| Thu 4 Nov 2004, 14:06 | | PROGRESS AT MESSINA PLATINUM |
|
MESSINA LIMITED - SOUTHERN PLATINUM REPORTS ON PROGRESS AT MESSINA PLATINUM
MESSINA LIMITED
(Registration number 1950/035912/06)
Share code: MES
ISIN: ZAE 000004438
(`Messina`)
SOUTHERN PLATINUM REPORTS ON PROGRESS AT MESSINA PLATINUM
The following is an extract from a news release issued by SouthernEra Resources
Limited, Messina`s holding company, in Toronton on 3 November 2004.
`November 3, 2004
Shares Issued and Outstanding 85,339,411
TSX: SPC
Southern Platinum Reports on Progress at Messina Platinum
Voorspoed Mine Surpasses 80,000 tonnes per month Production Target
Toronto, Ontario Southern Platinum Corp. today reported on progress at the
Company`s 91.5 percent subsidiary Messina Platinum and announced that the Phase
1 (Voorspoed) mine last month mined 82,800 tonnes and milled 81,383 tonnes. The
table below highlights the performance achieved at the Voorspoed mine through
the third quarter of 2004.
Q1 Q2 Q3 Q3 YTD October
04
Reef Tonnes 158,003 146,803 214,187 518,993 83,023
Mined
Reef Tonnes 171,410 157,147 199,967 528,524 81,383
Milled
5PGE+Au Grade 4.33 4.12 3.64 4.01 3.83
g/t
Plant 89.2 87.9 89.0 88.74 88.1
Recoveries %
5PGE + Gold Oz. 21,284 18,301 20,822 60,407 8,827
Nickel Tonnes 216 182 217 615 85
Copper Tonnes 157 131 157 445 60
Within months of gaining control of Messina approximately four years ago,
Southern Platinum commenced development of the Phase 1 mine. This was financed
out of treasury until three years ago, on September 11, 2001, when Messina
Platinum secured the project finance required to complete construction of the
Phase 1 mine. Two years ago, construction of the Phase 1 mine`s infrastructure
was completed on schedule and on budget and the Main Shaft and Main Plant were
commissioned. Over the past two years, Messina has been developing underground,
to open up mining faces, and recruiting and training its workforce, which now
stands at approximately 1,800.
Based on knowledge gained while mining on the two upper levels of the mine
during the construction period, the Board in 2002 approved the expansion of the
Phase 1 mine`s capacity from the original 80,000 tonne per month to 120,000
tonnes per month. In addition, the implementation of new mining methods -
conventional and mechanised long-hole stoping - was also approved. To support
the increased mining rate, deepening of the mine commenced immediately rather
than waiting until Year 5 as originally planned. In addition, construction of a
trackless workshop was completed at the 350-meter level; development of a
decline ramp from the 350-meter level commenced; a fleet of trackless
development and mining equipment was purchased and operators were hired and
trained.
These strategic decisions - to increase the mining rate and to implement
superior mining methods - were embarked on with the full understanding that the
mine`s build-up to full production would be delayed. However, these decisions
ensure that once in full production the mine will be safer, more productive and,
hence, more profitable. Had Messina not taken these key strategic decisions when
it did, the risk that the originally designed 80,000 tonne per month Voorspoed
shaft would be able to achieve and sustain an operating profit under the current
strong Rand environment would be greater than it currently is.
The geology of Messina Platinum, which is unique on the platinum-rich Bushveld
Igneous Complex, allows the implementation of conventional and mechanised long-
hole stoping, which are superior to the conventional down-dip mining practiced
on most other platinum mines in South Africa.
In addition to the implementation of long-hole stoping, a number of significant
business practice improvement at the Phase 1 mine have been implemented over the
past ten months, including:
Improving Messina`s safety performance;
Implementing continuous operations to improve productivity. Messina is the only
underground platinum mine in South Africa that has adopted this practice.
Doubling development rates since the start of the year; and
Fundamentally restructuring Messina`s bonus compensation scheme to reward
employees for excellent performance.
As with the strategic decisions described above, these actions taken over the
past ten months - while in the near term impacting the mines build-up to full
production - ensure that once full production is achieved it will be sustainable
and profitable under even under a harsh exchange rate environment. Collectively,
these initiatives taken early in the 20-year life of this mine ensure that the
mine will be amongst the safest, most productive and profitable underground
platinum mines in South Africa.
In addition to the impact of these strategically important initiatives,
Messina`s build-up to full production has been slower than anticipated due to
the inexperience of the majority of Messina`s new work force. Approximately
1,000 of Messina`s employees have been on site for just over 12 months. As each
month passes, the experience and productivity of the workforce improves.
Communications with the three unions representing Messina`s 1,800 employees have
improved over the past few months and constructive consultations are underway to
improve the productivity and working conditions of the employees.
In addition to the high level of activity at the Phase 1 mine, Messina has
continued exploration at the Phase 2(Doornvlei and Dwaalkop sections) and Phase
3 (Zebediela Section) projects. A feasibility study has been completed at the
Phase 2 Project and investigations are currently ongoing to fully evaluate
alternatives to commence the project in the current strong Rand environment.
During 2004 Southern Platinum has provided support to its subsidiary Messina
Platinum to meet the first two repayments in terms of the RMB syndicated project
debt facility. Through an inter-company facility arranged by the Company,
Messina repaid R63 million (approx. US$9.5 million) at the end of February and a
further R75 million (approx. US$11 million) at the end of August. Messina is
continuing discussions with the RMB syndicate and another major South African
bank to arrange restructuring of the remaining facility.
Southern Platinum is an independent producer, developer and explorer of platinum
group metals. The Company now controls the following platinum assets:
91.5 percent of Johannesburg-listed Messina Platinum;
50 percent of the Dwaalkop Joint Venture;
85 percent of the Millennium Platinum Project in South Africa;
100 percent of the Paradise Platinum Project in South Africa; and
95 percent of the Monts de Cristal Platinum Project in Gabon.
The common shares are traded on the Toronto Stock Exchange (TSX: SPC).
FOR FURTHER INFORMATION PLEASE CONTACT:
Southern Platinum Corp.
Mr. Patrick Evans, President and CEO
Telephone: (416) 359-7800
Fax: (416) 359-7801
E-mail: inbox@southplats.com
www.southplats.com
NOTE: Certain statements contained herein are `forward-looking` and are based on
the opinions and estimates of management, or on the opinions and estimates
provided to and accepted by management. These opinions and estimates include
those that relate to all the geological, development, mining and commodity price
and market parameters used by management. Forward-looking statements are subject
to a variety of risks and uncertainties and other factors that could cause
actual events or results to differ, possibly significantly. Readers are
therefore cautioned not to place undue reliance on any forward-looking
statement.`
4 November 2004
Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
CORPORATE FINANCE
