Integrated Annual Report 2012
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Mineral Resources and Reserves

 
Summary            
Assmang (jointly held)            
    MEASURED AND INDICATED    PROVED AND PROBABLE
    Mineral Resources   Mineral Reserves
    Mt Fe%   Mt Fe %
Iron ore mines            
BEESHOEK   117,45 63,73   54,00 64,05
    Dumps         12,50 55,44
KHUMANI            
  Bruce   227,79 64,53   168,73 64,15
  King   481,18 64,13   344,13 64,61
    Dumps         1,76 56,22
             
    MEASURED AND INDICATED   PROVED AND PROBABLE
    Mineral Resources   Mineral Reserves
Manganese ore mines   Mt Mn % Fe %   Mt Mn % Fe %
NCHWANING                
Seam 1   142,38 43,9 9,0   110,34 43,9 9,0
Seam 2   180,80 42,4 15,5        
GLORIA                
Seam 1   126,79 37,6 4,7   93,82 37,6 4,7
Seam 2   29,40 29,9 10,1        
BLACK ROCK                
Seam 1   43,60 40,6 18,1        
Seam 2   26,81 38,6 19,8        
                 
    MEASURED AND INDICATED   PROVED AND PROBABLE
    Mineral Resources   Mineral Reserves
    Mt Cr2O3%   Mt Cr2O3%
Chromite mine            
DWARSRIVIER   55,03 38,11   39,15 34,01

Subsidiary companies


    Mineral Resources   Mineral Reserves
    Measured Indicated Inferred Total   Proved Probable Total
    Mt Mt Mt Resource   Mt Mt Reserve
Chromite mines                  
RUSTENBURG MINERALS   3,5 1,9 7,0 12,4   2,2 1,1 3,3
ZEERUST CHROME     1,8 1,5 8,8 12,1   2,2 0,3 2,5
Pyrophyllite mine                  
WONDERSTONE   4,8 0,0 104,8 109,6   4,6   4,6

Salient features for the year ended 30 June 2012

Beeshoek

A total of 12,50 million tons on the contaminated ore dumps has been included in the Mine’s Reserve inventory.

Khumani

Significant increase in King Measured and Indicated Resources from 376,46 to 481,18 million tons after drilling additional boreholes and remodelling.

Nchwaning

Mineral Reserves increased by 4% to 110,34 million tons due to the increase in the mining cut from 3,5 to 4,5 metres for Nchwaning 3.

Gloria

The drilling of 27 new boreholes and remodelling of Seam 1 resulted in an increase of 37% in Mineral Reserves to 93,82 million tons.

Dwarsrivier

17% increase in Mineral Reserves to 39,15 million tons due to inclusion of 47 new boreholes in the Mineral Resources and Reserves update.

Competent person’s report on Mineral Resources and Mineral Reserves

The report is issued as the annual update of the Mineral Resources and Reserves to inform shareholders and potential investors of the mineral assets held by Assmang.

General statement

Assmang’s method of reporting Mineral Resources and Mineral Reserves conforms to the South African Code for Reporting Mineral Resources and Mineral Reserves (SAMREC Code) and the Australian Institute of Mining and Metallurgy Joint Ore Reserves Committee Code (JORC Code).

The convention adopted in this report is that Mineral Resources are reported inclusive of that portion of the total Mineral Resource converted to a Mineral Reserve. Resources and reserves are quoted as at 30 June 2012. External consulting firms audit the resources and reserves of the Assmang operations on a three-to four-year cycle basis.

Underground resources are in-situ tonnages at the postulated mining width, after deductions for geological losses. Underground Mineral Reserves reflect milled tonnages while surface Mineral Reserves (dumps) are in-situ tonnages without dilution. Both are quoted at the grade fed to the plant. Open-pit Mineral Resources are quoted as in-situ tonnages and Mineral Reserves are tonnages falling within an economic pit-shell.

The evaluation method is generally ordinary kriging with mining block sizes ranging from 10 x 10 metres to 100 x 100 metres to 250 x 250 metres in the plan view. The blocks vary in thickness from 2,5 to 10 metres. The evaluation process is fully computerised, generally utilising the Datamine software package.

