FACULTY OF MINING AND MINERAL

PROCESSING ENGINEERING
MINING ENGINEERING DEPARTMENT

NAME: TAFADZWA CHIMBUNDE

REG NUMBER: R19118N
MODULE: HMINE515-ENGINEERING AND MINERAL ECONOMICS

ASSIGNMENT 1

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 ALCHOBALO INVESTEMENTS
PRIVATE
LIMITED
GOLD MINING PROJECT

MINE PROJECT EVALUATION

REPORT

BY TAFADZWA ENOCH CHIMBUNDE

06 OCTOBER 2023

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PURPOSE GOLD PROJECT MINERAL EVALUATION
This Project mineral evaluation has been compiled from extensive industry and market research to
asses clearly the profitability of the named project and its necessity. Mineral Resources and Ore
Reserves were reported according to the JORC code standards. This document gives a detailed
description of return on investment covering the operational and financial aspect & its sustainability.
The document defines the project opportunities and risk, ways in which to mitigate the risks to keep
the business profitable.

The mineral project evaluation intends to

 to examine the viability of the gold mining project technically and economically
 to reduce potential uncertainty risks and thus raise the level of confidence in this project.
 Ensure that there is an understanding to the investor on the long-term aspirations and desired
outcomes for the ALCHOBALO Gold Project;
 Set the service requirements to formulate key strategies such as asset management, financial
management, people management
 Provide an overview of the ALCHOBALO Gold objectives to its day-to-day operations
 Provide a basis for decision making to continuously undertake ALCHOBALO Gold’s
operations, propelling long term capital and operational expenditure plans

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Table 1 ALCHOBALO GOLD PROJECT VISION & OBJECTIVES
VISION OBJECTIVES LONGTERM OUTCOMES KEY INITIATIVES
Evolve service offerings that meet
Provide customer’s needs Review options for new
competitively priced, services
Ensure competitive pricing for the Gold
To safely and high quality Gold market price
profitably provide
Grow existing markets
competitively
Provide high quality products
priced, high quality
Gold products
Maintain service levels through appropriate Mechanize and automate the
Provide fit for levels of mechanization project
purpose, safe and
Increase production levels
compliant Gold
Maintain appropriate levels of compliance
facilities with all requirements

Ensure on-going Run the business profitably Keep costs of production

profitability low. Prevent unnecessary
costs.

ALCHOBALO GOLD’S VISION AND OBJECTIVES

“To provide a safe operating Gold mine that maximises opportunities for efficient and cost-effective production
practices and meets the needs of gold market”.

This is to be delivered through the following objectives:

• Ensure the Gold Business and its operations meet all legislative requirements;
• Ensure planning of Gold operations meets production targets in the most efficient and cost-effective
manner;
• Develop and maintain strong world market analysis to optimise opportunity for ongoing sales;
• Produce quality Gold products within determined specifications;
• Develop operator training plans to ensure competent and skilled labour force;
• Develop and maintain preventative maintenance plans to ensure optimal production from Gold plant
and equipment;
• Regularly review cost of production information to ensure competitive pricing and achievable profit
targets;
• Ensure operation in accordance with the Quality and Safety Management Systems.

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PROJECT OVERVIEW
ALCHOBALO Gold Mine is situated in Chivhu, Mashonaland east province Zimbabwe, 5km south
west of Chivhu town, approximately 2km east of Kembo Dam and 3km from the Harare-beightbridge
highway (A4).The proposed project covers an area of 10 ha claim licence number 000074A. Mine
rights are under ALCHOBALO Investments Private Limited a company incorporated under the laws
of Zimbabwe having mining rights of gold in Zimbabwe. ALCHOBALO Investments Pvt Ltd has
partnered with Yi liang Pvt Limited a Chinese Investment group which is coming as the investor. With
a 51%-49% share ownership in favour of Yi liang and since ALCHOBALO has a ready investor it has
a joint venture agreement .

