LEEUWPOORT GOLD MINING PROJECT

PROJECT INVESTMENT: US$46.44 million

Cradle Gold Mining (Pty) Ltd

PROJECT OVERVIEW

Located on the East Rand Goldfield of Witwatersrand Basin, South Africa, the Leeuwpoort Gold Mining Project is a shallow resource, low risk, low capex, high margin and quick cash generative, unique brownfield project under development by Cradle Gold Mining.

The project site is located about 20 km east of Johannesburg, on the old ERPM mine site, now under ownership by Cradle Gold Mining.

Geological modeling of existing historical data indicates a target resource potentially exceeding 1.4M oz of gold on the Kimberley Reef formation with an estimated run of mine (ROM) grade of around 4.64 g/t.

Phase I of the project constitute resource confirmatory drilling to produce a DFS to validate the existing extensive historical data for compliance with SAMREC/ JORC 12 codes. This requires an initial investment of US$6.5m to undertake and will be completed under 24 months, and in the process creating a project value of US$357m.

Phase II is the development and construction phase that takes the project into production and is capitalised at an investment of US$37m. The first annual profit of US$48,7m will be declared in Y3 with a value uplift to US$480m (at PE of 10) created.

By Year 3 the project will have reached steady state production at a Nett Profit of ~ US$125m per annum.

Projected future values are based on progressing the project up the value curve toward a future stock exchange listing (IPO).

Phase III – is the steady state production phase, and the Leeuwpoort underground mining project is estimated to produce 86,000 ounces (oz) of gold a year at a steady state from the fourth year for an 8-year period. Average Free Cash Flow per year is estimated to be US$43m over the life of mine (LOM). However, Average Free Cash Flow per year is estimated to be US$67m at steady state from year 6 to year 12 of operations.

Locality Map

The “phased-approach” has been adopted as a proven business model to “de-risk” the project and to create value at each stage, thereby demonstrating economic robustness and viability which warrants further investment from phase to phase.

Fig. 1: Mining method used will be conventional stoping and cleaning will be done through underground loading and haulage as shown above.

TENEMENTS OWNED BY CRADLE GOLD MINING

FILES DOWNLOAD

Leeuwpoort Gold Teaser document

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THE WITWATERSRAND GOLD BASIN

The Witwatersrand (Wits) basin is the largest goldfield in the world and the Witwatersrand gold mines combined have produced an estimated one-third of the world's total mined gold ever produced to date. Production from the basin has come from more than 150 mines which have extracted over 4.5 Gt of ore to yield more than 42 000 t of Au at an average grade of 9.3 g/t Au. These figures relate to a 100year period from 1887 to 1987.

The following article published on May 3rd, 2022, in African Mining journal, provides a good argument that there is still much more gold on the Wits basin.

HAS THE CITY OF GOLD STILL GOT LUSTURE?