Kabanga Nickel Project

P
Presentation
t ti tot Ausmine
A i
December 01, 2010
TOPICS

1. Location
2. Ownership and History
3. Project
j Description
p
• Geology
• Mine
• Process Plant
• Site Infrastructure
4 Project Challenges
4.
• Tanzania Infrastructure
• Human Resources
• Resettlement
5. Questions
2
LOCATION

3
Location

TANZANIA
Lake Victoria

Mwanza
K b
Kabanga

Tulawaka Bulyanhulu
Shinyanga
Kahama

Ngara 0 km 20 40

T A N Z A N I A

Rulenge
Bukiriro Keza
Dar es Salaam
Ngara District
Kabanga
Kabanga
Muganza
BURUNDI

4
Kabanga Site

Tembo Zone
MNB Zone Drill Camps North Zone

Main Zone

Kabanga Camp

5
OWNERSHIP AND HISTORY

6
Ownership and Management

• Shareholders’ Agreement April 2005

– Barrick Gold 50%
– Xstrata Nickel 50%
• Xstrata Nickel is the project manager
• Xstrata Nickel funded first $145 million of expenditures - current
and ongoing expenditures funded 50/50
• Total project expenditure from 2005 to end November 2010
approximately
pp y$
$240 million
• Xstrata Nickel will process up to 17,500 tpa contained Ni in
concentrate through Xstrata smelter and refinery at preset terms

7
Ownership History

• Late 1970s: Nickel sulphide mineralization discovered at Kabanga during UNDP

regional exploration
• 1990/92: Sutton Resources secured Kabanga and Kagera concessions
• 1992-1995: Sutton-BHP joint venture
• 1997-2000:
1997 2000 Anglo-American
A l A i JV with
ith S
Sutton
tt ((acquired
i db by B
Barrick
i k iin 1999)
1999).
• 2000-2005: Barrick sole ownership
• April 2005: Barrick
Barrick-Falconbridge
Falconbridge joint venture agreement signed
• August 2006: Xstrata PLC acquired Falconbridge Limited
• 2005-2010: Conducted Scoping, Pre-feasibility and Feasibility Studies

8
PROJECT DESCRIPTION

9
Overall Site Layout

10
Mine and Plant Site Layout

11
General Description – Site Facilities

• Underground nickel mine starting at 600 ktpa and ramping to 2.2

Mtpa
• Concentrator
• Tailings
T ili di
disposall ffacility
ilit
• Access road 5km
• Camp
• Airstrip
• Diesel power plant (contract)
• Waste water treatment (HDS
(HDS, RO)
• Sewage treatment
• Security
S it ffences (camp,
( mine
i site)
it ) and
d game ffences (TDF
(TDF, airstrip)
i ti )
• Paste fill preparation plant 12
General Description – Off Site

• Rock quarry (construction and paste plant feed)

• Sand pits and sand wash plant
• Concentrate shipment:
– 2t bulk bags, initially by road, later by road/rail 1,200 km to port at
Dar es Salaam
– Initial handling using existing facilities – will require construction
of additional handling facilities at Isaka railhead and Dar es
Salaam port (bag storage/handling)
• Future power line

13
Project Strengths

• High quality mineral resource – well understood

• Robust process flow-sheet based on well-defined metallurgy
• Guaranteed access to smelting and refining capacity
• Excellent additional resource potential
y long
• Potentially g mine life
• Project welcomed by the community
• Diversification of Tanzanian mining sector

14
Project Challenges

• Remote location – no nearby towns

• Tanzanian infrastructure (power supply, rail transport)
• Security
• Proximity to Burundi (security, environmental)
• Limited skills base
• Concentrate oxidises rapidly → heat
• Resettlement (300 households)

15
Health, Safety and Environment

• Kabanga Nickel is committed to

– Prevention of accidents
accidents,
incidents, illnesses and
pollution
– Regulatory compliance
– Continual improvement in
health safety and
health,
environmental performance

