SOUTH32 LIMITED - Worsley Alumina Ore Reserves update

Worsley Alumina Ore Reserves update

South32 Limited
(Incorporated in Australia under the Corporations Act 2001)
(ACN 093 732 597)
ASX / LSE / JSE Share Code: S32
ISIN: AU000000S320
south32.net

                                            South32 Limited

                                 WORSLEY ALUMINA ORE RESERVES UPDATE

South32 Limited (ASX, LSE, JSE: S32; ADR: SOUHY) (South32) is pleased to announce changes to
its estimates of Ore Reserves for Worsley Alumina.
                     
          •   43 Mt[1] of Ore Reserves added from the Marradong West Area

Worsley Alumina is an integrated bauxite mine and alumina refinery which is 86% owned by South32.
It is located 130 kilometres (kms) south east of Perth, in Western Australia.

Full details of this update are contained in the attached report.

The estimates of Mineral Resources and Ore Reserves have been reported in accordance with the
Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012
(JORC Code) and the Australian Securities Exchange Listing Rules. This report summarises the
information contained in the JORC Code Table 1. Appendices prepared in connection with this report
have been submitted to UK Listing Authority (UKLA) national storage mechanism and are available for
inspection at http://www.morningstar.co.uk/uk/NSM or are otherwise available on South32’s website at
http://www.south32.net.

About South32

South32 is a globally diversified mining and metals company. We produce bauxite, alumina,
aluminium, energy and metallurgical coal, manganese, nickel, silver, lead and zinc at our operations
in Australia, Southern Africa and South America. We are also the owner of a high grade zinc, lead
and silver development option in North America and have several partnerships with junior explorers
with a focus on base metals. Our purpose is to make a difference by developing natural resources,
improving people’s lives now and for generations to come, and to be trusted by our owners and
partners to realise the potential of their resources.


Further Information

Investor Relations
Alex Volante                            Tom Gallop
T +61 8 9324 9029                       T +61 8 9324 9030
M +61 403 328 408                       M +61 439 353 948
E Alex.Volante@south32.net              E Tom.Gallop@south32.net

Media Relations




[1] Dry million metric tonnes.


James Clothier                         Jenny White
T +61 8 9324 9697                      T +44 20 7798 1773
M +61 413 319 031                      M +44 7900 046 758
E James.Clothier@south32.net           E Jenny.White@south32.net



Further information on South32 can be found at www.south32.net.




JSE Sponsor: UBS South Africa (Pty) Ltd
23 August 2018




Update on estimates of Ore Reserves for Worsley Alumina

South32 confirms an addition of 43 Mt to its Ore Reserves estimate as at 30 June 2018 for Worsley Alumina. The
increase relates to the first time reporting of Ore Reserves from the Marradong West area of the Worsley Alumina
project.

The Mineral Resources and Ore Reserves estimates as at 30 June 2018, are presented in Appendix 1, Table 1
and Table 3. A comparison to previously published Mineral Resources and Ore Reserves estimates (as at 30
June 2017) are presented in Appendix 1, Table 2 and Table 4.

The estimates of Mineral Resources and Ore Reserves have been reported in accordance with the Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 (JORC Code) and the
Australian Securities Exchange Listing Rules.

The breakdown of the total estimates of Mineral Resources and Ore Reserves into the specific JORC Code
categories is contained in the Appendix 1 Tables. This report also summarises the information contained in the
JORC Code Table 1, which is included in Appendix 2 of this report.
Estimate of Ore Reserves
The declared Ore Reserves estimates are based on the Worsley Alumina Mineral Resource estimates as at 30
June 2018.

Material and economic assumptions
Worsley Alumina’s Boddington Bauxite Mine (BBM) has been operating since 1984. The run-of-mine (ROM) ore
is crushed onsite before being transported by conveyor to the Worsley Alumina Refinery near Collie, in Western
Australia.

Sufficient studies have been undertaken to enable the Mineral Resource to be converted to Ore Reserve on the
basis of current operating methods and practices.

