Blyvooruitzicht Media Day
Thursday, 22 January 2004
! Blyvoor Expansion Project Update
! Project Boost at Blyvoor
Deon van der Mescht
Divisional Director: SA Operations, DRD
! No. 4 & 5 Slimes Dams Reclamation Project
Koos Barnard
General Manager: Blyvoor
1
1
Disclaimer
Some of the information in this presentation may contain projections or other forward looking statements regarding future events or other
future financial performance. We wish to caution you that these statements are only projections and those actual events or results may
differ materially. In reviewing, please refer to the documents that we file from time to time with the SEC, specifically to our annual report on
Form 20-F. These documents contain and identify important factors that could cause the actual results to differ materially from those
contained in our projections or forward looking statements, including such risks as difficulties in being a marginal producer of gold,
changes and reliability of ore reserve estimates, gold price volatility, currency fluctuations, problems in the integration of operations,
exploration and mining risks and a variety of risks described in our annual report on Form 20-F. We undertake no obligation to publicly
release results of any of these forward looking statements which may be made to reflect events or circumstances after the date hereof or
to reflect the occurrence of unexpected results.
Cautionary Note to U.S. Investors: the United States Securities and Exchange Commission permits mining companies, in their filings with
the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use the term
"resources" (which includes "measured", "indicated", and "inferred") in our presentation, which the SEC guidelines strictly prohibit us from
including in our filing with the SEC. U.S. Investors are urged to consider closely the disclosure in our Form 20-F, File No. 0-28800,
available from us at 45 Empire Road, Parktown, Johannesburg, 2193, South Africa. You can also obtain this form from the SEC website at
http://www.sec.gov/edgar.shtml
2
2
Some background on Blyvoor
! Wholly-owned by Durban Roodepoort Deep
! Five km south of Carletonville, 75km south west of Johannesburg
! Other mines in the area
! Gold Fields’ Driefontein operation
! AngloGold’s Savuka, Mponeng and Tau Tona
! Harmony’s Elandskraal
! No 1 shaft sunk in 1937
! No 2 shaft sunk in 1938
3
3
Some background on Blyvoor,
cont’d
! World War 2: all sinking suspended
! No 3 ventilation shaft sunk in 1946
! No 4 shaft sunk in 1960
! No 6 shaft (old Doornfontein 1 shaft) sunk in 1951
! No 5 shaft (old Doornfontein 3 shaft) sunk in 1986
! Doornfontein mine acquired in 1995
! Current workforce
! 4 700 employees
! 850 contractors
4
4
Where we are
5
5
Safety performance
1998
1999
2000
2001
2002
2003
! Association of West Rand Mines Safety winner six years
in succession
! 60% improvement in LTIFR over six years
! 1997: 17.84; 2003: 7.19
! average rate for competing mines in 2003: 19.21
! nearest competitor’s rate in 2003: 9.18
! DME letter of commendation
6
6
Blyvooruitzicht Expansion Project
(BEP) Update
7
7
BEP objectives
! Convert vast ore resource to reserves
! Realise reserves’ full potential
! Develop profitable, sustainable business delivering consistently
to all stakeholders
! Increase life of mine (LOM)
! Maximise return on capital investment (ROI)
! Realise acceptable return on equity value
8
8
BEP’s key focus areas
! Restore shaft, underground infrastructure, access to pillars:
! no 5 shaft west (old Doornfontein lease area)
! no 6 shaft (old Doornfontein no 1 shaft area)
! no’s 2 and 4 shafts
! Focus on flexibility
