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V W HILLS MINERAL PROCESSING CONSULTING CK 9814933823 P.O, BOX 12012, STELLENBOSCH, 7613, REPUBLIC OF SOUTH AFRICA TEL: — 27218878510 FAX TRANSMISSION FAX: 2721 8878510 CELL: 27 82493 6837 EMAIL: wwhills@iafrica.com TO: Ariel Resources Ltd FAX No: 09 506 220 4274 ATT: _ Bill Bennett cc: Rick Skelton FROM: Vic Hills DATE: 5 August, 1997 TIME: 8:31 PM Number of pages including cover sheet: 5 Subject: Queries Following Site Visit Bill, Further to our site visit, {have some specific queries that 1 would appreciate further larity on. 1. Mill Capacity T have calculated the mill capacity using the Bond formula and found it to be 495 tons per day on primary ore. ‘The calculation and assumptions used follow: Feed size (80% passing) = 9500 1 ( %/g inch ) Product size (80% passing) = ap Primary ore work index. = 14.7 kWh/ short ton = 16.2 kWh/t Then, Energy Requirement = 16,2 x [ 10/SQRT(74) - 10/SQRT(9500)] - 17.1 Wht Installed Mill Power = 440+ 700hp Useful Mill Power (95%) ~ 522.5 hp = 392 kW Then, Mill Capacity - 3921741 = 22.9 th @90% mill utilisation == = 495 vd Similarly, for a blend of 33% oxide and 67% primary ore, the mill capacity is calculated to be 350 tons per day. Teed size (80% passing) * 9500 pw (4h inl) 5 Product size (80% passing) = 4) h Primary ore work index. © = ‘14,7 KWh/ short ton Oxide ore work index i 10.0 kWh/ short ton » Combined work index - 0.67 x 14.7 + 0.33 x 10.0 - 13.2 kWh’short ton * 14.5 kWh/t Then, Energy Requirement ~ 14,5 x [ 10/SQRT(74) - 10/SQRT(9500)} - 15.4 kWhit Installed Mill Power = 350 + 200 hp Usefull Mill Power (95%) = 522.5 hp = 392 kW ‘Then, Mill Capacity * 392/15.4 = 25.5 th @ 90% mill utilisation = 550 vd These calculations are not supported by your plant test, where an equivalent of 770 tons por day was prooossed over u two hour period. Would you please sane 00 CUE ARRLAYHEAIEE LDL we ell oe way Bl lla eee have exirted at the time of the tect. 2. Operuting Costs Jorge supplied me with a schedule of Matapalo manpower. I did not request rates of salary, which are now required to construct a more complete cost model Would you please supply the missing information in the following table and supply translations for the Spanish job designations. Wa 62-90 soroues TSMVAR ]o TEMAS JO [ers |rvesozJoror yarezar ]ieo _ jeseoar coer re1ee Ta. iaaTvae iBNWAS wsmvae} 2 | ianawas| 2 fiantvas| —¢fooo fo seganug MON] TABLE 1: Manpower Schedyle ‘OPERATING PERSONNEL Designation | Numberof | Salary ‘Additional Total Persons Company Cost Contribution | To Company | Calonesimntty | Colonesémnth | Calnnesimnth ‘Staff Plant Manager T Foreman 7) 2 Bay Me Shift Operators Supervisor [acs tae Stipping 245 P/4 Lamero 356 Driver Lehx- 26% P/ ‘Carbon Movement Carbon Movement 2 I Various ‘Enearg. De Lamas T 240%, Chapeador z DAS 0 4 Labourer | £3 Z3CRH ‘Soldador 7 Asst, Soldador 2 ‘AUXILLIARY SERVICES PERSONNEL — Security Chief 7 Assistant 1 eee [Watchman 9 Chief \; 7 WX Assistant Ciel 1 404 Pd ‘Fundidor es continued Electrical Workshop Chil 7 ‘Assistant T Diver ( i Fneargado' = { ‘Miscellneous 1 ‘TOTAL ol From a schedule of costs supplied by Jorge, 1 have compiled a basic cost model to atimate processing costs for a CIP operation al various tonnages. This is shown fn Table 2. Would you please comment on the assumed fixed cost component Would you also please provide operating cost estimates forthe new crusher plant te woll eo the Innovat plant at the tonnages indicated, showing assumed power, abour and reagents as appropriate. 3, CLs Innovat received your fax of 3 August, thank you very much. From our discussions if 18 Lkar that the capital cost of the Innovat is estimated at $1 750 per Ud capacity for the Innovat itself plus $500 per vd capacity for associated infrastructure. Would you please provide the basis on which the CIP capex of $9 075 000 is estimated, My understanding is that the capex of $450 000 for the expansion of the Innovat pilot plant in Phase J, largely provides for assooiated CIP capacity 4 teas slimes. Ti thig ease, the Innovat would have a capacity of 225 Uday based on 36 hours Tesidence time and, in addition, the CIP would have a capacity of 35 Uday. Is this correct? 