4.   MINERAL RESOURCE AND RESERVES

4.6.1  

Glen Douglas

Glen Douglas Mine’s resource estimation process is based on 144 drill holes representing 5,300m at a nominal spacing of 200m by 200m. The majority of the drill holes were drilled by diamond drilling techniques; however some of the later infill drilling was completed with percussion drilling. Drill holes are sampled every 1m down the hole and the entire core is sampled. The samples were initially only analysed for SiO₂ and total insoluble content, however after the initial exploration, the standard procedure was changed to XRF analysis for Si, Al, Fe, Ca, Mg, Na, K, Mn and Ti. The number and spacing of holes used to define this deposit are considered appropriate given the relatively simple geological structure. In SRK’s opinion the quality and quantity of the data upon which the Mineral Resources at Glen Douglas Mine are based is sufficient to derive the Mineral Resources and Mineral Reserves as reported here.

A 3D model of the lithological contacts of the deposit is produced based on modelling drillhole sections 150m apart. These Sections are linked up in geological modelling software to create wireframe models for each lithology. A block model is created in the geological modelling software with block dimensions in the X, Y and Z dimensions of 25, 25, and 10m, respectively. The block model was sub-celled three times in the X and Y direction and twice in the Z dimension using the wireframes, to more correctly represent the volumes of the wireframe solids. Lithological codes are assigned to the block model based on the wireframes solids. Blocks that did not have a lithological code after the initial assignment were populated with lithology codes using inverse distance squared based on the block model cells. The waste and intrusive lithologies are assigned after the dolomite lithology to ensure that no waste is classified as ore. The model is restricted using a surface representing the natural ground surface and the latest pit shell. Vertical sections were created at intervals through the deposit, to check and validate the correlation of the block model, the wireframe solids and the borehole information. Volumes within the block model were also validated against the volumes of the wireframes.

Three-metre composites were created for all the drillholes within the dolomite lithology. Experimental semi-variograms are calculated from these data and a two structured isotropic spherical model created for the semi-variogram. Grade interpolation is carried out using Ordinary Kriging for SiO₂ values using only assay values for the dolomite lithology. SiO₂ is the only variable estimated, as it is the only parameter that impacts the acceptability of the product for metallurgical uses. In-situ densities of 2.83t/m³ for dolomite, 2.89t/m³ for the syenodorite sill and 1.90t/m³ for soil are globally applied. SRK considers the grade and tonnage estimation methodology applied at Glen Douglas Mine to be suitable for the derivation of Mineral Resources and subsequently Mineral Reserves.

Glen Douglas Mine currently reports Measured Mineral Resources as the potentially metallurgical grade dolomite within a perimeter defined by the drillholes. The remainder of the potentially metallurgical grade dolomite on the property is reported as Inferred Mineral Resources. In its audited resource statement, SRK has classified that portion of dolomite exclusive of a 100m safety pillar, which accounts for the majority of the Mineral Resource classified by Kumba as inferred, as an Indicated Mineral Resource. A portion of the Measured Mineral Resources underlies the process plant and other infrastructure. SRK considers that this material is potentially economically exploitable to produce metallurgical grade dolomite and aggregate, however it is not included in the LoM Plan.

Soil filled cavities, resulting from weathering, occur in the dolomite at Glen Douglas. Despite experiments with a number of different techniques no reliable method has been found for predicting the location of the cavities. When a mining block containing such a cavity is blasted the soil contaminates a portion of the block, rendering it waste and reducing the product yield of the block. Since this is weathering related the incidence of the soil cavities reduces with depth below surface.

Yield estimates have been produced for each bench based on mining records, and these are applied to the block model. The yield values used are in Table 4.25.

The LoM schedule which defines the Mineral Reserve is defined by the current final pit design to 1,395m. The primary product is metallurgical dolomite, therefore the pit design has been developed around the need to meet this requirement. There is a shortfall in the available tonnage of aggregate. This is not seen as a serious problem as there are a number of options available to meet the requirement. These are:

• Divert a portion of the metallurgical dolomite to aggregate.
  
• Recover material from the waste dumps by screening out contaminating soil.
  
• Modify the pit design to mine further into the footwall.
  
• Increase the depth of the pit into the footwall.
  
• Mine selectively in the vicinity of dykes and sills to reduce the mining losses.
  

The first option is not considered a good one as it results in a high value product being sold for a lower price, however the other options are viable and screening is already being used, but the recovered material is not included in the LoM.

The waste associated with this schedule is 18.5Mt of internal waste and 52.4Mt of overburden, dyke, sills and mixed waste, a total of 70.9Mt.

The mine plan assumes mining down to the 1,395m Level. All Mineral Resources used for conversion to Mineral Reserves are classified as Indicated and therefore convert to Probable Reserves.

Total tonnage of Metallurgical Dolomite available is therefore 50.4Mt which at a planned mining rate of 766Ktpa adequately caters for the 30-year life. Total tonnage of Aggregate is 18.1Mt which at a planned mining rate of 723Ktpa allows for a mining life of 25 years. SRK assumes for the purpose of the FM that in the last five years of the LoM Plan the Aggregate is sourced from other sources that may include Metallurgical Dolomite Reserves.