Initially the theory after Diggers in August 2017 was that the Pilbara and Witwatersrand (or Wits) gold basin were adjacent to each other. That theory suffered a major blow in ~November 2017 (which also affected the share prices), due to a new paper on the formation of Gondwanaland, which showed that India was in the way between South Africa and the Pilbara.

Most people that I have spoken to, have absolutely no idea what a South African gold mine looks like other than a lot of gold was mined from their conglomerates. My knowledge and these comments are based on the fact that I was gold analyst for ~11years from 1977 to 1988 (with mining houses, a merchant bank and then a stockbroker), and was rated (1^st or 2^nd for the last few years) and visited most of the shafts on most of the gold mines and hence saw almost all of the different types of gold in conglomerate reefs that had been or were being mined in South Africa.

I did have an added advantage over my peers, because I held a Mine Manager’s Certificate of Competency, which meant that I was invited to the monthly Mine Manager “group” mine visits at which I could ask any mine manager or GM or Consulting Engineer that went on the visit what was happening at any of their gold mines (platinum details were mostly a state secret). It would possibly fall into the category of insider knowledge these days, although the info (if relevant) was only fed back to fund managers in the form of typed “notes”. Otherwise mine knowledge was gained from the raunchy Chamber of Mines’ visits or mine site invitations to analysts.

Most of the comments made in this description are based on my own records which include two “books” that were published under the stockbroker (Frankel Kruger) I was employed by being: the 88 page Book 1 “Investing in South African Gold Shares” published in March 1984 (which was my MBA thesis), and 132 page Book 2 “Evaluating South African Gold Shares” published in October 1984.

While I do not dispute that there is gold in the Pilbara in gold in quartz veins or watermelon seed gold nuggets, the question has always been one of economic distribution as described by Maitland in 1919 over Beatons Creek with an estimated ~0.7g/t distribution (based on trial mining and treatment). Also by both Metana in the 1980s and Dominion in the 1990s who had high expectations in one quarter, halved their annual gold production targets from there in the next quarter, and thereafter never discussed it again.

CRA did drill the Pilbara area to a depth ~3km with a programme of 6 drillholes in the 1970s, following up the conceptual Wits theory out of which the best intersection was reputedly 10g/t over 0.5m within a 30m thickness of conglomerate at a depth of 2.7km. After which the team was reportedly brought into a room and told to stop wasting CRA’s money.

If Australian gold companies do still think that they have a Wits goldfield (after reading this), then they should be drilling conventional drillholes up to 3km to 4km deep on a ~500m apart drillhole spacing, as that was the norm. As in the 1970s/80s it took ~6 years (admittedly now faster), to drill usually ~12 to 20 holes (often with up to 3 wedges/deflections per drillhole [the highest that I saw was 13 deflections from one drillhole at 2.3km below surface]) to a depth of ~3km to 4km, and then take another 6 years to sink the required shaft or shafts in 2 or 3 steps down to the reef to be mined. A drilling programme in 1982 for a mine extension envisaged using 2 rigs to drill 6 holes on 6 different sites over a 30-month (ie 2.5 year) period, covering 1750m, 2000m, 1950m, 2330m, 2250m and 3050m, with 600m of deflections in each drillhole location.

Mines and deeper mine extensions were based on a 10 to 12-year timeframe, as many of the reefs to be mined only started from a sub-outcrop ~2km below surface. International analysts struggled to comprehend as to how you could plan to have a shaft in 10 years’ time, but yet your ore reserves were only 2 years, that’s because to be in an ore reserve the reef had to be pre-developed on all 4 sides, as in by level above and below and by raises on either side. So some high grade areas were hence kept out of reserves “for emergencies” to maintain budget targets or forecasts. Either because they were known high grade areas or one raise would be left with two cuts short of a level, so it could soon be brought in and mined as required.

At one stage when I worked for Union Corporation, I was responsible for the reported quarterly production statistics, which had 3 columns being Budget, Actual and Reported – and which analysts use to make predictions/forecasts. The reported numbers (throughput/ore treated, grade, and gold produced) were allowed to be smoothed so as not to attract attention or require explanation, provided the ozs or kg of production matched the actual ozs on a financial year basis, hence the required application/mining of those not-in-reserve high grade areas.

Why drill to ~3km to 4km? – well that is because there are up to 20 different reefs in that geological time interval as shown in the 3d schematic in the Figure and they are not all payable, in fact their payability depends on the perceived depositional feed entry points into the ~320km long NE x ~160kmwide NW (Wits) basin for each particular reef. The basin is updomed, punctured and locally overturned in about the centre due to the Vredefort Dome, otherwise it forms a cereal bowl-like shape on the left hand side, that flattens at ~5km deep.

