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Annual Report and Accounts 2011

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Kimberley Underground

 

At a Glance About About
Kimberley Underground:

Revenue contribution:

Graph

Revenue

US$18.2m

Diamonds sold

54,733 carats

Average price per carat

US$333

FY 2011 marked the first full year for Kimberley Underground under Petra management, following completion of the acquisition in May 2010. The Company was particularly encouraged by the prices achieved for Kimberley Underground production, with the average of US$333 per carat for the Period considerably exceeding initial expectations.

The Kimberley Underground operation comprises three kimberlite pipe mines: Bultfontein and Dutoitspan (serviced by Joint Shaft and the newly built Joint Shaft plant) and Wesselton (serviced by the Wesselton Shaft, though currently without processing facility). A substantial stockpile of ore, estimated to be 0.3 Mt, has been built up on surface at Wesselton whilst no processing facility has been available.

The slimes and tailings disposal difficulties with the new plant at Joint Shaft were largely addressed during H2 FY 2011 and tonnages processed increased from 176,527 in H1 FY 2011 to 267,128 in H2 FY 2011. At the current bottom-cut discard size of 2mm, the grade is expected to revert to the planned 14 cpht during FY 2012 as the oversize circuit has now been brought into production. The Joint Shaft plant is expected to deliver approximately 80,000 carats for FY 2012.

image of mine

Petra announced a revised business plan for processing at Wesselton at the time of the Company's full year Trading Update in July 2011, which involves a combination of a mobile pan plant together with a new plant (similar to that constructed at Joint Shaft). The mobile pan plant operation is currently being commissioned and is expected to process some 40,000 tpm. Subsequently, the main plant at Wesselton is expected to be commissioned in April 2012 and will treat a further 40,000 tpm. Wesselton is expected to contribute approximately 50,000 carats during FY 2012.

Unit costs of approximately R191 per tonne were negatively impacted by reduced throughput. Management expects the unit costs to improve once the Wesselton plant is fully operational.

Of the US$13 million capex, approximately US$9.5 million was spent on improvements to the Joint Shaft treatment plant. A further US$3.5 million was applied to the acquisition of adjacent land, buildings and infrastructure relating to water reticulation and slimes handling facilities (by assuming a rehabilitation guarantee).

FY 2011 – gross numbers

  Unit FY 2011 FY 20101 Variance
Sales      
Revenue US$m 18.2 n/a n/a
Diamonds sold carats 54,733 n/a n/a
Average price per carat US$ 333 n/a n/a
Total production (all ROM)      
Tonnes treated tonnes 443,655 9,141 n/a
Grade cpht 12.9 14.9 n/a
Diamonds recovered carats 57,402 1,362 n/a
Costs      
On-mine cost per tonne2 ZAR 191 n/a n/a
Total capex US$m 13.0 10.2 n/a

Notes:
1. The acquisition of Kimberley Underground completed in May 2010 and therefore comparable FY 2010 results are not available.
2. On-mine cash costs exclude costs assigned to ROM stockpiles.