Tuesday, 5 March 2013
Mine Permit
The Bamissing Gold Miners Permit
The Permit in respect of the Bamissing Gold Mine and Concession held by SOMIKA covers an area of 387 km 2 in Eastern part of Cameroon, of which the Bamissing Gold Mine accounts for an area of 2.0 km 2. The property is a developed mine site consisting of an underground mine operation, open pit workings, a gravity plant and related infrastructure. The Bamissing Gold Mine was actively mined from 1985 to 1991 and was placed on care and maintenance until operations were resumed by SOMIKA in January, 2004.
The Permit is unique in Cameroon, as under Cameroonian law exploitation permits are normally only granted in respect of areas covered by a complete approved feasibility study. Additionally, exploration permits are normally granted for a limited time (usually three years, twice renewable for three year terms), with a set amount of minimum required spending and on the basis that the area covered by the permit halveseach time the Permit is renewed. The Permit, on the other hand, is a combined exploitation permit that is derived from the legislation passed originally passed to enable the Soviet aided state company, SOGEMORK, to develop the Bamissing Gold Mine. The original permit was created in 1984 for a period of 15 years, renewable at five year intervals thereafter up to a maximum 30 year term. In April 2003, during its first renewal period, the Permit was transferred to ABU Gold,Limited (a 100% owned subsidiary of ABU Gold Mining Limited) and was simultaneously reinstated for a new term of 30 years. Should the exploitation of the mineral deposit, or subsequent mineral finds not be completed at the end of this 30 year period, the Permit may be renewed at the discretion of the Cameroon Government, and on terms negotiated at such time, for additional 10 year terms until the deposit is exhausted.
History of the Bamissing Permit
The Bamissing region has a long history of gold extraction with artisanal miners exploiting the alluvial placers. The first report of gold at Bamissing was in 1931 by a geologist conducting regional exploration when a high-grade quartz-gold vein was found in an artisanal working.
The Permit area was initially explored between 1967 and 1982 by two Cameroon national companies as part of a Soviet Technical Assistance Program to Cameroon. As a result of this exploration, a decision was taken to develop the Bamissing Gold Mine as a small underground operation using a recovery process based on crushing, milling and gravity concentration. Production commenced in 1985 and a total of 227,000 tonnes of ore was treated at an average head grade of 13 g/t to produce 81,000 ounces of gold by 1991. Upon the break-up of the former Soviet Union, personnel, financial and technical resources were withdrawn and the mine was placed on care and maintenance. In February 1992, the Cameroonian national company holding the Permit was dissolved and the Permit reverted to the Cameroonian Government.
In 1994, the Cameroonian Government embarked on a privatization program with the assistance of the World Bank. In connection with this program, the Cameroonian Government developed and commissioned an electricity supply infrastructure specifically for the Bamissing Gold Mine in 1995.Under the privatization program, a joint venture of Ashanti Gold Fields Co. Ltd. (“ Ashanti”) and Johannesburg Consolidated Investments Ltd. (“JCI”) was awarded the tender and issued the Permit in 1995 and conducted exploration activities at Bamissing between 1995 and 1996. JCI withdrew from the joint venture in 1996. Thereafter, Ashanti reached an agreement with Nelson Gold Corporation (“Nelson Gold”) in respect of the development, operation and acquisition of a majority interest in the Permit, subject to approval of the Cameroonian Government. At this time, Mr. Roy Meade, Chief Executive Officer of ABU, and Mr. Musa Ibrahim, a director of ABU, held the positions of Chief Executive Officer and Executive Director of Trade local Gold miners, respectively. Elliott and a sister trust to Fern were also significant shareholders of trade local Gold miners. Commencing in 1997, trade local Gold miners completed a bankable feasibility study on the Bamissing Gold Mine. The Cameroonian Government did not ratify this agreement between Trade local Gold miners and ABU.
