Current Operations

Gold mineralization in the Kalana Gold Mine is predominantly within flat dipping quartz veins that make up approximately 80% of the resource tonnage, with the remainder of the resource occurring within stockworks, situated within metasedimentary rocks centered on a diorite stock and a small amount from tailings. The quartz veins vary in thickness with an average of 1.0m. The veins lie on average 30m apart with the country rock generally unmineralized.

The Kalana gold deposit was explored in the period 1962 to 1982 by two Malian national companies with Soviet technical assistance. Extensive exploration by diamond drilling was completed over a number of years. The deepest vein intersection is 600m below surface. Production commenced in 1985 and a total of 227,000 tonnes of ore were treated at an average head grade of 13 g/t to produce 81,800 ounces of gold by August 1991 at a recovery of 86%.  The technical and financial resources were withdrawn in 1991 from the Kalana Gold Mine with the break-up of the former Soviet Union, and the mine was placed on care and maintenance.

After the acquisition by Avnel Gold, in late 2002, the existing plant and infrastructure was upgraded.  A contract was awarded to design and procure the new equipment for the gold plant and underground infrastructure.  Work commenced on site in the first quarter of 2003.

The two existing winders were upgraded with larger motors and modern control systems. New underground water pumps were installed on the 100m level. The existing underground power system was replaced with new electrical substations, power cables and distribution systems.  New mining equipment such as locomotives, winches and drilling equipment were purchased and installed.
The gold plant crusher and gravity sections were upgraded with a secondary crushing circuit, a Knelson gravity concentrator and gold room equipment. The existing ball mill was refurbished.  All existing electrical equipment was replaced with modern sub stations and distribution systems.

The capacity of the existing tailings dam was increased by raising the wall of the facility by 4 metres.  The existing air compressors were replaced with two Atlas Copco units.

Mine operation commenced in January 2004 with first gold production in March 2004.

Mining Operations

Gold production from 2004 to 2008 is shown in Table1 below.

Table 1 Kalana Gold Mine Production for 2004, 2005. 2006, 2007, 2008

Note:
In 2004 4,604 tonnes of coarse sand at 4.7 g/t are included in the total production.
In 2005 4,614 tonnes of coarse sand at 4.9 g/t are included in the total production
In 2006 3,627 tonnes of coarse sand at 5.8 /t are included in the total production

2004 Mining Operations

Mining operations were resumed by SOMIKA-SA in January 2004. Commercial production commenced in March 2004 with the first gold sale. From January to end December 2004 a total of 35,667 tonnes of ore at an average grade of 9.4 g/t Au has been milled.  From January to April ore was been taken mainly from the mining of sweepings (material left behind by the SOGEMORK mining operation) and removal of pillars.  From May 2004 stope faces were established on Vein 3 and a winze was driven below the 100 Level along Vein 1 in order to develop additional mining faces.  Stope production from Vein 1 commenced in July when the winze holed into the 135 level.  The expected increase in head grade was seen from July as the higher grade Vein 1 ore production started.  In October there was a rock fall in the Vein 1 raise and stope production was stopped until a new raise was developed to access the stope faces in Vein 1.  Mining was limited to the lower grade stopes in Vein 3 and lower grade ore development.  Ore production from Vein 1 stopes re-commenced in late December 2004.

2005 Mining Operations

During 2005, production continued on Vein 1 and Vein 3 stopes. The planned stoping method was modified to allow for permanent ore pillars to be left as rock support. Productivity was lower than planned due to inexperience of mining crews and the need to mine down dip from the 100 level. Ore blasted in the stopes is moved from below the 100 level by scraper winches up to the 100 level. Once haulages are established below the mining blocks, ore will be gravitated down to these haulages enabling productivity to increase. Water was intersected in the quartz veins and this has hampered production as it has to be pumped up to the 100 level.

Ore grades increased during the year. This was due to reduced dilution and higher gold content than forecast in the ore reserve blocks.

2006 Mining Operations

Underground mining production decreased in 2006 as mining was confined to vein 1 below the 100 level.  Mining continued down dip, with increasing distance from the 100 level. Stoping productivity improved as the mining crews gained experience with improved training from expatriate supervisors.

New ore reserve block (Vein 18 North) was planned to be mined during the second half of 2006. The stoping block was accessed by a winze from 100 level to 120 level. Water was intersected on the vein when it was exposed by development.  It was difficult to continue development on 120 level due to the water inflow and it was decided to stop development. This ore reserve block will now be mined from 150 level in late 2007.  The ore reserve block will be developed from up dip 150 to 120 level, allowing water to drain to 150 level.

Underground grades in 2006 significantly exceeded the mineral reserve grades (19.4g/t). The higher grades are attributable to higher gold content than anticipated as well as improved mining quality leading to less dilution. The ore reserve grades and reconciliation are discussed below.

The higher grades mined (29.44g/t) and higher gold recoveries (90%) resulted in the gold production exceeding forecast, despite lower tonnes mined than forecast.

2007 Mining Operations

In 2007, underground mining production increased to 35,000 tonnes ahead of the plan of 31,000 tonnes.  Stoping productivity continued to improve as the percentage of ore mined up dip increased.  This was due to the establishment of the infrastructure on 160m level at the No. 1 sub-incline shaft.

Underground grades decreased to 22.25g/t Au, although the mill head grade was 24.21g/t.  The mine call factor was 111% for the year.  The average head grade was slightly below the planned grade of 26g/t for
the year.