The classification into Measured, Indicated and Inferred Mineral Resources is done by means of geostatistical parameters such as kriging efficiency, kriging variance, slope of regression and a combination of the number of samples used and the dynamic search volume to inform a block. The spacing of boreholes as well as the geological structures are also considered in the classification.

The Mineral Resources and Mineral Reserves are reported on a total basis regardless of the attributable beneficial interest that Assmang has on the individual projects or mines. When the attributable beneficial interests on a mine or project are less than 100%, the actual percentage of the attributable interest is specified.

Maps, plans and reports supporting resources and reserves are available for inspection at Assmang’s registered office and at the relevant mines.

In order to satisfy the requirements of the Minerals and Petroleum Resources Development Act, Assmang’s operations will have to obtain new mining rights for all properties required to support the planned operations over the next 30 years. The Act was effective from 1 May 2004 and the new rights must be obtained within five years from then. Certain operations have already had their conversions approved while some are still in various stages of application.

Rounding of figures may result in computational discrepancies on the Mineral Resource and Reserve tabulations.

Definitions

The definitions of Mineral Resources and Reserves, quoted from the SAMREC Code, are as follows:

A “Mineral Resource” is a concentration or occurrence of material of economic interest in or on the earth’s crust in such form, quality and quantity that there are reasonable and realistic prospects for eventual economic extraction. The location, quantity, grade, continuity and other geological characteristics of a Mineral Resource are known, or estimated from specific geological evidence, sampling and knowledge interpreted from an appropriately constrained and portrayed geological model. Mineral Resources are subdivided, and must be so reported, in order of increasing confidence in respect of geoscientific evidence, into Inferred, Indicated or Measured categories.

An “Inferred Mineral Resource” is that part of a Mineral Resource for which volume or tonnage, grade and mineral content can be estimated with only a low level of confidence. It is inferred from geological evidence and sampling and assumed but not verified geologically or through analysis of grade continuity. It is based on information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that may be limited in scope or of uncertain quality and reliability.

An “Indicated Mineral Resource” is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a reasonable level of confidence. It is based on information from exploration, sampling and testing of material gathered from locations such as outcrops, trenches, pits, workings and drill holes. The locations are too widely or inappropriately spaced to confirm geological or grade continuity but are spaced closely enough for continuity to be assumed.

A “Measured Mineral Resource” is that part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade and mineral content can be estimated with a high level of confidence. It is based on detailed and reliable information from exploration, sampling and testing of material from locations such as outcrops, trenches, pits, workings and drill holes. The locations are spaced closely enough to confirm geological and grade continuity.

A “Mineral Reserve” is the economically mineable material derived from a Measured or Indicated Mineral Resource or both. It includes diluting and contaminating materials and allows for losses that are expected to occur when the material is mined. Appropriate assessments to a minimum of a pre-feasibility study for a project and a life-of-mine plan for an operation must have been completed, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors (the modifying factors). Such modifying factors must be disclosed.

A “Probable Mineral Reserve” is the economically mineable material derived from a Measured or Indicated Mineral Resource or both. It is estimated with a lower level of confidence than a Proved Mineral Reserve. It includes diluting and contaminating materials and allows for losses that are expected to occur when the material is mined. Appropriate assessments to a minimum of a pre‑feasibility study for a project or a life-of-mine plan for an operation must have been carried out, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. Such modifying factors must be disclosed.

A “Proved Mineral Reserve” is the economically mineable material derived from a Measured Mineral Resource. It is estimated with a high level of confidence. It includes diluting and contaminating materials and allows for losses that are expected to occur when the material is mined. Appropriate assessments to a minimum of a pre-feasibility study for a project or a life-of-mine plan for an operation must have been carried out, including consideration of, and modification by, realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental factors. Such modifying factors must be disclosed.

Relationship between exploration results, Mineral Resources and Mineral Reserves

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Iron ore mines

Locality

The iron ore division is made up of the Beeshoek Mine located on the farms Beeshoek 448 and Olynfontein 475, and the Khumani Mine situated on the farms Bruce 544, King 561 and Mokaning 560. All properties are in the Northern Cape approximately 200 kilometres west of Kimberley. The Beeshoek open-pit operations are situated seven kilometres west of Postmasburg and the Khumani open pits are adjacent to, and south-east of, the Sishen Mine, which is operated by Kumba Resources. Beeshoek and Khumani are located at latitude 28°30’00”S/longitude 23°01’00”E, and latitude 27°45’00”S/ longitude 23°00’00”E respectively. Khumani Mine supplies iron ore to the export markets. Exports are railed to the iron ore terminal at Saldanha Bay. Beeshoek ore is mainly supplied to local customers, with some ore exported via Khumani.

