MINERALS TO COMPLY WITH MARKET REQUIREMENTS
8.1 High level description of the processing plant
8.1.1 Basic plant design. (supported by a process flow diagram, of the plant).
No processing of the clay resource is required and therefore no design is applicable.
8.1.2 Efficiency of the process. (together with an estimate of the mineral recovery rate, and the expected mass or volume of mine waste or residues together with the manner in which it would be disposed of.)
Not applicable
8.2 Description of equipment and activities impacting electricity cost (excluding the processing plant)
Not applicable
8.3 Description of equipment and activities impacting on fuel cost Not applicable
8.4 Description of equipment and activities impacting on cost of stores and materials Not applicable
8.5 Description of equipment and activities impacting on the cost of water Not applicable
8.6 Description of activities impacting on other cost not included above
Not applicable
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8.6.1 Processing plant operating cost forecast (Excluding Labour) For first 10 years
COST CATEGORY YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 TEAR 9 YEAR 10
Fuel 0 0 0 0 0 0 0 0 0 0
Electricity 0 0 0 0 0 0 0 0 0 0
Water 0 0 0 0 0 0 0 0 0 0
Stores and materials 0 0 0 0 0 0 0 0 0 0
Other (specify) 0 0 0 0 0 0 0 0 0 0
TOTAL COST (To be reflected in the cash flow forecast)
0 0 0 0 0 0 0 0 0 0
NB! The costs determined here must explain the costs used in line item 5 of the cash flow forecast required herein under Regulation 11
(1) (g ) (vi)
No processing of the clay resource is required
and therefore no design is applicable.
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9 REGULATION 11 (1) (g) (iii): DETAILS AND COSTING OF THE TECHNICAL SKILLS AND EXPERTISE AND ASSOCIATED LABOUR IMPLICATIONS REQUIRED TO CONDUCT THE PROPOSED MINING OPERATION
9.1 Organizational Structure of the mine
9.1.1 Description of positions requiring certificates of competency and
under which skills category they have been budgeted for. 1) Mine manager in terms of Mine Health and Safety Act, 1996 (Act No.
29 of 1996) budgeted under the ‘’Senior management’’ category. 2) Mechanic for undertaking maintenance and repairs of mobile
equipment budgeted under the ‘’Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents’’ category.
9.1.2 Description of which part or parts of the mining operation will be
outsourced (if any) Mining the clay resource will be outsourced to a mining contractor (the labour only).
9.1.2.1 Description of positions requiring certificates of
competency and under which skills category they have been budgeted for. 1) Operators of mobile equipment (seven) budgeted
under the ‘’Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents’’ category.
9.2 Costing of the skills categories in the mining operation to determine if technical competence has been budgeted for: Complete the following tables:
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MINE EMPLOYEES
PERSONNEL ON THE MINE’S PAYROLL: (Years 1 to5)
CATEGORY
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
NO. OF POSITIONS
BUDGET NO. OF POSITIONS
BUDGET NO. OF POSITIONS
BUDGET NO. OF POSITIONS
BUDGET NO. OF POSITIONS
BUDGET
Top management 7 33,500 7 35,845 7 38,354 7 41,039 7 43,912
Senior Management 1 48,600 1 52,002 1 55,642 1 59,537 1 63,705
Professionally qualified and experienced specialists and mid- management
Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents
1 204,000 1 218,280 1 233,560 1 249,909 1 267,402
Semi-skilled and discretionary decision making
Non-permanent Employees
TOTAL PERSONNEL EXPENDITURE
9 286,100 9 306,127 9 327,556 9 350,485 9 375,019
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PERSONNEL ON THE MINE’S PAYROLL: (Years 6 to10)
CATEGORY
YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10
NO. OF
POSITIONS BUDGET
NO. OF
POSITIONS BUDGET
NO. OF
POSITIONS BUDGET
NO. OF
POSITIONS BUDGET
NO. OF
POSITIONS BUDGET
Top management 7 46,985 7 50,274 7 53,794 7 57,559 7 61,588
Senior Management 1 68,164 1 72,935 1 78,041 1 83,504 1 89,349
Professionally qualified and experienced specialists and mid- management
Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents
1 286,121 1 306,149 1 327,579 1 350,510 1 375,046
Semi-skilled and discretionary decision making
Non-permanent Employees
TOTAL PERSONNEL EXPENDITURE
9 401,270 9 429,358 9 459,414 9 491,573 9 525,983
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SUBCONTRACTORS EMPLOYEES (if applicable) (Duplicate
this form for each Subcontractor)
CATEGORY NUMBER YEAR 1
NUMBER YEAR 2
NUMBER YEAR 3
NUMBER YEAR 4
NUMBER YEAR 5
NUMBER YEAR 6
NUMBER YEAR 7
NUMBER YEAR 8
NUMBER YEAR 9
NUMBER YEAR 10
Top management
Senior Management 1 1 1 1 1 1 1 1 1 1
Professionally qualified and experienced specialists and mid-management
Skilled technical and academically qualified workers, junior management, supervisors, foreman and superintendents
7 7 7 7 7 7 7 7 7 7
Semi-skilled and discretionary decision making
4 4 4 4 4 4 4 4 4 4
TOTAL CONTRACT BUDGET (Not only salaries &wages)
BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET BUDGET
720,000 770,400 824,328 882,031 943,773 1,009,837 1,080,526 1,156,163 1,237,094 1,323,691
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SERVICE PROVIDERS
LIST OF SPECIALISTS, CONSULTANTS AND SERVICE
PROVIDERS
BUDGET YEAR 1
BUDGET YEAR 2
BUDGET YEAR 3
BUDGET YEAR 4
BUDGET YEAR 5
BUDGET YEAR 6
BUDGET YEAR 7
BUDGET YEAR 8
BUDGET YEAR 9
BUDGET YEAR 10
Environmental Assurance - general
60,000 63,600 67,416 71,461 75,749 80,294 85,111 90,218 95,631 101,369
Mine surveyor 10,000 10,600 11,236 11,910 12,625 13,382 14,185 15,036 15,938 16,895
Water monitoring 24,000 25,440 26,966 28,584 30,299 32,117 34,044 36,087 38,252 40,547
SHE Systems 48,000 50,880 53,933 57,169 60,599 64,235 68,089 72,174 76,505 81,095
TOTAL BUDGET (SERVICES) 142,000 150,520 159,551 169,124 179,272 190,028 201,429 213,515 226,326 239,906
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TOTAL COST OF ALL TECHNICAL SKILLS AND SERVICES REQUIRED TO OPERATE THE MINE
CATEGORY BUDGET YEAR 1
BUDGET YEAR 2
BUDGET YEAR 3
BUDGET YEAR 4
BUDGET YEAR 5
BUDGET YEAR 6
BUDGET YEAR 7
BUDGET YEAR 8
BUDGET YEAR 9
BUDGET YEAR 10
In house skills and services
286,100 306,127 327,556 350,485 375,019 401,270 429,358 459,414 491,573 525,983
Skills and services provided by subcontractors
720,000 770,400 824,328 882,031 943,773 1,009,837 1,080,526 1,156,163 1,237,094 1,323,691
Skills and services provided by service providers
142,000 150,520 159,551 169,124 179,272 190,028 201,429 213,515 226,326 239,906
Total budget for technical skills and competence
1,148,100 1,227,047 1,311,435 1,401,640 1,498,064 1,601,135 1,711,313 1,829,092 1,954,993 2,089,580
NB! THE TOTAL BUDGET FOR TECHNICAL SKILLS AND SERVICES AND COMPETENCE MUST BE TRANSFERRED
TO LINE ITEM 6 IN THE CASH FLOW FORECAST
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10 REGULATION 11(1) (g) (iv): DETAILS AND COSTING OF REGULATORY REQUIREMENTS IN TERMS OF THE ACT AND OTHER APPLICABLE LAW, RELEVANT TO THE PROPOSED MINING OPERATION
10.1 Environmental cost forecast.
10.1.1 Rehabilitation cost estimate (Refer to the guideline for Financial provision (described in Regulation 54 (1) (2) published on the Departments website. Complete 10 forecasts and paste them into this section, i.e. one for the progressive impact in each of the first 10 years of operation. The progressive total (10th year must be stated under this heading and also included into the first year of the cash flow under Regulation 11 (1) (g) (vi) below in the environmental cost category.)
