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ELD
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Eland Platinum - Eland Platinum Bfs Shows "Robust Economics, Solid Cashflows
Eland Platinum Holdings Limited
(formerly Nungu Trading 500 Limited)
(Incorporated in South Africa)
(Registration number 2005/029957/06)
(JSE code: ELD & ISIN: ZAE000078655)
("Eland Platinum" or "the Company")
ELAND PLATINUM BFS SHOWS "ROBUST ECONOMICS, SOLID CASHFLOWS"
The bankable feasibility study (BFS) on Eland Platinum Holdings Limited"s 65%
held Elandsfontein Platinum Mine near Brits, undertaken by the company with
input from leading PGM industry consultants, shows that the project has
robust economics and generates solid cashflows, the company announced today
(23 November 2006).
Using a conservative case with platinum (Pt) at $950/oz, palladium (Pd) at
$300/oz, rhodium (Rh) at $2 100/oz, gold (Au) at $500/oz and an exchange rate
of R8.00/$, the ungeared, pre-tax discounted cash flow analysis yields a net
present value (NPV) of R2 050 million at a 10% discount rate and an internal
rate of return (IRR) of 27%.
Based on the spot prices (20 November 2006), with Pt at $1 262/oz, Pd at
$320/oz, Rh at $4 860/oz, Au at $624/oz and R7.24/$, the NPV increases to R5
618 million and the IRR to 53%.
Eland Platinum Managing Director David Salter said: "The excellent results of
the study prove the strength of the Elandsfontein project, the base from
which we intend to grow our company."
The envisaged 250 000t/m UG2 mine has a life of more than 40 years. The
Merensky potential of the property has yet to be defined.
Opencast mining of the UG2 reef will take place during the first five years.
Underground development will begin in December 2007 and by 2012 all
production will be from underground mining.
The development schedule provides for commissioning of the concentrator
during the fourth quarter of 2007. Metal production will ramp up to an
average estimated steady state annual production of 270 000 ounces 4E
(platinum, palladium, rhodium and gold) a year by 2012. Rustenburg Platinum
Mines Ltd, a subsidiary of Anglo Platinum Limited, has a right of first
refusal to acquire all of the concentrate produced from the Elandsfontein
project.
As announced previously, all mining and concentrator operations will be
outsourced.
The total estimated capital required for the development of the mine to
August 2008, including contingency and escalation, is R1.46 billion in
November 2006. Some R62 million was spent to the end of September 2006 on
metallurgical plant progress payments, long lead items and site
infrastructure. The balance comprises R1.08 billion of capital expenditure
and R0.31 billion of working capital to fund the metal `pipeline". R177
million has been spent on acquisition, study and related costs.
Internally generated cash flows restrict the total peak funding requirement
to R1.28 billion.
The break down of the capital requirement to complete the project is as
follows:
mining R268 million
metallurgical R601 million
tailings R47 million
infrastructure R55 million
owner"s costs R60 million
contingency and escalation R50 million
A further R292 million will be needed for development and sustaining capital
during the 16-year mine planning horizon. This will be funded by internally
generated cash from the ongoing operations.
Operating at steady state, the open pit is estimated to produce 160 000
ounces 4E a year at a run of mine (ROM) grade of 3.00 grams per tonne (g/t)
4E, with a metallurgical recovery of 55%. The open pit operating cost is
estimated at R219 per tonne.
The underground operation is estimated to produce 270 000 ounces 4E a year at
steady state with a ROM grade of 3.54 g/t 4E, and a metallurgical recovery of
79%. The underground operating cost is estimated at R279 per tonne.
ENDS
Date: 23/11/2006 05:26:06 PM Produced by the JSE SENS Department