History

Mining of iron ore (mainly specularite) was undertaken as early as 40 000 BC on the farm Doornfontein which is due north of Beeshoek. The potential of iron ore in this region was discovered in 1909, but, due to lack of demand and limited infrastructure, this commodity was given little attention. In 1929 the railway line was extended from Koopmansfontein (near Kimberley) to service a manganese mine at Beeshoek. In 1935 The Associated Manganese Mines of South Africa Limited (Assmang) was formed, and in 1964 the Beeshoek Iron Ore Mine was established, with a basic hand sorting operation. In 1975 a full washing and screening plant was installed and production increased to seven million tons over the years. The Khumani Iron Ore Mine was commissioned in 2007 and in 2012 produced nearly 12 million tons with expansion plans to 16 million tons per annum.

Mining authorisation

The Beeshoek mining lease (ML3/93) comprises an area of 5 686 hectares and is located on the farms Beeshoek (448) and Olynfontein (475). The converted mining right was executed on 16 March 2012. Registration of the right is in process.

The Khumani mining right comprises an area of 7 388 hectares and is located on the farms Bruce (544), King (561) and Mokaning (560). The mining right was executed on 25 January 2007 and was registered on 5 March 2007.

Geology

The iron ore deposits are contained within a sequence of early Proterozoic sediments of the Transvaal Supergroup deposited between 2 500 and 2 200 million years ago. In general two ore types are present, namely laminated haematite ore forming part of the Manganore Iron Formation and conglomerate ore belonging to the Doornfontein Conglomerate Member at the base of the Gamagara Formation.

The older laminated ore types occur in the upper portion of the Manganore Iron Formation as enriched high-grade haematite bodies. The boundaries of high-grade haematite orebodies crosscut primary sedimentary bedding, indicating that secondary haematisation of the iron formation took place. In all of these, some of the stratigraphic and sedimentological features of the original iron formation are preserved.

The conglomeratic ore is found in the Doornfontein Conglomerate Member of the Gamagara Formation and is lenticular and not persistently developed along strike. It consists of stacked, upward fining conglomerate-gritstone-shale sedimentary cycles. The lowest conglomerates and gritstones tend to be rich in sub-rounded to rounded haematite ore pebbles and granules and form the main orebodies. The amount of iron ore pebbles decreases upwards in the sequence so that upper conglomerates normally consist of poorly sorted, angular to rounded chert and banded iron formation pebbles.

The erosion of the northern Khumani deposit is less than that in the southern Beeshoek area. The result is that Khumani is characterised by larger stratiform bodies and prominent hangingwall outcrops. The down-dip portions are well preserved and developed, but in outcrop the deposits are thin and isolated. Numerous deeper extensions occur into the basins due to karst development. A prominent northsouth strike of the ore is visible. The southern Beeshoek orebodies were exposed to more erosion and are more localised and smaller. Outcrops are limited to the higher topography on the eastern side of the properties. Down dip to the west, the ore is thin and deep. The strike of the orebodies is also in a north-south direction, but less continuous.

Haematite is the predominant ore mineral, but limonite and specularite also occur.

Mining operations are all open pit, based on the conventional drill-and-blast, truck-and-shovel operations. Run-of-mine ore is crushed and stored as on or off grade on blending stockpiles. Ore from the stockpiles is either sent to the wash-andscreen plants or, if off grade, to the beneficiation plants. The washing and screening plants consist primarily of tertiary crushing, washing, screening, conveying and stacking equipment. The beneficiation plants consist of tertiary crushers; scrubbers; coarse and fine jigs; lumpy and fines product stockpiles; and a rapid load-out facility. No chemical is being used in any of the treatment plants.

