Platinum Australia Now Going Full Ahead in South Africa As Well As Australia
A very intriguing company is ASX and AIM listed Platinum Australia as it looks like coming full circle and developing its Panton Sill PGM project in Australia having moved its focus of operations to South Africa. The reason for this move was quite simple. A bankable feasibility study carried out on the project in 2003 found that it technically sound but not commercially viable at the prevailing palladium price and US dollar exchange rate. The project, which is up in the Kimberleys in WA contains a resource of 14.3 million tonnes grading 5.2 g/t 7E PGEs - platinum palladium, rhodium, ruthenium, iridium, osmium and gold - which was defined by over 43,000 metres of drilling. This contains 2.4 million ounces of 7E PGEs and within it is a high grade resource of 10.1 million tonnes at 6.1 g/t 7E PGEs containing 2 million ozs 7E PGEs. This is quite a prize and not one to walk away from willingly.
The trouble was that the ore was refractory in nature and this resulted in flotation recoveries of less than 65 per cent to give a final concentrate assaying around 100 g/t PGE. The low grade of this concentrate, combined with the high levels of chrome, made the product extremely unattractive to smelters. To overcome this major problem, Platinum Australia developed its new Panton metallurgical process which achieved an overall PGE recovery of approximately 80 per cent into a very high grade PGE concentrate suitable for feeding direct to a refinery. By that time John Lewins, the managing director, was harbouring ambitions to take this technology to South Africa where it could be crucial to the success of other operations and profitable deals could be done.
The move to South Africa was a success and the company now has two projects there - Smokey Hills and Kalplats – but in the meantime the economics of the Panton Sill project have been transformed. Not only had the prices of gold, platinum and palladium rocketed since the decision was made to put the project on hold, but Sally Malay Mining has come on the scene with an offer which Mr Lewins could not refuse. In essence it agreed to spend A$750,000 in two stages. The result would be a bankable feasibility study to evaluate mining the higher grade ore at Panton which would be processed through the nearby Sally Malay plant to produce a high grade PGE concentrate acceptable to smelters. If the study proved positive Sally Malay would earn a 50 per cent interest in the first 1.5 million tonnes of ore mined at Panton and if all went well the agreement could be extended.
Sally Malay Mining has carried out some preliminary metallurgical testwork and the results tallied with those achieved by Platinum Australia. The next stage involves estimating capital and operating costs for the treatment of the high grade ore after incorporating the Panton Process so that smelting costs are eliminated. A small parcel of the ore will have to be mined from the existing decline and treated through a pilot plant. If this proves successful a larger parcel of ore, perhaps around 2,500 tonnes, will undergo similar testwork. What the two companies have in their sights is a very profitable operation thanks to higher metal prices, suitable technology and lower capital costs as a result of using the Sally Malay plant.
In the meantime there has been some good news from the Smokey Hills PGM project which is on the eastern limb of the Bushveld complex not far from the Modikwa platinum mine owned by African Rainbow Minerals and Anglo Platinum. A bankable feasibility study is taking place on a UG2 resource of 5.3 million tonnes grading 5.6 g/t 4E ( platinum, palladium, rhodium and gold ) to give 960,000 ozs 4E PGMs. The plan is to mine the UG2 Reef by open pit and shallow underground mining and treat the ore on site to produce a concentrate which would be saleable to nearby smelters. Towards the end of last month the company announced that metallurgical testwork had achieved flotation recoveries in excess of 88 per cent into just such a concentrate. This concentrate would be low in chromite and therefore attract no penalties from the smelters.
Smokey Hills has already received its ‘New Order’ prospecting rights, but they are still awaited for the Kalahari platinum project. Once everything is in order a pre-feasibility drilling programme will start. The company is therefore clearly firing on all cylinders and Brian Wides of Anglo Pacific Group is clearly delighted that he hung on to his 18 per cent holding during the difficult times. Time John Lewins came to London again to spread the gospel at one of our Forums now the tide is flowing so strongly in his direction.
