Skeat aims for success where others failed

Entrepreneur wants to mine gold in Barberton Greenstone belt, writes Jim Jones. Peter Skeat is one of those engineers who takes a fresh view on things often taken for granted.

He gives the impression his ideas are founded on common sense and technical logic. Well, that's how he presents his newly-named Galaxy Gold mining projects in the mountains above Barberton, Mpumalanga.

With his associates, he has assembled a mining area of about 25km long over parts of three more-or-less parallel and mineralised shear zones - the quaintly-named Saddleback, Sheba and Moodies faults. Their hydrothermal mineralisation plunges a few kilometres below the mountainous surface and, in the most general of terms, payable ore pods thicken and become richer in gold the deeper one goes.

Trouble is, unlike that of the Witwatersrand reefs, the hydrothermal gold in the Barberton Greenstone Belt is locked up in sulphide minerals. That stymied the old-time miners as far back as the 19th century - they were only able to mine and recover gold from shallow oxidised zones exposed on surface. They couldn't process the sulphide ores effectively.

About 20 years ago, Gencor (now BHP Billiton) pioneered the Biox treatment process. Simply put, sulphide ores are mined, crushed and milled and then treated with bacteria that "eat" the sulphides, freeing the gold for subsequent recovery by the conventional carbon-in-leach process. Biox has opened a new future for the Barberton gold field. But that, Skeat explains, is only half of it. Greenstone mining has a "bad name" in a South Africa spoiled by the Witwatersrand's abundance and its comparatively easy mining. Conventionally, greenstone mining in South Africa is "small".

Around Barberton, the mines have long been seen as such, to be worked by small-scale methods. Some, like Barberton Gold Mine, managed by Pan-African Mines, has been operating profitably for the past 15-odd years.

Among other old mine properties, Skeat's unlisted Galaxy owns the veteran Agnes mine which, he candidly admits, has a terrible market image since being mismanaged by the now-defunct Metallon. Skeat and his associates bought the property for R16-million in a 2008 liquidation sale.

The Agnes ore pod's cross section measures a good 120m by 45m and is reckoned to dip for 2000m at 60°. In other words, the ore body is amenable to large-scale mining and, instead of the old, small stopes, the intention is to extract the ore from the mountain and below with large-scale back-fill stoping and use dump trucks to carry ore out of the mine to the mill. This concept springs from Skeat's university training - a civil engineering degree at the University of Cape Town and mining at the University of the Witwatersrand - and early professional work that combined the two disciplines. The days of hauling ore with small locos and "ngolovans" are ending.

At present, the Agnes mine (renamed Galaxy) and the neighbouring Golden Hill produce 18000 tonnes of ore a month and recover about 20000 oz of gold a year. The target is 53000 tons of ore a month. At that rate, there's enough known ore to sustain operations for 20 years, yet only a fraction of Galaxy's properties have been properly drilled and explored.

Operating costs are lower than on the reef, with fewer miners and less electricity needed for every ton of ore processed. Galaxy's initial expansion calls for plant and equipment estimated to cost between R400-million and R500-million. And, unlike some other gold promoters, Skeat is adamant that Galaxy will not over-capitalise. The intention is to raise equity on the JSE around mid-year.

Will it fly? If it doesn't, it won't be for lack of innovation. And while conventional reef mines are declining, this could be the time when greenstone lifts off.