Gold recovery increased to 92% despite a decrease in head grade from 2006.  The improvement reflectedongoing operation improvements.  Total gold production of 25,359 ounces exceeded the plan of 23,000 ounces due to higher tonnes milled and higher gold recovery, offsetting lower grades.

2008 Mining Operations

In 2008, underground mining production increased to 48,000 tonnes, slightly below the plan of 52,000tonnes.  This was due to the increased availability of stope faces that were opened up by development on 150m and 180m levels. Production in December 2008 was negatively impacted by a failure of the winder gear box resulting in 24 days production being lost.

Underground grade decreased to 15.7g/t as lower grade mining blocks were mined.  The head grade was below the plan of 19g/t as the expected high grade Vein 18 reserve block was not exposed by development on 180m level. 

Gold recovery decreased to 88% in line with the lower head grade. Total gold production of 21,407 ounces was below the plan of 28,600 ounces due to lower head grade and lower ore milled.

Mine Development

The mine is being developed to provide sufficient exposed ore reserves to meet the planned production rate of 60,000 tonnes per annum in 2009. The majority of the ore reserves lie between 100m and 300m below surface. The existing No 1 shaft is operational down to 100m below surface and is being used to hoist ore from stoping areas that are being mined down dip from the 100m level. During 2004 and 2005 some ore reserve blocks above the 100m level were also mined.

No 2 shaft is located approximately 300m to the west of No 1 shaft. No 2 shaft was deepened to 195 metres below surface. Haulage development on the 150 and 180 levels will be developed from No 2 shaft to access new ore reserve blocks during 2006 and 2007. 

These ore reserve blocks are located 300m north and 250m south of the two shafts.
The current mine plan anticipates that in 2008 all the ore from the mine will be hoisted to surface via No 2 shaft and will be trucked to the plant located adjacent to No 1 shaft. 

Shaft Infrastructure

Access to underground workings is established through two shaft systems (referred to as No 1 Shaft and No 2 Shaft). Both shafts are 3 m in diameter.  No 1 Shaft is developed to 105 Level, a depth of 105 m, with an additional 5 m overrun. A single drum, licensed winder fitted with a 1.5 tonne capacity kibble is used for the transport of men, material and rock. The total rated hoisting capacity of the shaft system is approximately 5,000 tonnes per month. This shaft is not used for rock and men hoisting since 2007

 No 2 Shaft is currently the main production shaft. The current shaft bottom is 180 m Level (180 m below surface), There are 2 haulage levels on 150 and 180 from No 2 shaft to the ore veins located north and south of the shaft.

The ventilation of the mine workings is currently conducted with No 1 Shaft as a ventilation intake and No 2 Shaft as the exhaust shaft. Underground fans ensure adequate ventilation flow into the relevant workings.

No 1 Shaft is located at the plant and hoisted ore is fed directly to the plant feed bin. Ore is hoisted from No 2 Shaft and transported to the gold plant by truck. A conveyor has been installed to feed the ore from No 2 Shaft into the existing plant crusher system.

Mine Layout and Design

Level development is established from the shafts to access the ore bodies. Drives are developed within the ore body to expose the mineralisation on strike. Raises and winzes are then developed to expose the dip extent of the mining blocks. Each block of ground, delineated by the planned production from a single raiseline, is referred to as a stope. Individual panels are established from the raiseline  and mined on strike to the mid point between raiselines. Systematic pillars will be left to provide roof support leading to a loss of approximately 20% when converting resources into reserves.

Approximately 60% of the ore reserve to be mined in the current mine plan is located to the north of the existing underground infrastructure and between the 105 and 300 Levels. The ore between 105 and 180 Level will be accessed from No 2 Shaft. The shaft is be deepened and two additional levels (150 and 180) will be established.  

Mining Method

Stoping operations are conducted with conventional pneumatic handheld rock drills with airless. Blasted rock is scraped (with a 35 kW face winch) from the working face into strike gullies located at the bottom of each panel. A larger, 55 kW gully winch it then used to scrape the ore along the gullies. This ore is scraped directly into the hoppers via a chute arrangement, referred to as a‘chinaman chute’ or into a rock pass down to the haulage. The 1.2 tonne hoppers are trammed with 3 tonne battery locomotives to the shaft. Production blasts produce a 0.9 m to 1.2 m face advance.

Level development is conducted with a similar system as the stoping. The planned advance is 1.5 m per blast. Blasted rock is loaded using pneumatic overhead loaders (LM36-type) which load directly into the same hoppers and trammed to the shaft.
All level transport is rail bound. The hoppers are guided to the shaft and manually tipped to discharge directly into rock passes and then into the shaft loading box for hoisting to surface. A skip with a 2.5t payload is installed  in bo No 2 shaft

Geotechnical design

Based on previous and more recent underground observations, the base of oxidation appears to vary between 100 and 70 Level. No underground mining operations are planned above 70 Level. Ground conditions generally appear good below the weathered zones, with competent ground and limited need for systematic support in development ends.

Large exposed spans underground will require systematic support. In-stope support generally consists of wedged timber props. The use of in-stope pillars forms part of a detailed geotechnical investigation, following which SOMIKA reported that it has implemented the design recommendations.

Drives developed in the ore body require stability pillars up dip and down dip until stoping has been completed. Subsequent extraction of these pillars is possible (at least in part) but has not been planned.

Utilities