The capital costs are based on the expected future development of the mine, refinery, tailings facilities and
sustaining capital requirements. The costs have been accounted for in the operation’s valuation models.
    •    Operating costs are estimated as part of the South32 internal budgeting process, which also considers
         transport costs including current truck, conveyor and contractor rates.
    •    Other economic assumptions used for the valuation reflect South32’s internal views of demand, supply,
         volume forecasts and competitor analysis, and are commercially sensitive.

Ore Reserve classification
Proved and Probable Ore Reserve are derived from the respective Mineral Resource classification in accordance
with the JORC Code other than as noted below.
Approximately 4 Mt of Measured Mineral Resource was converted to a Probable Ore Reserve. This ore is subject
to contractual co-operation arrangements with Newmont’s Boddington Gold Mine and is under or in close
proximity to existing key infrastructure. Internal and planned dilution within ore reserve pit shells represents
<10.8% of the total Ore Reserve by mass and are considered to have the same level of confidence as the
reported Mineral Resource.

The Reserve Life reported as of 30 June 2018 reflects the scheduled extraction period in years for the total Ore
Reserves in the current approved life of operation plan.

Mining method and assumptions
The BBM mining operations are centred on existing crushing and conveying hubs in the Saddleback and
Marradong mining areas.

Shallow, multi-pit, open-cut mining techniques (drill, blast, load and haul) are used by BBM and have been
developed over the last thirty-four years to efficiently extract bauxite from the discrete pods. This mining method
is used to model and report the 30 June 2018 Ore Reserve estimate.

The Ore Reserve is reported within mine design shells, generated using mine design assumptions, including
limiting factors (i.e. heritage sites, protected areas, thickness and mining constraints etc.), which are applied to
the resource model.

Processing method and assumptions
The Worsley Alumina Refinery produces alumina from bauxite exclusively sourced from BBM utilising the Bayer
refining process. This refining process is the industry standard used to produce alumina from gibbsitic bauxite
ores.
     •    Predicted recoveries at the refinery are derived using a historic recovery model over the life of the
          operation.
     •    Metallurgical recovery is assumed at 94.1%.
     •    Allowances have been made for deleterious elements in the life of operation plan valuation.


Cut-off grade
A variable cut-off grade ranging from 22.5-25% for A.Al2O3 and <=3.5% R.SiO2 is considered in the pit design
shells used for reporting the Ore Reserves. The Marradong West area is mined under a third-party access
agreement, which specifies a cut-off grade for individual pits. This pit scale cut-off grade is applied directly when
reporting the Marradong West Ore Reserve.

Estimation methodology
The Ore Reserve as at 30 June 2018 was estimated using updated mine design shells for ore and waste,
applying the current mining parameters, constraints, and exclusions, which were then confirmed in an economic
mine schedule.

Material modifying factors
The reported Ore Reserve is within the mine design shells, using current mining methods and practices. These
are fully contained within South32 mining tenements. The Ore Reserve is scheduled to be extracted within the
expected expiration date of all mining leases.

Worsley Alumina is an operating asset which has all the required infrastructure and environmental approvals
required to operate its existing mine sites. The requirement for future infrastructure and its expected approvals
have been considered in the mine schedule which assumes no outstanding or foreseeable issues with material
legal agreements or regulatory approvals. Long-term marketing arrangements are in place.

Competent Person Statement
The information in this report that relates to estimates of Mineral Resources for Worsley Alumina is presented on
                                                      
a 100% basis and represents an estimate as at 30th June 2018. It is based on information compiled by Jessica
Binoir and Rodney Brown.
The information in this report that relates to estimates of Ore Reserve for Worsley Alumina is presented on a
                                                    
100% basis and represents an estimate as at 30th June 2018. It is based on information compiled by Glen
Burnham.

Ms. Binoir and Mr. Burnham are full time employees of South32. Mr. Brown is employed by SRK Consulting. All
three individuals are members of the Australasian Institute of Mining and Metallurgy. Each Competent Person
has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the
activities being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Each Competent Person
consents to the inclusion in this report of the matters based on their information in the form and context in which it
appears.

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