The Era and Rosema Stene Rehabilitation Trust (IT 707/96) was founded to provide for the rehabilitation of the various mines of Era Stene (Pty) Ltd. As at 30 June 2015 there is a surplus in the Trust for the financial provision of the current mine (located on Portion 9 (a portion of Portion 7) of the farm Rietvalei 195 IR). The funds in the Trust currently earn interest at greater than 8% per annum (tax free). The mining area (current mine as well as the proposed extension of the pit into a portion of the Remaining extent of Portion 7 (a portion of Portion 3) of the farm Rietvalei 195 IR) will increase by less than 3% per year for the next 10 years and it is estimated that the average rehabilitation cost inflation is at 5%. The trustees of the Trust therefore expects that no new contributions will have to be made into the Trust and that the surplus will increase at a higher rate than the expected rehabilitation costs. No additional financial provision from Era Stene (Pty) Ltd is therefore expected for the next 10 years. The above rehabilitation cost estimate was done according to the Mineral and Petroleum Resources Development Regulations, 2004. New Regulations were however promulgated on 20 November 2015. The financial provision will therefore be reviewed and aligned to the new Regulations within the period as prescribed in the transitional arrangements of the new Regulations.
10.1.2 Socio Economic impact cost estimate.
(Refer to the guidelines on community consultation, and the scoping report template. Estimate the risk of compensation to persons whose socio- economic conditions may be directly affected by the mining operation. Provide the estimated total under this heading and also include it into the first year of the cash flow under regulation 11 (1) (g) (vi) below in the environmental cost category).
This mining rights application will ensure prolonged operation and as such the current socio economic benefit will remain. No further socio-economic cost/compensation is anticipated.
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10.1.3 Summary of estimated environmental cost: complete the table below.
Estimated Environmental and Rehabilitation cost
CATEGORY
COST ESTIMATE
a) Progressive total for rehabilitation 0
b) Cost to mitigate socio-economic conditions of directly affected persons
0
TOTAL COSTS (Transfer amount to cash flow forecast – Line 7 Year 1 only)
0
10.2 Other Regulatory Costs (complete the table below)
Cost Amount per annum
Explanation on how amount was calculated
Royalties 0 Royalty < R100 000, thus exempted
Mine Health and Safety Regulations
0 This cost has been included under Section 9.2 (Service Providers)
Occupational Health 0 This cost has been included under Section 9.2 (Service Providers)
Rates and Taxes 42 000 Based on current actual monthly invoices.
National Skills fund 0 No funds are paid directly to the National Skills Fund. The 1% Skills Development Levy is however paid to SARS and this cost has been included under Section 9.2 (Personnel on the mine’s payroll).
TOTAL COSTS (Include amount into the cash flow forecast – Line 7)
42 000
The costs thus derived must be clearly explained and used to justify the numbers that are reflected in line item 7 of the cash flow forecast required in terms of regulation 11 (1) (g) (vi).
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11 REGULATION 11 (1) (g) (viii): PROVISIONS FOR THE EXECUTION OF THE SOCIAL AND LABOUR PLAN
11.1 The following table must be duplicated here from the table in SECTION 5: FINANCIAL PROVISION of
the Social and Labour Plan ESTIMATED EXPENDITURE ON THE SOCIAL AND LABOUR PLAN IN A 10 YEAR PERIOD
ITEM YEAR1 YEAR2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR10
HUMAN RESOURCE DEVELOPMENT
41,000 41,000 47,000 47,000 53,000 53,000 58,000 58,000 64,000 64,000
LOCAL ECONOMIC DEVELOPMENT
10,000 10,000 10,000 10,000 10,000 11,000 11,000 11,000 11,000 11,000
MANAGEMENT OF DOWNSCALING
2,000 2,000 2,000 2,000 2,000 3,000 3,000 3,000 3,000 3,000
ESTMATED TOTALS PER YEAR
53,000 53,000 59,000 59,000 65,000 67,000 72,000 72,000 78,000 78,000
The costs quantified in the aforesaid categories must justify the numbers that are reflected in line item 8 of the cash flow forecast required in terms of Regulation 11(1)(g)(vi).
