Saimm 201403 mar

  • View
    246

  • Download
    3

Embed Size (px)

DESCRIPTION

Journal of the SAIMM March 2014

Text of Saimm 201403 mar

  • Danie Krige Commemorative EditionVolume I

    VOLUME 114 NO. 3 MARCH 2014

  • a member of the

  • Gold Fields Limited cherishes the memory of Professor Danie Krige for his signicant contribution to the gold mining industry and to our company.

    TO BE THE GLOBAL LEADER IN SUSTAINABLE GOLD MINING

    www.goldelds.com

  • Global Mining Consulting and Software Solutions

    www.minerp.comwww.minerp.com

    Struggling to find a globally experienced service provider whounderstands your unique mining challenges? Dont deal with anyonewithout considering MineRPs consulting and technical miningsoftware.

    Mining Studies

    Due Diligence

    Planning Optimisation

    Reserve Estimations

    Project Management

    Strategic Planning

    Cost Estimation

    Software

    nt

    South AfricaAustraliaEurasia

    CanadaUSAChile

  • The relationship between certainty and value in mineral asset management.

    Johnny van den Berg, Mining Executive, MineRP

    Mineral assets migrate through a logical lifecycle from exploration target to final product. It is critical that mines harvest maximum economic value at each stage during this lifecycle in order to demonstrate the optimum value of the company to the investor.

    Calculating Nett Worth

    Investors use a variety of instruments to determine the value of natural resource companies- but it all boils down to Nett Worth = Total Assets Total Liabilities.

    In this sense mines are particularly interested in how the Mineral Asset component of the Total Assets is derived. The rules for publication of the Mineral Inventory are highly regulated and prescribed by legislation or reporting codes. Published inventories however are open to interpretation by analysts and investors, leaving the question of the intrinsic value of the asset open to speculation. Intrinsic value (of course) lies in the eye of the beholder! The mine owners valuation offen differs vastly from that of a potential acquiring company or a trade union negotiator trying to get maximum benefits for its members.

    The fact that mineral inventories only gets published annualy leads to further value speculation - speculation that could easily be avoided through the implentation of accurate, transparent and auditable systems for on-demand reporting and analysis of mineral resources irrespective of their current state.

    MineRPs GeoInventory solution removes risk and adds value by reducing uncertainty and ambiguity through regular reporting and more robust reconciliation to the original inventory. Value is added not only through improved understanding of the asset, but also by demonstrating to analysts and investors the value generated by spending capital on Assets Under Construction.

    MineRPs GeoInventory and GeoFinance Solutions allow for the cradle to grave management of the mineral asset. This is done through standards-based translation of the impact of mining activities (managed in mining technical systems) into mineral inventory transactions carried in enterprise resource planning (ERP) systems such as SAP. ERP systems track business resources

    including raw material and other business fundamentals such as production, supply chain, human resources, assets and others.

    Impact on balance sheet

    MineRPs GeoInventory solutions potentially impact the balance sheet by increasing the availability, consistency, accuracy, transparency and auditability of mineral asset reports and valuation at every stage of the mineral asset lifecycle.

    The diagram above demonstrates the intersection points at which the investor or analyst adds value to mineral assets. Traditionally, these intersections mark the stages at which investors recognise added resource value. The reality is however that mining companies incur the most cost between the reserve and the sold intersections (For some companies this can last as long as 40 months). If the mine can show an ability to consistently perform well in bringing its mineral inventory through the value chain, investors may add additional valuation intercepts, which in turn will lead to a positive re-rating of the company.

    For more information about MineRPs GeoInventory and GeoFinance solutions, please visit www.minerp.com, or contact Johnny at jvandenberg@minerpsolutions.com

  • ii MARCH 2014 The Journal of The Southern African Institute of Mining and Metallurgy

    OFFICE BEARERS AND COUNCIL FOR THE2013/2014 SESSION

    Honorary President

    Mark CutifaniPresident, Chamber of Mines of South Africa

    Honorary Vice-Presidents

    Susan ShabanguMinister of Mineral Resources, South AfricaRob DaviesMinister of Trade and Industry, South AfricaDerek HanekomMinister of Science and Technology, South Africa

    PresidentM. Dworzanowski

    President Elect

    J.L. Porter

    Vice-Presidents

    R.T. JonesC. Musingwini

    Immediate Past PresidentG.L. Smith

    Honorary Treasurer

    J.L. Porter

    Ordinary Members on Council

    H. Bartlett S. NdlovuN.G.C. Blackham G. NjowaV.G. Duke S. RupprechtM.F. Handley A.G. SmithW. Joughin M.H. SolomonA.S. Macfarlane D. TudorD.D. Munro D.J. van Niekerk

    Past Presidents Serving on Council

    N.A. Barcza R.P. Mohring R.D. Beck J.C. Ngoma J.A. Cruise R.G.B. Pickering J.R. Dixon S.J. Ramokgopa F.M.G. Egerton M.H. Rogers A.M. Garbers-Craig J.N. van der MerweG.V.R. Landman W.H. van Niekerk

    Branch ChairmenDRC S. MalebaJohannesburg I. AshmoleNamibia G. OckhuizenPretoria N. NaudeWestern Cape T. OjumuZambia H. ZimbaZimbabwe S.A. GaihaiZululand C. Mienie

