Maximising The Value And Life Of Our Resource

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The Company holds eight mining licences for the following areas:

Mining Licences 128 A, B and C

Stretching from about 7 km offshore of Chameis Bay and covers an approximate area of 555 km² to the south of Lüderitz.

Mining Area 1, Bogenfels and Elizabeth Bay mining licences

Extending from the Orange River in the south to Lüderitz in the north, and offshore in the Atlantic Ocean to a range of 20 to 35 kilometres inland.

Douglas Bay mining licence

Extending north of Lüderitz for some 60 kilometres and approximately 15 kilometres inland from the Atlantic high-water mark.

Orange River mining licence

Extending along the Orange River for about 50 kilometres inland from the Mining Area 1 boundary.

The Mineral Resource Department consists of the following sections: Exploration Geology; Sampling Plants and Geological Laboratory (Geolab); Mineral Resource Management; Mine Planning; Mine Geology; Survey; Info Centre and GIS Office and Environmental Management.

The aim of the Exploration Geology section is to discover, delineate, and evaluate new and existing deposits. New prospects are mapped out and delineated using small diameter probe drilling. A geological model is constructed from this data, and modelled in 3D using Vulcan software, or a Geographical Information System (GIS) package, and the deposit is zoned into geologically homogenous zones. Sampling per geological zone is done, using either bulk samples, or the BG36 large diameter drill. Depending on the different deposits, varying sample sizes are taken. E.g. on the Orange River deposits, samples of 20 000 – 40 000 tonnes are taken, whereas at Elizabeth Bay, five tonne samples are sufficient. In addition, a project looking for primary kimberlites is running in northeast Namibia. This project is at grassroots level, and no kimberlites have been discovered to date.

The sampling plants and Geolab are used to treat the samples that are generated in the exploration programmes from either bulk sampling or BG36 large diameter drilling. The Orange River Exploration (OREX) plant is a 90 tonne per hour Density Medium Separation (DMS) plant that currently treats samples from the Sendelingsdrif prospect, and will continue to treat samples from other Orange River prospects in the future. In Mining Area 1 (MA1), the Southern Areas Sampling Plant (SASP), a 10 tonne per hour DMS plant, treats all samples from MA1 and Bogenfels. All of the concentrate generated by these plants is treated at the Geolab and the Geological Sampling Recovery (GSR), a state-of-the-art recovery with the latest X-ray machines. In addition, the GSR is used to audit production plant efficiencies.

The Mineral Resource Management team is the custodian of data related to the mineral resource. Database development and maintenance resides in this section. The team uses a single source approach to maintain data integrity.

The Mine Planning team at the Mineral Resource Department performs a central planning function to the different mine operations in Diamond Area 1. It includes preparing Life of Mine (LOM) plans, mine design, technical support and audits. They also help with the compilation of the Strategic Business Plan (SBP) of the mine.

Mine geologists are part of the management teams in each mining operation. They play an integral part in the business and rely on effective and fast survey information in feeding actual data into the planning and Short Interval Control (SIC) processes. Mine geologists have a major role in assurance process audits and ensure that the resource is performing within the set limits. Keeping the resource updated and adding carats to the resource is critical for the LOM process.

The Survey Section’s prime objective is to provide a survey service to the Mining, Geology, Environmental and Engineering Departments at Namdeb. The Survey Section is responsible for the generation of monthly mineral resource depletions. The section also provides technical support to the navigation and mining component on the Beachcomber and !Gaub dredgers.

The Information Management section deals with data delivery and information processing, capturing, indexing, storage, retrieval and meta-data services for all Mineral Resource sections.

The Environmental section is responsible for providing environmental assurance throughout the mine’s life cycle. Its main objectives include: The implementation, maintenance and continued improvement of an ISO 14001 certified management system; collaborative stakeholder engagement that influences regional/national initiatives, enables transparent reporting to stakeholders and manages reputational risk; obtaining licences to operate through an Environmental Impact Assessment (EIA) process, in line with legal requirements; monitoring of natural resource use, setting of targets and reporting of performance; and, rehabilitation done in a way to address legacy issues and proactively included into new mining projects. Environmental personnel are part of each operation as well as every aspect of the mine planning process.

