Veremo Pig Iron Development Project

Date of acquisition:

May 2008

Location:

Eastern Bushveld, near Stoffberg, Mpumalanga Province

Shareholding and key partner:

25% Petmin, 75% Framework Investments Limited (100% subsidiary of Kermas Limited)

Commodity:

Magnetite with 42% Fe and 14% TiO₂ content

Ore body:

Titaniferous magnetite ore outcropping on surface

Reserves and Resources:

Updated SAMREC-compliant Measured Resource of 44.3Mt (previously 11.6Mt), and an Indicated Resource of 29.10Mt in the weathered zone of the ore body, which is easier to process

Project status:

Comprehensive exploration programme undertaken: 90 holes drilled equating to 6,000m; additional 40 holes of triple-core drilling, equating to 1,000m commissioned; average depth per drilling hole, 32m; 306 trenches and 15 pits excavated

Anticipated production date:

2013 - 14

Infrastructure and logistics:

Well situated, close to existing power and rail infrastructure; water supply in close proximity

Capital expenditure to date:

R50 million

Veremo is a magnetite project located in the eastern Bushveld region of South Africa. The land over which Veremo Holdings holds mineral rights includes five contiguous farms covering 1,769 hectares. This project is suitable for the production of high-quality pig iron.

The ore body forms part of Layer 21 of the well-known magnetite layers of the Bushveld Complex’s eastern limb, and is particularly well developed in the area, outcropping on the surface. The ore is characterised by iron content of 42% and titanium dioxide content of 14%.

In 2009, MSA GeoServices (Pty) Ltd designed and managed an in-fill core drilling and sampling programme as part of a geological scoping study with the aim of delineating a SAMREC-compliant Measured Resource in selected high-priority areas identified from previous drilling campaigns. In particular, the highly weathered 'cap' of Ti-magnetite Layer 21 in the so-called 'platform' areas was singled out for this exercise.

Previous analytical test work on mini-bulk samples from several deep pits has shown that the weathered material has higher FeO and substantially lower SiO₂ concentrations compared with the fresh material and might therefore not require a costly grinding/milling stage prior to pyro-metallurgical processing.

In the financial year ending June 2010, management focused on ensuring that the geological validation programme was completed. The results of the drilling programme were published in March 2010 and SAMREC-compliant Measured and Indicated Resources of 73.35 million tonnes were declared, with an Inferred Resource of 12.83 million tonnes identified of the weathered as opposed to fresh material.

During the six months to 30 June 2010, management of Veremo was transferred to Framework Investments and a steering committee was established to address the critical work streams to be delivered in the next 12 months.

View the Directors’ review on Veremo in the Annual Report 2010. (PDF – 92KB)