| Thu 8 Oct 2009, 7:05 | | NHM - Northam Platinum Limited - Northam concludes Booysendal feasibility study |
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NHM
NHM
NHM - Northam Platinum Limited - Northam concludes Booysendal feasibility study
NORTHAM PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1977/003282/06)
Share code: NHM ISIN: ZAE000030912
("Northam")
Northam concludes Booysendal feasibility study
Johannesburg, 8 October 2009
Key features
* Modular approach confirmed
* Tonnages:
* Module 1 - 120 000 tonnes milled per month
* Module 2 - 120 000 tonnes milled per month
* Production and sales volumes:
* Module 1 - 130 000 (3PGM+Au) per month
* Module 2 - 115 000 (3PGM+Au) per month
* Financing decision to follow on the completion of value engineering process
* Northam Board approval and construction of mine expected in early 2010
* First module capex - R3 billion (2009 terms)
* Combination of steady state Zondereinde mine and significant greenfields
growth at Booysendal provides compelling PGM investment opportunity
Northam Platinum Limited is pleased to report that the Booysendal feasibility
study report is complete and is in the process of being compiled, while a review
of the design and layout is under way. Final board approval for the project is
expected early in calendar year 2010.
Northam`s acquisition of the Booysendal project became effective in August 2008,
with work on the feasibility study having begun in June 2008. Booysendal is
located on the eastern limb of the Bushveld Complex, near the town of Lydenburg.
Commenting on the results of the study, Northam CEO Glyn Lewis said today, "The
feasibility study has confirmed our approach to the project. Booysendal is
living up to our expectations and is likely to be a significant, long-life
producer, and one of the new-generation PGM mining projects of the future.
"The mining plan confirms that a modular approach, initially focussing on the
UG2 reef, should be implemented. The plan is to mine at a rate of 150 000 tonnes
per month and upgrade this production through a Dense Media Separation ("DMS")
plant to produce a concentrator feed of 120 000 tonnes per month. The second
module will have a similar production profile when it is brought into operation,
resulting in a total concentrator fed of 240 000 tonnes milled per month. For
module 1, at full capacity, in mid 2009 money terms, the average operating cost
is expected to be R410 per tonne mined.
"These operating parameters are expected to give rise to sales of some 130 000
ounces (3PGM+Au - platinum palladium, rhodium, gold) per annum on completion of
module 1, rising by a further 115 000 ounces (3PGM+Au) per annum, to a total of
245 000 ounces (3PGM+Au) for both modules.
"The capital cost for module 1 is expected to be R3.0 billion (in 2009 terms)
over a five-year period with similar capital expenditure anticipated for module
2. Our intention remains to fund the project through a combination of a rights
issue, internal retentions and medium-term bank debt."
Northam will begin the construction of an access road and water pipeline and
start the boxcut for the module 1 on-reef decline in the first half of 2010.
First concentrate from module 1 is anticipated in 2013, reaching full production
in 2015. Module 1`s life-of-mine is expected to exceed 20 years, during which
period further production expansions would be developed.
The national power utility, Eskom, has undertaken a feasibility study for an
80MVa substation to be situated on the Booysendal property. Eskom is currently
also in the process of conducting the Environmental Impact Assessment (EIA)
study for the transmission lines from the nearby Steenberg sub-station. The
application for the first 20MVa has been submitted and a budget quote is
awaited. Our critical path analysis has identified the supply of electricity as
a key factor.
The conversion of Booysendal`s old order mining right to a new order mining
right over nine of the 11 farms was executed on 10 September 2009. The
application for new order mining rights on the remaining two farms and the
transfer of the Der Brochen extension is in progress.
The scale of Booysendal, together with the accessibility of the reef horizon
from surface, provides the project with significant inherent flexibility and
growth potential. Further expansions of the mine (such as increasing the UG2
mining rate, or exploitation of the Merensky reef) will be the subject of a
further feasibility study.
Further updates will be provided to the market in due course.
Key features: Booysendal feasibility study
Key features of the Booysendal project arising from the feasibility study are:
Modular approach
* The UG2 reef will be optimally mined by developing on a modular basis.
Each module aims to produce 150 000 run-of-mine (RoM) tonnes per
month. The North Shaft complex, comprising four declines (three on
reef and one in the footwall) makes up module 1, with a similar
decline configuration considered for the South Shaft or module.
* In order to minimize the environmental impact, a reverse decline
system (which has a smaller total footprint than a conventional adit)
will be used to access the primary decline cluster to allow for the
efficient transport of ore, men, material and machinery and access to
the Merensky reef horizon.