4, Innovat Tst Report Finally, on closer inspection, the test reports that 1 have deal largely with bottle toll leeches. Do you have reports on the pulsed column Teaches and on the Innovat runs themselves. If $0, would it be possible to fax copics of these. ‘Thanks very much. Regards VWHILLS URLS PHONE NO. : O21 SB7EE10 us. W HILLS MINERAL PROCESSING CONSULTING CK 9549335/23 P.O. BOX 12012, STELLENBOSCH, 7613, REPUBLIC OF SOUTH AFRICA TEL: — 27.21 887 8510 00 2721 887 8510 ~ CELL: — 27 82 493 6837 S® EMAIL. ywhills@iafrien.com rh FAX TRANSMISSION on).27 2) 983 Ariel Resources Ltd FAX No: 06 $06 220 4274 Bill Bennett CO: Rick Skelton Vic Hills 11 August, 1997 YIME: 9:87PM Number of pages Including cover shect: 2 fe ___ Subject: Queries Following =omme Priot to my fay of » August 1997, | was reviewing the existing elution capacity versus future requirements, which gave rise to the information requested. Since then, I ha: giving further thought to the relevance of the cusbon columns on the thicke: In order to clarify therr performance. it would be anprociated if you would please the information requested below beze silver gia.'es are not available please ignore would also appreciate your thouyhis gn the benefits or otherwise of the carbon rol Bose Cat wto: Tm Feeds: 3507) 360.9) Eaarmey/yig 2 20.62% For Carbon In Solution Coic may © Proportion of gold reco ced via this circuit ® Solution Flow Rete, cubiomette’hos, 3 4/8 © Solution Head Grade; gram(Au)/cubic metre 0-54 gram (Agy'eubic mete 422 © Solution Tail Grade, graun(Aul/cubic metre 0.40 _ gram (Ag) cubic metre 2.80 * Loaded carbon value, grain(Av)’ metric tor LA Sieur ewe facinn gr Ag) metric ton i G Sluled carbon value, gram(Auyinetri¢ ton | © 48 Pare Fina gram iag me won) Prorjenio de Meera * Any other carbon arslutin pots avaiable, OC y CIP a Nem: EL Caagen DE Codunnas Se ADMINS A 506 2968025 Pe. PHONE WO. : OO1 SS7EEIO For Carbon In Pulp Plant «Proportion of gold recovered via this circuit PulpFlow Rate 25464 M3/Hown. Liquid/ Solids Ratio 46274 Head Grade (Solution), gram(Auy'eubicmere 240 gram(Agyfcubic mete Se BD Hoad Grade (Solids), gram(Au)!meticton =. O00 gram (Ag) metricton = 5.00 Tail Grade (Solution), gram(Auy/ cubic mene 0-03 M99. 68,9 6ifein 2 OFA Fine grim (Apy cubic mere 0-8 © Tail Grade (Solids), gram(Au)! metricton 2 SO gram (Agy metricton 3» 3! Loaded carbon value, gram(An)’ meftie ton eo da Sere Fi nal gram (Ag)! metric ton Pro : jena Me2zchA Eluted carbon valuc, —_gram(Au)/ metric ton rt ud ctcycr?. grain (Ag)! metric ton Any other carbon or solution profiles available 1 would also be interested to know whether the current loaded carbon values are 1 achievable, or whether they are kept low by management decision to production targets 42 Tepfhexar=' Se Trews PeopeTAdo lostaviR OS Coluynas Para AmmpLincioe Peaura DE 225m hx Regards hE, 2.13 W ALTO. VWALs ‘Thanks very much Co qyeecls Gu CHPY Dan les Sidviewres Valores ee Lee Loaded CarBow Valve From dy fowrnic Tm + 1 Green M3 /merric Ton: 3555 - FELTED Congow Valse gaom Wu /merrie Toy: 242 rs Ne icy LD MONE NO. Pug. 96 1997 La:4ser VW HILLS MINERAL PROCESSING CONSULTING eR aS49NIEDN P.O BOX 12012, STELLENBOSCH, 7613, REPUBLIC OF SOUTH AFRICA VEL: 2721 8878510 FAX TRANSMISSION FAX: 2721 8878510 CEI 27 82 493 6837 EMAIL: Ariel Resources Ld FAX No: 09 506 220 4274 Bill Bennett CG: Rick Skelton Vie Hills 6 August, 1997 TIME: 10:38 PM Number of pages including cover sheet: 2 . ______ Subject: Querles Following Site Visit Bill, Thank you Jor your prompt replies to iny fax of yesterday A few more points have cropped up in the interim | hope you don’t mind me forwarding them as they erise but \with the time difference it seems the best way ta hacuile queries 1 In confipning the existing elution capacity, | have found some inconsistencies in my notes. In one place } have gold plus silver loadings of 300 to 380 oz/st and in another, gold

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