There’s still??gold?in them hills

2014-05-25 15:00

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

While gold deposits are being steadily eroded in Gauteng, gold mining is getting a new lease of life in the area around Barberton in Mpumalanga.

The Witwatersrand’s little brother has been quietly producing gold for more than a century, and there’s a lot more just waiting to be mined.

New discoveries are being made, old deposits are getting a second look and companies are expanding.

But it has to be seen in context. About 1.5?billion ounces of gold has so far come out of the Witwatersrand in about 130 years, and the Mpumalanga area has so far yielded about 13?million ounces.

Gold majors operating in Gauteng – like AngloGold, Harmony and the soaring Sibanye Gold – entirely overshadow the mostly junior operations in Barberton, but that’s no reason to sneer.

Africa-focused Pan African Resources’ Sheba mine is one of the longest-running and richest mines in the country. It is listed on the Alternative Investment Market (AIM) and is still churning out grades of up to an astounding 20g a ton after more than a century of continuous operation.

Pan African Resources’ other two operations in the area aren’t quite as prolific, but it’s still pulling out an average grade of 7.5g a ton across the board.

It is moving into lower-grade territory though, with Evander Gold Mines bought from Harmony last year for R1.5?billion, a move that is expected to virtually double production. Evander has deposits of about 36.1?million ounces of the yellow metal.

The Greenstone Belt along the Makhonjwa mountain range that rolls into northern Swaziland is the second-richest gold field in South Africa, but it is far from straightforward to mine. Rich gold deposits give way to sulphides, a potential metallurgical horror.

The answer is the Biox method developed for this reason by Gold Fields about 25 years ago.

Biox is a biological treatment that breaks down the sulphides and prepares the ore for the conventional cyanide leach.

Unlike the flat layers of deposits in the Witwatersrand, geological forces in the Greenstone Belt have over time buckled and bent the Barberton formations. As a result, there is very little logic to the deposits and there is a wide variation in grade.

Chris Rippon, senior geologist at Pan African Resources’ Barberton mines, described the Greenstone Belt as a “raisin cake” and the Witwatersrand deposit as a “layer cake”.

Either way, Pan African Resources got the icing. Right next door to the mid-tier gold and platinum miner, a series of junior miners eke out ore with grades of about 2g to 3g ton. But the gold here is relatively shallow and if costs can be kept down, profit is possible.

The directors of Vantage, an ASX-listed junior miner, are convinced of this. With R710?million already invested, Vantage is getting ready to radically expand operations into its Lily and Barbrook mines.

The directors are promising a production rise from the 30?000 ounces in 2013 to upwards of 45?000 ounces in the next couple of years. The company’s mines can conceivably produce more than 70?000 ounces a year.

But it’s been tough going and a less tenacious board of directors would likely have thrown in the towel.

Caledonia, another junior miner, did exactly that. After a labour dispute ended in the torching of key assets, the AIM-listed company in 2008 flogged Lily and Barbrook mines to Vantage for $10?million (R103?million).

Four months after listing in 2010 – in which it raised A$30?million (R287?million) – Vantage suffered the wrath of the Association of Mineworkers and Construction Union (Amcu), to which the workforce is 57% subscribed, and was crippled by a seven-week illegal strike.

“Amcu used us as a dress rehearsal for what’s happening now on the platinum mines,” said Willo Stear, a nonexecutive director at Vantage.

Vantage CEO Michael McChesney headed back to Australia, hat in hand, and tapped the high net-worth, mining-focused investors for another A$10?million.

Things started looking up and then a pillar collapse set things back again. Last year’s 25% collapse of the gold price pulled down profits to A$0.26?million from A$4.5?million in 2012.

Its share price plummeted 90%. The company is currently trading at A$0.04c from A$0.22 in 2012.

But this hasn’t scared off investors and the company has just raised an unsecured, three-year-term loan of A$12.5?million, which it will use to expand both the Lily operation and the complex Barbrook mine.

Nevertheless, the area is littered with the remains of intrepid companies including Rand Mines, Simmer & Jack Mines, Caledonia Mining and Metallon Gold.

There’s no doubt that some of the country’s best remaining gold deposits are in the Makhonjwa mountains. But getting it out successfully and profitably is not for the faint at heart.

From mining to geological trove

Mining started in the Barberton area in about 1881?–?five years before the mother lode was found in the Witwatersrand.

Repeated discoveries in the area got treasure hunters so enthused for a few years that by the mid-1880s, they had dug up rock so rich in parts it was?–?and still is –?visible to the naked eye.

Soon the place was flooded with people, shovels in hand and a glint in their eyes.

The Transvaal’s first stock exchange was put together in the frenzy. In England, a brisk trade was being done in corrugated iron house kits that were flat-packed and shipped out to South Africa.

Many of these houses and buildings are still fully functional in the town.

Legendary barmaid Cockney Liz also set up shop in town. Rumour has it that Liz was famous not only for her musical abilities, but also for holding regular auctions in which she sold herself to the highest bidder.

Despite the inevitable influx of modern businesses and stores, the remnants of Barberton’s history make it look unnervingly like an elaborate movie set.

The town and surrounds were all but abandoned towards the turn of the 20th?century.

Rampant malaria and increasingly low-grade and complicated gold deposits coincided with the discovery of massive gold deposits on the Witwatersrand and the town emptied as fast as it had filled.

The malaria is gone now and guesthouses have proliferated to cater for history buffs and travellers. Geologists and rock enthusiasts also head to the area to see and study the ancient mountain range.

The exposed rocks in the area date back about 3.5?billion years ago making them some of the oldest in the world.

Usually, rock of this vintage has been eroded and reheated and no longer exists.

The Barberton Greenstone Belt, or the Makhonjwa Mountains, are made up of layers of lava, ash and sediment that buckled and twisted billions of years ago.

It was pushed up too high to be reabsorbed into the middle of the earth and was later protected from above by kilometres-thick layers of Transvaal deposits –?a major part of Highveld geology. Now these deposits have eroded, exposing a virtually unique account of what the earth was like three and a half billion years ago.

Detailed explanations of the rock formations and how it was laid down can be found along the geology trail between Barberton and Bulembu just inside the Swaziland border.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.