Mineral Resources and Reserves

Only Measured and Indicated Resources are converted to Proved and Probable Reserves respectively. Modifying factors were applied to these resources and financially optimised. The financial outline is used to define the optimal pit by means of the Lersch-Grossman algorithm. The resources within this mining constraint are defined as reserves. These are categorised into different product types, destined for the different plant processes and scheduled for planning.

The methodology followed to identify targets is initiated with geological mapping, followed by geophysics (ground magnetics and gravity). Percussion drilling is used to pilot holes through overlying waste rock down to the iron orebodies. Diamond drilling is the next phase, which is usually on a 200 x 200 metre grid. Further infill drilling is carried out at spacing ranging from 100 x 100 metres to 25 x 25 metres, depending on the complexity of the geological structures. Numerous exploration programmes have been completed in the last 40 years. A total of 2 832 holes (1 315 holes on Khumani and 1 517 holes on Beeshoek) have been drilled. Core samples are logged and split by means of a diamond saw and the half-core is sampled every 0,5 metres. Before submission for assaying, the half-cores are crushed, split and pulverised. Samples with values larger than 60 per cent are included in the definition of the orebodies. Any lower-grade samples inside the orebody are defined as internal waste and modelled separately. Each zone is modelled per section, and then wireframed to get a three-dimensional (3D) model.

Ordinary kriging interpolation within Datamine is used to estimate the grade of each 10 x 10 x 10 metre block generated within the geological model. Density in the resource model is calculated using a fourth degree polynomial fit applied to the estimated Fe grade. Densities range from 4,38 t/m3 (60 percent Fe) to 5,01 t/m3 (68 percent Fe). A default density of 3,2 t/m3 is used for waste.

At the iron ore mines all blast holes are sampled per metre, but composited per hole. All holes are analysed for density and blast holes in ore are sampled and analysed for Fe, potassium oxide (K2O), sodium oxide (Na2O), silica (SiO2), aluminium oxide (Al2O3), phosphorus (P), sulphur (S), CaO, MgO, Mn and barium oxide (BaO). Every fifth blast hole is geologically logged per metre, which is used to update the geological model. The chemical results of these holes are used to update the ore block model. The major analytical technique for elemental analyses is XRF spectroscopy. Volumetric titration is used as verification method for the determination of total iron in the ore. International standards (eg SARM11) and in-house iron standards are used for calibration of the XRF spectrometer. The Khumani laboratory participates in a round robin group that includes 11 laboratories for verification of assay results.

Beeshoek Iron Ore Mine: Resources and Reserves




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Beeshoek ROM Dumps


  Proved Probable Total
  Reserves Reserves Reserves
Area Mt Fe % Mt Fe % Mt Fe %
North Mine (B Dump) 0,60 60,00 0,60 60,00
North Mine (C Dump) 2,10 55,00 2,10 55,00
South Mine (B Dump) 0,50 60,00 0,50 60,00
South Mine (C Dump) 9,30 55,00 9,30 55,00
*Total 2012 Dumps 12,50 55,44 12,50 55,44
Totals are rounded off.
*Dumps are beneficiated to produce a saleable product.

Beeshoek year-on-year change

Measured and Indicated resources for Beeshoek Mine decreased to 117,45 from 118,97 million tons, mainly due to mining depletion. Mineral Reserves also decreased from 55,13 to 54,00 million tons. A total of 12,50 million tons at 55,44% Fe of contaminated ore dumps have been declared as Probable Reserves. Beneficiation of these dumps results in a saleable product. A feasibility study for Village pit is still in progress.

Khumani Iron Ore Mine: Resources and Reserves




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Khumani ROM Dumps


  Proved Reserves Probable Reserves Total Reserves
Area Mt Fe % Mt Fe % Mt Fe %
Bruce (Off-grade) 1,33 55,00 1,33 55,00
King (Detrital) 0,43 60,00 0,43 60,00
*Total 2012 Dumps 1,76 56,22 1,76 56,22
Totals are rounded off.
*Dumps are beneficiated to produce a saleable product.

Khumani year-on-year change

At Khumani Mine Measured and Indicated resources significantly increased from 603,43 to 708,97 million tons mainly due to remodelling of King which incorporated new borehole information. Conversion of these Mineral Resources to Reserves is in process. Total reserves decreased to 512,86 from 545,36 million tons in 2011 due to mining depletion. A total of 1,76 million tons of contaminated ore dumps at 56,22% Fe have been reported as Probable Reserves.