3.9 million effort hours (1,300 days) without a lost time injury

16
 Mo
onthly Work Ho
ours

0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
May 0.0
Jun 10.6
Jul 6.9
Aug 4.9
Sep 7.6
Oct 6.1

2005
Nov 5.1
Dec 6.6
6
Jan 7.7
Feb 6.8
Mar 6.1
Apr 6.8
May 6.0
0
Jun 5.4
Jul 4.7
Aug 4.2
Sep 3.8
Worked Hours

Oct 3.4
Nov 3.1 9.4

2006
Dec 2.9 9.1
Health and Safety

Jan 2.7 8.6

Feb 2.5 10.1
Mar 2.8 9.8
LTI

Apr 3.0 10.0

May 2.8 9.8
Jun 2.7 9.1
Jul 2.5 8.9
Aug 2.4 8.7
Sep 2.2 8.2
Oct 2.1 8.4
LTIFR

Nov 2.0 8.3

2007
Dec 1.9 8.6
Jan 1.9 8.2
Feb 1.8 8.4
Mar 1.7 8.0
Apr 1.6 7.7
May 1.6 7.5
TRIFR

Jun 1.5 7.2

Jul 1.5 6.9
Aug 1.4 6.7
Sep 1.4 6.7

2008
Oct 1.4 6.6
6
Nov 1.3 6.6
6
Dec 1.3 6.4
6
Jan 1.3 6.3
Feb 1.3 6.2
Mar 1.3 6.2
Apri 1.3 6.1
May 1.2
1 6.0
0
Jun 1.2
1 5.99
Jul 1.2
1 5.99
Aug 1.2
1 5.8
8
Sep 1.2
1 5.8
8
Oct 1.2
1 5.7
• LTI and TRI frequency rates continue to decline

Nov 1.2
1 5.7
Dec 1.2
1 5.7
• Safety performance improved steadily since 2005

Work Hours & LTIFR & TRIFR (Frequency base 1,000,000 Hrs)

2009

Jan 1.2
1 5.7
Feb 1.2
1 5.7
Mar 1.2
1 5.7
Apr 1.2
1 5.6
May 1.2
1 5.6
Jun 1.2
1 5.6
July
• Currently 3.9 M effort hours since last LTI (1,299 days)

1.2
1 5.6
Aug 1.1
1 5.6
Sep 1.1
1 5.6
Oct 1.1
1 5.6
Nov
Dec
2010
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

LTIFR & TRIFR

R
17
GEOLOGY

18
Regional and Tectonic Geology

• Kabanga occurs in the Great Lakes

Ni Belt, Eastern Margin of the
Proterozoic Kibaran Orogenic Belt
(1.4 Ma)
• Th
The B
Belt
lt extends
t d through
th h Burundi,
B di
Kabanga
Tanzania and into Uganda
• The Kibaran Belt is known to host
Ni-occurrences

19
Kabanga

• 4 zones of Massive Sulphides

–North
–Tembo
–Main
–MNB

•A
Associated
i t d with
ith ultramafic
lt fi iintrusions
t i into
i t
metasediments (schists, metapelites, quartzites)

20
Kabanga Nickel Deposits

Deposits Shown Projected to Surface (Plan Map)

and Projected to Depth (Vertical Section)
Plan Map Airstrip
TemboDeposit
Mine site
Area

NorthDeposit
NorthDeposit
MNB Deposit

C
Current
t Road
Main Deposit Camp

Schematic Plan Section

Surface

North
Main Deposit
Deposit Tembo
Deposit
MNB
Deposit
1.2km Vertical Section
Depth
Looking NW
Schematic Cross Section
Kabanga Nickel Deposits

Vertical Cross-Section North Deep

North Deep – 12200N

5500

5400

5300

5300

5300
0E

0E

0E

0E

0E
Geological Units
1000m
LQZT – Lower Quartzite
LQZT
LSSC – Lower Spotted Schist

