BUSINESS PLAN
FOR
SECTOR MINING
RESOURCES
PRIVATE LIMITED
Submitted By:
SRINIVAS YENAGANDULA
Flat 51 Tatenda Place,
6A Central Avenue,Harare
Cell: 0777 109 566 E-mail:
CERTIFICATE of QUALIFIED PERSON – YANAGANDULA SRINIVAS
I, YANAGANDULA SRINIVAS, do hereby certify that:-
1. I am a Director of SECTOR MINING RESOURCES (Pty) Ltd,Flat 51 Tatenda
Place,6A Central Avenue,Harare Cell: 0777 109 566E-mail:
2.I have graduated with a Bachelor of Mining Engineering degree from the
University of the Osmania,Hyderabad,India in 2004. In 2021 I was awarded with
a Mine Managers Certificate from the Director General of Mines Safety,India
3.I have worked as a Mining Engineer for more than 30 years with my
specialization lying within Mineral Reserve and mine management. I have
completed a number of Mineral Reserve estimations and mine plans pertaining
to various commodities, including gold,
3. I have completed a number of assessments and technical reports pertaining
to various commodities, including Gold
4. I am affiliated with the professional associations which meet all the attributes
of a Professional Association or a Self-Regulatory Professional Association
5. I was awarded in2008 with a half blasting license from zimbabwe Explosives
Department.
INFORMATION RISK
This Report was prepared by SECTOR MINING RESOURCES (Pty) Ltd (“SMR”). In the
preparation of the Report, SMR utilised information relating to operational methods
and expectations provided to them by various sources.
Where possible, SMR has verified this information from independent sources after
making due enquiry of all material issues that are required in order to comply with the
requirements SMR and its directors accept no liability for any losses arising from
reliance upon the information presented in this Report.
No warranty or guarantee, be it express or implied, is made by the authors with
respect to the completeness or accuracy of the legal aspects of this document.
OPERATIONAL RISKS
The business of mining and mineral exploration, development and production by their
nature contain significant operational risks. The business depends upon, amongst
other things, successful prospecting programmes and competent management.
Profitability and asset values can be affected by unforeseen
changes in operating circumstances and technical issues.
POLITICAL AND ECONOMIC RISK
Factors such as political and industrial disruption, currency fluctuation and interest rates could have a
impact on future operations, and potential revenue streams can also be affected by these factors. Th
majority of these factors are, and will be, beyond the control of any operating entity.
PROJECT SUMMARY
• Background and Purpose
The purpose of the business plan is to enable the acquisition and hiring of mining
equipment (Drilling Machines with compressors, Excavators, Dumpers and Wheel
loaders), so that we would be able to join the mining fraternity as a small-scale miner and
contribute to wealth and employment creation as well as foreign currency generation.
• SECTOR MINING RESOURCES Pvt LTD wish to investing on Build Stone
Mining Syndicate in shamva region for one year and also in future with Local
mining syndicates at various places for mining and processing the gold ore.
• SMR initially hiring mning equipment and plant for mining and processing the ore
and gradually purchase the land and equipment for SMR own use.
• Shareholders
The business is a Private Limited owned and run by Srinivas Yenagandula, who is the
currently main shareholder of the entity. it is being supported by the Directors who are
Srirama Gopal Yellapragada and LOCADIA these are the current directors of Sector
Mining Resources ( Private ) Limited.
• Loans & Investments
Sector Mining Resources (Private) Limited has no loans and investments with any bank.
• Startup Expenses and Capitalization
Estimated Pre-Start-up Monthly Expenses are as follows:
Site Pre-operating $2000
Expense
Office Overhead $1000
Mining works and $15000
Hiring equipment cost
Mining Permits and $1000
licenses
Land Settlement $1000
Processing cost $10,000
Pre-Operating Supplies $1000
Total $31,000
• Location & Brief Description of the business
The quantity of claims which is approximately 10 hectares and has provision to
reach 20 hectares is situated in New Brixton Xl , and the business operational is
New Brixton Xl , Brixton Farm , Shamva The provision and having a Head office in
Harare At Flat 51 Tatenda Place, 6A Central Avenue , Harare, Zimbabwe
• Market Analysis and Plan
The critical activity in gold mining is to acquire the metal for the demand is
already very high so that there is no need to worry about the gold price or the
marketing side of the product.