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12 REGULATION 11 (1) (g) (iv): DETAILS REGARDING OTHER RELEVANT COSTING, CAPITAL EXPENDITURE REQUIREMENTS AND EXPECTED REVENUE APPLICABLE TO THE PROPOSED MINING OPERATION.
12.1 Expected Revenue.
12.1.1 Explanation of revenue determination. (given the prices of the various
relevant products and byproducts produced) how the price referred to in item 5.9 above, and the production referred to in item 6.1.4 above was arrived at and applied to each year’s production estimate in order to estimate revenue.
The current market price per ton of clay resource was discussed in Section 5.9 and is estimated at R 36. Based on a production of 87 000 tons per annum the revenue for the first year is R 3 132 000.
12.1.2 Revenue forecast (for each year over the full period applied for based on the above explanations. Note that this revenue estimate must be stated both here and in line item 3 of the cash flow forecast required below in terms of Regulation 11 (1) (g) (vi).) The market price per ton of clay resource was discussed in Section 5.9 and is estimated at R 36. The forecast given below is based on an annual rate increase of 7% and a constant production of 87 000 tons per annum.
Year 1 ................ R 3 132 000 Year 2 ................ R 3 351 240 Year 3 ................ R 3 585 827 Year 4 ................ R 3 836 835 Year 5 ................ R 4 105 413 Year 6 ................ R 4 392 792 Year 7 ................ R 4 700 287 Year 8 ................ R 5 029 308 Year 9 ................ R 5 381 359 Year 10............... R 5 758 054 Year 11............... R 6 161 118 Year 12............... R 6 592 396 Year 13............... R 7 053 864 Year 14............... R 7 547 635 Year 15............... R 8 075 969 Year 16............... R 8 641 287 Year 17............... R 9 246 177 Year 18............... R 9 893 409 Year 19............. R 10 585 948 Year 20............. R 11 326 964 Year 21............. R 12 119 852 Year 22............. R 12 968 241 Year 23............. R 13 876 018 Year 24............. R 14 847 340 Year 25............. R 15 886 653 Year 26............. R 16 998 719 Year 27............. R 18 188 629 Year 28............. R 19 461 833 Year 29............. R 20 824 162 Year 30............. R 22 281 853
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12.2 Estimated Capital Expenditure
12.2.1 Initial capital expenditure. (List of expenditure on the initial capital expenditure items).
This application is for an extension to the existing opencast pit and hence no further capital expenditure is expected. All the equipment is already in use at the current mining operation. No new equipment will be added due to the extension into the area applied for. The surface rights of the applied for mining rights extension are owned by Era Stene (Pty) Ltd.
12.2.2 Ongoing capital expenditure (A discussion on ongoing capital expenditure items and estimated amount thereof in each of the years in which it will be incurred). Ongoing capital expenditure will only be incurred to replace the current equipment at the end of its useful life. The new replacement value of the current equipment is estimated at R10 000 000. The equipment has an average useful life of 20 years. Therefore, on average the ongoing capital expenditure is R500 000 per year (R10 000 000 / 20 years) in year 1 (escalating at 6% thereafter).