Historical production at Beeshoek and Khumani Mines (saleable product)


  Beeshoek Khumani
Financial year Mt Mt
2007/2008 5,30 2,00
2008/2009 2,66 6,65
2009/2010 0,52 8,77
2010/2011 0,96 8,73
2011/2012 2,10 11,60

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Manganese mines

Locality

The manganese mines are situated in the Northern Cape province in South Africa, approximately 80 kilometres north-west of the town of Kuruman. Located at latitude 27°07’50”S and longitude 22°50’50”E, the site is accessed via the national N14 route between Johannesburg and Kuruman, and the provincial R31 road.

History

In 1940, Assmang acquired a manganese ore outcrop on a small hillock known as Black Rock. Several large properties underlain by ore were subsequently found and acquired. Today the Black Rock area is considered to be the largest and richest manganese deposit in the world. Manganese ore operations were extended and today include the Gloria and Nchwaning underground mines. Manganese ore is supplied locally to Assmang-owned smelters, but is mainly exported through Port Elizabeth as well as Durban and Richards Bay.

Mining authorisation

The Nchwaning mining lease (ML10/76) comprises an area of 1 986 hectares and is located on the farms Nchwaning (267), Santoy (230) and Belgravia (264). The Gloria mining lease (ML11/83) comprises an area of 1 713 hectares and is located on portion 1 of the farm Gloria (266). The new mining right was executed on 13 July 2011. Registration of the right is in process.

Geology

The manganese ores of the Kalahari Manganese field are contained within sediments of the Hotazel Formation of the Griqualand West Sequence, a subdivision of the Proterozoic Transvaal Supergroup. At Black Rock, Belgravia and Nchwaning, the Hotazel, Mapedi and Lucknow Formations have been duplicated by thrusting. The thrusted ore bodies comprising Black Rock (Koppie), Belgravia 1 and Belgravia 2 are collectively known as Black Rock ore bodies. The average thickness of the Hotazel Formation is approximately 40 metres.

The manganese orebodies exhibit a complex mineralogy and more than 200 mineral species have been identified to date. The hydrothermal upgrading has resulted in a zoning of the orebody with regard to fault positions. Distal areas exhibit more original and low-grade kutnohorite + braunite assemblages, while areas immediately adjacent to faults exhibit a very high-grade hausmannite ore. The intermediate areas exhibit a very complex mineralogy, which includes bixbyite, braunite and jacobsite amongst a host of other manganese-bearing minerals. A similar type of zoning also exists in the vertical sense. At the top and bottom contacts it is common to have high iron (Fe) and low manganese (Mn) contents while the reverse is true towards the centre of the seam. This vertical zoning has given rise to a mining practice where only the centre 3,5 to 4,5 metre-high portion of the seam is being mined. At the Gloria Mine the intensity of faulting is much less, which also explains the lower grade.

Two manganese seams are present. The No 1 seam is up to 6 metres in thickness, of which up to 4,5 metres are mined, using a manganese marker zone for control. There is, therefore, minimum dilution. Limited mining of Nchwaning Seam 2 has been done while no mining has been undertaken on Gloria Seam 2.

Nchwaning Mineral Resources and Reserves

Mineral Resource classification at Nchwaning Mine is based on consideration of a number of parameters: kriging variance, kriging efficiency, regression slope, geological structures and quality of assay data. Each of these parameters contributes to the overall classification depending on weighting assigned to each of the parameters. Measured and Indicated Resources have been defined for Nchwaning. Geological losses are built into the grade models.

The Nchwaning Mine was diamond drilled from surface at 330 metre centres and the data is captured in a Geological Database Management System (GDMS) developed by CAE Mining. The core was logged and 0,5-metre-long, half-core, diamond-saw cut samples were submitted to Assmang’s laboratory at Black Rock for X-ray fluorescence (XRF) analyses. Mn and Fe values were checked by Wet Chemical analyses. Several standards were used to calibrate XRF equipment, and results are compared with other laboratories on a regular basis.

