Ezulwini and MWS moving forward Ezulwini - Expectation to be profitable by May 2012.
Notwithstanding the restructured operation at Ezulwini, and the reduction in the required delivery of gold to FNB to 7% of gold production, the turnaround in operations at Ezulwini has not yet been realized or yielded the expected results. While the quantity and grade of the blasted tonnes is substantially in-line with the new operating plan, a fall of ground on one of the major ore transfer levels has required that the underground production be trammed at a much greater distance to the shaft. The mobile trackless equipment on this major ore transfer level, is currently not sufficiently robust to sustain the required rate of transport of ore to the shaft. As a result, the operation continues to lose money and consume cash at a greater rate than planned despite the fact that all efforts continue to resolve this issue. In order to address these issues, management is in the process of implementing a detailed action plan, which includes clearing the fall of ground, correcting the trackless section operating conditions and addressing the mechanical condition of the trackless equipment on the level. These actions are expected to yield the desired results as early as May 2012. However, for the month ended April 30, 2012, Ezulwini continued to operate on a cash negative basis and there is no certainty that the position will improve over the next three months.
MWS - Apparently FIU spent the first quarter of 2012 building a new tailing storage facility. (This was after the AngloGold agreement had been made according to FIU's timeline, so apparently we built them a new tailings storage facility without getting anything for the work)
MWS increased its tonnage throughput by 45% in the third quarter of Fiscal 2012 compared to the third quarter of the fiscal year ended March 31, 2011. The increase in throughput was driven primarily by the commissioning of the new tailings storage facility, which along with the third gold plant module in April 2011, increased processing capacity from an average of 1.2 mtpm to 1.8 mtpm. The final gold expansion phase of the MWS Project during the first quarter of 2012 brought with it three new resources, namely the Hartebeestfontein tailings dams No. 1, 2 and 7. The material characteristics of the new resources necessitated modifications to both the carbon-in-leach and the elution circuit to enable the infrastructure to accommodate the larger fraction size of the new material. While these modifications have been successful and enabled the third gold module to process the material that it receives effectively, the lower feed grade of the Hartebeesfontein resource has resulted in decreased recovery performance when compared to the first and second gold modules which receive higher grade material from the Buffelsfontein tailings resources.