Mokopane, South Africa — Hunter-Dickinson-led
Drenthe is part of Anooraq’s Northern block target on the Platreef property, 275 km north of Johannesburg.
The resource, calculated by independent consultant GeoActiv, weighs in at 99.4 million tonnes and grades 0.6 gram platinum, 0.63 gram palladium, 0.012 gram rhodium and 0.06 gram gold per tonne, plus 0.16% nickel and 0.1% copper.
The calculation is based on a total of 43 holes sunk in 2000 and 2002 over a 4.5-km-long portion of the favourable Platreef horizon. The southern 800-900 metres of the farm have been drilled off at almost 50-metre centres, though more holes are required to fill it in. The northern section has been tested by single holes every 200 metres. The work defined three zones with good grade and continuity over a total thickness of 35 metres. The largest zone measures 250 metres by 2 km and is 10-20 metres thick.
Using a cutoff grade of 0.5 gram combined platinum-palladium-gold, the resource extends some 2.4 km. Mineralization remains open to the north, as well as downdip to the west.
The main target is the upper 40-50 metres of the Platreef horizon, which forms the base of the Bushveld igneous complex and dips at 40 to the west. Most of the mineralization is hosted in a coarse-grained pyroxenite and consists of two zones, dubbed A and B, separated by a few metres of low-grade material. Zone B, at the hangingwall contact of a norite unit, generally runs around 11-14 metres in thickness. Zone A is typically 6 metres thick.
Drenthe model
With the resource figure in hand, Anooraq has developed an initial in-house economic model at Drenthe. The model considers the exploitation of an inferred development resource of 62.3 million tonnes grading 0.56 gram platinum, 0.7 gram palladium, 0.12 gram gold, 0.16% nickel and 0.09% copper. The estimate is based on an in situ metal value cutoff level of US$9.50 per tonne.
The resource excludes any hangingwall material, which has returned grades of up to around 3 grams platinum-palladium-gold.
Says David Copeland, Hunter-Dickinson’s director of projects: “We don’t see hangingwall mineralization in every hole; it doesn’t add a lot of tonnes, so at this juncture we haven’t included it in the resource. Ultimately when we start to fine-tune things, we’ll probably do something and see how it works out volume-wise.
“What I really like about it [Drenthe], from an operational perspective, is that you don’t have huge spikes carrying the holes. When you look at the assays, grades are consistent all the way down.”
Initially, a proposed open pit would have 50 walls, though the walls would follow the dip of the Platreef and steepen at depth. The life-of-mine stripping ratio is 4-to-1, but it will be less than 1-to-1 in early going.
The proposed processing rate is 8,000-10,000 tonnes of ore per day, and average annual production is pegged at 26,000 oz. platinum, 36,000 oz. palladium, and 5,000 oz. gold over an estimated life of 20 years. The model employs recoveries encountered at
By comparison, Anglo Platinum’s Potgietersrust Platinums (PPRust) mine, about 10 km south of Drenthe, produced 350,000 oz. PGMs in 2002. The head grade slipped to 3.53 grams PGMs, while the stripping ratio climbed to 17.7-to-1. Cash operating costs were US$239 per oz. At the end of 2001, reserves were about 515 million tonnes grading 3.89 grams PGMs plus gold per tonne.
Anglo Platinum has embarked on a program to boost its PGM production, including returning PPRust to the record production levels attained in 2001. Anglo Platinum is also in the midst of building a smelter complex at Polokwane (formerly Pietersburg), about 20 km from Anooraq’s property. Given Anglo Platinum’s existing relationship with Anooraq, Drenthe would seem an attractive source of new reserves.
Projected operating costs at Drenthe are as follows:
n US$11 per tonne milled;
n 90 per tonne mined;
n processing costs of US$6 per tonne;
n administrative costs of US35 per tonne;
n reclamation costs of US85 per tonne.
Copeland says these numbers are conservative and allow a lot of room for improvement, adding: “The capital cost is US$67 million based on our own concentrator and mining fleet. We’ve looked at an all-new stand-alone operation — no contract mining or toll-milling — just to see if it flies.”
The model yields an internal rate of return of 15.5% based on metal prices of US$650 per oz. platinum, US$265 per oz. palladium, US$350 per oz. gold, US$3.50 per lb. nickel and US75 per lb. copper. The rand-to-U.S.-dollar exchange rate is 8-to-1.
Sustaining capital comes to US$50 million over 20 years. The operation is expected to generate gross revenue of US$20.19 per tonne milled.