12.2.3 Summary, in a 10-year tabular format. (stating the initial, ongoing, and total amount of capital expenditure in each of the first ten years in which it will be incurred)
YEAR INITIAL ONGOING TOTAL
Year 1 R 0 R 500 000 R 500 000
Year 2 R 0 R 530 000 R 530 000
Year 3 R 0 R 561 800 R 561 800
Year 4 R 0 R 595 508 R 595 508
Year 5 R 0 R 631 238 R 631 238
Year 6 R 0 R 669 113 R 669 113
Year 7 R 0 R 709 260 R 709 260
Year 8 R 0 R 751 815 R 751 815
Year 9 R 0 R 796 924 R 796 924
Year 10 R 0 R 844 739 R 844 739
12.3 Explanation and summary of other costs (not addressed elsewhere in the mining work programme, in each year in which they are to be incurred.) No other costs are anticipated.
12.4 Summary of capital and other costs. (Complete the table below)
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SUMMARY OF CAPITAL AND OTHER EXPENDITURE
CATEGORY YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 TEAR 9 YEAR 10
Initial capital expenditure 0 0 0 0 0 0 0 0 0 0
Ongoing capital expenditure 500,000 530,000 561,800 595,508 631,238 669,113 709,260 751,815 796,924 844,739
Other costs specified in 12.3 above
0 0 0 0 0 0 0 0 0 0
TOTAL CAPITAL AND OTHER (To be reflected in the cash flow forecast)
500,000 530,000 561,800 595,508 631,238 669,113 709,260 751,815 796,924 844,739
(Note ! These total amounts must be transferred to line item 9 of the cash flow forecast required in terms of Regulation 11 (1) (g) (vi) below.
13 REGULATION 11 (1) (g) (vi): A DETAILED CASH FLOW FORECAST AND VALUATION, EXCLUDING FINANCING OF THE
PROPOSED MINING OPERATION, WHICH FORECAST MUST ALSO CLEARLY INDICATE HOW THE APPLICABLE REGULATORY COSTS WILL BE ACCOMMODATED THEREIN. (The following cash flow forecast must be submitted in accordance with the line items provided. The applicant may not change the line items or their sequence. The applicant may, however provide for escalation within accepted practice, and provide other indicators such as IRR in addition)
25
CASH FLOW FORECAST AND VALUATION (REGULATION 11(g)(vi)
Y1 R’000
Y2 R’000
Y3 R’000
Y4 R’000
Y5 R’000
Y6 R’000
Y7 R’000
Y8 R’000
Y9 R’000
Y10 R’000
TOTAL R’000
1
REGULATIONS 11(1) (d) and (f) PRODUCTION
87 87 87 87 87 87 87 87 87 87 870
2
REGULATION 11(1) (e) PRICE
36 38.52 41.22 44.10 47.19 50.49 54.03 57.81 61.85 66.18 49.74
3
REVENUE
3,132 3,351 3,586 3,837 4,105 4,393 4,700 5,029 5,381 5,758 43,272
4
REGULATION 11(1) (g) (i) MINING COST
1,224 1,286 1,352 1,420 1,492 1,567 1,646 1,728 1,815 1,906 15,436
5
REGULATION 11(1) (g) (ii) TECHNOLOGY COST
0 0 0 0 0 0 0 0 0 0 0
6
REGULATION 11(1) (g) (iii) TECHNICAL SKILLS COST
1,148 1,227 1,311 1,402 1,498 1,601 1,711 1,829 1,955 2,090 15 772
7 REGULATION 11(1) (g) (iv) REGULATORY REQUIREMENTS
42 45 47 50 53 56 60 63 67 71 554
ENVIRONMENTAL COST
0 0 0 0 0 0 0 0 0 0 0
8
REGULATION 11 (1)(G) (viii) SOCIAL AND LABOUR PLAN COST
53 53 59 59 65 67 72 72 78 78 656
9
REGULATION 11(1) (g) (v) CAPITAL AND OTHER
500 530 562 596 631 669 709 752 797 845 6 591
10 WORKING PROFIT/LOSS 165 210 255 310 366 433 502 585 669 768 4 263
11 TAX 46 59 71 87 103 121 141 164 187 215 1 194
12 NET CASH FLOW 119 151 184 223 263 312 361 421 482 553 3 069
13
DISCOUNTED CASH FLOW
119 141 161 182 201 222 241 262 281 301 2 111
The Applicant may provide for escalation, based on accepted practice, and may provide other indicators such as IRR.