The Permit in respect of the Bamissing Gold Mine and Concession held by SOMIKA covers an area of 387 km 2 in Eastern part of Cameroon, of which the Bamissing Gold Mine accounts for an area of 2.0 km 2. The property is a developed mine site consisting of an underground mine operation, open pit workings, a gravity plant and related infrastructure. The Bamissing Gold Mine was actively mined from 1985 to 1991 and was placed on care and maintenance until operations were resumed by SOMIKA in January, 2004.
The Permit is unique in Cameroon, as under Cameroonian law exploitation permits are normally only granted in respect of areas covered by a complete approved feasibility study. Additionally, exploration permits are normally granted for a limited time (usually three years, twice renewable for three year terms), with a set amount of minimum required spending and on the basis that the area covered by the permit halveseach time the Permit is renewed. The Permit, on the other hand, is a combined exploitation permit that is derived from the legislation passed originally passed to enable the Soviet aided state company, SOGEMORK, to develop the Bamissing Gold Mine. The original permit was created in 1984 for a period of 15 years, renewable at five year intervals thereafter up to a maximum 30 year term. In April 2003, during its first renewal period, the Permit was transferred to ABU Gold,Limited (a 100% owned subsidiary of ABU Gold Mining Limited) and was simultaneously reinstated for a new term of 30 years. Should the exploitation of the mineral deposit, or subsequent mineral finds not be completed at the end of this 30 year period, the Permit may be renewed at the discretion of the Cameroon Government, and on terms negotiated at such time, for additional 10 year terms until the deposit is exhausted.
History of the Bamissing Permit
The Bamissing region has a long history of gold extraction with artisanal miners exploiting the alluvial placers. The first report of gold at Bamissing was in 1931 by a geologist conducting regional exploration when a high-grade quartz-gold vein was found in an artisanal working.
The Permit area was initially explored between 1967 and 1982 by two Cameroon national companies as part of a Soviet Technical Assistance Program to Cameroon. As a result of this exploration, a decision was taken to develop the Bamissing Gold Mine as a small underground operation using a recovery process based on crushing, milling and gravity concentration. Production commenced in 1985 and a total of 227,000 tonnes of ore was treated at an average head grade of 13 g/t to produce 81,000 ounces of gold by 1991. Upon the break-up of the former Soviet Union, personnel, financial and technical resources were withdrawn and the mine was placed on care and maintenance. In February 1992, the Cameroonian national company holding the Permit was dissolved and the Permit reverted to the Cameroonian Government.
In 1994, the Cameroonian Government embarked on a privatization program with the assistance of the World Bank. In connection with this program, the Cameroonian Government developed and commissioned an electricity supply infrastructure specifically for the Bamissing Gold Mine in 1995.Under the privatization program, a joint venture of Ashanti Gold Fields Co. Ltd. (“ Ashanti”) and Johannesburg Consolidated Investments Ltd. (“JCI”) was awarded the tender and issued the Permit in 1995 and conducted exploration activities at Bamissing between 1995 and 1996. JCI withdrew from the joint venture in 1996. Thereafter, Ashanti reached an agreement with Nelson Gold Corporation (“Nelson Gold”) in respect of the development, operation and acquisition of a majority interest in the Permit, subject to approval of the Cameroonian Government. At this time, Mr. Roy Meade, Chief Executive Officer of ABU, and Mr. Musa Ibrahim, a director of ABU, held the positions of Chief Executive Officer and Executive Director of Trade local Gold miners, respectively. Elliott and a sister trust to Fern were also significant shareholders of trade local Gold miners. Commencing in 1997, trade local Gold miners completed a bankable feasibility study on the Bamissing Gold Mine. The Cameroonian Government did not ratify this agreement between Trade local Gold miners and ABU.
On March 18, 1999, the Cameroonian Government issued a parliamentary decree cancelling the transfer of the Permit to the Ashanti-JCI joint venture as it had failed to meet its contractual commitment to put the Bamissing Gold Mine into production within the prescribed three-year term.
The Cameroonian government re-issued an international invitation to tender for the Permit in July 1999.Trade local Gold miners submitted a tender at this time, but was unsuccessful. However, the successful company did not meet its initial financial commitments, as a result of which the tender was cancelled and a Permit was never issued.
