The pair will form a 50-50 joint venture to explore, over five years, Anooraq’s Drenthe farm and the northern portion of Anglo Platinum’s Overysel farm. Anooraq will act as operator and spend up to US$1.8 million on exploration; when it has done so, it will have the option of advancing the project to the feasibility stage.
Following the feasibility study, the companies can begin mining together or on their own. A joint management committee would oversee a combined operation, with each partner’s respective stake reflecting the relative value of the metals contained on each property as outlined under the feasibility study. The pair would then look for a black empowerment partner to take a 26% interest.
If Amplats decides to go it alone, it will retain at least a 12.5-15% non-contributory interest in the joint venture.
At Drenthe, inferred resources total 99.4 million tonnes grading 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 estimate is based on a cutoff grade of 0.5 gram PGEs plus gold.
In addition to Drenthe, Anooraq will contribute its Witrivier farm, immediately to the northeast, should the Drenthe deposit extend there.
For its part, Amplats will donate its rights to the northern portion of the Overysel farm contiguous to the south of Drenthe. Historical drilling on Overysel, within 400 metres of the Drenthe boundary, returned 10.4 metres grading 1.88 grams PGEs plus gold, 6.4 metres of 1.86 grams PGEs plus gold, and 29 metres grading 2.02 grams PGEs plus gold.
The world’s largest primary producer of platinum has committed to treat and dispose of PGE ore from any eventual operation at its recently completed smelter at Polokwane, 80 km east of Drenthe.
Amplats owns and operates the 12,000-tonne-per-day Sandsloot open-pit mine, 12 km south of Drenthe. The mine, which has been in operation since 1993, produces 350,000 oz. PGEs plus gold annually.
Anooraq also controls the Rietfontein property, 25 km south of Drenthe, where crews have outlined extensive, near-surface nickel-PGE-copper mineralization contiguous with mineralization on the adjacent Turfspruit farm. At Turfspruit, African Minerals is delineating about a billion tonnes exceeding 1 gram PGEs plus gold. African Minerals, a private affiliate of Robert Friedland’s Ivanhoe Capital, can earn a half-stake in Rietfontein by spending at least $1.5 million on exploration.
Anooraq intends to carry out infill drilling on Drenthe plus drilling aimed at determining the southern limit of the deposit on Overysel. A new resource estimate will follow.
Earlier this year, Amplats announced plans to boost platinum output by about 60% by 2006. The company was to have announced new targets sometime in November, but the strengthening rand has forced the miner to rethink its plan.
News of the deal sent shares in Anooraq up 18, or more than 9%, to $2.11 in mid-afternoon trading on Nov. 26.
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