sepfluor nfm project development and objectives
TRANSCRIPT
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Johan BritsProject Director NokengProject Construction and Progress
Kevin DabinettGeneral Manager NokengOperational Readiness
Rob WagnerCEO
October 2018
SEPFLUOR NFM PROJECT DEVELOPMENT AND
OBJECTIVES
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DISCLAIMER
16 October 2018SEPFLUOR NFM PROJECT DEVELOPMENT AND
OBJECTIVES2
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The presentation contains reference to certain intentions, expectations and plans of SepFluor. Those intentions, expectations and plans may or may
not be achieved. They are based on certain assumptions which may not be met or on which views may differ. The performance and operations of
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implied, is made by SepFluor, its subsidiaries, directors, officers, employees, agents, advisers or consultants that any intentions, expectations or plans
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FACTS AND LOCATION
16 October 20183
Sepfluor is a privately held company whose primary mineral asset is the Nokeng Fluorspar Mine in Gauteng, South Africa (100% owned)
• Located ±80km north of Pretoria, adjacent to the Vergenoeg mine
• Previously explored by Gold Fields in the 1970s and BHP Billiton in early 2000’s
• Two high quality adjacent haematite-fluorspar deposits being Plattekop and Outwash Fan with a 12.18Mt high quality SAMREC-compliant reserve
• All regulatory and mining licence approvals in place
• Mining right area: 1 309ha
• Mine financing concluded (June 2017) and construction commenced July 2017
• Planned production of 180 000tpa acidspar and 30 000tpa metspar to commence in February 2019
NFM PROJECT DEVELOPMENT
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PROCESS DEVELOPMENT
16 October 20184
Geology
• Lebowa Granite Suite of the Bushveld Complex - Volcanogenic type forming intrusive pipe and
extrusive strati form deposits. The eroded volcano resulted in fluorspar hematite deposits:
• Plattekop: A channel lag feeder to the Vergenoeg vent, is a bedded to finely laminated 20 m thick
layer of fluorspar-hematite occuring south of the Vergenoeg Pipe
• Outwash Fan: A strati-form fluorspar deposit occurring 3 km to the south of Plattekop, formed as a
result of sedimentary deposition after erosion of the pyroclastic rock suite.
Mineralogy
• XRD analysis - presence of fluorspar; hematite and REE’s phases
• SEM analysis - fluorspar coarse grained and the fine fraction intergrown with hematite
• MLA analysis - identified a group of arsenic bearing minerals as fully liberated and associated with
iron sulphides
• PIXE analysis – arsenic association with iron sulphide confirmed & coined at Nokeng as arsenised-
pyrite
Challenges
• Plant feed consistency due to sourcing from two distinct orebodies
• Separation of fine intergrown fluorspar from hematite
• Maximising recovery at product specification of >97,2% CaF2
• Minimising entrained iron in product to <1%FeO
NFM PROJECT DEVELOPMENT
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PROCESS DEVELOPMENT
16 October 20185
Controls
• Design with blending stockpile, breakage along grain boundaries, flotation at
elevated temperature, multi stage regrinding and wet magnetic separation
• Modern and proven equipment selection
• Back-up capability of Metspar circuit
• Product storage and blending capacity
• Quick analytical turnaround from on-site analytical laboratory
PROJECT DEVELOPMENT AND CONSTRUCTION
Open pit mining
Crushing &
screening
Multi-stage
grinding
Flotation –fluorspar
concentration
Tailings
storage
facility
Fluorspar concentrate for shipping
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PHASED PROJECT EXECUTION
16 October 20186
Mine planning and pit
establishment
Utility supply
Power
Water
Process plant design and
erection
Permit and Environmental
compliance
Tailings storage facility
Training and operational readiness
Shallow resources
Feasibilities
Permitting and environmental considerations
Test work and process
definition
Exploration
Project Funding
Nokeng Mine Project
20 months
R1250m Direct Costs
180ktpa Acidspar
30ktpa Metspar
Community/
Stakeholder engagement
Product to
market
February 2019
Pre Construction
Construction
outputs
Legend:
NFM PROJECT DEVELOPMENT
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CONSTRUCTION PROGRESS
16 October 20187
Statistics
* Updated 8 Oct 2018
Challenges experienced
• Finalising the complex funding agreements
• Remote location concrete supplies
• Variable Geo-Tech considerations
• Concurrent multiple structural steel fabricators
• Delays with construction of electricity supply
• Local community expectations and demands
Design Status* Units
Concrete 10,291 9,332 m3
Steel 1,343 1,018 t
Piping 17,315 6,505 m
Cabling 87,545 18,035 m
Racking 4,380 2,651 m
Total construction personnel: 820
Man-hours worked to date: 1.5mill
LTI’s to date: 1
NFM PROJECT DEVELOPMENT
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MILESTONES AND BUDGET
16 October 20188
Programme – 20 months (608 days)
• On track to achieve completion and handover by 7 Feb 2019
• Expenditure to date: ≈65.6% of direct costs expended to date
• Expenditure within budgeted capital costs
NFM PROJECT DEVELOPMENT
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MINE SITE JULY 2017
9 16 October 2018NFM PROJECT DEVELOPMENT
For reference Initial
site clearance
commencing in July
2017
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OPERATIONAL READINESS
16 October 2018OPERATIONAL READINESS 12
So what is it?