• All the gold produced is to be sold to Fidelity Printers and Refinery at a
price determined by the refinery. The refinery is a subsidiary of the Reserve
Bank of Zimbabwe. The current price of gold at the market is over $48/g but
we have been prudent in forecasting it in our cash flow where we have used
a low price of $44/g.
• Sales Forecasts
We have forecasted annual sales of approximately $150 000 in the 1st year.
Monthly sales will grow by an average of 5% for the first three months and
reaches a peak tonnage of approximately 1500 t. Therefore sales growth is a
function of tonnage of ore excavated.
• Expertise of Management
We have planned to engage a mining engineer on consultation basis, with
background knowledge in gold mining and having at least 5 years experience. We
also intend to consult geologists who will be working hand in hand with the
mining engineer in exploring the direction and existence of the ore in the soil. The
business advisor has an ACCA qualification and has 10 years experience in
business management. We intend to employ qualified expertise like secretary and
accountant after about 1 year, for book-keeping and accounting. Initially we will
outsource some people mentioned below in local Zimbabwe.
• Strategic Direction
Initially, in the first year the Director s (owner) shall be fully involved in the day-to-
day running of the mine and from the 2nd year onwards, ownership will be
separated from management.
• Developmental Plan
Future Investment Cost in three years
Estimated Capital Cost:
Mine land procurement $100,000
and Development cost
Vehicles,Excavators,wheello $200,000
aders, etc
Process Equipments $100,000
Office Equipments & $ 5,000
Furnishings
Total $405,000
We intent to acquire mining equipment for the extraction of the gold ore,
transportation, processing and infrastructural development of the mine. During
the first and second year of operation most of the equipment will be hired due to
capital inadequacy. Some of the mining equipment include 20 tonne excavators
which are going for $80,000 each, compressors going for about $3000 each and
also Dump trucks to ferry ore to processing plant.
Future plans include the sinking and construction of a mine shaft and a gold
processing plant, construction of roads and of houses for workers and
development of the mining community that will have emerged. The 3 year
cashflow statement shows a healthy cash surplus to implement these
developmental goals.
2.0 INTRODUCTION TO GOLD MINING OPERATIONS
The proposed 12 TPD Gold Project comprises of Brixton
Gold Mine and the Ore Processing and Beneficiation Plant.
The Gold project is an open-pit mining operation with processing of ore
as an integral part of the mines as the ore could not be sold in the
market. The ore mined out from the mines will be sent to processing
plant, where the ore will be finely grind to recover gold. The gold in
upper surface layers (10-20 meters deep) is oxidized. The deeper layers of ore
body contain gold predominantly in sulphide matrix. The oxide ore
will be mined first and will be extracted by adopting Gravity separation –
Cyanidation – Carbon in Leach – Electrolysis technique. Sulphide ore will
be mined and treated by Gravity separation – Flotation – Roasting –
Carbon in Leach – Electrolysis process. The mill tailings shall be
disposed off separately in a designated tailing dump. The tailings shall
be disposed by pumping in slurry form.
