Gold One's Operations and their Impact on the Eastern Basin AMD Problem

1. Presentation to the Parliamentary Portfolio Committee on Water and Environmental Affairs Eastern Basin 28 June 2011

2. Operations • Gold One’s operations are situated on the East Rand and are associated with the Eastern Basin only • Gold One’s activities are not responsible for the Eastern Basin AMD problem • Modder East: • Construction of the new Modder East mine commenced in May 2006 • Commercial production was declared in December 2009 • Ramp up to full production is still on-going • Sub Nigel: • Sub Nigel Mining Company Limited was acquired by Gold One in 2006 • Assets included the Sub Nigel No. 1 Shaft, which had been on care and maintenance for many years • Mining right was granted in 2008 • Shaft was recommissioned and first ore was hoisted in January 2009

3. Steps Taken at Modder East • Modder East had the option of either utilising the existing Grootvlei infrastructure or building a new mine to access the orebody • Gold One elected to build a totally new mine at a cost of R1.1 billion that would be disconnected from the Eastern Basin and historical underground workings, rather than inherit the legacies of the past • The underground workings at Modder East are not connected, and will not at any point in time in the future be connected, to the Eastern Basin or to any historical underground workings • Modder East is therefore not impacted by the water in the Eastern Basin • All potential impacts on groundwater volumes and quality were identified and an amended Environmental Management Programme was approved in 2007 • EMP does not provide for any pumping of water • Modder East has a water use licence and is a zero discharge site • Waste rock is sold as aggregate resulting in a very small rock dump • A tailings facility has been built on the footprint of an old tailings facility to minimise the pollution plume

4. Ground Water Study Extracts from Modder East’s 2006 groundwater specialist study: • The current state of knowledge suggests that the planned Modder East Mine will have a very limited impact on this aquifer system and the nearby water resources, provided that certain important hydrogeological management principles are followed. • The most important of these is to allow the mine to flood within two years of closure. • Provided that certain water and ore management measures are put in place, no acidification in the mine will occur during the operational and flooding phases.

5. Steps taken at Sub Nigel • Number 1 Shaft at Sub Nigel is currently connected to the historical underground workings of the Eastern Basin • The shaft was recommissioned in 2008/2009 at a cost of R29 million to operate primarily as an underground training school • Given the shaft’s connection to historical underground workings, all mining to date has been conducted above the water in the Eastern Basin to prevent any new contribution from Sub Nigel to the Eastern Basin’s water level • Gold One has ensured that no surface water has been introduced to the underground workings and no water has been or is pumped to surface • Sub Nigel does not have a tailings or a waste rock dump – ore is treated at Modder East • Sub Nigel’s current underground workings are under threat by reason of the cessation of pumping at Grootvlei • Gold One is considering plugging the shaft and mining a reef above the plug • New workings will not connect to historical underground workings, thus eliminating any future effect from the operation on AMD in the Eastern Basin

6. Discussion www.gold1.co.za