* Depending on prevailing economic circumstances and power availability,
construction of the second module should begin in 2013.
Access to the reef
* A modified room and pillar mining method will be employed to extract
the UG2 reef, which will be transported to surface via a footwall
conveyor system connected to the reverse declines. This will allow for
maximum flexibility in the mine design and easy future access to the
Merensky reef horizon.
Throughput
* Each module will produce approximately 150 000 tonnes per month of RoM
ore with a DMS circuit to be used to remove 30 000 tonnes per month of
low grade/waste material so as to improve the grade of ore delivered
to the UG2 concentrator plant.
Anticipated costs
* The average operating cost for North Shaft is expected to be R410 per
tonne mined. There may be a marginal increase in operating cost once
the second module is producing, principally as a result of logistical
costs arising from the need for a surface cable ropeway conveyor from
the second module to an expanded metallurgical facility, and the
marginally lower grade UG2 that is anticipated at South Shaft.
Environmental permitting
* Environmental permitting for the first on-reef decline has been
approved. The Environmental Management Plan (EMP) amendment for the
reverse declines and plant infrastructure is currently underway.
Approval is expected in the first half of 2010. Extensive
environmental surveys and studies have been undertaken so as to
minimise both the footprint of the mine, and its impact on the
environment.
Timing and production build-up
* The construction of North Shaft is planned to begin in the second half
of 2010, with the first PGM concentrate being produced in 2013, after
commissioning of the processing plant.
* Construction of the South Shaft should begin in 2013, with the first
PGM ounces being produced in 2016.
Capital costs
* The project capital cost for module 1 is estimated at R2.97 billion
(in 2009 terms). The project capital cost at module 2 is estimated to
be similar (in 2009 terms).
Smelting
* Given the proposed implementation at Booysendal of Northam`s successful
vertical sparger technology in the UG2 concentrator circuit, it is
anticipated that the current smelter capacity at Northam`s Zondereinde mine
will be adequate for the treatment of module 1 UG2 concentrate.
* Accommodating concentrates from module 2 would require an upgrade of
smelter capacity and extensions to the crystallizing and electro-winning
circuits.
Power supply
* Eskom has completed the feasibility study for an 80 MVa substation to be
situated at Booysendal and is doing the EIA study for the transmission
lines from Steenberg. Northam has submitted an application for the first
20 MVa and Eskom is in the process of preparing the budget quote. Critical
path analysis has identified electricity as a key factor and significant
attention is being paid to this aspect. The spare capacity at Mototolo
(which, by agreement, is available to Northam) is adequate for the
construction of the necessary mining infrastructure.
About Northam and Booysendal
Northam Platinum Limited (Northam) is the only fully independent, black-owned
and controlled integrated PGM producer listed on the JSE Limited (JSE). The
company wholly owns and operates the cash-generative Zondereinde platinum mine
and metallurgical complex on the upper end of the western limb of the South
African Bushveld Complex near the town of Thabazimbi.
Northam is planning to develop its wholly-owned 103 million ounce (3PGM+Au)
Booysendal project, which is located near Lydenburg on the eastern limb of the
Bushveld Complex. In addition, the company holds a 7.5% interest in the Pandora
joint venture, a PGM mining operation on the western limb of the Bushveld
Complex, near Brits, in partnership with Anglo Platinum, the Bapo Ba Mogale
community and Lonmin.
The company has a combined resource base of 130 million ounces (3PGE+Au)
(including 8.1 million ounces (3PGE+Au) in mineral reserve at Northam`s
Zondereinde mine). The progressive development of Booysendal will add some 245
000 ounces (3PGM+Au) to the company`s existing annual output of some 300 000
ounces (3PGM+Au) with more than 50 years life-of-mine. As an independent, fully
integrated PGM producer, Northam has full control over the entire PGM
beneficiation stream of its metals from mine to market.
Northam wishes to confirm that the information contained in this announcement
was reviewed by an internal expert employed by Northam, Mr F R Rautenbach
(NDT - metalliferous mining), prior to release.
Distributed by:
Russell & Associates, Johannesburg
Tel: +27 (0)11 880 3924
Fax: +27 (0)11 880 3788
Northam will be hosting a presentation of the feasibility study results.
Details as follows:
* Date and time: Thursday 8 October 2009 at 11:30
* Venue: Glenhove Conference Centre, 52 Glenhove Road, Melrose Estate.
* Details of webcast and audio facilities will be published on the company`s
website at www.northam.co.za
Sponsor
BJM Corporate Finance (Proprietary) Limited
Date: 08/10/2009 07:05:02 Produced by the JSE SENS Department.
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