South Africa: Promising Signs for New Mine Near Rustenburg

South Africa: Promising Signs for New Mine Near Rustenburg

Toronto-listed platinum explorer Platinum Group Metals (PTM) would proceed to a bankable feasibility study this year on a new $328m-$355m platinum mine near Rustenburg, said president and CEO Michael Jones yesterday.

The partners in the Western Bushveld Joint Venture (WBJV) are PTM with a 37% stake, Anglo Platinum (Angloplat) with 37% and Africa Wide with 26%.

Jones said the partners had recently given the go-ahead to proceeding with the bankable feasibility study after the pre-feasibility study showed the potential viability of a 250000oz-a-year platinum, palladium, rhodium and gold mine on the property south of Sun City, next door to Angloplat’s BRPM mine.

Angloplat raised the potential risk of the project not achieving its expected mining rate as well as potential difficulties in accessing the ore body, but still approved the next stage.

Jones said these risks would be addressed in the current study but PTM was confident the mine could mill at 140000 tons of ore a month. The mine could employ 3000 workers and produce its first ore in 2010.

On the basis of work done so far, a 20-year life of mine was expected but there was considerable potential to grow the size of the resource.

PTM had identified an ore body reaching to a maximum depth of 650m and along a 5km strike length.

A second question raised at the company’s presentation to media and investors was the possible fragmentation of the ore body as a result of the later geological event that created the Pilanesberg mountains.

Jones said the mineral was deposited in large blocks that could be drilled over months or years.

There was some faulting, but the mine plan was to use conventional rather than mechanical methods which, although more expensive, would be more appropriate to mining this type of deposit.

The WBJV study has considered two approaches: sinking a vertical shaft only, or starting with a decline shaft.

If a decline shaft is built, the ore could be extracted sooner, which would help to generate cash earlier.

Asked whether PTM had any plans to list on the JSE, Jones said the company had considered it but “right now we are not in money-raising mode”.

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