At Nchwaning a total of 316 boreholes and 22 648 underground sample sections were considered in the grade estimation for Nchwaning Seam 1. The data was optimised over a thickness of 4,5 metres (Nchwaning 3) and 3,5 metres for the rest of Nchwaning, and exported into data files for computerised statistical and geostatistical manipulation to determine the grades of Mn, Fe, silica (SiO2), calcium (CaO) and magnesium (MgO).

Ordinary kriging interpolation within Datamine was used to estimate the grade of each 50 x 50 x (3,5/4,5) metre block generated within the geological model.

Sub-cell splitting of the 50 x 50 metre blocks was allowed to follow the geological boundaries accurately. The relative density of Nchwaning manganese ore was taken as 4,3 t/m3.

Trackless mechanised equipment is used in the board and pillar mining method. Mining in the eastern extremity of Nchwaning occurs at a depth of 200 metres while the deepest (current) excavations can be found at a depth of 519 metres below surface.

Ore from Nchwaning No 2 Mine is crushed underground before being hoisted to a surface stockpile via a vertical shaft. Similarly, ore from the Nchwaning No 3 Mine is crushed underground before being conveyed to a surface stockpile via a declined conveyor system. Ore is withdrawn from the surface stockpile and forwarded to two stages of crushing, dry screening and wet screening to yield lumpy and fine products.

At the plant the finer fractions are stockpiled while the coarser fractions are extracted from the respective product boxes into road haulers, sampled, weighed and stored on stacks ahead of despatch. Samples from each stack are analysed for chemical content and size distribution. This ensures good quality control and enables the ore control department to blend various stacks according to customer demand.

Nchwaning year-on-year change

Mineral Reserves for Nchwaning lower seam (Seam 1) increased by 4% to 110,34 million tons mainly due to an increase in the optimised evaluation cut from 3,5 to 4,5 metres for Nchwaning 3. The Mineral Resources for Seam 1 increased from 126,69 to 142,38 million tons. Nchwaning Seam 2 Mineral Resources remained at 180,8 million tons.



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Nchwaning Mine: Seam 2 Manganese Resources


Mineral Resources Mt Mn % Fe %
Measured 53,37 42,0 16,3
Indicated 127,43 42,6 15,2
Total Resources (Seam 2) 2012 180,80 42,4 15,5
Total Resources (Seam 2) 2011 180,80 42,4 15,5
Totals are rounded off.      

Black Rock Mineral Resources

The Black Rock ore bodies occur in the Black Rock (Koppie), Belgravia 1 and Belgravia 2 areas. They are all part of a large thrust complex. Modelling of these ore bodies was undertaken using 151 Nchwaning boreholes that intersected the thrust complex and 174 Black Rock infill boreholes. A 38% manganese cut-off was used in the modelling. Seam 1 and 2 were modelled at variable thicknesses.

Black Rock: Seam 1 Manganese Resources


Mineral Resources Mt Mn % Fe %
Measured 9,03 40,3 18,1
Indicated 34,57 40,7 18,1
Total Resources (Seam 1) 2012 43,60 40,6 18,1
Total Resources (Seam 1) 2011 43,60 40,6 18,1
Totals are rounded off.      

Black Rock: Seam 2 Manganese Resources


 
Mineral Resources Mt Mn % Fe %
Measured 8,23 37,4 19,8
Indicated 18,58 39,2 19,8
Total Resources (Seam 2) 2012 26,81 38,6 19,8
Total Resources (Seam 2) 2011 26,81 38,6 19,8
Totals are rounded off.      

Gloria Mineral Resources and Reserves

Procedures for drilling and assaying at Gloria Mine are the same as at Nchwaning. A total of 165 boreholes and 6 480 underground samples were considered in the evaluation of the Gloria Seam 1. The underground sampling values were used in evaluating areas close to current mining. The boreholes were optimised over an evaluation width of 3,5 metres and the relative density was taken as 3,8 t/m3. The seams were evaluated by means of statistical and geostatistical methods to determine the grades of Mn, Fe, SiO2, CaO and MgO. Ordinary kriging interpolation within Datamine was used to estimate the grade of each 50 x 50 x 3,5 metre block generated within the geological model. Sub-cell splitting of the 50 x 50 metre blocks was allowed to follow the geological boundaries. Mineral resource classification techniques are the same as for Nchwaning.

