| Thu 14 Jan 2010, 15:01 | | PLN - Platmin Limited - Production build up progresses at Pilanesberg Platinum |
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PLN
PLN
PLN - Platmin Limited - Production build up progresses at Pilanesberg Platinum
Mine
Platmin Limited
Incorporated in the accordance with the laws of Canada
Registration number: 610178-0
Share code on TSX: PPN
Share code on AIM: PPN
Share code on JSE: PLN
ISIN: CA72765Y1097
PRODUCTION BUILD UP PROGRESSES AT PILANESBERG PLATINUM MINE
Platmin reorganizes to achieve 250,000 PGM ounces per annum
NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE
SERVICES
January 14, 2010. TORONTO: Platmin Limited ("Platmin" or "the Company"; TSX/AIM:
PPN; JSE: PLN) today announced results for the quarter and nine months ended 30
November 2009. These results relate principally to Pilanesberg Platinum Mine
(PPM), the first of the Company`s Platinum Group Metals (PGM) producers, which
is building up to an annualized production target of 250,000 PGM ounces (3 PGMs
+ Au).
In announcing these results, Tom Dale the recently appointed CEO of Platmin,
said: "The production build-up at PPM has progressed further during the November
quarter. Metal dispatched and sold improved by over 50% and mine operations
improved steadily with run-of-mine (ROM) tonnages up by 24% on the previous
quarter. The Company should reach its targeted production rate of 250,000 PGM
ounces per annum early in calendar 2011, which is approximately one year later
than originally anticipated. Once in full production, PPM will be well placed to
play a key role in the consolidation of PGM interests in the Pilanesberg area."
Important features of quarterly performance were:-
* Net loss of US$2.3 million or US$0.01 loss per share
(previous quarter - net profit of $6.6 million or US$0.02 earnings
per share). Quarter-on-quarter, the net variance is largely due to
the $8.8 million reduction in foreign exchange gains, from $11.1
million in Q2 to $2.3 million in Q3;
* 13,406 PGM (3PGM + Au) ounces dispatched and sold
(previous quarter - 8,782 PGM ounces);
* A PGM basket price received of $1,175/oz (ZAR8,787/oz), up from the
previous quarter of $1,036/oz (ZAR8,032/oz). Quarter-on-quarter, the
higher basket price offset the strength of the Rand against the US
Dollar;
* Revenue from metal sales (revenue) of US$16.2 million (previous quarter
- US$11.0 million);
* Capitalized development and operating costs of US$31.0 million or
US$14.7 million net of revenue. As a development stage company, revenues
are offset against capitalized project development and operating costs.
(Previous quarter - US$20.6 million or US$9.6 million net of revenue);
* Topsoil and overburden removal of 3.340 million cubic meters (previous
quarter 2.263 million cubic meters);
* Reef tonnages delivered to the ROM pad of 680,261 tonnes (previous quarter
546,999 tonnes);
* Final commissioning of the UG2 and Merensky circuits of the concentrator
plant and the 10 MVA standby diesel power plant, subsequent to the quarter
end;
* Appointment of Tom Dale, mining veteran, as CEO on 1 December 2009;
* Organizational restructuring implemented to separate the management of
operations and development;
* Appointment of additional senior mining staff to bolster planning and
operational capacity in support of the long term strategy.
Important features for the nine months ended 30 November 2009 were:-
* Net loss of US$9.2 million or loss per share of US$0.02
(previous year to date net profit of US$2.7 million or earnings per
share of US$0.02). Period-on-period, the variance is largely due to the
$10.4 million reduction in foreign exchange gains, from $13.7 million
in 2008 to $3.3 million in 2009;
* The delivery of PGM concentrate from April 2009;
* 23,995 PGM ounces dispatched and sold;
* PGM basket price received of $1,074/oz (ZAR8,437/oz);
* Revenue from metal sales of US$27.9 million;
* Capitalized development and operating costs of US$81.1 million or US$53.2
million net of revenue. (Previous year - US$23.9 million);
* Topsoil and overburden removal of 9.543 million cubic meters
(previous year - 5.392 million cubic meters);
* Reef tonnages delivered to the ROM pad of 1,871,512 tonnes.
