john lewins sets out 500k oz y target

Platinum Australia sets out 500k oz/y target
Allan Seccombe
Posted: Thu, 12 Jul 2007
[miningmx.com] -- PLATINUM Australia aims to be a 500,000 oz platinum group metal (PGM) producer within five years, as it brings two South African and one Australian project into being as well as looking for acquisitions, which could result in a Johannesburg listing MD John Lewins said on Thursday.


Platinum Australia will have 50,000 oz of PGM production next year and lift that to 250,000 attributable oz by 2010, with a projected cash flow of $100m a year.

“We are looking at acquisitions prospects and if those come off we will list on the JSE,” Lewins said at the Investec junior platinum mining conference in Cape Town.
a producer with north of 500,000 oz“We are looking to be a producer with north of 500,000 oz in the next five years,” he said.

The first project in the pipeline is Smokey Hills, which has a million ounces in resources updip from the Modikwa project on the Eastern Limb of the Bushveld Igneous Complex (BIC). The $54m mine will be an opencast then underground operation with a seven year life. Payback is forecast in three months.

It will produce 95,000 ounces of PGMs a year and AIM and ASX-listed Platinum Australia is negotiating a toll treatment agreement for its ore, which should be concluded in the next couple of weeks, Lewins said.

A mining licence is expected soon. Platinum Australia applied for a licence in September last year. It takes about a year for the process to be completed. Standard Bank has put $37m of finance in place.

A plant will be commissioned in April 2008.

Its second project is Kalplats on the Kraaipan Greenstone belt some 330km west of Johannesburg. Seven deposits have already been identified and drilling has started on another two potential targets. There is a resource of 3.4 million ounces at a depth of up to 200 metres.

The Kalplats project is targeted to produce 280,000 attributable PGM ounces in a $120m project. Opencast mining, with a 13:1 strip ratio would last for 10 years before mining would move underground.


Click Here to subscribe to our daily newsletter“There is major potential for expansion,” Lewins said. The project is equally shared with ARM Platinum. Prospecting rights have been granted for more ground to the north and south of the existing property, extending the strike length to 50 kilometres.

Harmony Gold drilled 45,000 metres on the property between 2000 and 2003 before ARM Platinum acquired the project.

Platinum Australia is earning 49% of the project by completing the pre-feasibility and bankable studies into the project.

The geology is broken and more complex to mine than that of the BIC, but it lends itself to opencast operations, with unexplored potential at depth. A bankable feasibility study will be completed by early 2008.

Platinum Australia has a two million ounce resource in the Kimberley region of Western Australia, where it has partnered Lonmin Platinum in developing a process to improve the grade of low-quality concentrate called the Panton Process, which is being piloted in South Africa.

A bankable study completed during the lower PGM prices in 2003 is being revised and production should start at the end of this year, Lewins said. Steady state production will be 40,000 PGM ounces a year.

Japanese and Chinese companies have already approached Platinum Australia to process the concentrate, he said.

The Panton process, if it proves viable, could be applied at Kalplats to extract metal from parts of the orebody that has grade of one gram a tonne during the second phase, he said. The first phase will produce a flotation concentrate for toll treatment elsewhere. The BIC lies 200km to the east.