Tailings dump recovery concept

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Information about Tailings dump recovery concept
Business & Mgmt

Published on February 28, 2014

Author: pgshambare

Source: slideshare.net

Description

business plan, concept note on mining of dumps

TAILINGS-DUMP RECOVERY CONCEPT DOCUMENT F l a t 1 4 0 3 , S e d e r h o f , 3 3 3 N a n a S i t a S t r e e t , P r e t o r i a , 0 0 0 2 P h i l l i p 0 7 1 S h a m b a r e 9 8 8 4 3 6 6 p g s h a m b a r e @ g m a i l . c o m -1-

Table of Contents 1. EXECUTIVE SUMMARY......................................................................................................3 2. BUSINESS DESCRIPTION...................................................................................................5 3. BUSINESS INFORMATION..................................................................................................6 4. FINANCE REQUIREMENTS.................................................................................................8 5. TECHNICAL REVIEW........................................................................................................10 6. FINANCIAL REVIEW .......................................................................................................13 7. APPENDIX....................................................................................................................... 17 -2-

1.EXECUTIVE SUMMARY 1.1. Summary The Organisation aims to establish an entity to exploit opportunities that exist in the mining industry with particular emphasis on recovering gold and other trace elements from gold mine dumps or trailing’s which remain after ores have been processed. The Organisation’s project principal objective will be in identifying potential dumps from gold mines which have significant gold residue to be recovered; tests will be made on samples on acquired dumps and movable dump processor equipment will be placed on an approved dump. Dumps are acquired by entering into agreement with dump owners, and or bids will be placed to buy the dumps put on sale. Through this business plan/concept document, the promoters of the tailings recovery project have decided to apply for funding/partnership to be used towards buying dumps, acquisition of towable tailings processing equipment and to fund first cycle operational costs. 1.2. Products and Services Organisation project will be offering gold recovery operations from mine dumps in rich gold areas in Africa, locations of dumps have been identified in Zimbabwe were the concept is relatively new, and very few established companies are in this business meaning that there is still relatively little competition and limited barriers to entry in the industry, thus using Zimbabwe as a stepping stone to other gold rich areas across Africa. Tailings, also called mine dumps, culm dumps, slimes, tails, refuse, leach residue, are the materials left over after the process of separating the valuable fraction from the uneconomic fraction of an ore. The composition of tailings is directly dependent on the composition of the ore and the process of mineral extraction used on the ore. A feasibility study progresses with samples being submitted to mining consultants for evaluation. After testing to establish assay, moisture content, recoverability and size, the Organisation purchases the dump from the mine operator when they become available. 1.3. Location and Expected Specifications The Organisation will acquire gold mining dumps on which to set up movable trailing processing equipment and reprocess the dump to recover gold left out by the mineral processing technology which was employed to produce the trailing’s. Dumps will be acquired if they have a turnover of at least 0.5grammes/tonne of trailing’s as a conservative assumption, industry experience avails that the turnover can fall within a range of 1gramme- 8gramme/tonne. Dumps are also available in different sizes depending on the scale of mining operations, or capacity of existing primary mineral ore processing plant, sizes range from tens of thousands tonnes to millions of tonnes. -3-

1.4. Viability The Organisation is in a position of making sustainable excess revenue over expenditure over a short term period given the stable and relatively high value of gold against low cost of processing tailings. Continued improvement in processing technology has created a gap in need to be exploited in the gold recovery sector as the opportunities increase to re-employ advanced equipment to recover gold from mining dumps. The retreatment business is high-volume and low-risk. Vast quantities of material are processed through the plant in order to recover gold from old mine dumps at a recovery rate that varies depending on the material being treated. A 10 000 tonne dump with a gold recovery capacity of 1gramme/tonne will produce 10 kg’s of gold. A 50 000 tonne dump with recovery capacity of 0.5grammes/tonne will produce 25kg’s of gold. Below is a table showing possible conservative outcomes of recoverable gold output from various sizes of dumps. Dump Size (Tonnes) Recoverable Output grammes/tonne 1 gramme (0.001) 0.5 gramme (0.0005) 0.8 gramme (0.0008) 10000 50000 100000 500000 1000000 10 5 8 50 25 40 100 50 80 500 250 400 1000 500 800 Production in Rands Dump Size (Tonnes) 10000 50000 100000 500000 1000000 1g(0.001) 0.5g(0.0005) 0.8g(0.0008) 4 235 100 21 175 500 42 351 000 211 755 000 423 510 000 2 117 550 10 587 750 21 175 500 105 877 500 211 755 000 3 388 080 16 940 400 33 880 800 169 404 000 338 808 000 The average world gold price for the year 2013 according to the New York Times is reported to be US$ 42.35/gram, US$ 1317.38/ounce and US$ 42351.86/kg. Price/kg Rands 423 510, Price/kg US $42 351, at Exchange Rate 1US $: 10 Rand. The future predictions of gold prices look positive as the factors which determine demand and supply of the commodity present a positive outlook of the future. -4-