Commenting on the progress, Tom Dale today said, "Platmin has delivered on
several important fronts, including securing new order mineral rights,
consummating an effective Black Economic Empowerment (BEE) transaction and
the cost-effective establishment of world-class mining and processing
infrastructure. In a relatively short space of time, PPM has evolved from an
exploration/development company into an operating mining company. In line
with this evolution we have put in place the additional mining skills
required to achieve our targets."
PPM`s original planned production build-up to an annualized rate of 250,000
PGM ounces by the end of 2009 was an ambitious target which has not been
met. During the critical start-up phase, industry-wide industrial action
precipitated "go slows" and work stoppages by contractor employees at PPM,
significantly slowing the build-up. These disruptions adversely affected the
mine`s ability to achieve the balance between Merensky and UG2 ores required
for stability and consistency in the processing plants during this period.
Further contributory factors were:-
* Lower metallurgical recoveries from the weathered and oxidized ore mined
at or near the surface along the north-south western corridor in the pit;
* The friability of this oxidized ore limiting the upgrade factor of ore
processed through the DMS circuit. Recoveries and the effectiveness of the
DMS circuit are expected to improve as mining progresses eastwards into the
deeper, unaltered ore; and
* Higher-than-expected dilution owing to the structural complexity along the
western boundary of the pit, adjacent to the north-south fault zones.
Dilution is likely to decline as the knowledge of the ore-body increases
and mine planning improves.
The Board has approved a revised mine plan which, subject to the normal
uncertainties associated with mine planning during a start-up, will see the
production of 28,000 PGM ounces dispatched and sold for the 10 month period
ended December 31, 2009, rise to some 160,000 PGM ounces for the 12 month
period ended December 31, 2010. This is planned to increase to an annualized
production rate of 250,000 PGM ounces early in calendar 2011.
The delay of approximately one year in achieving full capacity and anticipated
corporate activities in a consolidating industry will require additional
funding. This is likely to be sourced through the combination of a short-term
working capital facility and some longer term financing. Given the strong PGM
price environment and improved investor sentiment towards the PGM sector, the
international capital markets provide attractive opportunities. Platmin
remains debt-free, un-hedged and continues to maintain a conservative funding
structure during the build-up period to full production. These factors provide
maximum flexibility for the Company`s financial structuring.
Following his appointment as CEO, Tom Dale has created a new division within
the Company focusing exclusively on exploration and development opportunities.
This division will be headed up by Platmin veteran Terry Holohan, a PGM
metallurgist with an extensive background in the business. As a first
initiative, the team will conduct a Bankable Feasibility Study (BFS) over
the nearby 20 million PGM ounce resource Magazynskraal property, which is
controlled by Platmin`s largest shareholders, the Pallinghurst Investors
Consortium and BEE partner, the Bakgatla community.
In summary, Platmin is evolving into a significant PGM producer, with PPM
set to deliver on the original BFS forecasts in the near term. The Company
continues to enjoy several competitive strengths:
* Reserves that are amenable to lower-cost surface mining, with the ability
to generate significant cash flows;
* A world-class PGM concentrator, designed for expansion and surrounded by
platinum deposits, situated approximately 50km from the nearest
competition;
* A suite of exploration and development projects providing ample opportunity
for growth in the longer term.
Platmin`s Chairman, Mr. Brian Gilbertson commented that, "Given the robust
PGM markets, the significant progress made at the operations to date, the
calibre of the orebody and the focus of the new management team, the Platmin
is well positioned to become an important player in the South African PGMs
industry."
The full results for the three and nine months ended November 30, 2009 and
accompanying MD&A can be accessed on the company`s website, www.platmin.com
About Platmin
Platmin is a mineral exploration, development and operating company engaged
in the exploration for, and development of, Platinum Group Metals (PGM)
deposits in South Africa. The Company has developed the Pilanesberg Project
into the Pilanesberg Platinum Mine (PPM) and is exploring for PGMs on its
other three key projects: Mphahlele, Grootboom and Loskop. Platmin`s goal
is to become a significant producer of PGMs through the development and
operation of several mines on its key projects. Management`s main priority
is to achieve full capacity at PPM.