26
14 REGULATION 11 (1) (g) (vii): DETAILS REGARDING THE APPLICANTS RESOURCES OR PROPOSED MECHANISMS TO FINANCE THE PROPOSED MINING OPERATION, AND DETAILS REGARDING THE IMPACT OF SUCH FINANCING ARRANGEMENTS ON THE CASH FLOW FORECAST.
14.1 Financing the cash flow (Provide in tabular format an explanation of how the cash flow will be financed, showing the amounts, the type of financing, eg. Loans, equity, retained earnings, etc, as well as the impact of financing on the cash flow in terms of financial arrangements and repayments)
No financing is required. All cash flow will be provided from cash reserves of Era Stene (Pty) Ltd.
14.2 Detail regarding the financing arrangements (Elaborate on the financing arrangements that are described in item 14.1 above, in terms of where the finance will be sourced, extent to which the financing has been finalized and on the level of certainty that such financing can be secured.)
No financing is required. All cash flow will be provided from cash reserves of Era Stene (Pty) Ltd.
14.3 Confirmation of supporting evidence appended (Attach evidence of available funding and or financing arrangements such as balance sheets, agreements with financial institutions, underwriting agreements, etc. and specifically confirm in this regard what documentation has been attached as appendices).
Era Stene (Pty) Ltd’s 30 June 2015 audited balance sheet is attached as Appendix E as supporting evidence.
15 REGULATION 11 (1) (h): UNDERTAKING, SIGNED BY THE APPLICANT, TO ADHERE TO THE PROPOSALS AS SET OUT IN THE MINING WORK PROGRAMME
Herewith I, the person whose name and identity number is stated below, confirm that I am the Applicant or the person authorised to act as representative of the Applicant in terms of the resolution submitted with the application, and undertake to implement this mining work programme and adhere to the proposals set out herein.
Full Names and Surname
Dirk Rosema
Identity Number 400712 5021 080
APPENDIX A
PLAN SHOWING THE LAND AND MINING AREA TO WHICH THE APPLICATION RELATES (THE PLAN
REQUIRE IN TERMS OF REGULATION 2(2))
APPENDIX B
TITLE DEEDS OF PROPERTIES
1) Portion 9 (a portion of Portion 7) of the farm Rietvalei 195 IR 2) Remaining extent of Portion 7 (a portion of Portion 3) of the farm Rietvalei
195 IR
APPENDIX C
GEOLOGICAL REPORT BY LOUIS KRUGER
GEOTECHNICS CC
Report on the Engineering Geological investigation of the remaining extent of Portion 7 (a portion of Portion 3) of the farm Rietvalei 195 IR, dated September 2015
REPORT ON
THE ENGINEERING GEOLOGICAL INVESTIGATION OF
THE REMAINING EXTENT OF
PORTION 7 (A PORTION OF PORTION 3) OF
THE FARM RIETVALLEI 195 IR
LOUIS KRUGER GEOTECHNICS CC PO BOX 90093
Garsfontein 0042
Tel 082 651 4819 Fax 086 671 1684
SEPTEMBER 2015
Client
ROSEMA BRICKS
REPORT ON THE ENGINEERING GEOLOGICAL INVESTIGATION OF THE REMAINING EXTENT OF PORTION 7 (A PORTION OF PORTION 3) OF THE FARM RIETVALLEI 195 IR CONTENTS
Page
1.INTRODUCTION ..................................................................................................... 1 2.AVAILABLE INFORMATION................................................................................... 1 3.LOCALITY ............................................................................................................... 1 4.TOPOGRAPHY AND DRAINAGE .......................................................................... 1 5.METHOD OF INVESTIGATION .............................................................................. 1 6.GEOLOGY .............................................................................................................. 2 7.SOIL PROFILE ........................................................................................................ 2 8.GEOHYDROLOGY ................................................................................................. 2 9.CONCLUSIONS AND RECOMMENDATIONS....................................................... 3 Figure 1 : Locality Figure 2 : Regional geology Figure 3 : Isopach Map of The Karoo Sequence on The East Rand (Bredell 1979)
808.01
1
REPORT ON THE ENGINEERING GEOLOGICAL INVESTIGATION OF THE REMAINING EXTENT OF PORTION 7 (A PORTION OF PORTION 3) OF THE FARM RIETVALLEI 195 IR 1. INTRODUCTION
