5. MINING

This section includes discussion and comment on the mining engineering and related aspects of the LoM Plans associated with the Material Properties. Specifically, comments are given on the applicability of the mining methods, rock mechanics and geotechnical considerations, ventilation and the planning process. The mining engineering and related aspects contained in this section support the production schedules, operating costs and capital expenditures contained in the FMs in Section 14.

5.1 Mine Planning Process

The planning process at the Material Properties is dependent upon input from the geology/resource management departments. Responsibility is assigned for addition/revision, and depletion sign-off on the Mineral Resource and Mineral Reserve models, which form the basis for subsequent design and planning and extraction sequencing incorporated into the LoM Plan. In the majority of instances this is completed using a combination of geological modelling, mine planning and production scheduling computer software.

The LoM Planning cycle (currently financial year from January to December), following ratification of key input parameters, commences with updating of the Mineral Resource statement allowing for depletion projections and generation of a SAMREC/JORC compliant statement for 31 December. On completion of this update of the Mineral Resource statement, the planning process commences and comprises:

Targets, objectives and guidelines that are derived from the corporate headoffice business plans;
A detailed short-term (one- to three-year) operating plan including detailed mining face positions for surface mine layouts and associated development layouts for underground operations;
An extension to this short-term plan resulting in a five-year or ten-year plan from which a capital expenditure programme is developed;
Extension into a full LoM Plan including mining layouts and extraction strategies, which deplete the Mineral Reserve in accordance with the pre-defined strategies.

In conjunction with the above, a detailed (one-year) operating cost budget is subsequently projected and where appropriate modified for the LoM production schedule. The one-year budget is generally prepared on a monthly basis, extending into quarterly periods and annually thereafter. Of critical importance is the utilisation of historical data for dilution and extraction factors and operating costs.

SRK concludes that the LoM Planning process and resulting LoM Plans are diligently prepared by competent professionals. SRK considers that the planning process and resulting LoM Plans, as modified and reported herein, generally reflect international practice and are appropriate for the purposes of this CPR.