With for example the Kimberley reefs mined mostly in the Far East Rand of Evander, the Main Reef and Main Reef (Carbon) Leader through Johannesburg, to the Bird and Upper Elsburg Reefs west of Jo’burg in the West Rand, VCR and Carbon Leader in the West Wits, Vaal Reef at Klerksdorp, and mostly Basal Reefs in the Welkom Goldfield of the OFS (Orange Free State – I only know the old names).

It should be noted that even if the grade was measured on all 4 sides for the ore block to be contained in ore reserves, the distribution of the gold in the block varied according to the different type of reef, and that was measured by the MCF or Mine Call Factor, being the percentage of gold accounted for / gold called for. The proper calculation for the MCF was (declared tonnage x [declared yield {or recovered grade} +residues in g/t]) / (Total tonnage based on area mined [usually quoted in centares {ca} or sq m] x sampled grade in g/t).

Typical Reef MCFs were: Kimberley (98%), Basal (92%), Vaal (90%), Carbon Leader (89%), VCR (86%) and Elsburg (75%). Ore reserves usually used Stope Width (SW) or height (mostly ~1m to 2m). However, when it came to treatment or mill throughput, then MW or mill width was used (which basically included all the development, while CW or channel width was the reef thickness. For example at Western Deeps: Carbon Leader (CL) : CW 26cm, SW 100cm; VCR : CW 33cm, SW 134cm; Mill width or MW : 186cm (MWs were usually 20cm to 50cm higher than SWs).  

It has been stated that the watermelon-seed sized gold nuggets being found in the Pilbara were just like the ones in South Africa. However, I never saw a watermelon seed visible gold nugget in the entire time I was in South Africa, and not even referred to in museums or on display in various display cabinets of the then 8 mining houses.

The discovery of the conglomerate reefs in South Africa is well documented (and bears no resemblance to the discovery of gold in the outcrops in the Pilbara), being largely credited to an Australian named George Harrison who in 1886 stumbled over an outcrop of weathered conglomerate on the Oosthuizen farm at Langlaagte near what was to become Johannesburg (where he was helping to build a cottage) which on crushing produced a long tail of gold in the pan.

Alas as with most discoveries, who found what changes with time, and George’s mate George Walker claimed he discovered it while looking for material to build the cottage and it was the richer Main Reef (carbon) Leader, not the Main Reef. The conglomerate was often called banket, due to its resemblance to a type of nutty toffee that was being made at that time.

After that there was the gold rush and for quite some time many papers had the Wits basin derived as a sedimentary formation deposited into a sluggish basin. However, over even greater time, other geologists have come up with different theories, despite most of the reefs being contained within a sedimentary sequence of quartzites etc. It has gradually become similar to epithermal geology, where often a group of epithermal geologists all have their own theories on how the deposit they are reviewing has formed and fit that deposit into their model. Whereas for the Wits the closest correlation that still fits in my opinion appears to be quartz-rich placers with generally small pebble sizes as seen in the Figure (in fact the pebbles are often angular implying close to source). When the quartz pebbles are blue, then that usually infers uranium (in South Africa).

It is widely accepted by sedimentary theorists in South Africa that the gold in the Wits basin was derived from the Archaean greenstone belts older than 3.25bn years, while the uranium was drawn from granites that intruded the greenstones between 3.05bn and 3.2bn years’ ago. With the Wits basin itself containing sediments and volcanics up to 14km thick, deposited between 2.5bn & 2.75bn years ago.

A typical mine (that closed under Gencor) was Buffelsfontein in the Klerksdorp Goldfield which was ~9km long on strike and ~6km on dip spread over a ~9km x 8km area when projected to surface as shown in the Figure and statistically in the Table. It had shaft pillars in which nothing was allowed to be mined (to protect the shaft) that fitted into a 500m x 500m square since its Vaal Reef depth was mostly only ~2km to 2.5km below surface (its later Strathmore Shaft went to 3.7km). Whereas Western Deep Levels down to ~3km to 4km for its (Ventersdorp) Carbon Leader and VCR (Ventersdorp Contact Reef) reefs had shaft pillars that were 1km x 1km, for its two shafts ~5km apart from each other.

The typical labour force for a mine like Buffelsfontein or Hartebeestfontein was ~16,000 employees. Comprised approximately in ~1986 in the case of Harties of : 21.8% Basotho, 21.3% Xhosa, 19.4% Shangaan (Mozambique), then the Homelands (eg Ciskei, Kwazulu, Bophuthatswana), then other South Africa, then other Africa (as there was an indoctrined belief throughout Africa that you were not a man until you had worked in the mines of Southern Africa).

