KAT Exploration Inc (KATX)

[Kadin]

Bibiani Geotechnical Considerations

Historically there have been nine multi bench scale slope failures within the Bibiani main pit, six on the west wall and three on the east wall. Almost all the failures occurred either within of immediately after the high rainfall season of August to November, suggesting that the stability of the rock mass is sensitive to raised groundwater / phreatic surfaces in and around the pit.

On the west wall three failures were in the oxidised zone and three in fresh rock. On the east wall all three failures were in fresh rock.

An assessment of the underlying reasons and contributing factors to the slope failures concluded that the failure triggers and mechanisms predominantly centred around structural stability controlled by shear planes, raised perched phreatic surfaces and slope crest unloading promoting toppling failure.

An additional situation arises where there has been interaction between structure, slope face and underground voids, and account needs to be taken of the location of previously mined stopes, especially near to the ramp system.

A spatial review indicates that the vast majority of the known stopes, especially the large open voids, are fully contained within the design, with only a handful intersected mainly along the pit bottom axis. Some development is intersected in the west wall, which is impossible to avoid, these being predominantly cross-cuts perpendicular to the wall.

From the operational perspective the key issues were that the slope angles in the oxide material were too steep, the drainage system on the west wall was ineffective and a pit design process based on an incomplete understanding of the structural geology and extent of the shear plane systems.

In 2006 SRK carried out a Geotechnical Review of pit slope stability for a cutback of the Bibiani pit. In the process of preparing the cutback optimisation and pit design SEMS has followed the guidelines of the SRK report and incorporated worst-case slope angles.

Based on the assessment of available structural information and the history of the pit, the most geotechnically sensitive area for the cutback is considered to be the west wall. SEMS have therefore located the main haulage ramp in the east wall, and reduced the slope of the westwall. The primary rock west wall slope averages 45 degrees or less, in accordance with the SRK recommendations.

In view of the significant pre strip investment required for the cutback, and the time lapse since the 2006 SRK review, SEMS recommends that an updated Geotechnical appraisal of the current cutback design is undertaken before the project is commenced.

Material Movement and Scheduling Aspects...

As evidenced in the bench by bench material tabulation, the strip ratio in the upper benches is exceptionally high because of the past mining history and the mining rate in the first two to three years will need to be considerably higher than the later years.

A total of 54 Mbcm of waste must be removed during the course of mining, the much of it before any appreciable quantities of ore are encountered.

The scheduling strategy used in the May 2010 Technical Study was to defer waste mining as much as possible by expediting mining of ore at the southern and northern ends, and to defer commencement of the east wall cutback (adjacent to the workshops and other structures) for as long as possible. It is still considered that this strategy is valid, although it would need updating to accommodate the additional waste in the new pit.

A complete schedule would need to incorporate mining of the satellite deposits, once they become available for mine planning. It is envisaged these smaller pits would reduce the heavy pre-strip burden on early ore supply from Main Pit.

Discussions and Conclusions...

SEMS competent persons have updated the Bibiani Main Pit Ore Reserves using costs and parameters that have been revised for current conditions. The cut-off grade has reduced slightly and the overall average grade has declined 8% but the contained ounces have increased by some 30%. The value (operating cash flow) has increased to $215M at the base case gold price of $1250/oz.

The June 2011 Ore Reserve update has produced an encouraging increase in ore tonnes and ounces, creating a large pit that may be phased over a pre-strip period during which adjacent smaller satellite deposits provide mill feed.

Based on the interpretive data, further increases in gold prices should produce additional ore reserves, as depicted in table 10. However at some point of time, constraints of infrastructure, waste dumping space, existing waste dump proximities, and other potential factors may come into play.

These would need to be addressed in order to reap the benefit of continuing to expand the pit. Alternatively much of the value advantage of rising gold prices may be captured purely within the current pit design, although at the expense of increases in mill feed....

It appears they assessed the area in 2010 and the report indicates it is current as of 2011.
They may have decided the area would not be profitable for them thus dropping a 24 acre section which was 'gifted' to the people.

Optimisation Procedure...

The Datamine cost model was loaded into NPV Scheduler software for pit optimisation. A base case gold price of $1250 / ounce was assumed. Economics were run at varying gold prices to report sensitivities.

In addition, sensitivities to slopes and key costs were reported.
Optimisation was run unconstrained by surface infrastructure. The resultant pit extends over a section of the Bibiani to Sunyani road to the south, and into the mine workshop area on the east. It is typically a cutback around all walls of the existing mined out pit, with cutback widths varying from 30m, up to 100m. The implications of the proximity of the unrestricted pit to the Bibiani Old Town need to fully assessed.

Comments on the Optimised Pit...

a) Mining costs used in the open pit optimisation are based on contract mining rates for similar operations within the region. An alternative and possibly more economical mining option, yet to be evaluated, is to undertake owner mining of all / part of the works.

b) The open pit cutback encroaches upon the Bibiani to Sunyani road making it necessary to establish a diversion bypassing the affected section. Approval will be required for this.

c) A section of the south-western pit wall approaches the foot of part of the southern waste dump, which may be a limiting factor in further deepening of the southern end of the pit unless the actual dump itself can be partially moved.

d) The new pit encroaches 30 to 50 metres further upon the old mine stores and workshops and proximity to the old Bibiani town. Approval will be required from the Environmental Protection Agency in respect of the proximity of the cutback to the old Bibiani town.

http://www.nobleminres.com.au/live/wp-content/uploads/2012/01/SEMS-BIBIANI-Reserve-Update_Final_24June2011.pdf



I wonder how this translates regarding their decision and rainy season in Ghana...hm?

Of course, would could redress the knowledge gleened from a SNEY geo, Paul Abbott, who happens to be one of Kat Gold Holdings new geo's?


http://investorshub.advfn.com/boards/read_msg.aspx?message_id=74195322

The very same SNEY that promised in countless PRs that they would be off the skull and crossbones well over a year ago...uh hem...still skull and crossbones, FYI.

http://www.otcmarkets.com/stock/SNEY/quote


OR...The Engineers...Thanks B402!

http://investorshub.advfn.com/boards/replies.aspx?msg=74693451

Hopefully, the following will make an indelible impression on investor's minds.