Mining & Mineral Processing

Mining

A dozer trap mining unit (“DMU”) has been selected as the optimum mining method. The DMU is a simple cost effective method of mining, best suited to free-flowing, friable, incompetent material as present at Kwale.

Over a 13-year Life-of-Mine (“LOM”), 1.2 Mt of waste will be relocated and 140.6 Mt of ore mined and processed, producing 4.7 Mt of final product for sale. The Site Layout Plan below shows the location of the Central and South mine pits in relation to the processing plant, tailings facility and water supply dam.

The following table lists Kwale Ore Reserves by classification and dune. The Ore Reserves are estimated using all available geological, relevant drill hole and assay data, including mineralogical sampling and test work on mineral recoveries and final product qualities. The Ore Reserve estimates are determined by the consideration of all of the modifying factors in accordance with the JORC Code 2004, and for example, may include but are not limited to, product prices, mining costs, mining dilution and recovery, metallurgical recoveries, environmental considerations, access and approval. The mineral assemblage is reported as a percentage of insitu ore.

Ore Reserve Statement

Dune	Classification	Tonnes	THM	Slime	Oversize	Ilmenite	Rutile	Zircon
		(Mt)	(%)	(%)	(%)	(%)	(%)	(%)
Central	Proven	46.3	6.9	24.6	0.4	3.93	0.91	0.42
	Probable	29.2	4.5	24.5	1.0	2.45	0.61	0.26
	Proven and Probable	75.5	6.0	24.6	0.7	3.36	0.8	0.36
South	Proven	39.9	3.7	26.5	1.7	1.89	0.52	0.22
	Probable	25.2	3.4	29.2	4.8	1.42	0.4	0.17
	Proven and Probable	65.1	3.6	27.6	2.9	1.71	0.48	0.2
Total	Proven	86.2	5.4	25.5	1.0	2.99	0.73	0.33
	Probable	54.4	4.0	26.6	2.7	1.97	0.51	0.22
	Proven and Probable	140.6	4.9	25.9	1.7	2.59	0.65	0.29

Mining will commence in the higher-grade Central Dune before moving to the lower-grade South Dune in the 8th year of operations. Annual mining rates and average heavy mineral grades for the LOM are shown below.

Processing

Metallurgical Test Work

A series of metallurgical test programs, including pilot plant testwork and closed-circuit trials, were conducted between 1997 and 2005, culminating in the design of a wet concentrator plant (”WCP”) and a mineral separation plant (”MSP”) in 2006 as part of Vaaldiam’s DFS.

Base reviewed the previous testwork and plant design and determined that potential existed to simplify the circuits by:

• converting the desliming circuit from two-stage cyclone separation to a single-stage cyclone plus constant density tank separation circuit;
• using more modern mineral separation equipment to simplify the ilmenite circuit;
• removing wet high intensity magnetic separation (”WHIMS”) from the ilmenite circuit, which also removed the need for ilmenite stockpiling and drying stages; and
• using a series of high tension (”HT”) electrostatic separators and rare earth roll magnetic (”RER”) separation stages to simplify the rutile circuit.

Testwork at Allied Mineral Laboratories was performed on a sample of the heavy mineral concentrate (“HMC”) produced from the 2004 pilot plant operation. This testwork confirmed the performance of simplified circuit design and the revised flowsheet was used as the basis for the redesign of the Mineral Separation Plant (“MSP”) conducted during the EDFS.

Processing Plant Description

The processing plants for the Kwale Project are designed to process ore to recover three separate products, ilmenite, rutile and zircon and generate a number of reject streams.

Ore will be received at the WCP from the DMU via a slurry pipeline. The WCP is designed to remove slimes, at a particle size less than 45 µm, concentrate the valuable HM (ilmenite, rutile and zircon) and reject most of the non-valuable, lighter gangue minerals. The WCP will contain a number of gravity separation steps, utilising spiral concentrators. The HMC will contain 90% HM.

The HMC will be processed in the MSP. The MSP will clean and separates the ilmenite, rutile and zircon minerals from one another and remove any remaining gangue. This is accomplished by a combination of attritioning, electrostatic separation, magnetic separation, classification and gravity separation.

The process route is depicted in the simplified block flow diagram below

COMPETENT PERSONS STATEMENT
Information on this website that relates to Ore Reserves at the Kwale Project is based on information compiled by Scott Carruthers and Per Scrimshaw, both of whom are Members of The Australasian Institute of Mining and Metallurgy. Mr Carruthers is a full time employee of BSE. Mr Scrimshaw is employed by Creative Mined Enterprises. Both Mr Carruthers and Mr Scrimshaw have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Both Mr Carruthers and Mr Scrimshaw consent to the inclusion in this announcement of the information based on his work in the form and context in which it appears.