2.1 Mine Development:
Initially, several trenches and pits shall be opened and developed which shall result in
the identification of several reefs of different sizes that shall be indicated in the
geological reports that shall come out after prospecting for gold. This shall also
determine the mining methods to be implemented in the near future. Tonnes of ore
shall be stockpiled for milling and also with a view to mill after the acquisition of
appropriate milling equipment. Further exploration and mining development needs to
be undertaken to enable the project to produce effectively and profitably. Therefore,
some of the mining equipment listed below is required to kick start operations:
• A compressor for drilling*
• A jack hammer*
• Drill stills and bits*
• Electrical cables (2000m)
• Set porta pack gas bottles
• Wheelbarrows
• Protective clothing
• Fuel:-petrol, diesel and oils
• Processing chemicals such as mercury, cyanide, acids etc*
• Water pump and pipes
• A tractor to ferry ore and other materials required at the mine
• A ball and a stamp mill*
• Picks, hoes and shovels
• A jaw crusher*
• Electricity
• Movable magazine for storage of explosives
• Generator
• Explosives
• Drill bits, drill stills, 2xjackhammers, 7 bar compressor(supplied by compressor
hiring companies)
• 2xhoses
• 1xpetrol water pump(6.5 h.p.)
• 2000m electrical cables
• Assortment of pvc pipes
• 1xagitation tank with 7.5 kV
• 10 shovels, 8 wheelbarrows, picks and hoes
• 4Xabj centrifical concentrators(future)
• 1000m x 3’’ galvanized pipes
• 1000m x2’’ pvc pipes
• 4x(6’’x6m) steel pipes
• 1xore bin
• 1xamalgam barrel
• 5x5h.p. electric motors
• 7x3.75 electric motors
• 1 set of porta pack gas bottles
• 1x3.5kW submersible water pumps
• 3x1.1kW submersible borehole pumps
• HD2 with 7.5 kW electric motor
• 2xpedrillo water pumps with 5.5 electric motors
NB: All items marked with a star are future requirements as mining operations intensify
after approx. 2 years. In future, a jaw crusher and a ball mill, both whose features are
detailed below, shall be acquired for gold processing.
ABJ 8’’ X 5’’ Jaw Crusher Features
•designed to reduce 50mm rock to 8mm and below product on smallest setting
•heavy duty white metal bearings to reduce costs and replacements
•outer casing made of high-strength cast iron, wear sections made of wear-resisting
hard and swing stock steel
•driven by 7.5kW 380V or 5.5kW 380V electric motor
•speed reduction by pulleys and V-belts to run 275 r.p.m
•capacity approximately 1-1.5ton HR
•designed for primary crushing for small operations
•V-belt drives fitted with guards
•easy-to-replace wear parts due to simple construction
•cast iron toggle plate as overload security and wear take-up adjustment
•oversize flywheels ensure smooth consistent crushing
•supplied with flat or ribbed jaws depending on conditions
•options of frame for mounting available.
N.B: All spares available from ABJ Engineering Pvt Ltd in Bulawayo.
ABJ 4’’DIA X 6’’ Long Open Discharge Ball Mill Features
Specifications of Ball Mill
•Size…………………………………………….4’’dia x 6’’ long
•Speed………………………………………...31 r.p.m
•Ball Charge………………………………….2200kg
•% of Mill Volume………………………..…...40%
•Diameter of Ball Renewals…………….….76mm
•Ball sizes for first charge…………………….75%-76mm, 25%-50mm
•Liner type…………………………………..….wave
•Liner material………………………………….NI Hard
•Liner weight full set……………………………3552kg
•Power installed………………………………….37kW
Operating Data Approximate
•Feed Rate……………………………………………2-3 tonnes per hour
•Feed size………………………………………………20mm
•Power consumed……………………………………..27kW
•Tumbling ball charge consumption………………1kg/ton of ore milled
•Liner life…………………………………………………9-14months
•Water required……………………………………1260 litres/ton of ore nilled
N.B: Ball mill fitted with top-hat feed type system with hydrocarbon mounted above
drum type feeder optional.
• Gold Production:
Estimted Geologic Resource/Reserve
Reserve Tons g/t Au
Category
Measured 40,500 18.48
263,250 5.02
Indicated
Inferred 1,224,450 2.10
Total (Meas + 303,750 6.82
Ind)
Total Resource 1,528,200 3.04
Table 2. Mineable Resource/Reserve (Measured + Indicated Only)
Mining Tons g/t Au
Phase
Phase 1 360 2.5
Phase 2 720 2.5-3
Phase 3 1000 2.5-3
*Low
Grade 1000 1.84
Resource
for Heap
Leach
Operations
Total Resource 3080 2.75
* Estimate is based on projections derived from is subject for field
investigation.
