Metorex takes a plunge into platinum

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Charles Needham, Metorex CEO

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Metorex takes a plunge into platinum
Allan Seccombe
Posted: Fri, 07 Dec 2007

[miningmx.com] -- METOREX will begin production of 21,000 oz/year of platinum group metals in about 18 months from its newly acquired platinum project to treat chromite tailings in a R170m venture that will have a pay back in three years, CEO Charles Needham said on Friday.

Metorex spent R110m in cash and shares to acquire 100% of Phoenix Platinum, which has rights to process chromite tailings on the Western Limb of the Bushveld Igneous Complex. The current dumps will give the project a life of about 10 years.

Metorex, a diversified miner with a strong focus on copper, will spend a further R60m on a concentrator, to be built over the next 18 months, Needham told Miningmx in a telephonic interview. The project payback will be three years after the plant is commissioned.

We aren't on a major platinum drive

�We�ve had our eyes and ears open for platinum and Phoenix was a company our guys knew about,� he said, explaining Metorex had wanted to become involved in the platinum sector for a while now.

�This makes a great entry into platinum. We�ve got no deep level mining discomfort,� he said, adding Metorex had looked at a number of platinum prospects in the past.

�We need to do this in a controlled manner and we need to take small and strategic steps. We are not on a major platinum drive,� he said. �We need to deal with what we�ve got here and bed it down before we start making overtures in the mergers and acquisitions arena.�

Metorex is talking to undisclosed parties about securing the rights to their chromite and platinum risings, or material that goes onto tailings. This would increase Metorex�s resource base and lead to an increase in production.

The processing plant will operate at full design capacity of 500,000 tonnes of material a year to produce 21,000 oz of platinum group metals in concentrate, which will be sold to a nearby smelter owned by one of the major platinum companies.

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Metorex�s project is to be built between Mooinooi and Brits. Anglo Platinum, Impala Platinum and Lonmin are all in the vicinity, but Needham said the closer the smelter the better the finances for the project.

Asked if there were any synergies to be had with Sylvania Resources, which has an identical project on the Eastern Limb of the Bushveld Complex, Needham said there had not been any talks between the two companies.

The purchase of Phoenix has already been paid for and the concentrator would be funded out of internal cash flows, he said.

There are no plans to process chromite and sell it to third parties, he said. The current thinking is to place it on tailings dumps.

Needham did not immediately have to hand the prill split or how much of each platinum group metal would make up annual production, but platinum makes up the bulk of output followed by palladium and rhodium.

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