1.5. Financial Consideration The promoters through this document and other initiatives seek to raise debt financing of R 2 382 240 to be applied to cover the capital expenditure worth R 2 320 000, and one month’s working capital of R 62 240. 2. BUSINESS DESCRIPTION 2.1. Business Model The business model has been strategically crafted to strategically initiate the idea through different phases aimed at setting up the Organisation on a growth projectory. Phase 1 until financial realization • Identification of Historic mine dumps • Land use agreements, sampling, assay & lab work • Following exploration results, detailed analysis of collected data is undertaken • Risk and hazard assessment • Failure evaluations • Feasibility studies and financial evaluations • Water balance development and utilization • Pilot scale test work and material characterization • Commissioning of operations -5-

3.BUSINESS INFORMATION 3.1. Particulars of the Managing Member Name Physical/ Postal Address Cell Table 1: Member’s Details 3.2. Particulars of the Business Enterprise Name Enterprise Type Registration Number Registration And Start Date Description of Business Financial year End Accounting Officer Physical / Postal Address Contact Person -6-

Cell Table 2: Company Details 3.3. Vision, Mission, Objectives & Values 3.3.1. Vision Statement To become an un-hedged gold producer and a leader in surface gold tailings retreatment in Africa. 3.3.2. Objectives We have given ourselves strategic goals and objectives designed to strengthen the organization’s revenue earning potential. Our main strategic goals are: • Become a viable organization allowing us the freedom of taking advantage of other mining investment opportunities as they become available • Realize a positive return on investment within the first 12 months 3.3.3. Strategies • Reducing risk and creating opportunities • Controlling costs • Maximizing margins • Assuming its social and environmental responsibilities This strategy involves using various capitals – human, financial, intellectual capital – to extract gold from extensive surface resources in the safest and most efficient manner, thus ensuring the sustainability of its social and environmental capital. The Organisation’s long-term strategy is to improve gold recovery so that, in future, zero gold is returned to tailings deposition facilities; and to grow its reclamation business by: • The use of technology and continuing R&D • Acquiring additional surface resources (Gold Dumps) • Using existing expertise and skills to expand into the reclamation of other minerals from discarded tailings material -7-

4.FINANCE REQUIREMENTS 4.1. Sources of Funds The Organisation requires debt financing of R 2 382 240 mainly to cover the capital expenditure worth R 2 320 000, and to finance one month’s working capital of R 62 240. 4.2. Funding/ Start up Summary Sources of funds Rands Members contributions Members loans to the company Loans/ Investment 2 382 240 2 382 240 Application of funds Capital Expenditure One Month Working Capital 2 320 000 62 240 2 382 240 -8-

4.3. Application of Funds The Organisation will use the required funds to cover for the acquisition of mine dump, processing equipment and installation expenses; one month’s working capital. The quotations are shown in appendices. The application of the funds will be as follows: Application of funds Capital Expenditure One Month Working Capital 2 320 000 62 240 2 382 240 4.4. Break down of Capital Expenditure Asset Required Towable Dump Processor Submersible Water Pump 30hp Generator 28Kv Excavator Motor vehicle- Bakkie Total Qty 1 2 1 1 1 Price 1 500 000 30 000 90 000 600 000 100 000 2 320 000 4.5. Breakdown of Working Capital Operating Expenses Description Accounting Fees Bank Charges Rent, Water and Electricity Insurance Office Supplies Internet/Web Domain & Email Accounts Marketing Storage Contingencies Salaries and Allowances Telephone and Faxes Total Month 1 300 300 10000 740 800 1200 2000 900 1200 44000 800 62240 -9-

