South African gold producer Great Basin Gold’s (GBG’s) ambition of becoming a midtier gold producer is fast becoming a reality and could be achieved by June this year when its Burnstone project, in Mpumalanga, is ramped up to full production.

GBG is breathing new life into South Africa’s underexploited South Rand goldfield.

The ramp-up of the Burnstone project will mean that GBG will be actively developing projects situated in two of the world’s gold regions, and which give the company access to a total resource base of 19,1-million tons of gold.

The company has a project situated on the Carlin trend in Nevada, US, that will be producing 120 000 oz/y. Currently, this Hollister project is producing 80 000 oz/y. Milling issues last year affected production, but these have since been resolved through the refurbishment of the Esmeralda mill. This has also opened up opportunities for expansion and has enabled efficiencies in the mining operation.

With its existing project in the US, GBG will be eager to ramp up its maiden South African project, Burnstone, to full production. GBG CEO Ferdi Dippenaar reports that the reason for this is that both projects offer high profits at low operational costs.

Local Gold
The Burnstone project is situated near Balfour, in Mpumalanga, on the eastern extent of the Witwatersrand gold basin, which runs through the North West province, Gauteng, Mpumalanga and the Free State, and which is known as the South Rand.

Unique to the project is the shallow extent of the reef, which, Dippenaar says, puts the company at an advantage over deeper-level gold mines.

At a media day at the project, GBG illustrated the advancements.

While most of the infrastructural work has been completed, GBG says a lot of work still needs to be done to achieve the June 2010 ramp-up date target.

The company aims to mine the shaft from two locations. The heart of the project is the main vertical shaft, which, at 450 m, is almost at its targeted depth of 485 m. Planned expenditure on the shaft is R271-million, of which R183-million has been spent; the balance will be focused on the construction of the winder house, on which construction started in October 2009.

In order to save costs, the company decided to refurbish two existing winders rather than buy new ones.

The winder contract was awarded to project house DRA Minerals, which is currently completing the refurbishment.

The installation of the winders will be in line with the completion of the winder house this month, with commissioning due for April.

GBG is also planning to gain access to the reef through a decline shaft situated some 450 m from the vertical shaft. The decline shaft also allows mining to take place at a depth of 450 m and will eventually link up with the vertical shaft.

Most of the ore at Burnstone will be mined through the decline shaft that runs through the two blocks that the company has identified as having the most potential. The ore will then be taken to the vertical shaft for transport to the metallurgical plant.

Progress on the building of the metal- lurgical plant is satisfactory. The refurbishment of the mill that will be used to process the ore is 88% complete and the area excavated for the mill, silo, thickener and carbon-in-leach area is 100% complete. More than 70% of the capital equipment to be used at the plant has been procured, while  equipment to be manufactured is 30% complete.

Social Upliftment
Dippenaar reports that key to the project is the contribution of the company to the local community.

A main feature of the Burnstone project is the number of women employed. In 2008, women made up 22% of the company’s workforce, increasing to 23% in 2009 and already up at 24% this year.

The project has sourced a significant portion of its workforce from the local community. Dippenaar reports that local employees currently make up 49% of the project’s workforce, up from 40% in 2008.

“The company’s objective is to have a blend of locally trained employees and employees from other companies with the technical skills required for a mechanised operation,” he says.

The company also runs a number of community projects. One of the most important is the recycling project, where the company provides any waste that can be recycled to the local community, which then takes it to the recycling centre.

“Considering that the population of the local near-mine communities totals 40 100, the company has made significant headway in developing the community and providing it with sustainable employment. The unemployment rate in the community is estimated to be 37,8%, a large majority of which are youth,” says Dippenaar. He adds that the company will be contributing an additional R30-million to future corporate social responsibility programmes.

Low-Cost Attraction
The past two years have seen cost challenges for the industry, forcing many operations to resort to radical cost cutting measures, first in the wake of the rolling Eskom blackouts during which time mining productivity plummeted 90% and then after the 2008 financial meltdown.

However, because of the shallow nature of the deposits at Burnstone and also at Hollister, GBG has a significant advantage over deeper-level mining operations. Comparative shallowness, coupled with a better economic outlook, is expected to attract shareholders to the business, which is listed both in South Africa and abroad.

Dippenaar sees GBG having a favourable debt-to-equity ratio that will facilitate Burnstone’s commissioning by midyear.

With the Hollister and Burnstone mines producing 374 000 oz/y at full design capacity, considerable cash flow will be generated for company growth, which is currently Africa-focused with exploration projects in Mozambique and Tanzania.