900m BNPU – Banded Pelitic Unit

LRPU – Lower Pelitic Unit

800m UMAF – Ultramafic

MSSX – Massive Sulphide

LRPU

700m

100 metres

600m

1000m asl = 600m below surface

Section looking Grid North (028°)

Kabanga Mineral Resource

• 577 km drilling since inception

• Kabanga
K b mineral
i l resource 58 Mt.
Mt

• Contains 36% Inferred Resources

North 41 1Mt @ 2.81%

41.1Mt 2 81% Ni
Tembo 13.2Mt @ 2.20% Ni
Main 3.0Mt @ 1.93% Ni
MNB 0.7Mt @ 1.50% Ni
Total 58.0Mt @ 2.61% Ni

Geological Information - 3.5Mt @ 1.80% Ni

Kabanga Mineral Resource

Kabanga Nickel Project Resources

North
h Main
i MNB Tembo
b MSSX
SS Tembo
b UMIN North
h UMIN

60

50

40
nes (Mt)

30
Tonn

20

10

-
May 05 Jul 06 May 07 Jun 08 Jun 09 Jun 10
Model Version
MINING

25
Key Features of Mine Plan

• Underground mine - ramp haulage with trucks

• Single portal to access North – drift from North to access Tembo
• Twin declines for first 300 meters (one for ventilation)
• First production 2 years
after start of project development
• Initial production rate
+/-600 thousand tonnes per year
• Steady state production rate
2.2 million tonnes per year

26
Mining

• Contract mining for development and early production years

• Post Pillar mining initially, then Blast Hole stopes where orebody
thickness and dip permit, Cut and Fill otherwise
• C
Cementedt d Rock
R k Fill iin upper portion,
ti paste
t bbackfill
kfill when
h ttonnage
rate increases
• Future vent shaft conversion to skip hoisting
• Future refrigeration plant
• 11kV electrical reticulation, 1000v feed to mining equipment
• 3 x permanent pump stations with 4 helical rotor pumps each, plus
6 intermediate
i t di t ttravelling
lli pumps
• Explosive – Emulsion + AN, peaking +/- 4.5 tpd (mine and quarry
combined)

27
Design Basis - Decline

28
Mining Equipment List (peak numbers)

• 10 underground haultrucks (60t units)

• 9 LHD units (8.5 m3 buckets)
• 6 Jumbo drills
• 1 cable bolter
g
• 5 longhole drills ((hydraulic
y top
p hammer units))
• 5 Integrated Tool Carriers
• 2 shotcrete sprayers
• 5 agi-trucks
• 4 emergency vehicles
• 20 LV’s

29
PROCESS PLANT

30
Design Criteria - Ultimate

• Initial production rate 600 ktpa (75 tph)

• Steady state ore treatment rate 2.2 million tonnes/year (275 tph)
• Head grade: Ni=2.39%, Cu=0.32%, Co=0.18% (including dilution)
• Grind size 80% passing 100 microns
• Concentrate g
grade 19% Ni,, 10% H2O
• Recovery of Ni to concentrate 89%
• Concentrate production (wet)
– Initial 240 tpd, 79,000 tpa
– Final 700 tpd,
p , 275,000
, tpa
p
• Initial concentrator converts to paste preparation after ramp-up to
2.2 Mtpa (grinding and Po rejection)

31
Process Flowsheet (initial)

32
Process Flowsheet (ultimate)

KNCL

33
Process Challenges

Pyrrhotite/Pentlandite ratio >10:1

– ore prone to rapid oxidation – sintering,
sintering decreased Ni recovery
– separation (aeration + lime) very good - >95% Po rejection.
– still significant
g Po in concentrate ---> self-heating.
g
– rougher tailings +/- 70% Po – cannot be used directly for backfill
• Po flotation to desulphurise but results in low mass remaining
• Need to crush/grind additional material for paste (waste,
quarried rock)