• A good definition of operational readiness (OR) is “the capability to efficiently
deploy, operate, and maintain the systems and procedures” required to effectively
operate a new asset.
• Operation Readiness includes the management practices for performing pre-start-
up reviews, identifies organisational tasks, roles and responsibilities including but
not limited to the following:
• Recruitment of a new workforce
• Training
• Setting up stores systems and stocks
• Maintenance systems
• Key systems
• Basic procedures and safe operating practices
• Alignment of all processes including outsourced contracting
• On and off site logistics
• Social responsibilities to surrounding Communities
?
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OPERATIONAL READINESS
16 October 2018OPERATIONAL READINESS 13
Why is it necessary?
• Operational Readiness (OR) is often neglected because OR activities are usually
not part of the project lifecycle. The job of the project manager and of the project
team is essentially completed when the project is “Handed Over”. At this point
operational management takes over.
• This takeover represents the biggest risk to the successful conclusion/transition of
the project into continuous operations. Lenders, shareholders and sponsors regard
this transition as the most risky period for a project as it is the key transition from
the theory of a project to reality and has the potential to destroy significant value.
“it is often the 'people' side of delivering the operation that
presents the greatest challenge”
“up to 30% of the potential value of a major project can be
destroyed as a result of operational readiness failure”Deloitte case studies
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CRITICAL ISSUES
16 October 2018OPERATIONAL READINESS 14
There are numerous examples of these OR failures including some in the Fluorspar space which have created significant “value destruction” and huge “credibility gaps”
To this end Nokeng has devoted significant focus on OR and achieving a competent startup in a fluid project environment. We have:
• Set up a dedicated OR process run in parallel with the Project Construction Management
• Outsourced several process packages to expert providers to simplify management focus
• Identified key positions and skills and recruited early
• Engaged communities from an early stage and in a holistic manner to create buy in and involvement
• Initiated key training initiatives well in advance of production start
• Identified and commenced implementation of key systems well in advance of handover
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OUTSOURCING
16 October 2018OPERATIONAL READINESS 15
The following has been outsourced or falls outside the direct management activities of
the mine operational team simplifying and focusing management inputs
• Marketing and Sales (Sepfluor)
• Mining to Andru Mining
• Initiated 6mths ahead of startup
• Open both orebodies
• Complete infrastructure development
• Steam generation and Boiler operation to Dryden
• Coal supply
• Permitting
• Specialized technical maintenance and operation
• Metspar briquetting and plant design and build to Picko
• Binder optimization
• Plant design and construction
• Expert operator
• Logistics of final product shipping from mine to port to Traxys
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RECRUITMENT AND TRAINING
16 October 2018OPERATIONAL READINESS 16
A sequence of recruitment was commenced in late 2016 to:
• Identify key positions and skills
• Phase recruitment around key technical and management skills
• Integrate new recruits in the project construction phase
• Cascade recruitment from management down over 18mths
• Develop key sourcing networks in the mining /process field as well as into the neighboring communities
• For short term construction based employment
• Long term permanent employment
• Enforce similar amongst our outsourced providers
• Develop training mechanisms to ensure wide effective skills base
• Built and outsourced a Community based engineering skills training Centre (year ahead of operations)
• Recruited key technical/management skills to mentor new employees
• Retain core industry expertise as mentor/coach’s 6 months post handover (Minopex)
• Pre-screen new employees through community/construction engagement over project timeframe.
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SYSTEMS
16 October 2018OPERATIONAL READINESS 17
Systems design and implementation is very time consuming and it was important to
decide and commence early with this.
• Early decision to implement integrate ISO management systems for Quality,
Environment and Safety. Implementation commenced late 2017 and first audit will be
targeted for late 2019. Well progressed and forms core of management systems.
