SENS Note - 17 August 2012

Lyttelton Dolomite Centurion Mine resource update

 

Infrasors Holdings Limited

(Incorporated in the Republic of South Africa)

(Registration number 2007/002405/06);

Share code: IRA

ISIN: ZAE000101507

("Infrasors")

 

LYTTELTON DOLOMITE: Lyttelton Dolomite Centurion Mine – New Order Mine Right Executed and Life of Mine Increase to 50 years and related Lyttelton Expansion programme ("Lyttleton 2")

 

Lyttelton Dolomite Proprietary Limited (“Lyttelton”), a wholly owned subsidiary of Infrasors, comprising the Lyttelton Centurion and the Marble Hall Mines. Lyttelton conducts opencast mining of a dolomite ore-bodies supported by the beneficiation process of crushing, washing, sizing and milling.

The dolomite products are beneficiated for the following markets:

 

- Metallurgical grade dolomite for the use in the iron and steel industry;

- Metallurgical  grade   dolomite   with  higher   silica  content (“construction dolomite”) for use in the production of reinforced concrete and related products for     the construction industry;

- Metallurgical dolomite stone dust for the coal industry;

- Powders for the chemical and agricultural industries.

 

LYTTELTON CENTURION MINE – CONVERTED NEW ORDER MINE RIGHT EXECUTED

In accordance with the Minerals and Petroleum Resources Development Act (MPRDA), Lyttelton applied on 10 March 2009 to The Department of Mineral Resources for the conversion of the Old Order Mining License into a New Order Mining Right for the Lyttelton Centurion Mine.

The New Order Mining Right to mine dolomite at the centrally located Lyttelton Centurion Mine was executed on 7 August 2012. The New Order Mining Right remains valid for thirty years, at which time the mine has sole right to apply for an extension to mine the remaining minerals on hand.

 

LYTTELTON CENTURION MINE – LIFE OF MINE (“LOM”) INCREASE

The mineral resources and mineral reserves at the Lyttelton Centurion Mine have increased due to the following reasons:

 

a) A revision of the pit design to extract minerals from areas previously excluded; and

b) An extension   to   the   mine   footprint   to   allow   mining   on   the extended area.

The mine pit revision was conducted by the competent geologist: Perold Earth Science Services.

 

As a result the dolomite resources have increased to 80.1 million tons (“Mt”). 11.3 Mt represents metallurgical grade dolomite for the iron, steel, coal and chemical industries and 69.9 Mt for the construction industry. The construction dolomite resources have increased since 2007 from a total of 13.9 Mt to the current total of 69.9 Mt. During the period since listing in 2007 construction dolomite resources used in production has been 6.1 Mt.

The proved and probable dolomite reserves now consists of 11.2 Mt of metallurgical dolomite, and 57.2 Mt of construction dolomite.

The total LOM of the Lyttelton Centurion Mine is currently calculated to be in excess of 50 years and the metallurgical grade component LOM is expected to be in excess of 20 years.

 

The Lyttelton Centurion Mine’s Mineral Resources and Mineral Reserves statement at 30 June 2012 is as follows:

 

DOLOMITE RESOURCES AND RESERVES

 

MINERAL RESOURCES              2012                     2011                     2007

 

Operation    Resource   Metallur-   Construc-   Metallur-    Construc-    Metallur-       Construc-

Category      gical       tion        gical        tion        gical           tion

Dolomite   Dolomite     Dolomite    Dolomite      Dolomite       Dolomite

Mt         Mt           Mt          Mt           Mt             Mt

 

Centurion   Inferred          -       12.614           -         0.924               -           -

Mine  Indicated      0.257       53.133           -        39.420               -        4.79

Measured     10.978        4.109       8.350         5.170               -        9.20

Grand Total     11.235       69.855       8.350        45.514               -       13.99

Mineral Resources are inclusive of   Mineral Reserves

 

MINERAL RESERVES              2012                     2011                     2007

 

Operation   Reserve    Metallur-   Construc-   Metallur-    Construc-    Metallur-       Construc

Category      gical       tion        gical        tion        gical           tion

Dolomite   Dolomite     Dolomite    Dolomite      Dolomite       Dolomite

Mt         Mt           Mt          Mt           Mt             Mt

 

Centurion Probable         0.257      53.133            -       39.420               -        4.79

Mine       Proved         10.978       4.109        8.350        5.170               -        9.20

Grand Total l             11.235      57.242        8.350       44.590               -       13.99

 

Perold Earth Science Services has estimated Mineral Resources and Mineral Reserves for the mining operations of Infrasors in accordance with the South African Code for the Reporting of Mineral Resources and Mineral Reserves (the SAMREC Code, 2007 edition as amended July 2009).

The Mineral Resources and Mineral Reserves statement as at 30 June 2007 was compiled by the competent person L Nel (Msc)(AEP), Department of Geology, University of the Free State, and was included in the Pre-Listing Statement issued in July 2007. The Mineral Resources and Mineral Reserves statement as at 30 June 2007 is included to illustrate the increase in Mineral Resource since then. Infrasors subsequently embarked on an exploration and mine redesign programme aimed at increasing the mining asset, which resulted in the increase of the LOM from the 11.7 years on 30 June 2007 to a current LOM in excess of 50 years at 30 June 2012.

 

LYTTELTON 2 – EXPANSION PLAN

As a result of the approval and execution of the New Order Mining Right for the Lyttelton Centurion Mine, and the associated increase in the Mineral Resources and Mineral Reserves, Lyttelton proposes to introduce the Lyttelton 2 project that will improve and increase its production capacity in order to:-

- further mechanise the mine beneficiation processes;

- reduce costs per ton of finished beneficiated product due to inter alia economies of scale;

- enhance the spread and recovery of fixed costs over broader mining and beneficiation volumes;

- increase beneficiation capacity by up to 50%;

- separate out the beneficiated metallurgical dolomite products and stockpiles for the iron, steel, chemical and coal industries;

- build strategic stock piles of finished product to:-

- facilitate forward sales;

- ensure continuity of supply in production downtime periods (such as planned routine maintenance and Christmas close-down);

- provide greater    flexibility   for   maintenance,   shut   downs   of production lines;

- minimise unplanned maintenance shut downs and unplanned production interruptions;

- provide continuity of available products to its customers; and

- increase market share.

 

A portion of metallurgical minerals are currently sold into the construction dolomite market due to the limitations on the current beneficiation process. With the implementation of the Lyttelton 2 project the metallurgical beneficiation process will be improved and increased thereby maximising the metallurgical grade component for the iron steel, coal and chemical markets. By adding the Lyttelton 2 beneficiation plant the LOM serving the metallurgical market will increase to approximately 22 years.

 

The Lyttelton 2 project will position the mine for future infrastructure growth with the ability to be a low cost producer.

By order of the Board of Infrasors Holdings Limited

 

T.R Robinson

Chief Executive Officer

16 August 2012

Johannesburg

 

Sponsor

Sasfin Capital (a division of Sasfin Bank Limited)

 

Date: 17/08/2012 12:20:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.