34
Mill Building Plan View
Process Equipment List (Initial)

• Primary jaw crusher 75mm CSS

• Secondary cone crusher 20mm CSS
• Double deck screen 13mm bottom deck aperture (P80 10mm)
• Ball mill 3.6m D, 6m EGL, 1,200 kW
• 6 x 250mm hydrocyclones
• 2 x 30m3 aeration tanks + 2 x 30m3 conditioning tanks
• 6 x 33m3 rougher
g flotation cells
• 5 x 20m3 cleaner cells
• 3 x 20m3 cleaner scavenger cells
• 1 x 7m concentrate thickener
• 2 x plate and frame pressure filters
• Concentrate bagging system 36
Process Equipment List (Final)

• Primary jaw crusher 100mm CSS

• SAG mill 6
6.1m
1m D
D, 2
2.74m
74m EGL
EGL, 1
1,800
800 kW
• 1 x double deck SAG discharge screen
• 1 x pebble crusher (cone)
• 2 x ball mills 4.27m D, 4.88m EGL
• 4 x 375mm hydrocyclones
• 2 x 50m3 aeration tanks + 2 x 50m3 conditioning
g tanks
• 8 x 33m3 rougher flotation cells
• 5 x 20m3 cleaner cells
• 3 x 20m3 cleaner scavenger cells
• 1 x 13m concentrate thickener
37
Consumables

• SAG balls (125mm) – 420 g/t

• Ball mill balls (75mm) – 380 g/t initial
initial, 440 g/t final
• Reagents (indicative consumptions only)
– CaO – 4.0
4 0 kg/t
– PEX – 180 g/t
– Aero 3477 ppromoter – 125 gg/t
– Na2SO3 depressant – 300 g/t
– MIBC frother – 15 g/t
– Anionic poly acrylamide flocculant (used for concentrate
thickener and WWTP clarifier)

38
 KABANGA
INFRASTRUCTURE

39
On-Site Infrastructure

• Water supply – mine dewatering and recycling. Pipeline from

Ruvubu river (15 km) in later years
years. Potable and makeup from
boreholes
• Diesel p
power p
plant ((8 MW installed)) – BOO contract
• Sewage treatment – RBC and UV disinfection - separate plants for
camp and mine site
• Potable water plant
• WWT plant (HDS and RO) – 350 m3/h at peak
• Satellite-based voice and data communications
• M
Modern
d security
it system
t – CCTV monitoring,
it i card
d access control,
t l
electrified fence.
• 1800m gravel airstrip (early in construction)

40
On-Site Infrastructure (cont’d)

• Permanent camp – 400 rooms with provision for expansion,

recreation facilities
facilities, laundry etc.
etc Includes separate security
accommodation block
• Office,, change
g house,, laboratoryy etc
• Maintenance and warehouse facilities
• Rock dump (lined)
• Tailings disposal facility (lined) + seepage containment
• Future backfill plant
– Crush and grind waste rock and quarry rock
– Desulphurised tailings (Po flotation)
– Paste preparation and pumping, u/g reticulation
• Possible future refrigeration plant – 5-8
5 8 MW(R)
• Fuel storage (500 m3 supplier inventory + 100 m3 day storage) 41
Village Layout

New permanent village

Executives – 10 rooms

Senior staff - 152 rooms

Junior staff – 184 rooms

Security – 48 rooms

C
Common ffacilities
iliti –

• Admin Building / Clinic

• Kitchen / Dining

• Wet Mess and

Recreation

• Construction
contractors to provide
own accommodation at
drill camp
Surface Vehicles & Equipment

43
Off-Site Infrastructure

• In-country
– Future connection to grid (full scale)
– Concentrate handling at Isaka (railhead)
– Concentrate storage
g and handling g facilities in Dar es Salaam
• Off-shore
– Concentrate storage
g and handling g facilities ((Port of Q
Quebec))
– Concentrate-receiving facilities (Canada smelter)

