Platmin eyes growth as output ramps up

Allan Seccombe | Thu, 14 Jan 2010 16:57

[miningmx.com] -- Platmin will ramp platinum group metal (PGM) production up to 160,000 oz in concentrate this year and it is working on a bankable study for a second project to aggressively grow the company internally and through consolidation.

The Toronto- and Johannesburg-listed Platmin is roughly a year behind reaching its annual target of 250,000 PGM oz because of labour and grade issues from the oxidised part of a complicated ore body, but it has set early 2011 as the new target date. It sold 28,000 oz in the 10 months to end-December 2009.

Platmin, a company developing its flagship platinum project, brought out nine-month results to end-November, which showed revenue of $28m and a net loss of $9.2m bacuse of a $10m reduction in foreign exchange gains, it said.

Tom Dale, a mining stalwart with a history in gold and copper operations, was brought into the company in December last year as CEO by Brian Gilbertson, who is chairman of Platmin and founder of Pallinghurst Resources, the largest shareholder in the platinum junior.

Dale has since brought in open-cast mining experience, poaching skills from embattled fluorspar group Sallies, which he recently headed. He has also divided the company into operational and exploration/development units. The company has a detailed drilling programme at the mine to better predict the ore body and grades.

Platmin needs to raise further capital because of the year-long delay in reaching full production and to pursue its consolidation strategy immediately north of the Pilanesberg game reserve on the Western Limb of the Bushveld Igneous Complex, Dale said.

This would be sourced from short-term working capital facilities and longer-term financing, he said without giving details on how much money Platmin needs to secure.

Platmin’s strategy is to expand and use its concentrator -- utilising its “significant” cash flow from its steady-state PGM production – to begin consolidating platinum prospect near its mine, Dale told Miningmx.

The only other concentrator in the area is some 50km away, making Platmin the dominant player in the region, he said.

The first target is the Magazynskraal property owned by the Pallinghurst Investors Consortium, the holder of a 52% stake in Platmin. The property has a resource of 20 million ounces of PGMs and the exploration/development team headed by Terry Holohan will shortly start a bankable study into it.

“We have got an impatient chairman and he wants things to happen,” Dale said of Gilbertson with whom he worked at Gencor in the 1990s.

The group has three other exploration projects on the Eastern Limb it is investigating.

Dale said relations with labour at the mine was showing signs of normalising after a month-long strike in August and disruptive discontent in the months leading up to the action.