KAROUNI (TROY 100% THROUGH TROY RESOURCES GUYANA INC.)

OCCUPATIONAL HEALTH AND SAFETY


The Company is strongly committed to the long-term health and safety of its employees.  In April of this year, the safety programme efforts were increased, including the introduction of the SLAM (Stop. Look. Analyse. Manage) programme. Site safety awareness has dramatically increased and incidents are down considerably since the introduction of this initiative.


The Karouni operation recorded 1.6 million man hours during the year. The RIFR (Recordable Injury Frequency Rate - measured as recordable incidents per 100,000 man hours) has steadily declined by 55% and is currently at 9.14, just above the target rate of 8.00. The previous year’s target was 10.00. There were 11 lost time incidents during the year which is a 9% increase. However, only 2 lost time incidents were recorded in the second six months of the year.

DEVELOPMENT AND OPERATIONS

The 2017 fiscal year saw completion of minor modifications and upgrades to the process plant and infrastructure. The total cost of the capital projects was A$1 million.

All permits and licenses are up to date and the Company is in full compliance with its ongoing environmental and operational requirements. The Company expects to receive additional permits for the expansion of its waste dumps in late 2017, and intends to start rehabilitation of previously disturbed areas. The Company has also changed its waste development philosophy and will start reclamation on the major waste dumps towards the end of 2017 calendar year.

OPERATIONAL REVIEW

Mining in Hicks 2 pit and Smarts 2 and 4 pits progressed well early in the year. Five Caterpillar 775 dump trucks, capable of hauling 70 tonnes per load, were mobilized as a trial. The change in fleet composition reflects one of the key efficiency improvements undertaken at site.

Phase 1 of the infill grade control drilling was completed in Smarts Stages 2 and 4 during the first three months. Results of this drilling were incorporated into an updated mining model which was completed late in the year.
Site management instituted a plan to improve operator training and continuous improvement in the plant circuit. A number of changes were made to assist in the handling characteristics of the saprolitic clay ore in the crushing circuit. This resulted into a significant reduction in the number of plant stoppages.

The mine suffered serious challenges leading up to the end of the 2016 calendar year, though mine production remained steady. In December, a significant failure occurred in the south wall of the Smarts 3 pit, thus restricting access to the higher-grade portions of the deposit. As a result, efforts were re-directed onto mining portions of Smarts 1, Smarts 4 and southeast of Smarts 3. Unfortunately, these are lower grade areas. This change resulted in higher stripping ratios, lower than forecasted grades, lower gold production and higher costs.

The Smarts 3 pit wall failure occurred during a seasonal wet period and the rains saturated the surface material, causing the bottom of the pit to fill up with saturated material flowing down into the pit. During the latter half of December 2016 and January 2017, the slip material on the pit floor and encroaching toe were removed. The removal of this material significantly decreased the flow rate of saturated material into the pit. In late January 2017, a geotechnical consultant evaluated the conditions and provided recommendations as to how best remediate the failure with a minimal impact on ore reserves.

The temporary halt in mining activities in Smarts 3 allowed the Company to commence RC grade drilling there. The results of the RC drilling programme allowed the Company to better define the extent and grade distribution of the high grade ore.

The processing plant had a project record output of 80,000 tonnes for October and November 2016 before throughput in December was restricted by the lack of availability of the secondary cone crusher which suffered a severe mechanical failure.


With remediation work continuing in Smarts 3, mining continued to focus on the Smarts 1 and 4 pits at the start of the second half of the year. Ore mined during this period was the highest for the year. The accelerated development and increased ore recovery from the upper benches of Smarts 4 negatively impacted the ore mining grade as lower grade material was mined to maintain ore to the mill. The problems encountered with the Secondary crusher continued to affect production during the early part of January 2017 and resulted in a total rebuild of the secondary crusher which has performed well since.

Mining in the Smarts 4 area is now below the weathered horizon and all production is subject to drill and blast which has resulted in higher mining costs. This trend will continue as all pits pass below the weathered rock horizon.

The RC programme in Smarts 3 was completed during the June 2017 quarter. The drill rig moved into Smarts 1 to continue drilling grade control holes on a 10m x 5m spacing. This programme will enabled a more detailed grade control model to be constructed leading to substantial improvements in the short and medium term mine planning.

Mining in Hicks 3 pit was completed during the third quarter and mining advanced in Hicks 2. Diversion of the Hicks Creek is expected to begin early in the 2018 fiscal year. The creek diversion will allow access to the higher-grade blocks of Hicks 2. Continued improvements and optimisations in the processing plant resulted in increased gold recovery. The plant had a record output of 88,841 tonnes in March. 

As anticipated, open pit mining operations were somewhat hampered by heavy rains during May and June. In June 2017, 489mm of rain was recorded, approximately 28% higher than the 383mm received for the same period in 2016. The rain delays were offset by increased pumping capacity and upgrading the roads to “all weather”. During the wettest month, the large CAT 775 ridged body trucks continued to operate well. The Karouni minesite now has a total of five 775’s permanently supplementing the fleet of 40 tonne articulated dump trucks.

In April, the Company undertook a safety awareness programme to follow-up on previous initiatives. The programme has been well received and accepted. Highlights include the Lost Time Injury Frequency Rate declining to around 6.5, down 16% and the Total Recordable Incident Frequency rate declining to around 8, down 55%.

During the June 2017 quarter, the Company undertook a comprehensive cost initiative review and productivity programme. Since the inception of the programme, there have been numerous improvements in cost savings, productivity and efficiencies.

Areas of focus include:-

    Mining Fleet Performance: Utilisation and productivity performance for contractor and Company equipment. A programme was initiated to improve the utilisation and productivity of the Company’s mining fleet which would in turn reduce the reliance on the more costly contractor equipment. At the end of June 2017, the productivity for both trucks and excavators was trending higher despite June being the wettest month of the year. The cost per tonne for the excavator fleet trended lower despite a spike in May which related to equipment damage. The cost per tonne for the truck fleet also trended lower.

    Contract Reviews: All contracts were reviewed and audited against commercial and deliverables obligations. Improved processes were implemented in tracking contractor hours and tighter controls implemented for purchasing spare parts and components for the Company’s mining fleet.

    Drill & Blast Contract Rates: Drill and blast rates were renegotiated with the Company’s drilling contractor and were subsequently reduced by approx. 30%. This had a significant impact on the cost structure with savings of between US$200,000-US$300,000 per month.