44
 TANZANIA
INFRASTRUCTURE

45
Power Supply to Kabanga

Challenges Ahead

– Generation Capacity
• Additional generation capacity is required

– Transmission Constraint
• Reinforcement of Iringa-Singida-Shinyanga (800km line) –
funding imminent

– Construction of Bulyanhulu-Nyakahura line

• Funding for the transmission line

46
TANESCO System

Iringa-Singida-Shinyanga Bulyanhulu-Nyakahura Nyakahura-Kabanga

47
Transportation

Challenges Ahead
– Significant increase in road traffic
• Maintenance
• Safety,
y, noise,, dust

– Rail network
• Poor condition – requires huge investment in track, locos,
wagons
• Previously privatised (RITES concession) but now self-
self
managed
• Proposed upgrade/extension to Rwanda and Burundi

– Port operations
• Significant delays in both bulk and container handling in Dar
• Shortage of land for handling facilities
48
Rwanda/Burundi Link

Kigali
Bugesera

Rusumo
Ruvubu R. Keza
Nyabikere

Gitega Muremera

Waga Mukanda
Isaka
Musongati

Tabora

Dodoma

Dar es Salaam

Morogoro

49 16.03.2009
Rwanda/Burundi Link

Kigali

Bugesera

Rusumo

Keza
R
Ruvubu R.

Nyabikere Muremera

Gitega
Mukanda
Waga

Isaka
Musongati
50 16.03.2009
Transportation Overview

Kabanga

340k
340km

980km

17,340km

1,200km
,

Total distance 19,860km

19 860km
51
Concentrate Bag Handling

Ship loading bags of nickel sulphide concentrate

52
HUMAN RESOURCES

53
Challenges

• Very small skilled resource pool

– short history of mining
– small number of mines
– no other base metal mines
• Education levels generally poor
• “Magpie”
Magpie mentality
• Still some security issues (proximity to Burundi)

54
Training and Development

• Internal
– Pre-employment
Pre employment training for local employment pool
– Integrated succession planning and training
– Dedicated training
g department
p
– Basic training centre with multiple computers and on-line access
already in place
– On-line
O li ttraining
i i and d simulators
i l t
– Developmental work
assignments
g

55
Training and Development

• External
– Training assignment to parent company operations
– Partnering with Tanzanian and international training institutions
– Training
gpprogrammes
g hosted in local communities
– Support through scholarships, co-op programs, summer jobs,
providing guest instructors, sponsoring chairs, projects, etc.
– Partner
P t with
ith other
th mining
i i companies i tot supportt training
t i i initiatives
i iti ti

56
RESETTLEMENT

57
Resettlement Principles

• Approximately 300households
• Guiding principles
– Resettlement will be avoided or minimized to the extent possible.
– Systematic consultation with affected communities
– Households being resettled will enjoy improved socioeconomic
conditions
– Compensation will be fair and equitable
– A monitoring and grievance
procedure will be implemented

58
Resettlement Map

Homesteads on Project Site

0 2.0km

Potential Mine
N LEGEND
Impact Footprint
Area
Si ifi
Significant
t Sit
Sites within
ithi Mine
Mi Area
A

Homesteads

Mine Infrastructure Graves

Area Spiritual Sites

Other Features

Mine Impact Area

Mine Infrastructure Area

Pipeline (water)

Roads

Tailings Dam Pathways

Water
Pipeline Area
Homesteads Outside
Mine Footprint Area

59
Potential Relocation Sites

• 22 potential sites identified through the RWG process

• Majority of sites are within 10km of mine impact area

60
Path Forward

• 2011
– complete approvals process (EIS
(EIS, SML
SML, MDA
MDA, funding)
– carry out essential engineering
• H1 2012
– Resettlement activities
– Complete
p detailed engineering
g g
• Mid 2012
– Commence construction

61
Potential Relocation Sites

62