! all projects under constant review
! capex v gold price
9
9
Champions
! no 6 shaft
! closed, stripped, vandalised, LOM: 0
! LOM increased to 22 years
! now 13% of Blyvoor’s underground production
! biggest growth potential
! no’s 2 & 4 shafts
! planned closure, 2001
! LOM increased to 22 years
! now 25% of Blyvoor’s underground production
10
10
Casualty
! Low-grade Main Reef Project
! KO’d by low gold price (profitable at R100 000/kg)
! but ‘parked’, not scrapped
! currently under review
11
11
Identifed mineral resource,
June 2003
SURFACE
UNDERGROUND
65.54 Mt
0.45
g/t
65.54
Mt
0.45
g/t kg
29 457
29 457 Kg
947
947Koz
Koz
189.54 Mt
4.32 Mt
g/t
189.54
4.32
g/t
819 437 kg
819 437 Kg
26345345
26
Koz Koz
Reserve
SURFACE
U/GROUND
Surface
Underground
TOTAL
TOTAL
255.08 Mt
255.08
3.33 g/t Mt
848 894
3.33
g/tKg
27 292 Koz
848 894 kg
27 292 Koz
12
12
Mineral resource and reserves,
March 2001
! Classification as per SAMREC
9 Year L.O.M
Reserve
RESOURCE
RESERVE
256.4 Mt
3.30 g/t
850 348 Kg
27 339 Koz
21 Mt
4.43 g/t
93 065 Kg
2 992 Koz
13
13
Mineral resource and reserves,
June 2003
! Classification as per SAMREC
22 Year L.O.M
Reserve
RESOURCE
RESERVE
255.08 Mt
3.33 g/t
848 894 Kg
27 292 Koz
50.59 Mt
3.55 g/t
179 801 Kg
5 780 Koz
14
14
Reserve growth due to BEP
and gold price
Gold
Price
Gold Price
3.8%
3.8%
BEP
7.8%
7.8%
BEP
Resource
Reserve
Reserve
8.2%
8.2%
15
15
Project Boost
16
16
Project Boost
! Company-wide initiative
! Objectives:
! reduce operational risk
! lower unit costs
! ensure consistent production
! increase ore reserves
17
17
Blyvoor’s Project Boost
initiatives
1. Processing of no’s 4 & 5 slime dams
Lower unit cost
2. 16M22 ore and vent pass systems
Increase reserves
3. B4 Main Reef payshoot
Increase reserves
4. 35-33 decline system
Increase reserves
5. 4 & 6 shaft steelwork upgrading
Consistent production
6. 5 shaft loading and spillage arrangement
Consistent production
7. No. 6 slime dam extension
Consistent production
8. Water project
Increase reserves
18
18
4 & 5 Slimes Dams Reclamation
Project
19
19
Agenda
! Current and future mining scenarios
! Principles of the project
! Financial evaluation
! Capital expenditure
! Project team
! Environmental issues
! Technological innovation
! Some “before and after” visual impressions
! Future opportunities
! Conclusion
20
20
Current mining scenario
Current @ 675kg per month
! ROM tonnage generated from underground and surface
rock dump reclamation:
! underground (2,4,5,6 shafts) :
75 000 tpm
! rock dumps @ Annan shaft
:
130 000 tpm
:
205 000 tpm
Total
21
21
Future mining scenario
Future @ 675kg per month
! ROM tonnage generated from underground, surface rock dumps
and slime reclamation :
! underground (2,4,5,6 shafts)
:
80 000 – 120 000 tpm
! rock dumps @ Annan / 4 shaft :
40 000 – 0 tpm
! 4 & 5 slimes reclamation
:
240 000 tpm
Total
:
360 000 tpm
22
22
Key features of the project
! Eight-year life
! 24 million tons available for retreatment
! 240 000 tons treated per month
! Head grade of 0.587 g/t
! Gold recovery factor of 60%
! 84.5 kg per month
23
23
Key features of the project,
cont’d
! Total working costs: R15.50/t, R45 000/kg
! Capex: R45 million
! Construction began June 2003
! Cold commissioning November 2003
! Completed on time and within budget
24
24
Financial evaluation
Gold Price (R/kg)
NPV @ 18% after 8 years (Rm)
IRR (%)
Payback period (months)
85 000
90 000
95 000
145,4
148,5
151,6
184
207
235
19
18
17
25
25
Principles of the project
CIL CIRCUIT
Residue
Pumps
Return
Water
Dams
NO 6 SLIMES
DAM COMPLEX
Carbon to
Elution &
Smelt
Au
Clear water dams
High
Pressure
Water
Pump
Underground water
Screening
