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Jubilee's Tjate ups capex to $470m Posted: Thu, 20 Sep 2007 [miningmx.com] -- JUBILEE Platinum, a junior mining firm, said its Tjate platinum project on South Africa’s eastern Bushveld would cost $470m to build, a 17.5% increase on estimates in the firm’s June 6 scoping study. “We are increasing the shaft size to accommodate about 200,000 tonnes of ore per month,” said Colin Bird, CEO of Jubilee Platinum, in a telephonic interview. This was 50,000 tonnes per month more than estimated in the scoping study. “We just think it’s the most manageable figure,” said Bird. Jubilee, which is now working on a bankable feasibility study for Tjate, said in June the mine would produce about 262,000 oz/year of platinum, and would eventually mine at a depth of 1.1km. The capital expenditure increase was one of the findings of an optimisation study recently completed by Jubilee Platinum. The study also said the Tjate project would have a net present value (NPV) of $800m assuming a 5% discount. This NPV would increase to $1bn were production a fifth higher. On this basis, the recent announcement that Mitsubishi Corporation had withdrawn from a proposal to buy a 20% stake in the project for $16m is serendipitous for Jubilee. The Japanese trading house was hoping to buy shares for cash from Jubilee’s 49%-owned empowerment partner New Platinum Corporation. However, the BEE group declined the cash preferring to retain the shares which one company source said was motivated by the recent appreciation of shares in Eland Platinum and Wesizwe Platinum. Xstrata, the UK mining house, said in August it would buy control of Eland Platinum’s Elandsfontein project in the southern part of the Bushveld for about $1bn in cash. “They (Mitsubishi) had a very good deal, probably the best of their lives,” said Bird. “But the deal was ultimately frustrated because the BEE firm wouldn’t accept the cash,” he said. “There was no argy-bargy though.” An accelerated drilling programme would be launched at Tjate as part of the bankable feasibility study. Once the study was “up and running”, Jubilee would approach banks with a view to raising finance in an equity/debt split. “We’ve already had offers from banks,” said Bird. “In some cases, they’re even willing to take a stake in the project, but we don’t want to dilute our existing shareholders,” he said. Click Here to subscribe to
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