Northern Coastal Mines consists of discrete operations within mining licences ML44 (Bogenfels), ML45 (Elizabeth Bay) and ML46 (Douglas Bay).

Bogenfels: The Pocket Beaches mine is located 130km south of Luderitz. All mining operations have been completed and the site is on the process of being rehabilitated. Operations were located south of the Bogenfels Arch. Usable infrastructure has been relocated to other mining operations in Oranjemund. Scrap will be removed by SA Metal (Namibia). The earthmoving rehabilitation will commence in due course. The site will be restored to how it was found.

Elizabeth Bay: Elizabeth Bay mine is located 30km south of Lüderitz. The ore body varies, consisting of diamondiferous material occurring in multiple thin units (grit layers and lenses) separated by barren, finer grained sands. This succession has been divided stratigraphically and chronologically into three distinct units, namely: Red Beds, Brown Beds and Grey Beds. In 2009, a large rich deposit became accessible by accretion of the sea, thus exposing the richer gravels previous covered by the sea. Elizabeth Bay Mine is now fully operational with a total staff complement of 250 people inclusive of contractors.

Beach and Marine Contractor Operations: Shallow marine contractors generally utilise mining vessels of less than 25 tonnes. Divers mine gravel from the sea bed at water depths of minus 7 metres to minus 30 metres. The mined gravel is generally screened and bagged while at sea. The screened gravel is then transported to Lüderitz and off-loaded at Contractors Treatment Facility (CTF) where it is further processed. Currently, surf zone contractor mining is in the area between Elizabeth Bay and Lüderitz, between the high water line to a depth of minus 7 metres. Land based contractor mining is currently active in the Pomona area.

Douglas Bay: Currently there are no mining operations in that licence area.

Previously known as Mining Area 1 (MA1), Southern Coastal Mines (SCM) is situated within Mining Licence No. 43 on the south-western coast of Namibia. SCM stretches from the Orange River at Oranjemund to Chameis Bay, about 100km north of Oranjemund.

Raised Pleistocene diamondiferous beaches, deposited at depths ranging from 25m below current mean sea level to +30m above mean sea level are responsible for the lion share of the carats produced by Namdeb and its predecessors since operations began early in the previous century.

The mineralised marine gravels have been washed onto shore from approximately two million years ago in the form of linear beaches, driven by the southern winds and long shore drift currents. The diamonds were transported from the kimberlite pipes of Southern Africa, along the mighty Orange River to the Atlantic Ocean. The large diamonds are concentrated in the south and as the gravel load moved along the coast, the vigorous and persistent wave action sorted the diamond population into smaller stones and higher grades towards the Affenrucken area, some 80km north of the Orange River mouth. The persistent wave action interacting with sand, gravel and the bedrock structure resulted in the formation of gullies and potholes, which served as trap sites for the diamonds, thus upgrading the deposits. The diamonds and gravels were subsequently covered by marine and windblown sand varying in thickness between 25m in the south to less than 6m at Affenrucken. In the past, Geologists sampled these deposits using trenches spaced between 500m and 1km apart, to evaluate the potential diamond content. In the recently accreted areas, small and large diameter drilling and sampling are used to evaluate the deposits.

Ore is currently mined from an area within 15km from the southern limit of the mining licence. Stripping of the overburden is done primarily with a dredger and a fleet of articulated dump trucks (ADT’s). The dredge pumps the fluidised overburden onto the beach and this plays a vital role in the building out of the shoreline (accretion) and the maintenance of the seawalls. The ADT’s remove the overburden and build and maintain seawalls to protect the mining operations from the onslaught of the Atlantic Ocean.

The mine currently operates one dry in-field screening (DIFS) and two wet in-field screening (WIFS) plants. These plants are utilised to screen off the oversize and fines material from low grade terrace gravel and other ore from nearby mines, thus upgrading the product which is then taken to the treatment plant. These screening plants are used to reduce haulage costs and are deployed far from the main treatment plant to maximise the savings effect on load and haul costs.

The high grade basal gravel is usually well entrapped in the bedrock depressions and is mostly less than a metre thick. Geologists pass areas as depleted and surveyors ensure that the advance lines are surveyed and captured on a geographical information system (GIS). The GIS is used in displaying data like monthly depletions, sample data, infrastructure and licence areas.