In July 2000, Trade local Gold miners changed its business objectives away from mining and sold to Elliott Associates, L.P. for $100,000 its intellectual property in the various feasibility studies which it had undertaken in respect of the Bamissing Gold Mine. In September 2001, Elliott Associates L.P. formed ABU Gold,Limited specifically to tender for the Bamissing Gold Mine.
Acquisition of the Permit by ABU
On October 3, 2001, a tender comprising a technical bid and financial bid for the Permit was submitted by ABU Gold, Limited to the Cameroonian Government. The technical bid was based on the bankable feasibility study completed by trade miners Gold in August of 1999, which relied on trade miners old’s own work as well as a number of prior studies.
The tender contemplates the refurbishment of the existing Bamissing Gold Mine to enable re-commencement of underground mine production at a rate of 60,000 tonnes of ore per year processed in a gravity circuit, with the possibility of increasing the tonnage of ore mined and processed to 175,000 tonnes per year processed through a gravity and a carbon in leach (“CIL”) circuit, conditional on increased gold prices and reconfirmation of the prior operators’ data and independent assessments.
ABU Gold,Limited originally lost the tender to another company. Management of ABU was subsequently informed by the Cameroonian Government that the successful bidder had defaulted on its financial obligations, and that its tender rights were cancelled. As a result, the Cameroonian Minister of State Domain formally awarded the tender to ABU Gold,Limited on December 23, 2002.
The financial terms of ABU’s tender, as accepted by the Cameroonian Minister of State Domain, include the payment of
a $500,000 entry fee, payable on signing of the Foundation Agreement (paid by ABU in March 2003);
$800,000 for the tangible assets, payable upon the signing of the Accord de Cession (paid by ABU in March 2003);
$1,200,000 for the reserves, payable in instalments, with $300,000 payable on signature of the Deed of Transfer (paid by ABU in March 2003), $300,000 payable at the end of the first year after signature of the Deed of Transfer (paid by ABU in February 2004) and $600,000 at the end of the second year after signature of the Deed of Transfer (payable in February 2005 for which an extension to June 2005 was granted, and payment was made in May 2005).
The terms of the tender also require ABU to make an equity contribution to SOMIKA of $1,685,000, composed of a cash payment of $350,000 and $1,335,000 deemed to have been expended by ABU on the completion of the feasibility study. ABU was also required to bear 50% of the care and maintenance costs of the Bamissing Gold Mine and Permit area from the date of the award of tender up to the date of signature of the Foundation Agreement. This amounted to $45,000 which was paid by ABU in February 2003.
Pursuant to the terms of the Permit, ABU is required to return the mine to commercial production by February 2006 and to spend $1.335,000 on exploration over a three-year period ending February 2006.
Acquisition of the Permit by ABU
On October 3, 2001, a tender comprising a technical bid and financial bid for the Permit was submitted by ABU Gold, Limited to the Cameroonian Government. The technical bid was based on the bankable feasibility study completed by trade miners Gold in August of 1999, which relied on trade miners old’s own work as well as a number of prior studies.
The tender contemplates the refurbishment of the existing Bamissing Gold Mine to enable re-commencement of underground mine production at a rate of 60,000 tonnes of ore per year processed in a gravity circuit, with the possibility of increasing the tonnage of ore mined and processed to 175,000 tonnes per year processed through a gravity and a carbon in leach (“CIL”) circuit, conditional on increased gold prices and reconfirmation of the prior operators’ data and independent assessments.
ABU Gold,Limited originally lost the tender to another company. Management of ABU was subsequently informed by the Cameroonian Government that the successful bidder had defaulted on its financial obligations, and that its tender rights were cancelled. As a result, the Cameroonian Minister of State Domain formally awarded the tender to ABU Gold,Limited on December 23, 2002.
