South Africa's Evander gold field, the most easterly of the country's major gold areas, came into being by accident. That sums up the early story of the Evander gold field and what were to become its four mines – mistakes, missed opportunities and downright bad luck.

Top 10 world gold producing countries 2012 [graph]

As far back as 1903, an exploratory borehole by Eastern Rand Exploration was sunk on the Winkelhaak farm – a hole that stopped well short of any gold mineralisation. Others followed, but by 1910 all exploration activities ceased in the area. By 1926, emissions of natural gas elicited some interest and there was some unsuccessful drilling for oil – drilling that incidentally, intersected gold mineralisation in conglomerates. Lack of funds prevented further exploration.

After South Africa left the gold standard in 1932, exploration would resume – but though low-gold grade Witwatersrand strata were intersected they were misinterpreted – the geologists were looking for the Main Reef on which the East Rand mines were founded. The Geological Society of South Africa concluded: "No formations have been intersected in the Far East Rand which can definitely be correlated with the Upper Witwatersrand." The indications of economic reef horizons were overlooked because the geologists were looking for the wrong thing.

By 1938 EF Marland, the chief geologist of the old Union Corporation group (now subsumed into BHP Billiton), had obtained the earlier plans and misinterpreted data that had been stored in the Society's archive. At the back of his mind Marland believed that something had been overlooked, but there was more pressing business to attend to. And it was not until a decade later that Union Corporation got around to flying magnetic reflective surveys here and in other parts of the country. And, by 1950, there were sufficient indications of geological anomalies to drill two exploration boreholes to the east of what is now our Twistdraai property. These holes provided structural information but little in the way of economically viable reef intersections.

Taung gold [photo]

Then came the realisation that borehole UC65, located roughly in the centre of what was to become the Winkelhaak Gold Mine, had in fact intersected the Kimberley Reef at 1,101 metres below surface. Gold grades were low, as were those indicated by two subsequent boreholes, but Union Corporation's geologists did realise that if the area was to have a “golden” future, it would be based on the Kimberley Reef – no Main Reef was discovered.

Then came the fortuitous mistake. A mistake in transposing the site from one plan to another resulted in borehole UC74 (now in the centre of the Evander township) being mislocated. This borehole delivered a Kimberley Reef intersection with mean gold grade of 2,615 cmg/t. It was the start of a new gold field. In 1955, half a century after the first drilling attempts, Union Corporation applied for a mining lease for Winkelhaak Mines Limited. There was a scramble to sink shafts and to start mining, and Winkelhaak's first gold was poured in 1958.

The rest has parallels with the broader history of South Africa's gold industry, particularly with that of the Free State and Jeanette. Union Corporation opened three more mines in the Evander area. Bracken and Leslie poured their first gold in 1962, followed by Kinross a few years later. But sporadic exploration of neighbouring farms failed to prove gold in payable tonnages.

The four properties were merged by Gencor (the company formed earlier by the full merger of the General Mining and Union Corporation in 1980) on the basis that overhead costs could better be contained by spreading them over what would be a large-tonnage, low-grade operation. It was not to be.

By the late 1990s, gold prices were causing problems across the entire industry and management decided to close and decommission what was the then-unprofitable No.6 Shaft at Winkelhaak in 1998 after only 13 years of operations and the extraction of only 2.2 Mt of ore at this shaft. As it was, poor gold prices that resulted in a shortage of capital meant that development needed to reach the main ore body had not been completed. Any thoughts of re-opening would have to wait until sustainably higher gold prices could restore No.6 Shaft to profitability.

More was to follow as Gencor merged with BHP Billiton and started its withdrawal from gold mining. The Evander properties were sold to Harmony Gold which believed it had the knack of mining low-grade deposits cheaply and profitably. But Harmony Gold was gradually shifting its focus to new ventures outside South Africa and publicly stated its intention either to sell or joint venture certain of its South African assets. This led to the 2008 joint venture agreement with Taung Gold over the project in terms of which Taung Gold could earn a 52% interest by completing a bankable feasibility study over it.

In 2010, a scoping study indicated that the No.6 Shaft resource merged with that of the completely un-mined neighbouring Twistdraai property, had a significant gold production profile. The stage had been set for a revitalisation of mining as an extension to the mature Evander goldfield. The 2008 joint venture arrangement was, however, soon superseded.

As a measure of our confidence in the viability of the Evander project, an agreement was reached to acquire the entire property from Harmony Gold in 2010. Taung Gold subsequently became the registered holder of a mining right over Evander in November 2013. Before No.6 Shaft was closed, development from it did not fully access the main ore body – it will when the re-opening is completed. In the meantime the new shaft will be purpose-built to meet the planned scale of ore production.