Platmin gets positive study for Pilanesberg (August 06, 2007)

Platmin (PPN-T, PPN-L) will go ahead with production from the Pilanesberg platinum group element project, in the Bushveld camp of northern South Africa, following a positive feasibility study.

The study puts the life of the mine at 16 years with average production of 250,000 oz. combined precious metals annually (platinum, palladium, rhodium and gold). About 150,000 oz. of that annual figure would be platinum and about 70,000 oz. of it palladium. Production from the project, about 60 km northwest of Rustenburg, would start in the early part of 2009.

The deposits, Tuschenkomst and Ruighoek, would be mined by open pits producing 5 million tonnes of ore annually. Tuschenkomst has a measured and indicated resource of 66.8 million tonnes grading 1.27 grams platinum, 0.59 gram palladium, 0.17 gram rhodium and 0.06 gram gold per tonne, plus 0.09% nickel and 0.02% copper. Ruighoek’s resource, all indicated, is 12 million tonnes at 1.9 grams platinum, 0.86 gram palladium, 0.21 gram rhodium and 0.09 gram gold per tonne.

The designed pit at Tuschenkomst has a strip ratio of 6.2 over the life of the mine. The plan would be to bulk-mine material from the Merensky Reef layer of the Bushveld intrusion, and several other platinum-bearing layers below it. The lower UG2 Reef layer would be selectively mined in the pit.

The two pits planned at Ruighoek have a much higher combined strip ratio, 18, reflecting highly selective mining of all the platinum-bearing layers (the Merensky, the UG2, and two intervening layers) there. Pits on both deposits would go to about a 150-metre depth.

The open pits would feed a mill at Tuschenkomst producing two concentrates (one from UG2 material and another from the other layers) and then blending them to produce a marketable product for smelters.

In metallurgical tests on the ores, the circuit is expected to recover 71% of the precious metals, plus 52% of the nickel and 69% of the copper.

Platmin expects a US$260-million after-tax net present value (at an 8% discount rate, and assuming no debt financing) and an internal rate of return of 21.7%. The project would pay back its capital in two and a half years. The study assumed that over the life of the mine, platinum would average US$951 per oz., palladium US$299, rhodium US$3,819, and gold US$593. Nickel prices were assumed to average US$17,200 per tonne (US$7.80 per lb.) and copper prices US$3,750 per tonne (US$1.70 per lb.). The modelled average South African rand exchange rate was US12.4 (or R8.06 to the U.S. dollar).

The financial model does not take into account possible byproduct credits for ruthenium and iridium, both of which are present in the deposit but whose metallurgical recoveries are not definitively known yet. Ruthenium grades are expected to run about one-eighth to one-tenth of platinum grades in Merensky Reef and related silicate material, and about one-third in UG2 material. Iridium is present as a trace element.

Platmin has a 72.4% interest in the project via its shareholding in Boynton Investments. Black- empowerment company Moepi Platinum holds another 19%, having consolidated holdings owned by five other empowerment shareholders.

Platmin is also moving to a feasibility study on the Grootboom project, over on the eastern limb of the Bushveld intrusive complex near Lydenburg. A drilling pro- gram and re-evaluation of existing drill data has allowed Platmin to increase the indicated resource at the project.

The new resource figure, calculated by consulting firm RSG Global, shows 17.7 million tonnes grading 2.39 grams platinum, 1.74 grams palladium, 0.41 gram rhodium and 0.04 gram gold per tonne on Grootboom, including resources on the adjoining Annex property. Platmin has an agreement for an option to purchase mineral rights on the Annex property from BHP Billiton (BHP-N, BLT-L, BHP-A).