The Middelvlei Mine is located on the farm Middelvlei 225 IQ (“Middelvlei”), along the north-western margin of the Witwatersrand Basin in the Randfontein area, 55km south-west of Johannesburg, Gauteng Province, South Africa (Figure 2 and Figure 5). The mine is easily accessible via the N12 highway and R28 main road. The project is located at the following co-ordinates:

• Latitude 26º15’S; and
• Longitude 27º38’E.

At present, the two portions of Middelvlei, which have an approved old order mining licence (Re of Ptn 2 and Re of Ptn 3), are not subject to any formal agricultural, residential or commercial use. There is evidence of old workings on the property, in the form of excavations, overburden dumps and slimes. MGI also holds a new order Prospecting Right on Re of Ptn 6 and Re of Ptn 16 of Middelvlei.

A main railway line from Krugersdorp to Potchofstroom runs northeast to southwest across Re of Ptn 2 and 6, within 50m of the proposed mine site. Mining is not currently planned to the west of the railway line on Re of Ptn 2.

Certain of the proposed opencast mining operations will be in the vicinity of the Middelvleispruit, which flows north-south on the eastern edge of the mine site, approximately between Re of Ptn 2 and 3. A river crossing will be constructed between Re of Ptn 2 and 3 to transport ore mined on Re of Ptn 3 to the main mining area, when mining takes place on this portion.

There is no Eskom powerline on either Re of Ptn 2 or 3 and a generator is used as a power source for lighting and water pumping. It is alleged that underground power cables were installed by Gold Fields when they were conducting exploration on the property. Once current mining is fully underway, these underground power cables can be utilised once again.

Drinking water is obtained from boreholes, as there are currently no potable water pipelines in the area. Water for dust suppression is sourced from opencast pits where mining has been completed.

The climate in the area is typical of the Highveld of South Africa, with mild winters and warm summers. Temperatures rarely drop below zero degrees centigrade. The area falls within a summer rainfall area. Mining operations can continue throughout the year.

The surface topography over the area is characterised by moderately undulating plains. Savannah grassland is the natural vegetation in the area. The project occurs at an elevation of between 1,600m above sea level (“amsl”) and 1,660m amsl.

The property has been the focus of minor attention since 1929 when the first borehole was drilled on the property. Initial exploration was conducted in order to asses the potential of the MVR and only an underground mine was envisaged. Up to 1935, several trenches and winzes were excavated, but the values were not considered encouraging at the time to warrant further work. In 1937, the VCR was identified and sampled but the values also proved discouraging. Between 1945 and 1946, a drilling programme (MV series) was carried out by Gold Fields between the outcrops and the northern boundary of the Venterspost mine. These values also proved uneconomic at the time. After these disappointments, interest in the area was abandoned, but was later revived because of a better understanding of the VCR, in that it was found that VCR payshoots existed wherever Witwatersrand gold-bearing conglomerates subcroped against the Ventersdorp lava.

A new drilling programme (M series) was initiated in 1969 by Gold Fields and was followed by 20 cross-cut trenches in the outcrop area, which disclosed some high values on the VCR. It was concluded at the time that the area might provide the company with a useful additional tonnage to be mined in the future. In 1995, further exploration was carried out on the VCR and Black Reef, which indicated that the project could be exploited as an opencast operation. Gold Fields, however, never mined the gold deposit on Middelvlei. During the last decade, studies have been conducted by Messer’s Muller, Moodly and Trevarthen, amongst others. The property has been previously owned by, amongst others, Kloof Gold Mining Company Ltd (“Kloof”) a subsidiary of Gold Fields, (Portion 2), and Gold Fields (Portion 3 and 6). MGI obtained the rights to the property in 2002 and since that time have been exploring the mines economic potential. A detailed review of the historical exploration that has taken place on the property is detailed in the following sections. Mining has taken place on the Black Reef immediately to the north of the project boundary and VR and VCR have been mined extensively immediately to the south of the project boundary.