The financial terms of ABU’s tender, as accepted by the Cameroonian Minister of State Domain, include the payment of
a $500,000 entry fee, payable on signing of the Foundation Agreement (paid by ABU in March 2003); $800,000 for the tangible assets, payable upon the signing of the Accord de Cession (paid by ABU in March 2003); $1,200,000 for the reserves, payable in instalments, with $300,000 payable on signature of the Deed of Transfer (paid by ABU in March 2003), $300,000 payable at the end of the first year after signature of the Deed of Transfer (paid by ABU in February 2004) and $600,000 at the end of the second year after signature of the Deed of Transfer (payable in February 2005 for which an extension to June 2005 was granted, and payment was made in May 2005). The terms of the tender also require ABU to make an equity contribution to SOMIKA of $1,685,000, composed of a cash payment of $350,000 and $1,335,000 deemed to have been expended by ABU on the completion of the feasibility study. ABU was also required to bear 50% of the care and maintenance costs of the Bamissing Gold Mine and Permit area from the date of the award of tender up to the date of signature of the Foundation Agreement. This amounted to $45,000 which was paid by ABU in February 2003.
Pursuant to the terms of the Permit, ABU is required to return the mine to commercial production by February 2006 and to spend $1.335,000 on exploration over a three-year period ending February 2006.
Date
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April 7th, 2003
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Mine Permit was issued by the Government of Cameroonian
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Current Operations
Gold mineralization in the BMS Gold Mine is predominantly within flat dipping quartz veins that make up approximately 80% of the resource tonnage, with the remainder of the resource occurring within stockworks, situated within metasedimentary rocks centered on a diorite stock and a small amount from tailings. The quartz veins vary in thickness with an average of 1.0m. The veins lie on average 30m apart with the country rock generally unmineralized.
The BMS gold deposit was explored in the period 1962 to 1982 by two Cameroonian national companies with Soviet technical assistance. Extensive exploration by diamond drilling was completed over a number of years. The deepest vein intersection is 600m below surface. Production commenced in 1985 and a total of 227,000 tonnes of ore were treated at an average head grade of 13 g/t to produce 81,800 ounces of gold by August 1991 at a recovery of 86%. The technical and financial resources were withdrawn in 1991 from the BMS Gold Mine with the break-up of the former Soviet Union, and the mine was placed on care and maintenance.
After the acquisition by ABU Gold, in late 2002, the existing plant and infrastructure was upgraded. A contract was awarded to design and procure the new equipment for the gold plant and underground infrastructure. Work commenced on site in the first quarter of 2003.
The two existing winders were upgraded with larger motors and modern control systems. New underground water pumps were installed on the 100m level. The existing underground power system was replaced with new electrical substations, power cables and distribution systems. New mining equipment such as locomotives, winches and drilling equipment were purchased and installed.
The gold plant crusher and gravity sections were upgraded with a secondary crushing circuit, a Batouri gravity concentrator and gold room equipment. The existing ball mill was refurbished. All existing electrical equipment was replaced with modern sub stations and distribution systems.
The capacity of the existing tailings dam was increased by raising the wall of the facility by 4 metres. The existing air compressors were replaced with two Atlas Copco units.
Mine operation commenced in January 2004 with first gold production in March 2004.
Mining Operations
The BMS Gold Mine recommenced production in January 2004. Gold production to date is shown in the following table.
Note:
(1) In 2004 4,604 tonnes of coarse sand at 4.7 g/t are included in the total production. (2) In 2005 4,614 tonnes of coarse sand at 4.9 g/t are included in the total production (3) In 2006 3,627 tonnes of coarse sand at 5.8 /t are included in the total production (4) In 2011 an additional 250 ounces was recovered from the mill when the mill liners were replaced.
Mine Development
The mine is being developed to provide sufficient exposed ore reserves to meet the planned production rate of 60,000 tonnes per annum in 2009. The majority of the ore reserves lie between 100m and 300m below surface. The existing No 1 shaft is operational down to 100m below surface and is being used to hoist ore from stoping areas that are being mined down dip from the 100m level. During 2004 and 2005 some ore reserve blocks above the 100m level were also mined.