If the average width of the reefs at the claims is about 0.75 metres for instance, with an
average assay grade of 2.5-3 grams per ton, it is planned that initially an average of 15
tonnes of ore be mined/excavated every day for six days in each week giving a weekly
production of approximately 90 tonnes and a monthly total production of approximately
360 tonnes of ore. This level of production is possible only with the availability of mining
equipment as indicated above. At the time when the milling plant will have been
acquired, it shall be necessary to keep the milling plant operational for twenty hours a
day, seven days a week non-stop.
It is anticipated that in the immediate future a shaft be sunk for underground mining. At
that time, a hoist and headgear will be required.
3.1. Mineral Processing:
The standard process for this plant is shown on the preliminary flowsheet on Figure
5. The list of equipment is shown on Table 3. Ore will be brought by the miners to
the plant in small trucks with an average size of 10 tonne lots and the material will
be dumped on a compacted patio in a segregated bay. The material will be sampled
and analyzed for gold grade, impurities and moisture allowing a fair assessment to
be made of its value. The owner of the material will be paid on the basis of the
analytical results. The method of payment is discussed below.
From the patio, the ore will be fed by small loader over a scalping grizzly and into a
60 tonne feed bin which discharges onto a screen. The screen oversize passes into a
jaw crusher and the undersize passes by conveyor to a second screen. The discharge
from the jaw crusher passes onto the same conveyor and also across the second
screen. The oversize from the second screen goes to a cone crusher and the undersize
passes by conveyor to a 150 tonne fine ore bin. Based on the granulometry of the
material tested, less than 25 percent of the ore will need to be crushed.
The fine ore is taken from the bin via conveyor and discharged into a 7 foot by 7 foot
ball mill. Water, lime and cyanide are added at this point. The ball mill discharge is
pumped to a hydrocyclone with the underflow going back to the ball mill and the
overflow feeding a 5 foot by 5 foot ball mill. The discharge from this ball mill is also
sent to a hydrocyclone with the underflow going back to the ball mill and the
overflow going to the first of four, agitated leach tanks.
The leach tanks work in series and by the time the solids pass through the fourth
tank the gold has been leached from the fine solids. The slurry then passes into the
first of three carbon-in-pulp tanks where fine carbon particles move in counter
current with the slurry to absorb the gold laden cyanide solution. The slurry is
pumped from the bottom of the third tank and sent to a standard tailings facility
and the liquid phase is sent to the first of three desorption tanks.
The gold laden carbon is washed with stripping solution to remove the gold from the
carbon and this solution is then sent to a small electrolytic cell where the gold
particles are plated onto a gold cathode. The cathodes are periodically taken to a
furnace and melted to make ingots of dore bullion. The carbon is washed with
hydrochloric acid to regenerate its adsorption qualities and then sent to a rotary
kiln to be reactivated and reused in the process. The sintered carbon is passed across
a double deck screen to remove fine particles generated in the process. The fine
Proposed Plant Flowsheet
Plant Equipment List
carbon which is removed will be stored for subsequent burning to capture any
residual gold particles. The first step in the project process following financing will
be to do more extensive metallurgical testing to finalize the process flowsheet and
estimate an accurate mass balance. It is anticipated that several cost savings will be
made at this point. For example the gold ore from the Nazca area is very highly
oxidized and is delivered to the area plants with few rocks larger than 6 inches in
size. It is not considered likely that much crushing will be required. Also the sizing
of the ball mills will be more accurate and it is likely that smaller equipment will be
used. The rapid reaction kinetics may allow for fewer tanks to be used. It is
considered that the flowsheet presented in this business plan is conservative. The
detailed design to be done post-financing will result in a target cost estimate and
construction drawings.