For further information please contact:
Charmane Russell
Russell & Associates
+27 11 880 3924
+27 82 372 5816
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This market release contains ``forward-looking information`` which may
include, but is not limited to, statements with respect to the future
financial and operating performance of Platmin Limited (the "Company" or
"Platmin"), its subsidiaries and affiliated companies, and its mineral
projects, the future price of platinum or other Platinum Group Metals
("PGMs"), PGM production levels, mining rates, the future price of other
base metals, future exchange rates, the establishment of debt and/or credit
facilities, the estimation of mineral resources and reserves, the realization
of mineral resource estimates or their conversion into reserves, costs and
future costs of production, capital and exploration expenditures, including
remaining project development expenditure at the Pilanesberg Platinum Mine
("PPM"), costs and timing of the development of new deposits, costs and
timing of the development of new mines, costs and timing of future
exploration, requirements for additional capital, government regulation of
mining operations and exploration operations, timing and receipt of
approvals, licenses, and conversions under South African mineral legislation,
environmental risks, title disputes or claims, limitations of insurance
coverage and the timing and outcome of regulatory matters. Often, but not
always, forward-looking statements can be identified by the use of words
such as ``plans``, ``expects``, ``is expected``, ``budget``, ``scheduled``,
``estimates``, ``forecasts``, ``intends``, ``anticipates``, or ``believes``
or variations (including negative variations) of such words and phrases, or
state that certain actions, events or results ``may``, ``could``, ``would``,
``might`` or ``will`` be taken, occur or be achieved.
Forward-looking statements in this market release include, among others, the
forecast average annualized production rate of 160,000 ounces of 3PGM+Au metals
at PPM for the 12 month period ending December 31, 2010; and the ramp-up to
steady state production at PPM to achieve the Bankable Feasibility Study ("BFS")
numbers of about 20,000 ounces per month (250,000 ounces per annum on an
annualized basis) by early calendar 2011.
Such forward-looking statements are based on a number of material factors and
assumptions, including, that contracted parties provide goods and/or services on
the agreed timeframes, that equipment necessary for construction and development
is available as scheduled and does not incur unforeseen break downs, that no
labour shortages or delays are incurred, that plant and equipment functions as
specified, that geological or financial parameters do not necessitate future
mine plan changes, and that no unusual geological or technical problems occur.
Forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of Platmin and/or its subsidiaries and/or its affiliated
companies to be materially different from any future results, performance
or achievements expressed or implied by the forward-looking statements.
Such factors include, among others, general business, economic, competitive,
political and social uncertainties; the actual results of current
exploration activities; conclusions of economic evaluations and studies;
fluctuations in the value of the United States dollar relative to the
Canadian dollar or South African rand; changes in project parameters
as plans continue to be refined; future prices of platinum or other
PGMs; possible variations of ore grade or recovery rates; failure of plant,
equipment or processes to operate as anticipated; accidents, labour disputes,
industrial unrest and strikes and other risks of the mining industry;
political instability, insurrection or war; the effect of HIV/AIDS on
labour force availability and turnover; delays in obtaining governmental
approvals or financing or in the completion of development or construction
activities, as well as those factors communicated in the section entitled `
`Risk Factors`` of Platmin`s current annual information form ("AIF") which
can be viewed at www.sedar.com. Although Platmin has attempted to identify
important factors that could cause actual actions, events or results to differ
materially from those described in forward-looking statements, there may be
other factors that cause actions, events or results to differ from those
anticipated, estimated or intended. Forward-looking statements contained
herein are made as of the date of this market release and Platmin disclaims
any obligation to update any forward-looking statements, whether as a result
of new information, future events or results or otherwise. There can be no
assurance that forward-looking statements will prove to be accurate, as
actual results and future events could differ materially from those anticipated
in such statements. Accordingly, readers should not place undue reliance on
forward-looking statements due to the inherent uncertainty therein.
Date: 14/01/2010 15:01:01 Produced by the JSE SENS Department.
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