Techspectacular.com

Pilanesberg Platinum Mines (Pty) Ltd, a wholly owned subsidiary of Boynton Investments (Pty) Ltd, has been granted a mining right over four properties in the Pilanesberg project area by the South African Department of Minerals and Energy. The right covers about 85% of the Tuschenkomst, Ruighoek, Witkleifontein and Rooderand properties in the area. Initially, ore will be mined from the Tuschenkomst property followed by the Ruighoek property. Total project area is 14,511ha.

The project is located on the western limb of the Bushveld Complex in South Africa’s North West Province, around the Pilanesberg intrusion and next to Barrick’s Sedibelo project, which is estimated to contain about 90% of the world’s platinum resources and around 80% of its chrome.

About 72% of the project is held through Boynton, with about 27% held by Platmin’s Black Economic Empowerment partner, the Moepi group of companies. A smallholding making up the balance may be distributed among Boynton’s shareholders on a pro-rata basis at a later stage.

“The mining operation will recover all six platinum group elements, as well as gold, nickel and copper which are present in the ores.”

In November, 2007 Platmin announced the appointment of The Standard Bank of South Africa as lead arranger to secure about US$200m for the development of the project.

Platmin raised about C$92m (gross including an over-allotment option) in a private placement and public offering in December 2007, of which about C$76m was for construction at the project. The offering was underwritten by a syndicate jointly led by RBC Capital Markets and GMP Securities LP, and including Haywood Securities Inc.

GEOLOGY AND RESERVES

The target area in the Bushfeld Complex is the Merensky Reef, a layer of igneous rock which, together with an underlying layer, the Upper Group 2 Reef (UG2), contains most of the world’s known reserves of platinum group elements (PGEs). The Merensky Reef, which varies in thickness from 30cm to more than 1m, is a pyroxenite unit with often coarse-grained thin chromitite stringers.

The PGEs are hosted in disseminated sulphides with typical grades ranging from 3 to 10g/t. PGEs in the UG2 are contained in finely disseminated sulphides in the predominantly chromite rock, and typical grades are between 5 and 6g/t.

The mining operation will recover all six platinum group elements ‐ platinum, palladium, rhodium, ruthenium, iridium and osmium ‐ as well as gold, nickel and copper which are present in the ores.

A feasibility study on the project by SRK Consulting, announced by Platmin in July 2007, indicated proven and probable PGE mineral reserves totalling 4.4Moz of 3PGEs (platinum, palladium and rhodium) and gold, 3.2Moz attributable to Platmin. Life of Mine (LoM) is predicted at 16 years, which will be extended if the mineral resources on other properties forming part of the Mining Right are incorporated.

Platmin will produce two concentrates (UG2 and Silicate) that will be combined to achieve a PGE concentrate that is low in chrome. In order to obtain a PGE concentrate, the ore will first be crushed then wet-milled. Reagents (including collectors and frothers) will then be added to the slurry and air will be blown through the mixture, enabling the grains of the required metal minerals to be collected in the resultant froth.

Payback period on capital is predicted at two-and-a-half years following first production, based on basket metals prices less than half of current market prices, and the average operating margin over the LoM is expected to be 46%. The company says the ruthenium and iridium in ores and concentrates that will be co-produced with the 3PGEs has the potential to improve project values.

CONTRACTORS AND PRODUCTION

Engineering firm Dowding Reynard & Associates has been appointed to mine and process ore from two open pits at Tuschenkomst and Ruighoek. Mining will be based on extracting five million tonnes of ore per year, which will be processed through a central concentrating facility on the Tuschenkomst property. This will enable production to be ramped up to reach steady-state production of 250,000 3PGE+Au oz/year (100%) within the first year of production, 2009, and production is planned to reach a peak of 296,000 3PGE+Au oz/year in 2010.

“Production is planned to reach a peak of 296,000 3PGE+Au oz/year in 2010.”

Plant construction by DRA is underway, and commissioning by them is scheduled to take place in the first quarter of 2009. Initial waste stripping should start at the Tuschenkomst pit in March 2008. Ore mining at the Tuschenkomst property is on track to start during the last quarter of 2008.

Key equipment in the open pit will be 100t and 150t trucks from Terex, 125t and 325t Liebherr excavators and MCC blast hole drill rigs.

The processing plant will use Metso mills and crushers, and Outokumpu flotation cells. Also, electricity will be supplied via two 20MVA transformers. An established water network is already in place.

South African PGM plant operations contractor Minerals Operations Executive (Pty) Ltd and open-pit PGM mining contractor MCC Contracts (Pty) Ltd are the preferred contractors to run all operations at the Pilanesberg project.