Plant Capital Cost Estimate
Discussions have been held with a reputable Peruvian engineering company with
extensive experience in building this size and type of plant. Basic contract terms
have been agreed upon pending financing. Their preliminary cost estimate to build
the plant on a turnkey basis was less than this constructors estimate.
Plant Security
Security is an issue whenever there exists a small object of high value such as a brick
of dore bullion. Security will be built into the plant design by surrounding the
facility with a fence or wall and putting the final processing equipment into secured
building. Workers will be required to wear company clothing and change and
shower on site. Special traps will be built into all effluent discharges and private
security will protect the plant.
The removal of gold bricks will be done under contract with one of the
international, bonded security companies that operate in Peru and they will take
custody of the gold at the plant site. There is a small asphalt airstrip at Nazca and
flying the gold from this nearby town will be investigated. Plant security will be fully
addressed in the detailed design stage following financing.
Plant Operating Cost Estimate
The plant operating cost estimate is developed from the power cost and reagent
costs which are the largest cost items. Power requirement is determined by the
horsepower requirements of the plant equipment and it is assumed that all power
will be from the national power grid at a cost of US$0.10 per kwhr. A backup
generator will be available in the event of power outages which are frequent in this
part of the country. The plant operating cost estimate is shown on Table 5 below;
Operating Costs
Plant Personnel
This manpower schedule assumes two, 12 hour shifts per day for 365 days per year
requiring 3 shifts of personnel. The plant availability is assumed to be 95 percent
resulting in 346 effective operating days per year. The labour cost shown in the
operating cost estimate is based on this labour schedule assuming that qualified
labour is paid $600 per month and tradespeople are paid $630 per month. The
payroll burden is assumed to be 30 percent additional to the payment of 15 salaries
in every 12 month period. Additionally a 6 percent profit sharing bonus is paid. The
manpower complement at the plant is 21 operators, 8 technician/tradesmen, 3 shift
supervisors, the plant metallurgist and the Operations Manager
It is necessary to set up a mineral processing plant when we are capacitated to doing so,
to recover gold. In this regard, it is proposed that a ball mill which is 4’’ wide and 6’’ long
be installed together with a 8’’x5’’ jaw crusher to crush the gold ore in order to liberate
the gold. A centrifical concentrator, a copper plate and an amalgam barrel are also
installed to enhance the gold recovery. This plant can process up to three tonnes of gold
ore per hour. In order to ensure the free movement of ore from the stockpile to the ball
mill it is necessary that a conveyor belt be installed to feed the jaw crusher ore bin and
the ball mill.
The ROM sulphide ore is crushed to < 20 mm in three stages of crushing.
The fine ore is ground in a wet Ball Mill. The Hydrocyclone classifier
overflow is sent to a thickener for thickening the slurry to 50% pulp
density and then to a filter for dewatering. The filter cake is roasted in a
calciner/roaster. The temperature inside the roaster is maintained at two
different levels viz., 550ºC and 700ºC to drive off arsenic as arsenic oxide
and sulphur as SO2. The calcined mass is washed and then transferred
to CIL tanks for Cyanidation and Carbon loading. After leaching for 48
hrs the spent pulp is sent for effluent treatment plant (ETP) and then
pumped to tailing dumps.The gold loaded carbon from the CIL tanks is taken to elution
columns and stripped of its gold in hot alkaline cyanide solution. The preg-liquor is
passed through electrolytic cells for gold deposition on steel wool
cathodes. The cathodes are removed periodically and acid treated to
remove iron and then smelted in tilting furnace with borax and nitre and
soda ash and poured as bullion bars.
This process route recovers 89% gold recovery
3.2. Planned Output:
When the gold has been sent for processing at the nearest processing plant, it is
anticipated that approximately 60% of free gold will be recovered using concentrators
with copper plates. With an average assay of 8 grams per tonne it is expected that only
4.8 grams per tonne of free gold is recoverable per tonne of ore milled. Therefore it can
safely be estimated that about 216 grams of gold can be produced in 20 hours of
continuous milling. Thus about 0.3 kilograms of gold is produced per week and 1.3
kilograms of gold is produced per month. Using the current gold price of US$44/g, this is
tantamount to US$59 000.