“The beauty about this place is that infrastructure is not an issue,” says Copeland. “There’s a divided highway; there’s a population of about 90,000 in and around Polokwane; the communication system is good; and there are trained technicians. Power is US3 per kWh, and the mechanical availability of equipment is around 80-85%. We’re not out in the middle of nowhere. There’s still a lot of refinement to do yet, but this thing is robust.”
Robert Dickinson, Hunter-Dickinson’s co-chairman points out that “mineralization [at Drenthe] is open to the north and downdip, the next step won’t be more engineering; now that we know it works well, we’re going to drill off more ounces.”
Rietfontein
About 18 km to the southeast, at Anooraq’s Centre Block, African Minerals, a private affiliate of Robert Friedland’s Ivanhoe Capital, is in the midst of an aggressive program aimed at earning a half-interest on Anooraq’s 29-sq.-km Rietfontein farm. The property is immediately east of African Minerals’ Turfspruit farm and just south of Anglo Platinum’s Potgietersrust open-pit mine.
The Platreef pyroxenite horizon straddles the boundary of the two farms and hosts intervals of disseminated, net-textured and massive sulphides averaging about 1 gram combined platinum-palladium-gold per tonne plus nickel and copper. Drilling on Rietfontein has encountered much wider intersections than those at Drenthe.
The Platreef horizon occurs at surface at Rietfontein. So far, 36 vertical core holes have tested 1.7 km of the horizon and, in the process, outlined continuous mineralization over a strike length of 1.4 km. The zone dips at 30-70 to the west, averages 150 metres in width and extends vertically to 50-250 metres below surface.
The holes generally encounter 2-4 higher-grade mineralized intervals between 5 and 90 metres in thickness and grading about 1 gram platinum-palladium-gold. The platinum-to-palladium ratio is about 0.65, and the platinum-to-gold ratio is around 3. The mineralization also grades up to 0.26% nickel and 0.2% copper.
Selected drill results include the following:
n Hole 008 — 90.6 metres (from 40.33 metres below surface) grading 1.09 grams platinum-palladium-gold (PGMs), 0.45% nickel and 0.35% copper;
n Hole 024 — 86.43 metres (from 118.46 metres) running 0.86 gram PGMs, 0.23% nickel and 0.19% copper;
n Hole 028 — 192.65 metres (from 30.71 metres) of 1.05 grams PGMs, 0.31% nickel and 0.24% copper; and
n Hole 031 — 107.04 metres (from 30.42 metres) of 0.74 gram PGMs, 0.32% nickel and 0.23% copper.
The Platreef horizon dips to the west and runs on to the Turfspruit farm, where it is believed African Minerals is busy delineating some 1 billion tonnes exceeding 1 gram PGMs plus gold.
“There are 30 million ounces of PGMs in the Turfspruit-Rietfontein deposit, plus 6 billion tonnes of nickel, making it certainly one of the larger accumulations of metal in South Africa,” states Dickinson.
African Minerals can earn its Rietf
ontein stake by spending US$1.5 million.
Before any mining can begin at Rietfontein, about 5,000 homes would have to be moved.
South Block
Farther south, and still on the North Limb, Anooraq holds the 1,033-sq.-km South Block project. There, five farms — Rondeboschje, Cyferkuil, Naboomfontein, Haakdoornkuil and Vaalkop — comprise part of a 12-property package in which Anooraq can earn an 80% interest from Anglo Platinum. Anooraq currently has a half-interest in the joint venture and can maintain this by spending $3.6 million on exploration over five years. Another 30% can be had by bringing a property to commercial production.
At South Block, a prominent magnetic high outlines a shallow, gently dipping pyroxenite horizon about 100 metres thick. Anooraq’s property covers a 5.4-km-long portion of the pyroxenite horizon. Geochemical surveying indicates PGM and base metal values correlate well with the pyroxenite. The property also covers all of the downdip extension of the horizon.
The same horizon appears to host Australian-based
Anooraq notes that there does not appear to have been any previous drilling on the South Block, and plans to remedy that later this year.
Anooraq first became active in the Bushveld in 1998 with the inking of a deal to earn a 70% stake in the Platreef project. Since then, the company has amassed three land packages that cover about 50 km of near-surface mineral rights on the 95-km-long Northern Limb of the Bushveld complex.
“One of our key objectives is to continue to acquire land and be in a strong prospective land position,” says Dickinson. “We’re continuing that today.”
The Bushveld complex accounts for 80% of the world’s known PGM resources and 67% of the world’s annual platinum production. Most of the current production is derived from the narrow, higher-grade Merensky and UG2 reefs. While of lower grade, the Platreef horizon is considerably thicker and amenable to low-cost, large-scale surface mining methods.
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