Geology and exploration

Geological mapping

Geological mapping using remote sensing was used for: structural and lithological components of the
granitic ore body to show simple lineaments (faults, trends, veins) and complex features (folds, domes,
basins)

ASTER-Based Exploration Strategy

Was used for structural mapping to view the Earth’s surface in more detail and produced a Digital
Elevation Model for each area automatically mapping the main mineral types

The spectral detection bands of ASTER, in the Short Wave Infrared (SWIR) and Thermal Infrared
(TIR) provide a means of improving the effectiveness of mineral prospecting. Key indicator minerals
for various types of mineral exploration can be identified directly from the processed ASTER imagery
This saves lots of time, in the initial fieldwork stages of exploration and the geochemical analysis of
collected samples, allowing targets for drilling to be selected relatively quickly

Evaluation Methods of Mineral Resources

Present Status of Evaluation of Mineral Resources

A granite deposit is ot complicated ad does not need lengthy exploration to define the ore body
using satellite imagery to define the limit of the orebody and depth.

Resources and reserves

The resource can be estimated based on the developed three-dimensional geology model of the
deposit, continuity, and mineralization characteristics. The completed resource can introduce a basis
for subsequent reserve determinations as well as planning and mine design. The resource and reserve
estimations are classified according to standards that are internationally recognized.

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Mining

The optimization software is utilized for open-pit economic limits determination or stope shape
definition in underground mining projects. The economic limits of mining are selected based on
strategic analysis, which considers the impact of the changes in prices, recoveries, and cost. Resources
can be converted to reserves with the increasing details of the engineering.

Accordingly, Alchobalo Pvt Ltd has undertaken Capacity calculations, investment allocation, long
range production scheduling, and the sequence of exploitation. The cost estimates are generally based
on actual costs expended to date and on contracts and supplier quotations for the construction and
operation of the project and are applied to the design quantities, equipment schedules, Labour numbers
and consumption rates and productivity assumptions. Open Pit Capital Costs. The open pit mine
capital costs include the following:

 Heavy mobile equipment (HME)

 Minor equipment
 Explosives and diesel
 Mining software and systems
 Spare shovel bucket
 Spare FEL bucket
 Truck tray re-liner package
 Dewatering
 Pit dispatch system
 Global positioning system for mine surveying
 Blasting contractor set-up
 Maintenance system
 Pit power distribution
 Training simulator

Alchobalo Investments Pvt Ltd.’s experienced professional engineers and mining geologists provided
insight on key aspects of preliminary mine planning, including the critical components of water,
energy, and access requirements, as well as mining method. Our personnel support the early planning
and design stages, relying on their decades of experience with the mining industry and their
knowledge of current technologies to plan for:

Discounted cash flow analysis provides a means of relating the magnitude of expected future cash
profits to the magnitude of the initial cash investment required to purchase an asset or to develop it for
commercial production.

GOLD MINERAL CASHFLOW PROJECTION

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Discount factor 10%
Net Present Value

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Income
Gold Deposited from Purchases from
Custom Milling
Gold Deposited from Own Mining
Claims
Gold Deposited from Cyanidation
Process
Gold Estimated Average Grams Per
Tonne(g/t)

INITIAL PRICING OF ALCHOBALO GOLD AGGREGATES ARE HALF THE MARKET PRICE
INORDER TO BUILD A CUSTOMER BASE AND PRICING AND PROFITS WILL INCREASE AS
PROJECT GAINS TRACTION.

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Gold Risks Assessment

A Gold like any other business faces challenges that may threaten operations, so before the start
of operations risk assessment should be carried out to mitigate or control such risks as may be
encountered. ALCHOBALO is committed to consistent, efficient and effective risk assessment.
ALCHOBALO risk framework is summarised below. The table below summarises the Gold’s key
business risks along with their respective mitigations.

Figure 3 Gold risk assessment

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 Risk Description Mitigated Risk Risk Mitigation Unmitigated
Rating risk rating

Unskilled Labour medium Employing skilled Labour medium

Ineffective or inadequate medium Compliance and management systems high
processes

Operating at financial loss high Grow markets, revenue and extreme

manage costs, financial management

Poor site safety high Safety management systems extreme

Inadequate machinery high Weekly machinery servicing plan high
maintenance

Un expected pandemics high Healthy and safe practices extreme

e.g. Covid-19

Economic changes in medium A robust management system to deal with high

market changes in market

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