5.TECHNICAL REVIEW 7.1 Hydraulic mining of tailings The monitor uses high pressure water to erode the tailings in sections, washing the material downstream which is collected in a sump. Tailings dams are generally segregated by the coarseness of the material (coarse fraction near the spigot) and if a particular area of a dam is too coarse for pumping then blending is required. Once the required density is obtained in the sump and screening has prevented large objects from passing, the slurry is then pumped to thickeners and the underflow is reprocessed in the plant. The tailings are then stored in a tailings impoundment. - 10 -

The use of hydraulic mining for tailings can be to either reprocess the waste, mine the waste as a product, or for moving of the tailings to a more suitable location. Some tailings impoundments are hydraulically mined to not just process the tailings but to resite them for environmental reasons. This is an effective method and can take a shorter time than mechanical excavation, depending on the density and particle sizes of the tailings. Gold is recovered by Carbon-in-Circuit (CIC) and Carbon-in-Pulp (CIP) leach and absorption circuits. 7.2 Commercially viable recovery processes The major categories of commercially viable recovery processes include the following: • Gravity separation • Flotation • Cyanidation - processes may include the following operations: o Agitated tank leaching o Heap leaching o Carbon adsorption recovery o Zinc precipitation recovery • Refractory ore processing • Alternative lixiviants • Amalgamation 7.3 Carbon adsorption process There are several variations to the carbon adsorption process including: - 11 -

Carbon-In-Pulp (CIP): Carbon-in-pulp operation is a variation of the conventional cyanidation process. Ore is crushed, finely ground, and cyanide leached in a series of agitated tanks to solubilize the gold values. Instead of separating solids from the pregnant solution, as in the traditional cyanidation process, granular activated carbon is added to the leached slurry. The carbon adsorbs the gold from the slurry solution and is removed from the slurry by coarse screening. In practice, this is accomplished by a series of five or six agitated tanks where carbon and ore slurry are contacted in a staged counter-current manner. This greatly increases the possible gold loading onto the carbon while maintaining a high recovery percentage. Carbon is retained within the individual CIP tanks by CIP tank screens. Carbon-In-Leach (CIL): The carbon-in-leach process integrates leaching and carbon-in-pulp into a single unit process operation. Leach tanks are fitted with carbon retention screens and the CIP tanks are eliminated. Carbon is added in leach so that the gold is adsorbed onto carbon almost as soon as it is dissolved by the cyanide solution. The CIL process will frequently be used in small cyanide mills to reduce the complexity and cost of the circuit. 7.4 Capital Equipment to be employed Tailings processing systems Tailings processing systems that are 98%+ efficient in capturing the remaining gold and other precious metals from processing existing tailings piles left over from previous processing operations will be employed. High Production Gold Tailings Processing Equipment Technology - 12 -

* Process from 18-20 tons per hour, * 98% efficient capture rate, * easy to transport from site to site 6.FINANCIAL REVIEW 9.1 Projections and Assumptions Full financial projections that comprise a balance sheet, income statement cash flow statements and supporting schedules are attached to this document. The financials have been prepared under the following assumptions: • R 2 382 240 in combination of debt finance will be available in the short term; • Business will grow at an annual rate of 10% per annum, • Inflation is forecasted at 7% per annum • Income tax is forecasted at 28% for the five years • All transactions are assumed to be Cash - 13 -

