Veremo

Project description:

Potential pig-iron project

Orebody:

Titaniferous magnetite ore outcropping on surface

Date of acquisition:

May 2008

Shareholding in Veremo and key partner:

25% Petmin, 75% Framework Investments Limited (100% subsidiary of Kermas Limited); Petmin's effective economic interest in Veremo Minerals (Pty) Ltd is 34.9%

Location:

Eastern Bushveld, near Stoffberg, Mpumalanga Province

Type of project:

Development project

Commodity:

Magnetite with 42% Fe and 14% TiO₂ content

Reserves and Resources:

Resource is currently being verified by consultants; updated statement to be released in 2010

Project status:

Comprehensive exploration programme undertaken: initially drilled 90 holes equating to 6,000m. Additional 40 holes equating to about 1,000m of triple core drilling commissioned. Average depth per drilling hole, 32m; 306 trenches and 15 pits excavated

Planned production date:

2013 - 14

Anticipated cost of development:

US$ 300 million

Infrastructure and logistics:

Well situated, close to existing power and rail infrastructure; water supply in close proximity

Veremo is a magnetite project in the eastern Bushveld. The land over which Veremo Holdings has mineral rights includes five contiguous farms covering 1,769 hectares.

The orebody forms part of Layer 21 of the well-known magnetite layers within the eastern part of the Bushveld Complex, and is particularly well developed in the area, outcropping on surface. This project is suitable for the production of high-quality pig-iron. The ore is characterised by iron content of 42% Fe and titanium dioxide content of 14% TiO₂.

In 2009 MSA designed and managed an in-fill core drilling and sampling programme as part of a geological scoping study with the aim of delineating a SAMREC-compliant measured resource in selected high priority areas identified from previous drilling campaigns. In particular, the highly weathered 'cap' of Ti-magnetite Layer 21 in the so-called 'platform' areas was singled out for this exercise.

Previous analytical test work on mini-bulk samples from several deep pits has shown that the weathered material has higher FeO and substantially lower SiO2 concentrations compared with the fresh material and might therefore not require a costly grinding/milling stage prior to pyro-metallurgical processing.

Additional drilling of approximately 1,150 metres in 38 holes has been completed. The drill contractor has successfully managed to optimise the drill technique to increase core recovery to nearly 100% in the weathered zone following experimentation with differing equipment.

In the financial year ending June 2010, management will focus on ensuring that the geological validation programme is completed.

Concurrently with the drill and sampling programme, which will be used for an updated resource statement, extensive metallurgical test work is planned on representative ore samples from both weathered and fresh zones of Level 21. The conclusion of this test work is expected to provide all key parameters for a pilot plant programme in 2010. Thereafter it is anticipated that the processing flow sheet for the production of pig-iron can be finalised.

The geological data which forms the basis of the resources of the project is currently being validated in order to be able to commence the final metallurgical process analysis.

View the Directors’ review on Veremo in the Annual Report 2009. (PDF – 172KB)