Tailings JV for Gold Fields, Gold One

Southern-Africa focused Gold One International Ltd has joined forces with the world’s firth-largest gold producer, Gold Fields Ltd, regarding a potential joint venture to process tailings on the West Rand.

In statements released on Tuesday, the two companies said they had signed a memorandum of understanding to study the joint processing of their accumulated tailings, representing 700Mt of material and 60% of all tailings on the Rand. A scoping study is due to be completed by the middle of this year.

The venture would seek to reclaim gold, uranium and sulphur from the waste material, whilst re-treating tailings to reduce their environmental risks. Unprocessed tailings have to some extent been associated with the problem of acid mine drainage on the Witwatersrand.

The companies said “a key objective of the project will be to address the re-deposition of the residues in accordance with modern sustainable deposition practices, ultimately supporting mine closure in an environmentally sustainable manner.”

Both companies have access to earlier studies regarding the feasibility of processing their tailings. Through its US$250 purchase of Rand Uranium (RU), completed on January 9, Gold One obtained RU’s definitive feasibility study and engineering designs for the processing of gold and uranium at its Cooke tailings deposit. Gold One also acquired a gold tailings processing facility, and is presently developing a facility to process uranium.

Gold Fields completed its own economic studies for a tailings treatment project in 2010, estimating that it held 475.6Mt of material containing 4.5Moz of gold and 24,400t uranium.

The proposed joint venture may have similarities to the earlier East Rand Gold and Uranium Company (Ergo) project. Founded by Anglo American Corp, Ergo was an extensive tailings treatment and pipeline operation which initially ran from 1977 to 2005, closing when it became economically unviable.

AngloGold Ashanti sold the Ergo assets to DRDGold Ltd and Mintails Ltd in 2007. The project, which is now wholly owned by DRDGold, treated 13.2Mt of tailings in 2011 with an average yield of 0.11g/t, for total production of 48,352oz at a cost of R23/t (US$2.95/t).

The potential benefits of the venture were welcome by the chief executive officers at the respective companies. Speaking for Gold Fields, Nick Holland said “Gold Fields already has projects in place to retreat our tailings, and the MOU with Gold One allows us to further explore a relatively low risk opportunity to extract value from Gold Fields' surface resources that is not inherent in our share price."

Gold One's CEO, Neal Froneman, said “Economic recovery of gold and uranium from historical tailings deposits has been successfully demonstrated in other districts of the Witwatersrand goldfields. The combination of our technical studies and the quality of assets that would be pooled presents an exciting prospect for the joint venture and growth of Gold One's surface business.”