Platmin’s project costs creep higher

[] — THE COST of Platmin’s Pilanesberg platinum mine continues to creep up as it moves towards full production.

In March 2009, the capital figure for the project was R1.974bn, up from the June 2007 bankable feasibility study figure of R1.666bn.

In the latest figure, the costs have nudged up from end-March this year to R3.347bn or $457m. The figure then was put at $424m.

Platmin has been raising substantial amounts of money. It has issued shares to raise $250m and a $135m convertible debenture. It has also raised a further $26m in a short-term lending facility with key shareholder Pallinghurst Resources.

Platmin wants to bring Pilanesberg up to 160,000 oz of platinum group metals in concentrate this year ahead of full production of 250,000 oz in 2011, a year behind schedule. It is also setting its sights on consolidating the platinum prospects around the mine, using its concentrator as the centre of gravity for such a plan.

The closest concentrator is 50km away, making Platmin an obvious candidate for pulling together smaller mineral holdings in the vicinity.

Platmin produced 14,177 oz of PGMs at Pilanesberg in the March quarter. It has stockpiles of nearly 71,000 tonnes of Merensky and UG2 ore as well as 813,000 tonnes of low-grade material.

One of the important aspects of the opencast mine is moving away from lower-grade oxidised material into fresh ore supplies for the plant.

“Mining and processing activities continued in the ramp-up phase to commercial production at PPM [Pilanesberg], with the groundwork having been laid for increased production once mining progresses from the oxidised zone,’ said CEO Tom Dale.

Understandably, Platmin, which is still pouring money into completing the construction of the project, posted a loss for the quarter of $5.2m against a net loss of $12.5m for the quarter to end-February 2009. Platmin has changed its year end to December from February.

The first target for growth outside the Pilanesberg project is the Magazynskraal property owned by the Pallinghurst Investors Consortium, the holder of a 52% stake in Platmin.

The property near Pilanesberg 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.

No one from the company was immediately avaiable to talk to about the quarterly results or its plans.