• Development of Codes of Practice, operating procedures well advanced
• Issue with OEM information late
• Legal/Safety compliance a significant driver
• ERP system selected in 2017 and live from Mid September 2018
• Development of IT backbone to support the above completed and site office “Live”
• Key stores inventories identified and all long lead orders placed
• Key supply of utilities concluded
• New Eskom power supply complete and to be commissioned November
• Water supply wellfield built, tested and operational
• Potable water supply operational
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OTHER OPERATIONAL READINESS ISSUES
16 October 2018OPERATIONAL READINESS 18
Environmental
• Offshore shareholders and lenders with global expectations
• Early establishment of systems for statutory compliance. Already being managed
and monitored
• Establishment of baselines and history vital
• Access to expert independent contractors
Community
• Critical to build relationships built on deliveries and trust over time. Years in the
making
• Nokeng complex with multiple communities and municipalities and widely
dispersed
• People poor with massive real and politically driven expectations
• Both formal and informal communication networks critical (developed over the last
5 years)
• Need to maintain and grow these relationships through the startup into operations
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TECHNICAL AND COMMISSIONING
16 October 2018OPERATIONAL READINESS 19
The plant is technically complex and given a green workforce even with significant
experience it will take time for them to understand the intricacies. To accomplish this:
• Mine operations staff relocated to site with effect from 3 September 2018
• All key operational staff will be in employ by October 2018
• The balance of the new employees recruitment being some maintenance staff
will be complete by January 2019
• Plant commissioning will commence in the concentrator front end from late
September and run though to Performance Completion tests in late January/early
February 2019 and during this period
• Mine staff will assist with operation of all equipment
• Be part of the commissioning process
• Punch list defects with the EPC Contractor
• Perform any maintenance required during this phase
• Undergo any OEM specific training required on key equipment
• Learn the process flows and key measurables
They will be competent and effective by handover
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CONCLUSION
16 October 2018OPERATIONAL READINESS 20
The secret is
Start Early And then
Plan Review, Re-plan, Review, …………
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STRATEGIC GOALS AND PROGRESS
21 16 October 2018SEPFLUOR OBJECTIVES
Vertical Integration of the Nokeng and Wallmannsthal Mines with a Fluorochemicals plant is value accretive and provides significant returns
Welgelegen / Welgevonden
Kruidfontein
Fluorochemical
beneficiation plant
Nokeng
North West
Wallmannsthal
Limpopo
Mpumalanga
Gauteng
Free StateKwaZulu-Natal
Fluorspar deposit / mine
Beneficiation plant▪ High quality reserve – 12.2Mt; 19-year
life of mine (“LOM”) at 630,000 run-of-
mine (“ROM”) tonnes per annum (“tpa”)
▪ High grade – 27% CaF overall; 42% for2
Plattekop
▪ Quality deposit – low phosphorus, low
arsenic
▪ Cheap to mine – Open pit; Virtually no
overburden; low cost of production
▪ Concentrator – 180,000 tpa acidspar
and 30,000 tpa metspar fluorspar
1. Nokeng
▪ High quality chemical products
generated at low cost
▪ Anhydrous hydrogen fluoride (AHF) –
60,000 tpa (19 000 tpa surplus)
▪ Anhydrite (CaSO4) – 216,000 tpa
▪ Aluminium fluoride (AIF3) – low silica;
60,000 tpa
▪ 12,000 tpa metspar
▪ State of the art technology – Licence
agreement concluded with CHENCO
GmbH
2. SepChem
▪ High tonnage estimated resource –
One deposit of 30Mt at 15-20% CaF2
and a second deposit of 2.8Mt at 28%
CaF2 (early exploration)
▪ Cheap to mine – Open pit; low cost of
production
▪ Prospect permit granted in 2018 with
100% ownership. Exploration program
planning In progress
4. Kruidfontein
▪ Early exploration
▪ Grade – 22% CaF2
5. Welgelegen / Welgevonden
Phase I development
Phase II development
▪ Quality resource – 7.9Mt (deposit open
at depth); 16 year LOM
▪ High grade – 46% CaF
▪
▪
2
Quality deposit – low arsenic, low silica
Cheap to mine – Open pit; low cost of
production
▪ Pre-feasibility Study – Completed July
2013 (2018 update in progress)
▪ Mining Licence granted 2018
▪ 100,000 tpa acidspar and 15,000 tpa
metspar
3. Wallmannsthal
Future exploration
SepFluor’s key strategic Pillars:
• Complete construction, commission and
operate the Nokeng Mine (early 2019)
• In progress and athough tight on time
and budget currently
• Complete the DFS for the Wallmannsthal
Mine and commence construction.
(4Q2020)
• Key land purchases being executed
• Further reserve definition planned
• Mining Right and Water Use license
obtained
• Develop a significant fluorspar resource
base (ongoing)
• Key geotechnical and early
exploration work completed on Wilton
Deposit on Nokeng site. Drilling
program pending regulatory
environmental approval
• Prospect permit granted for
Kruidfontein target. 5 year exploration
program planned
• New 2018 BFS and Market Study completed for downstream
Aluminium Tri-Fluoride plant with positive outcomes. Key
financing initiatives formally commenced with a view to
concluding these in order to be ready to commence construction
by late 2H2019
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CONTACTS
16 October 201822
Nokeng Fluorspar Mine (RF)(Pty) Ltd
Tel: +27 (12) 622-9400 (Switchboard)
R&A Strategic Communications
Tel: +27 11 880 3924
Rob Wagner
Chief Executive Officer
Email: [email protected]
Olwen Auret
Email: [email protected]
Chris Mulder
Legal Manager
Email: [email protected]
Jolandi Nel
Public Relations Officer
Email: [email protected]
Johan Brits
Project Director
Email: [email protected]
Kevin Dabinett
General Manager Nokeng
Email: [email protected]
SEPFLUOR NFM PROJECT DEVELOPMENT AND
OBJECTIVES