& Transfer
Pumps
NOS. 4 AND 5 SLIMES
DAM COMPLEX
Hydraulic monitoring guns
Transfer
Pump
GULLY
Transfer
Pumps
26
26
Capital expenditure
Design, construction, procurement and commissioning
of new CIL metallurgical plant
± R41.2m
Establishment of reclamation site and cyclones on
No 6 extended dam
± R 1.3m
P & G costs
± R 1.1m
Geotechnical and groundwater investigation
± R 0.3m
Startup Carbon
± R 1.1m
Total
± R45.0m
27
27
Project team
! Mine management representatives
! Environmental management team
! Dowding Reynard & Associates (DRA) – engineering,
procurement and construction management
! Fraser Alexander – reclamation and residue disposal contract
! Various sub-contractors involved in the supply, construction
and commissioning phases of the project
28
28
Environmental issues
! Main Blyvoor EMP approved August 2001
! Project environmental impacts, remediation:
! alienation of soil & surface area
! ground / surface water quality
! dolomite geology
! visual
! located near R29, clearly visible to local community
! 99.7ha to be rehabilitated for alternative use
! rehabilitation of deposition site (no 6 dam)
! prevent dust, erosion, negative visual impact
29
29
Environmental issues, cont’d
! Authorizations required and obtained:
! to reclaim No’s 4 and 5 Slimes Dams (DME)
! to extend No 6 Slimes Dam for deposition (DME)
! Amendments to EMP required and obtained:
! water use licence
! National Nuclear Regulator (NNR)
! Rehabilitation of 4 & 5 Slimes Dams’ footprints
! Rehabilitation of No 6 Slimes Dam (deposition site)
30
30
Environmental issues, cont’d
! Public participation
! focus groups (Golder Associates)
! public participation meeting
! July 2003
31
31
Environmental issues, cont’d
! ± 120 persons attendees representing:
! local council
! DWAF
! Group Environmental Monitoring (NGO)
! DME
! Department of Agriculture
! community
! unions and associations
! outcome very favorable towards the project
32
32
Technological innovations
! Plant:
! Kemix Reactor Process
! better pre-conditioning of slimes material
! more efficient cyanidation, so better gold recovery
! lower reagent consumption, so lower unit costs
! higher carbon gold loadings, better gold recovery,
lower unit costs
! lower ‘preg-robbing’ (loss of gold through
contamination), so better gold recovery
! less carbon breakage, so better gold recovery,
lower unit costs
33
33
Technological innovations, cont’d
! No 6 Slimes Dam (deposition site)
! cycloning
! faster deposition
! faster rise
! therefore:
! reduced footprint, and
! improved stability
! R20 million saved in capex
34
34
Future opportunities
! Treatment of neighbouring tailings dams in the area
! with existing infrastructure throughput can be increased
by 30%
! Scavenging of sulfides from re-treated tailings
(gravity concentration)
! Treatment of ROM underground ores in new, more efficient
plant after depletion of slime reserves
! treating in new CIL instead of existing CIP system
35
35
Successes in the face of
adversity
! Low Rand gold price
! Wage increases since 2001
! average underground wage up 37%
! lowest underground wage up 74%
! Changing the “old” Blyvoor image and culture
! We’re well below industry average cost of R78 000 / kg
! check quarterly results next week!
36
36
Conclusion
! Proves DRD’s ability:
! to develop unique systems, controls, practices to ensure
profitability and sustainability in adverse conditions
! to successfully bring complex projects to fruition
! to manage mature mines for the benefit of all stakeholders
! Realises DRD’s mission to extend mine lives safely, profitably
! Further enhances our confidence and pride
37
37