Gloria Mine is extracting manganese at depths that vary between 180 to 250 metres. Ore is crushed underground before being conveyed to surface stockpile via a decline shaft. Ore is withdrawn from the surface stockpile and forwarded to two stages of crushing, dry screening and wet screening to yield lumpy and fine products.

At the plant the ore is processed in a similar way as at Nchwaning.

Gloria year-on-year change

Remodelling of Gloria Seam 1 after drilling of 27 new boreholes resulted in a 7,8% increase in Measured Mineral Resources to 33,92 million tons and a 52,8% increase in Indicated Mineral Resources to 92,87 million tons. Inferred Resources decreased from 84,00 to 48,49 million tons due to upgrade to Indicated Mineral Resources. Mineral Reserves increased from 68,25 to 93,82 million tons. The Mineral Resources for Gloria Seam 2 remained the same. No markets exist for Gloria Seam 2 ore at this time.

Gloria Mine: Seam 1 Manganese Resources and Reserves




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Gloria Mine: Seam 2 Manganese Resources


Mineral Resources Mt Mn % Fe %
Measured
Indicated 29,40 29,9 10,1
Total Resources (Seam 2) 2012 29,40 29,9 10,1
Total Resources (Seam 2) 2011 29,40 29,9 10,1
Inferred 2012 128,24    
Totals are rounded off.      

Historical manganese production at Nchwaning and Gloria Mines (saleable product)


  Nchwaning Gloria
Year Mt Mt
2007/2008 2,71 0,41
2008/2009 2,63 0,51
2009/2010 1,30 0,67
2010/2011 2,35 0,70
2011/2012 2,46 0,84

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Chromite mine

Locality

Chromite operations at Dwarsrivier Mine form part of the Chrome division of Assmang Limited. The mine is situated on the farm Dwarsrivier 372KT, approximately 30 kilometres from Steelpoort and 60 kilometres from Lydenburg, in Mpumalanga province in South Africa. Located at longitude 30°05’00”E/latitude 24°59’00”S, Assmang purchased the farm from Gold Fields Limited, together with all surface and mineral rights in October 1998.

History

Neighbouring properties to the north and south of Dwarsrivier had existing chrome mining operations at the time of purchase. The feasibility study of the plant, tailings dam and designs for the open pit and underground mines then commenced. After the completion of the feasibility study, approval to proceed with the final design and construction work was given in July 1999.

Chromite was obtained from the open pit mining areas at a rate of approximately 0,9 million tons a year and these areas were mined out within five years. Underground mining commenced in 2005 at a rate of 1,2 million tons ROM a year. Dwarsrivier Mine is specifically geared to deliver high quality metallurgical grade chromite to the Machadodorp smelter. In addition, the plant has been designed to produce chemical grade products for export.

Mining authorisation

An old order Mining Licence 21/99 was granted in October 1999. An application for the conversion to a new order mining right submitted in October 2007 is still pending.

Geology

Dwarsrivier Mine is situated in the eastern limb of the Bushveld Complex, which comprises persistent layers of mafic and ultramafic rocks, containing the world’s largest known resources of platinum group metals, chromium and vanadium. The mafic rocks, termed the Rustenburg Layered Suite, are approximately eight kilometres thick in the eastern lobe, and are divided formally into five zones.

The rocks of the Marginal Zone at the base of the succession consist mainly of pyroxenites with some dunites and harzburgites. Above the Marginal Zone, the Lower Zone comprises mainly pyroxenites, harzburgites and dunite, and is present only in the northern part of the Eastern Lobe, and only as far south as Steelpoort. The appearance of chromitite layers marks the start of the Critical Zone, economically the most important zone. The layers are grouped into three sets termed the Lower, Middle and Upper groups. The sixth chromitite seam in the Lower Group (LG6), is an important source of chromite ore and is the orebody being mined at Dwarsrivier Mine. In the Eastern Lobe, in the vicinity of Dwarsrivier, the strike is nearly north-south, with a dip of approximately 10 degrees towards the west. Average thickness of the LG6 seam is about 1,86 metres in the Dwarsrivier area. Pipe-like dunite intrusions are evident in the area, as well as dolerite dykes that normally strike northeastsouthwest. No significant grade variation is evident, especially not vertically in the ore seam in the Dwarsrivier resource.