Namdeb's Mining Licence 42 extends along the Orange River for about 50 kilometres inland from the Mining Area 1 (MA1) licence eastern boundary to Sendelingsdrif near the town of Rosh Pinah. This licence area is referred to as Orange River Mines and contains some of the highest value diamonds in the world.

Although early expeditions along the lower Orange River considered the ancient river deposits to be barren, it was in the early 1960's that diamonds were discovered amongst the boulders. It is now well established that there are two principal types of deposits flanking the modern Orange River:

• Older, higher lying terraces which yield the bulk of the economic deposits. These are referred to as Proto-Orange deposits and are dated at some 17 to 19 millions years old;
• Younger, lower lying terraces which are economic in localised areas only. These are referred to as Meso-Orange deposits and are dated at some two to five million years old.

In general the Proto-Orange deposits are low-grade (<2carats/hundred ton - cpht) with exceptional grades confined to small localised trap sites such as potholes, waterfall features and in the presence of large boulders. The high diamond quality (>98% gem stones) and large average size (1-2 carats/stone) contribute to make Orange River Mines an attractive and exciting economic prospect.

Namdeb commenced production operations of Orange River Mines at Auchas during 1990. The mining of this deposit was completed by 2000 by which time mining moved to the Daberas deposit. During the last 10 years Daberas has proven to be a huge success yielding healthy returns to shareholders and continues to be the mainstay of Orange River Mines. A total of 46 million tonnes of waste will be stripped over its 12-year lifespan and some 97 million tonnes of ore will be treated to produce 562 000 carats at a stone size of 1.36 carats/stone. The mine has a workforce of 228 people of which 99% are Namibian. Partners in the mining operations include Barloworld, B&E Namibia and Tyre Corporation. Barloworld repairs and maintains the earthmoving fleet, B&E Namibia do the mining and screening of the Hub portion of the Daberas deposit while Tyre Corporation do the tyre management.

Orange River Mines has an exceptional safety record. No fatalities have been recorded at Orange River Mines and no disabling injuries have been recorded since August 2007. This remarkable achievement can be attributed to a resilient behaviour based safety culture and a strong focus on risk identification, assessment and mitigation.

Botanical studies revealed that Juttadinteria Albata, a succulent plant found on gravel terraces, was located on the Sendelingsdrif, Driegat and Daberas deposits. This species is classified as vulnerable by the International Union for Conservation of Nature (IUCN). The Orange River Mine’s workforce has undergone training on the identification of the plant so that no plant will be unwittingly destroyed. Orange River Mines is also working in collaboration with the National Botanical Research Institute on a relocation trail to assess the feasibility of successful relocation of the Juttadinteria Albata during mining operations. This process forms part of the greater Orange River Mines Environmental Management System.

The Orange River Mines Life-of-Mine Extension Project has recently completed the feasibility study of the Sendelingsdrif deposit which will become the next biggest mines after Daberas in the Orange River Mining licence. Sendelingsdrif is an exciting deposit located 20 kilometres upstream from Daberas Mine. Sendelingsdrif has a planning reserve comprising of 32mill tons of ore, 339 000 carats and 5.6mil tons of waste. Mining of Sendelingsdrif is expected to start at the beginning of 2014 and it has a 7 year life of mine.

As Namdeb continues to treat challenges as opportunities there is certainly a future that lies ahead. Over the last few years Namdeb has been investigating new technologies to mine profitably the wetter areas in the inshore and innershelf part of our onshore licences.

Project 2050 was launched in 2010. Through this project, Namdeb's Strategic Project team continues to investigate and accelerate critical stay in business projects which have the potential toextend the life of mine.

All the projects incorporate milestones set up by the Namdeb Environmental Rehabilitation planand therefore currently active areas and associated infrastructure will be rehabilitated when it becomes redundant in the future.

Although the Namdeb mining licence areas have been mined for decades, this world-class deposit still has much potential to provide long-term benefits to the Namibian economy.