No 2 shaft is located approximately 300m to the west of No 1 shaft. No 2 shaft was deepened to 195 metres below surface. Haulage development on the 150 and 180 levels will be developed from No 2 shaft to access new ore reserve blocks during 2006 and 2007.
These ore reserve blocks are located 300m north and 250m south of the two shafts.
The current mine plan anticipates that in 2008 all the ore from the mine will be hoisted to surface via No 2 shaft and will be trucked to the plant located adjacent to No 1 shaft.
Shaft Infrastructure
Access to underground workings is established through two shaft systems (referred to as No 1 Shaft and No 2 Shaft). Both shafts are 3 m in diameter. No 1 Shaft is developed to 105 Level, a depth of 105 m, with an additional 5 m overrun. A single drum, licensed winder fitted with a 1.5 tonne capacity kibble is used for the transport of men, material and rock. The total rated hoisting capacity of the shaft system is approximately 5,000 tonnes per month. This shaft is not used for rock and men hoisting since 2007
No 2 Shaft is currently the main production shaft. The current shaft bottom is 180 m Level (180 m below surface), There are 2 haulage levels on 150 and 180 from No 2 shaft to the ore veins located north and south of the shaft.
The ventilation of the mine workings is currently conducted with No 1 Shaft as a ventilation intake and No 2 Shaft as the exhaust shaft. Underground fans ensure adequate ventilation flow into the relevant workings.
No 1 Shaft is located at the plant and hoisted ore is fed directly to the plant feed bin. Ore is hoisted from No 2 Shaft and transported to the gold plant by truck. A conveyor has been installed to feed the ore from No 2 Shaft into the existing plant crusher system.
Mine Layout and Design
Level development is established from the shafts to access the ore bodies. Drives are developed within the ore body to expose the mineralisation on strike. Raises and winzes are then developed to expose the dip extent of the mining blocks. Each block of ground, delineated by the planned production from a single raiseline, is referred to as a stope. Individual panels are established from the raiseline and mined on strike to the mid point between raiselines. Systematic pillars will be left to provide roof support leading to a loss of approximately 20% when converting resources into reserves.
Approximately 60% of the ore reserve to be mined in the current mine plan is located to the north of the existing underground infrastructure and between the 105 and 300 Levels. The ore between 105 and 180 Level will be accessed from No 2 Shaft. The shaft is be deepened and two additional levels (150 and 180) will be established.
Mining Method
Stoping operations are conducted with conventional pneumatic handheld rock drills with airless. Blasted rock is scraped (with a 35 kW face winch) from the working face into strike gullies located at the bottom of each panel. A larger, 55 kW gully winch it then used to scrape the ore along the gullies. This ore is scraped directly into the hoppers via a chute arrangement, referred to as a‘chinaman chute’ or into a rock pass down to the haulage. The 1.2 tonne hoppers are trammed with 3 tonne battery locomotives to the shaft. Production blasts produce a 0.9 m to 1.2 m face advance.
Level development is conducted with a similar system as the stoping. The planned advance is 1.5 m per blast. Blasted rock is loaded using pneumatic overhead loaders (LM36-type) which load directly into the same hoppers and trammed to the shaft.
All level transport is rail bound. The hoppers are guided to the shaft and manually tipped to discharge directly into rock passes and then into the shaft loading box for hoisting to surface. A skip with a 2.5t payload is installed in bo No 2 shaft
Geotechnical Design
Based on previous and more recent underground observations, the base of oxidation appears to vary between 100 and 70 Level. No underground mining operations are planned above 70 Level. Ground conditions generally appear good below the weathered zones, with competent ground and limited need for systematic support in development ends.
Large exposed spans underground will require systematic support. In-stope support generally consists of wedged timber props. The use of in-stope pillars forms part of a detailed geotechnical investigation, following which SOMIKA reported that it has implemented the design recommendations.
Drives developed in the ore body require stability pillars up dip and down dip until stoping has been completed. Subsequent extraction of these pillars is possible (at least in part) but has not been planned.
Utilities
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