The shallow platinum mines were higher as in Impala’s labour force was ~46,000 or ~13,000 to 15,000 employees per shaft (double-shift), hoisting ~12mtpa up the 3 shafts for the ~1.2mozpa platinum production (platinum being ~60% of the ~5g/t PGE). Buffels’ Strathmore shaft (being two stage ie ~2km then 1.5km, had a shaft capacity of ~4,000 employees/shift because it was to 3.5km). Due to the diverse languages a command mine language (mostly Xhosa & Zulu – based) was used called Fanakalo such as “buya lapa” being “come here”, or “hamba kahle” being “go carefully”. Fanakalo was very useful as it was spoken throughout Africa.

The labour distribution was mostly because each tribe had specific skills for which they were immensely proud such as for example : Basutes with the shovel; Shangaans for drilling; Xhosa’s for locos, timbering, surface supervisory work etc; and Zulus for book-keeping & stores.

In ~1986, Buffelsfontein was achieving its production according to the following shaft mix shown in the Figure : Southern 38%, Orangia 33%, Pioneer 18%, Eastern 10% and (the in construction) Strathmore 1%.

However, drilling on such wide gaps carried its own levels of high risk, even if the orebody was tabular and the grade distribution in cmg/t (being the width in cm x the grade in g/t) for 500m x 500m sided blocks could be predicted through applying Sichel t, Kriging or Shaparov, as shown in the Figure of Buffelsfontein. Buffels sank the Strathmore Shaft with production due to come in as its other shafts ran out of production but the orebody was extensively faulted like a deck of cards end on, which restricted its planned life.

I recall another gold mine, JCI’s Joel in the Orange Free State. The main shaft was sunk and drove out to the supposed sub-outcrop position of the reef and it was not there. There were faults on either side of the shaft that had moved the sub-outcrop over 200m further away. So it was eventually encountered. On other occasions, shafts were sunk to find that the reef had been completely faulted off ahead of the shaft, as Wit Nigel discovered.

As far as I am aware, only one reef, namely the VCR had a dark andesitic lava or basaltic hangingwall, the others were mostly quartzite hangingwalls, or occasionally shale, or a different conglomerate. (It should be noted that the different reef horizons often had different names amongst the different goldfields). The gold in the conglomerates was mostly not visible in the matrix between the often small angular quartz pebbles as shown in the Figure, in complete contrast to the large mafic boulders of the Pilbara.

Some South African reefs unconformably overlie other reefs, for example the Libanon conglomerate reef in the West Wits goldfield has a shale footwall and is overlain by a quartzite that becomes the floor of the Kloof conglomerate Reef, whose hangingwall consists of a sequence of Elsburg quartzites, and then the whole package has been tilted to become unconformably overlain by the VCR(eef) which has the andesitic Ventersdorp lava/basalt as its hangingwall.

There have been comments that some of the Pilbara conglomerates resemble the Carbon Leader of South Africa, well the Carbon Leader I recall seeing at Western Deeps in the West Wits goldfield, sometimes only resembled a ~1mm thick almost horizontal pencil line on a face underground which reputedly contained visible gold (possibly/probably visible) within it.

So where do the Pilbara conglomerates fit into the geological column ? Although there is a barren cobble-sized conglomerate under the Libanon Reef in the Figure with a quartzite hangingwall and footwall and a shale horizon higher up, one of the numerous formation schematic diagrams for the Wits basin does have boulder conglomerates at significant depth below the Wits reefs (possibly another ~6km or so). And eventually (~4km deeper still) the geological column overlies Archaean gold deposits (similar to WA), for the ~14km thick “sedimentary” package.

So possibly the Pilbara conglomerates were eroded along with the Archaean and other gold in quartz veins into the Wits basin. In which case, the Wits basin may not exist in the Pilbara : possibly either because the Pilbara was a landmass at that time, or it has already been eroded.

However, it can be seen in the Table just how large the South African gold mines were in area, depth and gold production – almost like large Chinese numbers, although China’s gold mines are generally much smaller than even Australia’s gold mines. So the question is do the Pilbara conglomerate companies still insist that they have a mega-moz Wits-like goldfield?.

Disclosure and Disclaimer> : This article has been written by Keith Goode, the Managing Director of Eagle Research Advisory Pty Ltd, (an independent research company) who is a Financial Services Representative with State One Stockbroking (AFSL 247100).

Figure. Typical Plan, Section, 3d Schematic, and Reef Specimens for a South African Gold Mine.

Table. South African Gold Mines with >5Moz of Gold Prodn, (ranked by Moz Gold Prodn to 1983 or 1988).