Louis Kruger Geotechnics CC was appointed by Rosema Bricks to do a reconnaissance engineering geological investigation on the Remaining extent of portion 7 (a portion of portion 3) of the farm Rietvallei 195 IR. The aim of the investigation was to provide an estimate of possible clay reserves. The following is addressed in the report:
General Geology
Soil profile
Geohydrology
Construction material
Estimated clay reserves
2. AVAILABLE INFORMATION
The following information was available:
1 : 50 000 Topographical map
“Report on the Engineering Geological Investigation of Portion 9 of the Farm Rietvallei 195 IR”, Louis Kruger Geotechnics”, May 2001
“Report on the Engineering Geological Investigation of Portion 9 of the Farm Rietvallei
195 IR”, Louis Kruger Geotechnics”, October 1996 The Isopach Map of The Karoo Sequence on The East Rand (Bredell 1979)
1 : 250 000 Geological map 2628 East Rand
3. LOCALITY
The Remaining extent of portion 7 (a portion of portion 3) of the farm Rietvallei 195 IR is situated approximately 18 to 20 kilometers east south -east of Bapsfontein, approximately one kilometers south of the Bapsfontein - Delmas road. The proposed site is bounded by a dirt road in the west, by a tarred road in the east and by the existing Rosema Brick quarry in the south. The locality is shown on Figure 1.
4. TOPOGRAPHY AND DRAINAGE
No topographical information was available. The available information shows that the site slopes towards the west and drains by means of sheetwash in the same direction towards the stream on the border of the site.
5. METHOD OF INVESTIGATION
The investigation consisted of the evaluation of existing information; this included geological map and publications and the results of the investigation of Portion 9 of the Farm Rietvallei 195 IR.
808.01
2
6. GEOLOGY
The site is underlain by sandstone, shale and coal of the Karoo Sequence, dolomite of the Transvaal Sequence and transported and pedogenic material, the regional geology is shown on Figure 2. According to the 1 : 250 000 scale geological map, the southern part of the site is underlain by sandstone, shale and coal of the Karoo Sequence. However, according to Bredell (1979) the Karoo Sequence is only present on the southern corner of the site (Figure 3). A more accurate indication of the extent of the Karoo Sequence on the proposed site was generated by combining the 1:250 000 scale geological map, the map by Bredell (1979) and the results of the investigation on Portion 9 of the Farm Rietvallei 195 IR (Louis Kruger Geotechnics 2001).
7. SOIL PROFILE
The results of the engineering geological Investigation of Portion 9 of the Farm Rietvallei 195 IR (Louis Kruger Geotechnics May 2001) show that the following materials can be expected on the site:
7.1 Hillwash
Moist, red brown, clayey sand with an average thickness of one meter was encountered in all the boreholes.
7.2 Pedogenic material
Pedogenic material, consisting of moist, dark orange, clayey sand with abundant ferricrete nodules and concretions is present below the hillwash up to an average depth of 4,0 meters
7.3 Residual Karoo sediments
Limited thicknesses (less than 5 meters thick) of residual material are expected on the western- and northern part of the site. On the remainder of the site the thickness of the residual materials is expected to be in the order of 12,0 meters. The previous investigations on Portion 9 show that the sediments occur in an east-west striking basin, with the centre of the basin located on the property south of the site. Portion 7 is therefore is situated on the northern edge of the basin and the thickness of the Karoo sediments is expected to increase towards the south-east and is expected to extend up to the southern boundary of the site
It is important to note that the recommendations are based on the results of a desk study and information from the existing quarry. It is therefore possible that variations from the expected conditions can occur.
8. GEOHYDROLOGY
The presence of the pedogenic material indicates that a perched water table could be present on top of the clays during periods of high rainfall.