    Corresponding Members of Council

    Australia: I.J. Corrans, R.J. Dippenaar, A. Croll, C. Workman-Davies

    Austria: H. Wagner

    Botswana: S.D. Williams

    Brazil: F.M.C. da Cruz Vieira

    China: R. Oppermann

    United Kingdom: J.J.L. Cilliers, N.A. Barcza, H. Potgieter

    USA: J-M.M. Rendu, P.C. Pistorius

    Zambia: J.A. van Huyssteen

    The Southern African Institute of Mining and Metallurgy

    PAST PRESIDENTS*Deceased

    * W. Bettel (18941895)* A.F. Crosse (18951896)* W.R. Feldtmann (18961897)* C. Butters (18971898)* J. Loevy (18981899)* J.R. Williams (18991903)* S.H. Pearce (19031904)* W.A. Caldecott (19041905)* W. Cullen (19051906)* E.H. Johnson (19061907)* J. Yates (19071908)* R.G. Bevington (19081909)* A. McA. Johnston (19091910)* J. Moir (19101911)* C.B. Saner (19111912)* W.R. Dowling (19121913)* A. Richardson (19131914)* G.H. Stanley (19141915)* J.E. Thomas (19151916)* J.A. Wilkinson (19161917)* G. Hildick-Smith (19171918)* H.S. Meyer (19181919)* J. Gray (19191920)* J. Chilton (19201921)* F. Wartenweiler (19211922)* G.A. Watermeyer (19221923)* F.W. Watson (19231924)* C.J. Gray (19241925)* H.A. White (19251926)* H.R. Adam (19261927)* Sir Robert Kotze (19271928)* J.A. Woodburn (19281929)* H. Pirow (19291930)* J. Henderson (19301931)* A. King (19311932)* V. Nimmo-Dewar (19321933)* P.N. Lategan (19331934)* E.C. Ranson (19341935)* R.A. Flugge-De-Smidt

    (19351936)* T.K. Prentice (19361937)* R.S.G. Stokes (19371938)* P.E. Hall (19381939)* E.H.A. Joseph (19391940)* J.H. Dobson (19401941)* Theo Meyer (19411942)* John V. Muller (19421943)* C. Biccard Jeppe (19431944)* P.J. Louis Bok (19441945)* J.T. McIntyre (19451946)* M. Falcon (19461947)* A. Clemens (19471948)* F.G. Hill (19481949)* O.A.E. Jackson (19491950)* W.E. Gooday (19501951)* C.J. Irving (19511952)* D.D. Stitt (19521953)* M.C.G. Meyer (19531954)

    * L.A. Bushell (19541955)* H. Britten (19551956)* Wm. Bleloch (19561957)* H. Simon (19571958)* M. Barcza (19581959)* R.J. Adamson (19591960)* W.S. Findlay (19601961)

    D.G. Maxwell (19611962)* J. de V. Lambrechts (19621963)* J.F. Reid (19631964)* D.M. Jamieson (19641965)* H.E. Cross (19651966)* D. Gordon Jones (19661967)* P. Lambooy (19671968)* R.C.J. Goode (19681969)* J.K.E. Douglas (19691970)* V.C. Robinson (19701971)* D.D. Howat (19711972)

    J.P. Hugo (19721973)* P.W.J. van Rensburg (19731974)* R.P. Plewman (19741975)

    R.E. Robinson (19751976)* M.D.G. Salamon (19761977)* P.A. Von Wielligh (19771978)* M.G. Atmore (19781979)* D.A. Viljoen (19791980)* P.R. Jochens (19801981)

    G.Y. Nisbet (19811982)A.N. Brown (19821983)

    * R.P. King (19831984)J.D. Austin (19841985)H.E. James (19851986)H. Wagner (19861987)

    * B.C. Alberts (19871988)C.E. Fivaz (19881989)O.K.H. Steffen (19891990)

    * H.G. Mosenthal (19901991)R.D. Beck (19911992)J.P. Hoffman (19921993)

    * H. Scott-Russell (19931994)J.A. Cruise (19941995)D.A.J. Ross-Watt (19951996)N.A. Barcza (19961997)R.P. Mohring (19971998)J.R. Dixon (19981999)M.H. Rogers (19992000)L.A. Cramer (20002001)

    * A.A.B. Douglas (20012002)S.J. Ramokgopa (2002-2003)T.R. Stacey (20032004)F.M.G. Egerton (20042005)W.H. van Niekerk (20052006)R.P.H. Willis (20062007)R.G.B. Pickering (20072008)A.M. Garbers-Craig (20082009)J.C. Ngoma (20092010)G.V.R. Landman (20102011)J.N. van der Merwe (20112012)

    Honorary Legal AdvisersVan Hulsteyns Attorneys

    AuditorsMessrs R.H. Kitching

    Secretaries

    The Southern African Institute of Mining and MetallurgyFifth Floor, Chamber of Mines Building5 Hollard Street, Johannesburg 2001P.O. Box 61127, Marshalltown 2107Telephone (011) 834-1273/7Fax (011) 838-5923 or (011) 833-8156E-mail: journal@saimm.co.za

  • ContentsForewordDanie Krigeby R.C.A. Minnitt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ivvPresidents Corner by M. Dworzanowski . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

    Special ArticlesIn Memory of Danie KrigeA contribution by GASA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viProfessor Danie Krige FRSSAfR.C.A. Minnitt and W. Assibey-Bonsu . .