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Mintails owns the rights to process and extract gold, uranium and sulphuric acid from extensive tailings resources located on the West and East Rand regions of South Africa's historic Witwatersrand Basin.  Mintails controls these rights in respect of over 330 million tonnes of slimes, sands and rock tailings materials, mainly located on South Africa's historic West Rand and from its 50% joint venture share in over 1.5 billion tonnes of slime tailing materials located on the East Rand.

COMPANY HISTORY

West Rand Gold Project

Mintails completed its initial capital raising of $12 million on 19 December 2005 and subsequently re-listed on the Australian Stock Exchange on 23 December 2005. The Company is an Australian listed public company with management and operations in South Africa.

The initial funds were raised for the purchase of the West Rand Gold Project, a gold tailings processing project with significant tailings resources approximately 70 kms outside Johannesburg, South Africa. The funds were applied to financing the refurbishment of the Mogale gold plant which allowed for re-commencement of gold recovery from the tailings dumps located on the West Rand goldfield.

The West Rand Gold Project is a regional gold and potential uranium and sulphuric acid play. It was planned that once production was established the Company would significantly increase the scale of activities through a Stage 2 upgrade and expansion of the Mogale operations. This was to be accomplished by raising additional funds (estimated at $50million at the time) to construct a second leach circuit and beneficiation plant to substantially boost both production and gold recoveries as well as to pursue other projects in South Africa of a similar size and nature.

Skeat Gold Mining Merger

In August 2006 the Mintails management entered discussions with Skeat Gold Mining (Pty) Ltd (SGM). SGM owned and operated one of the largest fleets of mining and earthmoving plant and equipment in Africa. SGM also owned and operated the HVH Gold (Proprietary) Ltd (HVH) heap leach operation on the East Rand and had acquired a decommissioned gold plant on the East Rand named East Daggafontein. SGM also secured an option to purchase another far more substantial plant, Brakpan Plant. Together these two plants formed the largest tailings treatment operation in the world; the former Anglogold-Ashanti owned ERGO (East Rand Gold and Uranium Operation).

SGM had acquired or held under option very substantial assets and infrastructure but held a relatively small hard rock gold tailings resource, whilst Mintails had a very substantial resource but only a limited capacity gold plant.  Accordingly there was a natural fit for the two companies to merge.

On 11 December 2006, shareholders of Mintails approved the board's recommendation to complete a merger with SGM.

Major benefits arising from the merger included;

• the Company's existing plans to upgrade capacity on the West Rand Gold Project would now be achieved through the utilisation of the two ERGO plants together with the SGM equipment and fleet assets;
• the Company could immediately increase production as well as diversifying its revenue base through the acquisition of the heap leaching operation operated by HVH;
• the Company acquired the experience and expertise of SGM's personnel which it anticipated would be invaluable in the development of WERGO (the upgrade in capacity on the West Rand);
• the Company acquired land and equipment assets surplus to the needs of the combined operations, which could be available in the longer term for realisation and this could provide significant cashflow during the construction and build up phase.

East Rand Operations and Expansion Focus

During the course of the following two years the Company integrated the operations acquired from SGM and raised funds for the refurbishment of the first CIL circuit at Brakpan and the construction of a new gold and uranium plant on the West Rand named WERGO.

In November 2007 Mintails announced a massive expansion to its joint venture interests on the East Rand (Elsburg) from 171.6m tonnes to approximately 1.7 billion tonnes.  Not only did this expansion include a significant increase in the volume of tailings materials, but the scope of the ERGO JV was extended to include potential uranium and sulphur mineralisation. As part of Mintails' contribution to the expanded joint venture certain high value elements of plant and equipment which were either earmarked for relocation to the West Rand or alternatively available for sale to third parties were no longer available.  A combination of these and other extenuating factors (including the collapse in global financial markets) lead to the Company to reconsider its implementation strategy for the new West Rand facility and further construction and commissioning was suspended in October 2008.

In December 2008 Mintails announced it had signed binding heads of agreement that completed the disposal of its 50% interest in the Elsburg Gold Joint Venture to DRDGold.  The sale consideration was R333 million AUD 51.3 (ZAR6.49 - 1 AUD) cash.  Mintails retained its 50% interest in the larger ERGO Mines Joint Venture as well as its 100% interest in its West Rand assets.

This transaction was completed in the first half of April 2009 and provided the Company with an injection of capital to pursue the continued development of its remaining assets.

Mogale Gold Plant

The Mogale Gold Plant was established in 1991/2 to treat 100,000 tonnes per month of ore from open pits and 20,000 tonnes per month of ore from underground mining to produce around 6,000 ounces of gold per month. The plant was subsequently upgraded and modified to increase capacity for the processing of tailings.

After securing agreement from SAEDF and the judicial manager Mintails commenced its upgrade and recommissioning of the plant during mid January 2006 and by late April 2006 had commenced minerals processing of slimes. The Company announced its first commercial gold production for the month of July 2006.

Information with regards to Mogale current position can be obtained from the ABOUT US tab of the website.

History of ERGO

Brakpan, the first operational and producing ERGO plant, was constructed in 1976 (east of Johannesburg) and began producing by 1978. The concept of treating the old slimes dams at a rate of 1.5mtpm (18mtpa) in the mid-1970's was revolutionary. The process at that stage involved slurry pumping the slime to the plant, floating of the pyrite, transporting the pyrite to the uranium plant for uranium production and leaching pyrite passing through an acid plant to produce sulphuric acid, and a calcine that went to the gold plant.

In 1981 ERGO entered into a 50/50 JV with a small gold operation called Simmer & Jack (on Johannesburg's eastern edge). ERGO paid for the construction of Simmergo which was a ~2mtpa plant to treat nearby sand dumps and underground ore from the old mine's workings, and started producing gold in 1983.

ERGO formed another 50/50 JV in 1983, this time with East Daggafontein Mines to treat the slimes dams of East Dagga's operations. Construction of the Daggafontein plant (~15 km east of Brakpan) began in 1985 using the new CIL technology of the time and was producing by 1987.

With pressure from falling gold prices, the Simmergo plant closed in June 1992, and the Dagga plant in December 2000. The original Brakpan plant closed in January 2005, as it became uneconomic to run, at cash costs of about US$400/oz.

Because ERGO constructed both the Brakpan and Dagga plants it used commonality between the plants (which enables parts to be substituted between the plants, and means there are "almost new" spares).

ERGO treated ~914mt of sand and slime and produced ~8.3moz gold and possibly ~2,500t of uranium in its 26-year operational life. In its peak years (not all the same year) it treated 51mt of slime (1998), and produced over 460,000oz gold (1986), and ~300t of uranium (1981)

During December 2005 SGM concluded a transaction with Anglogold Ashanti to acquire the East Daggafontein Gold Plant and 150ha of the land adjacent thereto. The SGM group also entered into negotiations to acquire the Brakplan plant, with this transaction concluding in September 2006. Upon completing the merger with Mintails, Mintails provided the funding to exercise the Brakpan option. Mintails utilised its ownership in these plants to become a stakeholder in the Elsburg JV and the ERGO JV.