LONDON (Mineweb.com) -- Platinum Australia is staking more than one claim to justify the epithet “unique”. The company is developing three platinum deposits; one on the Bushveld, one in South Africa but not on the Bushveld, and the third in Australia, which latter the company’s managing director John Lewins has said has the potential to become the largest open pit platinum mine in the world. The company is listed on the ASX and AIM (ticker PLA / PLAA).
Lewins was addressing the 20:20 Platinum Day sponsored by Mining Journal and MSA Mineral Exploration in London. All three of the projects are at feasibility study stage and the company is looking to be reach 230,000 ounces per annum of four PGE (platinum palladium, rhodium and gold) in 2009.
The three projects are the Smokey Hills, on the eastern limb of the Bushveld 300 kilometres north-east of Johannesburg, the Kalahari Platinum (“Kalplats”) project in the north West Province and 330 km west of Johannesburg, and the Panton project in the Kimberley region of Western Australia. Using a basket price of $510 (platinum at $750, palladium at $275, rhodium $800 and $450 gold), Smokey Hills has an internal rate of return of 90%, while Kalplats has an IRR of 45% with a two-year payback.
Platinum Australia has an 80% interest in Smokey Hills, which will drop to 65% as a result of a sale to a Black Empowerment Group. Smokey Hills’ feasibility study is scheduled for completion this coming June. The project has over six kilometres of mapped UG2 outcropping around the margin of two hills. The deposit is adjacent to and updip of Modikwa (which is a joint venture between Anglo Platinum and ARM Mining Consortium). The resource dips to a depth of 150 metres and currently stands at 5.3 million tonnes at an average grade of 5.61 gramme/tonne 4 PGE, giving 960,000 ounces continued PGE. The grade ranges from 3.5 g/t to 19.16g/t and the reef varies in thickness between 0.5 and 1.5 metres.
The metallurgy is standard UG2 and recent metallurgical testwork at Mintek has achieved flotation recoveries in excess of 88% into final saleable concentrate. It is also important that the final concentrate produced is low in chromite, which should result in a higher payable metal price with no chromite penalties.
Within this resource, 66% is measured and 34% indicated, and the company is looking to operate at a rate of 100,000 ounces per annum for seven years. There is potential upside to expand this to 150,000 ounces per annum, but this would have to be via a joint venture with the Modikwa partners and the company is in discussion with both Anglo and ARM. The operation will be open cut and construction is expected to start in September or October of this year. Ore will initially be shipped to a nearby plant at Modikwa while the company’s own plant is being built.
The Kalahari project has previously been investigated by both Harmony and ARM, and Platinum Australia has signed a joint venture agreement with ARM under which Platinum Australia is earning a 49% interest by carrying out the pre-feasibility and bankable feasibility studies. It lies on the Kraaipan Greenstone Belt, which is a layered intrusive on rocks roughly one billion years older than the Bushveld. The reefs are magnetite, not chromitite. The deposit enjoys a good infrastructure with metalled roads and grid power available within 10 kilometres of the project. Seven deposits have been identified over a 12 kilometre strike length and there are three more prospects yet to be investigated. So far exploration drilling has amounted to 46,000 metres to give a combined indicated and inferred resource of 3.4 million ounces. The average depth is only 150 metres, and the deepest hole to date has drilled down to 240 metres.
This is a continuous reef that has been broken by faults and the company believes it can identify where the missing reef lies and there is therefore “enormous” potential for increasing the resource. There is a 50-metre wide envelope averaging 1.2 g/t with the platinum:palladium ratio marginally in excess of parity and gold comprises less than 5% of the mineralisation. Within the overall resource there is a high-grade section of 12 million tonnes grading 3.6 g/t. Intersections have included 5.9 metres at 5.38 g/t, 9.95 metres at 4.57 g/t and 7.0 metres at 4.86 g/t. At present the company believes that Kalplats has the potential to be developed initially as an open cut mine producing 160,000 to 200,000 ounces of 3PGE with a mine life of roughly ten years and there is potential to move underground an double the life of mine.
The plan currently calls for an operation of 2.1 million tones per annum to produce 195,000 ounces of platinum. The deposit is open along strike and at depth and the company has had its application accepted for a further 38km of strike length. A detailed aeromagnetic survey will be flown but the company has already defined an additional eight kilometres before hitting faulting.
The bankable feasibility study on the Panton deposit in Australia identified a resource of two million ounces. The deposit is adjacent to the Great Northern highway and 60 km to the north of Halls Creek. Platinum Australia holds 100% of the project although Sally Malay is earning 50% of the first 1.5 million tonnes of material, which it will treat. The feasibility study was actually completed in 2003 but prices and exchange rates prevailing at the time rendered it uneconomic.
The mineralisation is contained within stratiform chromitite reefs on a deposit of ten kilometres length and three kilometres width. The company has been concentrating on the Top Reef which is of ten million tonnes roughly 150 metres below the mafic / ultramafic interface and which has an average true thickness of over one metre at an average grade 6.1g/t 4 PGE. The Middle Reef averages 0.5 metres true thickness at an average grade of 3.4g/t 4 PGE. The Measured and Indicated resource of the two reefs combined amounts to 5.0 million tonnes at 2.1g/t platinum and 2.3g/t palladium and 5.6 million tonnes at 2.4 g/t platinum and 2.3 g/t palladium.
Construction will begin in the fourth quarter of 2006 and the plan is to produce up to 50,000 ounces per annum of PGE with sale of concentrate commencing in 2007.
Platinum Australia accordingly expects to produce 40,000 ounces of PGE next year, reaching 230,000 ounces in 2009.
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