Mineral Resources and Reserves

Mineral Resources were estimated from boreholes on 150 to 3 000 metre grid spacing.

All possible resources down to a mineable depth of 350 metres below surface have been considered.

Vertical diamond drill holes are used for geological and grade modelling, except where information is needed to clarify large-scale fault planes. The Mineral Resources at Dwarsrivier Mine are based on a total of 284 diamond boreholes, inclusive of 47 new boreholes, that have been used for grade estimation and orebody modelling purposes. The drill core is NQ size and is geologically and geotechnically logged. The collar position of the drill holes is surveyed, but no down-hole surveys are done, and the holes are assumed to have minimal deflection.

The chromitite seam is bounded above and below by pyroxenites. As such, the ore horizon is clearly defined. The core is sampled from the top contact downwards at 0,5 metre intervals. The core is split and half is retained as reference material in the core sheds. The other half is crushed and split into representative samples, which are crushed and pulverised for chemical analysis. The samples are analysed using fusion/ICP-OES for chrome oxide (Cr2O3), SiO2, FeO, Al2O3, MgO and CaO. Three laboratories, all ISO 17025 accredited for this method, are used. Every tenth sample is analysed in duplicate. The density for each sample is measured using a gas pycnometer.

Mineral Resources have been estimated using ordinary kriging, where Cr2O3, FeO, Al2O3, MnO and MgO contents of the LG6 seam and densities were determined, using block sizes of 50 x 50 x 4 metres.

During mining, a slightly diluted run of mine ore inclusive of the “false” hangingwall is fed to the beneficiation plant. In the dense media separation part of the plant, the coarse fraction is upgraded to 40 percent Cr2O3, with a yield of 80 percent. In the spiral section of the plant the finer fraction is upgraded to 44 percent Cr2O3, and 46 percent Cr2O3 respectively, for metallurgical grade fines and chemical grade fines. A 67 percent yield is achieved in the spiral circuit.

Dwarsrivier Chrome Mine: Chrome Resources and Reserves




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Year-on-year change

Significant increases have been reported in Measured and Indicated Resources mainly due to the new borehole data which increased resource confidence. An increase from 17,25 million tons at 39,20% Cr2O3 to 20,43 million tons at 38,45% Cr2O3 was realised for Measured Resources while Indicated Resources increased from 31,52 million tons at 38,97% Cr2O3 to 34,60 million tons at 37,91% Cr2O3. Mineral Reserves increased to 39,15 million tons at 34,01% Cr2O3 from 33,44 million tons at 35,69% Cr2O3.

Historical production at Dwarsrivier Chrome Mine (ROM)


Financial year Mt
2007/2008 1,24
2008/2009 1,03
2009/2010 0,78
2010/2011 1,25
2011/2012 1,50

Competence

The competent person with overall responsibility for the compilation of the Mineral Reserves and Resources report is Paul van der Merwe, PrSciNat, an ARM employee. He consents to the inclusion in this report of the matters based on this information in the form and context in which it appears.

Paul van der Merwe graduated with a BSc (Hons) in Geology from Free State University. He spent four years as an exploration geologist for FOSKOR. He then joined the Uranium Resource Evaluation Group of the then Atomic Energy Corporation of South Africa for 12 years. While employed there he studied geostatistics and spent some time at the University of Montreal, Canada. In 1991 he joined Anglovaal Mining (now ARM) in the Geostatistics Department and evaluated numerous mineral deposit types for this group in Africa. In 2001, he was appointed as Mineral Resources Manager for the group. He is registered with the South African Council for Natural Scientific Professions as a Professional Natural Scientist in the field of practice of Geological Science, Registration Number 400498/83, and as such is considered to be a Competent Person.

All competent persons at the operations have sufficient relevant experience in the type of deposit and in the activity for which they have taken responsibility. Details of the competent persons are available from the Company Secretary on written request.

The following competent persons were involved in the calculation of Mineral Resources and Reserves:

M Burger, PrSciNat Iron
S v Niekerk, PrSciNat Iron
B Ruzive, PrSciNat Manganese
A Pretorius*, PrSciNat Chrome
S Kadzviti, PrSciNat Chrome/Manganese
*External consultant.

PJ van der Merwe
24 Impala Road, Chislehurston, Sandton
16 October 2012