Red Area Complex

Namdeb has approved N$ 150M (US$ 22M) investment to replace its existing Mining Area 1 Recovery Plant with a new state of the art Red Area Complex in Oranjemund. The Red Area Complex is responsible for the final recovery and sorting of diamonds from concentrates produced from the various land based diamond treatment plants within Namdeb's operations. Diamonds are then packaged within the Complex and transported to Namibian Diamond Trading Company (NDTC) in Windhoek.

The existing facility was built during the 1960's and is showing its age despite several upgrades over the years. With the new facility, the potential for improved efficiency of diamond recovery, security of the diamond product and lower costs of annual operation provide very attractive reasons for the establishment of the new complex.  The current facility is also positioned on a sizable diamond resource which cannot be mined while the facility is there.

Namdeb's and Debmarine Namibia entire revenue stream will be processed through the new facility, therefore the integrity and reliability of this operation is vital for Namdeb.  The N$ 150 million committed to this project ensures the longevity of efficient diamond recovery from all of Namdeb's sources well into the future. This further underlines Namdeb's mission to contribute to the Namibian economy and providing employment until 2050 and beyond. 

Some of the key benefits that the Red Area Complex will bring are:

• Improved diamond recovery efficiencies as a result of technological improvements throughout the process stream.
• A substantial reduction in the Plant’s footprint, radically lowering the impact that it has on the environment.
• A safer working “Zero Harm” environment for all of those involved
• Reduced potential of diamond theft because of improved resource protection (security) measures
• Reduced annual operating costs
• Reduced power consumption compared to existing facility (3.2 → 1.0 MW)
• Overall water consumption has been restricted to a minimum (20m3/ hour of make-up water required)

The project was approved in October 2011, and site construction commenced during the first quarter of 2012. The project is expected to be complete early in 2013, with a 3 month transition required to changeover fully from the existing plant to the new complex.

Sendelingsdrif

A total amount of N$ 280 million to be spent over 2012/13 has been approved for the construction of the new Sendelingsdrif mine in the Orange River Mines (ORM) mining license area.

The new mine at Sendelingsdrif will be the third mine in the ORM Mining License area (ML42); The Auchas mine was replaced with the Daberas mining operation in 2000 and the Sendelingsdrif mine will replace the current Daberas operation (current LOM until the end of 2013).  A project has however been initiated to investigate the probability of extending the Daberas LOM by treatment of low grade material.

The Sendelingsdrif deposit is the second largest in the ORM license area after Daberas with an estimated 433 000 carats of which about 300 000 carats are economically mineable. The current mine plan provides for roughly 45 000 carats per year over the estimated 7 years LOM of the mine.  The Sendelingsdrif mine is located the furthest upstream in the Orange River of all Namdeb mines and is subsequently expected to produce the largest average stones size of all the Namdeb mines.  All diamonds mined at Namdeb have initially been transported and deposited by the Orange River millions of years ago and the average stone size of the diamonds increase the further upstream they are found.

The Sendelingsdrif mining area falls within the succulent Karoo biome, a biodiversity hot spot. As a result, the agreed post mining land end-use of the mine has been classified as nature based tourism. The project team had to keep this in mind in all the processes considered for the project over its entire life, including the operational and close-out phases.

The effect of this was that dry screening was introduced as part of the treatment process at Sendelingsdrif to reduce water and power consumption but mostly to reduce the amount of slimes that need to be disposed of in order to minimise the size of the slimes dam. Apart from introducing major cost, slimes dams are also environmentally very unfriendly. In the Sendelingsdrif case, the slimes could be reduced to fit into a small, deep, bed-rock lined, mined-out pit.

Another result of pursuing the land end-use target is the progressive rehabilitation methodology that has been adopted for mining. This will mean that mined-out areas will be back-filled with mining residue as soon as they become available, leaving much less rehabilitation after the mining activities have come to an end.

The project has also adopted a very detailed restoration ecology programme subsequent to the requirements identified in the Environmental Management Programme Report (EMPR) that came from the Environmental Impact Assessment (EIA) that was done as part of the Feasibility Study of the project. The Environmental Clearance Certificate was obtained in August 2011.  As part of the restoration ecology programme, a green house is being constructed on site to facilitate required studies. The restoration programme will be done in consultation with the Namib Ecological Restoration and Monitoring Unit.

