Platmin faces production delays

Brendan Ryan | Mon, 15 Aug 2011 16:09

[miningmx.com] -- THE riots that took place at platinum junior Platmin on June 23 could delay the projected ramp-up to full production from the Pilanesberg Platinum mine (PPM) by three to six months.

Previous guidance from Platmin CEO Tom Dale was that full production at a rate of 12,000oz of platinum group metals (pgm) per month would be reached by the end of 2011.

According to Dale reporting results for the June quarter serious damage was done to equipment belonging to mining contractor MCC.

He commented, “mining recommenced on July 12 and progress is being made to return to previous volumes. Mining volumes were affected materially during July and August and it will be a significant challenge to reach previous levels by the fourth quarter of 2011.

“Due to capacity constraints arising from the destruction of MCC vehicles during the disruptions and long lead times on the delivery of new large mining equipment the management of PPM are evaluating the introduction of additional contractors to increase volumes to target levels.

“In order that PPM, MCC and the new contractor might focus on core competencies, separation of drilling and blasting and load and haul activities is being discussed.

“Load and haul would be further separated into waste and reefing operations. PPM plans to take direct control of drilling and blasting in order to optimize mineral resource management and improve pit conditions.

“The planned changes could take up to six months to implement and will create clear areas of accountability among the various parties. Prior to the industrial action, we were on our way to achieving breakeven and full production. We are confident that, once the revised operating structures are functioning, we will get back on track.”

Platmin lost US$23.2m in the June quarter (2010 June quarter - $24m loss) bringing total losses for the six months to end-June to $58m.

The company had unrestricted cash and cash equivalents totalling $160m at the end of June.

Platmin shares have dropped from a 12-month high of 850c to a low of 290c in trading on the JSE before recovering to current levels around 320c after release of these latest results on Monday.