NTS
FIGURE 2REGIONAL GEOLOGY(From 1 : 250 000 Geological Maps East Rand and Pretoria)
N.
THE SITE
From the 1 : 250 000 Geological Series 2528 Pretoria and 2628 East Rand
Dolomite, chert
Sandstone, shale and coalPV
C-Pd
VMD
Diamictite and shale
NTS
FIGURE 3Isopach Map of The Karoo Sequence (From Isopach Map of The Karoo Sequence on The East Rand (Bredell (1979))
THE SITE
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9. CONCLUSIONS AND RECOMMENDATIONS
It is important to note that the recommendations are based on the results of a desk study and information from the existing quarry. It is therefore possible that variations from the expected volumes can occur.
9.1 Estimated reserves
Since material from the existing quarry on Portion 9 is used for brick making, it is assumed that the materials on Portion 7 will be suitable for the manufacture of bricks as well. The estimated volumes of the different materials are shown on the following tables. It is important to note that the northern boundary of the Karoo sediments was not determined accurately; therefore a conservative approach to the calculations was adopted. The calculations are based on the following assumptions: The average thickness of the overburden is 4 meters The average thickness of clay is 12 meters The northern extent of the clay is assumed to be between the extent indicated on the 1:250
000 scale geological map and the extent indicated by Bredell (1979)
ESTIMATED VOLUME (m3) Overburden Clay
1 200 000 2 760 000
It is important to note that the calculated volumes are based on the results of a desk study. It is recommended that the extent and thickness of the clay be confirmed by doing a detailed investigation.
9.2 Construction material
Depending on the composition, the ferricrete should be suitable as construction material for roads; this should be verified once excavations for the quarry are in progress.
9.3 Excavatability
Due to the presence of hardpan ferricrete, heavy excavation equipment could be required. 9.4 Geohydrology
Ground water related problems are expected in excavation close to the shale – dolomite contact. If excavations proceed to- or close to the northern boundary of the basin the quarry could be flooded.
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9.5 Stability of excavations
The sidewalls of excavations should be cut back or shored.
----------------------------- L.J Kruger Pr. Sci. Nat
YEAR 1
YEAR 2
YEAR 3
YEAR 4
YEAR 5
YEAR 6
YEAR 7
YEAR 8
YEAR 9
YEAR 10
YEAR 11
YEAR 12
YEAR 14
YEAR 13
YEAR 15
YEAR 16
YEAR 17
YEAR 18
YEAR 19
YEAR 20
YEAR 21
YEAR 22
YEAR 23
YEAR 24
YEAR 25
YEAR 26
YEAR 52 to 56
PHASE II
YEAR 27
YEAR 28
YEAR 29
YEAR 30
YEAR 31
YEAR 57 to 59
YEAR 47 to 51
YEAR 42 to 46
YEAR 37 to 41
YEAR 32 to 36
PHASE I
PHASE 1
Area: 15 ha
Thickness: 8 m
Volume: 1.2mil m3
LOM: 31 years
PHASE 2
Area: 15.5 ha
Thickness: 7 m
Volume: 1.09mil m3
LOM: 28 year
PHASE 3
Area: 23.3 ha
Thickness: 2 m
Volume: 0.46mil m3
LOM: 11.5 years
North Quarry
Farm Dam
South-west Dam
South Quarry
Topsoil Stockpiles
Office Buildings
Clay Stockpile
Natural Pan
Clay Stockpiles
Scale 1 : 15 000 (A4)WGS Lo29
Job No F052-00
Figure 2
Legend
Existing Operations
Proposed Expansion
Area
Phase I Expansion of
South Quarry
Phase II Expansion of
South Quarry
Phase III Expansion of
South Quarry
LOM
ERA STENE CLAY MINING OPERATIONS
Site Plan and Life of Mine
APPENDIX E
EVIDENCE OF AVAILABLE FUNDING AND OR
FINANCING ARRANGEMENTS
1) 30 June 2015 audited balance sheet of Era Stene (Pty) Ltd