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Barplats targets 250k oz by 2007
Allan Seccombe
Posted: Fri, 20 Jan 2006

[miningmx.com] -- BARPLATS, a junior platinum miner, is achieving production levels from its Crocodile River deposits that were previously thought nearly impossible as it draws closer to a Toronto listing.

Barplats plans to be a substantial mid-tier producer of more than 500,000 oz of platinum in five years, said Allen Palmiere, Barplats chairman, in an interview with Miningmx.

The company will produce “well in excess” of 120,000 oz of platinum by the end of June, which marks the company’s fiscal year, he said. Production began in April. Output from its Crocodile River mines will rise to 200,000 oz by the end of calendar 2006, and 250,000 oz by the end of calendar 2007.

“We have significant mineral resources and it is our objective to take advantage of those resources. Certainly our objective is to produce well in excess of 500,000 oz/year within five years,” Palmiere said.

The 19-year-old Barplats has been run by a number of companies that have all tried to make it a sustainable venture but failed. World number two platinum miner Impala Platinum was the last to throw in the towel.

Under new management, Barplats is moving into production and recovery levels thought in the past to be too difficult to achieve at its Crocodile River mine on the western limb of the Bushveld Complex.

“The perception has always been, with respect to Crocodile River, that it is badly faulted, it has incompetent ground and poor roof conditions,” he said. “We’ve had nothing but pleasant surprises. The ground is very competent and the reef is pretty consistent.”

Apart from six major faults, it was not a difficult reef to mine. “If you look at geological model plans for Barplats generated a few years ago, you’d see all kinds of faults all over the place. The reality is that the vast majority of those previously indicated faults are not faults. They are relatively gentle rolls (undulations) in the reef."

We’ve had nothing but pleasant surprises

The current run rate of 80,000 tons is above levels achieved by other owners of the mine and recoveries are beyond what others had reached, he said. In October, recoveries reached 83%.

“There were also suggestions that no one would exceed more than 70% recovery, but that is history. I’m happy with recoveries in the mid to low 80s,” he said.

Barplats is making cash and it is moving towards a primary listing in Toronto either through corporate action or an initial public offering.

“We are in the process of looking at opportunities to raise equity offshore. We are reasonably well advanced. I hope within the next two months at the latest we’ll make an announcement of how we are proceeding,” he said.

Palmiere said there are plans to begin opencast mining at the Krokodildrift, now called Crocette, area, which lies to the west of its Zandfontein and Maroelabult mines. Production is expected within a year.

Drilling will soon start on the northern section of the Crocette deposit to precisely pin down the location of the reef outcrop. The granting of an exploration permit is expected in the next couple of weeks.

“Our intention would be to open cast mine that area followed by a decline and underground operation. That will be, when fully developed underground, a 40,000 to 50,000 ton/month operation, with a mine life well in excess of 10 years,” Palmiere said.

The cost of the entire Crocette project is estimated at R150m to R250m, which will be entirely self-funded out of proceeds from the open cast mine, according to preliminary plans.

Barplats is taking delivery of a second primary mill that will start operating from July 1. It would more than double the amount of ore being processed from the current 80,000 tons a month to 180,000 tons by the end of this calendar year. There are plans to boost throughput at the processing plant and feed it higher-grade material.

The three mines will generate run-of-mine feed of 240,000 tons/month, which will be fed through the dense media separation plant to strip out roughly 20% of material as waste.

The remaining 190,000 tons will be fed into the secondary mill at a grade of five grams/tonne, up from the current 4.3 grams/tonne.

Barplats has the 60 million ounce resource base at Kennedy’s Vale near Steelpoort on the eastern limb of the Bushveld Complex, where two unequipped 900-metre shafts were sunk 15 years ago.

By June Barplats will have started drilling the northern part of the deposit where there appears to be an outcrop. Barplats has to complete a bankable feasibility study to be funded through equity.

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It will cost an estimated R2.5bn to bring Kennedy’s Vale into production. The construction costs for underground development, shaft refurbishment and equipping as well as surface infrastructure will be funded through debt and equity.

The mine could produce some 200,000 tons of ore a month. “Production should not be less than 250,000 oz. This is based on extremely preliminary estimates,” Palmiere said.