Zandfontein Tailings Retreatment Project
On March 1, 2018 Eastplats and its subsidiary Barplats Mines (Pty) Limited entered into an agreement (the “UG Agreement”) with Union Goal Offshore Solution Limited (“Union Goal”). The UG Agreement provides for construction, mining and processing of the tailings resource, and the subsequent offtake of chrome concentrate from the Retreatment Project located at the CRM.
Union Goal has financed and sourced for Barplats the chrome processing circuit, related technology and knowhow (the “Chrome Circuit”) while Barplats will develop, mine and operate the Retreatment Project. The Chrome Circuit is designed to improve on recoveries of chrome concentrate compared to traditional technology which could expand available resources for mining and processing.
Operations of the Retreatment Project began in December 2018 and expanded to PGM recovery testing in Q2 2019 and continued during Q3 2019 as the Company continues providing material from the tailings resource, processing and producing chrome concentrate.
Union Goal’s business partners include major direct mine operators and traders of chrome ores and concentres. Union Goal also deals directly with downstream consumers through trading, direct and technological investments into ferro-chrome producers and has other interests directly with the stainless-steel industry. Union Goal has been in business for over 10 years and has traded more than one million tons of chrome ores and concentrates on average during the past four years with average annual sales reaching approximately US$200 million.
Management entered into the UG Agreement with the expectation of increased overall returns on the Retreatment Project due to the Chrome Circuit insulation compared to the traditional technology modeled in the Sound Mining Feasibility Study.
Sound Mining Solution Pty Ltd (Sound Mining) was engaged during August 2017 to prepare an Independent Technical Report (ITR) on the Company’s plans to re-mine and retreat the Zandfontein Tailings Storage Facility (TSF) to recover chrome (the Project), which resulted from mining of the UG2 at the Crocodile River Mine (CRM).
A technical review of the data used in the Mineral Resource estimation has shown the quality of the data to be adequate for the intended purpose. The historical drill results have limited QAQC monitoring as does the database in which the data is stored.
Sound Mining found no fatal flaws in the modifying factors applied in the Feasibility Study, and accordingly this ITR presents a Mineral Reserve of 6.42 Mt at 22.4 % Cr2O3 which is based on robust modifying factors.