Preparatory work for the construction of the Sendelingsdrif mine started with the access road, lay down areas and communication being done. NamPower finalised the new switch yard at Rosh Pinah that will supply Sendelingsdrif with power as well as the refurbishment of the 66kV line that runs from Rosh Pinah past Sendelingsdrif.

Major construction is expected to start in June 2012 with completion in July 2013.  Ramp-up of the operation will commence immediately after with full production expected by January 2014.

Elizabeth Bay Mine

The project is in the final phase of implementation. All construction work has been completed with the relocation/ salavaging of a Front end screening plant from Southern portion of the Operation and Primary, Secondary and Tertiary crushers re-configured in the existing Main Treatment Plant to simply the overall treatment process material flow. The mining activities are in full operation and the plant operations are ramping up to full production over the next three months. Full production is expected by mid-2012.  Elizabeth Bay mine has an anticipated 5 year Life of Mine with further potential through accretion, depth extensions and dry infield screening.

Medium Term Projects Currently in Study Phase

1. Floating Treatment Plant
   The Floating Treatment Plant (FTP) was a diamond treatment plant installed behind the Beachcomber cutter head suction dredge which served as the mining tool providing head feed to the plant. The FTP was destroyed in a fire incident in 2005, but the hull of the floating plant was preserved, and all salvageable equipment stripped out. With significant mineral resources remaining in fluvial footwall areas of the original Orange River mouth in the southern part of the Mining Area, a project was launched to investigate the re-building this plant to process this vast, low-grade deposit.
   
   Preliminary work was continued in 2010 and 2011 to upgrade and test the existing Beachcomber dredge in preparation for full implementation. The upgrading of the Beachcomber was required to increase the throughput capacity of the dredge and prove its ability to sustain the production required to make the project economically viable and address the associated clean-up (depletion) risk of the mining tool.
   
   The upgraded dredge has become a strategic tool in providing accretion for the southern portions of the mining area. By pumping the stripped material into the sea, accretion is achieved along the southern coastal areas, effectively pushing the sea back and allowing conventional mining to be done where previously the areas were under water.
   Implementation of the project is expected by 2014.
   
   
2. Integrated Treatment Plant (ITP)
   This project evaluates the potential of combining different sources through the current primary treatment plant in the Southern Coastal mining area.  The plant would be required to treat conventional run of mine, old treatment plant tailings dumps as well as future In-shore and accreted beaches (that latter including large amounts of shell).  The varied liberation requirements for the different sources as well as composition changes within the feed will necessitate innovative thinking with regard to preferential crushing and possible jigging solutions for the removal of lighter waste and shell from the plant head feed.   This project study will commence in 2012, with production expected from the re-configured plant during 2014.
   
   
3. Deflation Deposit Mining
   This project targets the thin deflation deposits in the vast valleys between Bakers Bay in the south and Elizabeth Bay in the north. The major challenge in this project is to economically mine large areas of very thin surface level deposit at a high rate, in a very environmentally sensitive location.  An environmental study was done in conjunction with the testing of the current mining solution (Wirtgen Surface Miner) and more than 50% of the resource was excluded from the minable resource due to the mining method's impact on the environment, deeming the entire project uneconomical.  More study work to find alternative mining solutions will need to be investigated for the project to continue.
   
   
4. Large Diamond Recovery Project
   This project targets the potential recovery of large diamonds (>25mm) within the treatment plant tailings dumps located in the southern portion of the mine which were noted for their large stone sizes in the past.  The possibility of larger stones than the original top cut-off size during the initial treatment processing of the gravels, is very appealing as recovery of a single stone annually would cover the costs of the project and its annual operating costs.  The plant would incorporate high capacity X-ray luminescent machines to recovery the Ultracoarse diamonds from the tailings dump feed source.  The project would have further benefit with the deposition of the plant tailings directly into the sea via a conveyor system, thereby achieving further accretion along the coastline and removing the coarse tailings dumps currently spoiling the coastline.
   
   
5. !Gaeb Dredge Relocation
   The !Gaeb Dredge was used for stripping at the Bogenfels Pocket Beach mines.  As part of the accretion strategy for MA1 the dredge will be used to do stripping alongside the Beachcomber dredge.  It is currently being refurbished and converted from diesel to electric drive and it will be operational towards the end of 2012.