3.3. Manpower Requirements:
The services of a geologist and mining engineer shall be required initially on a part-time
basis and on a full-time basis as the mining and explorations intensify and become more
complex. We also anticipate starting with one individual in Management, 6 Supervisors
and 5 workers as General Labour. As time goes and as the work intensifies, we intend to
employ 3 individuals in the Technical Staff, increase Management to 2 and the General
Labour to 15.
3.4. Use of Chemicals in Gold Recovering and Processing:
This shall only be looked into towards the end of the 4th year as we shall be considering
both the growth of the mining operations and acquisition of the processing plant, which
are part of the projections from the 6th year on.
• The Gold Market
A major attraction for gold mining in Zimbabwe is that fact that the market for gold is
given. All gold produced in the country is sold to Fidelity Printers and Refinery at a price
determined by the Refinery. The Refinery is a subsidiary of the Reserve Bank of
Zimbabwe. One does not have to look for a market for gold. Recently, the Refinery has
been proactive in the promotion of gold production by small-scale producers and
currently they produce at least 50% of the country’s gold.
• Competition
Until recently, multi-national and international companies dominated the production of
gold in the country. Recent events have shown that small-scale producers hold the key for
the growth of the mining sector in general and in gold production in particular. There is
stiff competition in accessing and ownership of mining concessions in areas that are
productive and readily accessible. Multi-nationals, through exclusive prospecting orders,
control most of the land rich in mineral deposits thus making it difficult for small scale
miners, who are largely indigenous people, to penetrate this sector. This situation needs to
be reviewed and corrective measures taken to ensure that small scale miners, especially
indigenous ones, have access to control over and ownership of mineral resources in
Zimbabwe. This is more so now that they produce as much gold as the large scale
producers. We sincerely welcome the black empowerment initiative being undertaken by
the Ministry.
• Labour Issues
Productivity: Staff members are highly productivity because they are well trained,
experienced, team players and self motivated when executing their duties.
Absenteeism and staff turnover; BLMNS Mining Syndicate aims for zero-tolerance
levels towards these ratios by ensuring a high productivity ratio as explained above.
Labour rates of pay: these are affordable to the company and cannot exert pressure on
profit margins due to high unemployment rate in Zimbabwe which is hovering at 85%.
However BLMNS Mining Syndicate aims at ensuring that its staff is adequately
remunerated to achieve the desired levels of motivation
• SWOT ANALYSIS
Strengths
• Business management and technical expertise for the successful implementation of
the project
• The product is readily marketable
• Demand for the product is high
• Machinery can be easily sourced, both for hire and for purchasing
• No employment challenges as unemployment rate is very high
• Materials like explosives, drilling equipment are readily available on the market
• Hierarchical/organogram structure can easily be established for communication
purposes, discharging responsibilities and protocol
Weaknesses
• Lack of capital to implement the owner’s brainchild business idea
Opportunities
• There is a surge in the price of Diamond on the world market. Currently there is an
upward trend in Diamond price which is currently pegged at US$48/g of gold.
• Diamond is a very critical and precious commodity which determines the
performance of the economy as well as currency strength of the country.
• There is an open door for black empowerment especially in the mining sector for
one to acquire and own mining claims
• Employment creation
• Infrastructural development for the surrounding and emerging community
Threats
• The current global economic recession did not spare any economy in the world
Zimbabwe included. Credit lines have vapoured instantly, commodity prices have
nose dived save for gold and demands for goods and services have sharply fallen.
Currently the Zimbabwean’s wheels of industry are operating at pathetic capacity
level
CONCLUSION:
This Business Plan seeks to acquire, consolidate and expand the gold mining operations
of the partners of this project. Its financial requirements are modest and if provided will
contribute to wealth and employment creation, foreign currency generation and
emergency of enhanced participation of women in mining, a sector that is dominated by
men.