9.2 Projected Monthly Income Statement TD Recovery INCOME STATEMENT Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Revenue 882 313 889 666 897 079 904 555 912 093 919 694 927 358 935 086 942 878 950 736 958 658 966 647 Gross Profit 882 313 889 666 897 079 904 555 912 093 919 694 927 358 935 086 942 878 950 736 958 658 966 647 Expenses 62 240 61 240 61 240 61 240 61 240 61 240 61 240 61 240 61 240 61 240 61 240 61 240 Accounting Fees Bank Charges Rent, Water and Electricity Insurance Office Supplies Internet/Web Domain & Email Marketing Storage Contingencies Salaries and Allowances Telephone and Faxes 300 300 10 000 740 800 1 200 2 000 900 1 200 44 000 800 300 300 10 000 740 800 1 200 1 000 900 1 200 44 000 800 300 300 10 000 740 800 1 200 1 000 900 1 200 44 000 800 300 300 10 000 740 800 1 200 1 000 900 1 200 44 000 800 300 300 10 000 740 800 1 200 1 000 900 1 200 44 000 800 300 300 10 000 740 800 1 200 1 000 900 1 200 44 000 800 300 300 10 000 740 800 1 200 1 000 900 1 200 44 000 800 300 300 10 000 740 800 1 200 1 000 900 1 200 44 000 800 300 300 10 000 740 800 1 200 1 000 900 1 200 44 000 800 300 300 10 000 740 800 1 200 1 000 900 1 200 44 000 800 300 300 10 000 740 800 1 200 1 000 900 1 200 44 000 800 300 300 10 000 740 800 1 200 1 000 900 1 200 44 000 800 EBITDA 820 073 828 426 835 839 843 315 850 853 858 454 866 118 873 846 881 638 889 496 897 418 905 407 Net interest (paid)/received Interest received Interest paid Depreciation (9 926) (9 926) (9 926) (9 926) (9 926) (9 926) (9 926) (9 926) (9 926) (9 926) (9 926) (9 926) 9 926 38 667 9 926 38 667 9 926 38 667 9 926 38 667 9 926 38 667 9 926 38 667 9 926 38 667 9 926 38 667 9 926 38 667 9 926 38 667 9 926 38 667 9 926 38 667 Earnings before tax 771 480 779 833 787 247 794 722 802 260 809 861 817 525 825 253 833 046 840 903 848 826 856 815 - 14 -

Taxation 223 729 226 152 228 302 230 470 232 656 234 860 237 082 239 323 241 583 243 862 246 159 248 476 Retained income for the month / year 547 751 553 681 558 945 564 253 569 605 575 001 580 443 585 930 591 462 597 041 602 666 608 338 - 15 -

9.3 Projected Annual Income Statement TD Recovery FY-End 2014 FY-End 2015 FY-End 2016 FY-End 2017 FY-End 2018 Revenue 11 086 764 12 195 440 13 414 985 14 756 483 16 232 131 Gross Profit 11 086 764 12 195 440 13 414 985 14 756 483 16 232 131 Expenses 735 880 783 712 834 653 888 906 946 685 Accounting Fees Bank Charges Rent, Water and Electricity Insurance Office Supplies Internet/Web Domain & Email Marketing Storage Contingencies Salaries and Allowances Telephone and Faxes 3 600 3 600 120 000 8 880 9 600 14 400 13 000 10 800 14 400 528 000 9 600 3 834 3 834 127 800 9 457 10 224 15 336 13 845 11 502 15 336 562 320 10 224 4 083 4 083 136 107 10 072 10 889 16 333 14 745 12 250 16 333 598 871 10 889 4 349 4 349 144 954 10 727 11 596 17 394 15 703 13 046 17 394 637 797 11 596 4 631 4 631 154 376 11 424 12 350 18 525 16 724 13 894 18 525 679 254 12 350 10 350 884 11 411 728 12 580 331 13 867 577 15 285 446 (119 112) (97 556) (74 922) (51 156) (26 202) 119 112 464 000 97 556 464 000 74 922 464 000 51 156 464 000 26 202 464 000 Earnings before tax 9 767 772 10 850 173 12 041 409 13 352 421 14 795 245 Taxation 2 832 654 3 146 550 3 492 009 3 872 202 4 290 621 6 935 118 7 703 623 8 549 401 9 480 219 10 504 624 INCOME STATEMENT EBITDA Net interest (paid)/received Interest received Interest paid Depreciation Retained income for the month / year - 16 -

7.APPENDIX - 17 -

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