[miningmx.com] — PAN African Resources’ (Pan African’s) Phoenix Platinum project near Brits in North West Province could be the first of a number of platinum ventures by the junior gold producer.
The company on Wednesday held a sod-turning ceremony on the site of the plant, which will recover 12,000o ounces per year of platinum group metals (pgm) by retreating material from nearby chrome mine tailings dams.
Pan African CEO Jan Nelson said Phoenix marked a strategic diversification for the company, which produces around 100,000oz/year of gold from its Barberton Mines complex in Mpumalanga.
Nelson told Miningmx: “If the platinum basket price (the price received on the mix of pgm produced by Phoenix) hits $2,000/oz then the Phoenix plant, which will employ 40 people, will make more money than Barberton does employing 2,200 people.’
That outlook is based on the first phase of production from Phoenix, because Pan African intends doubling output to 24,000oz/year of pgm once the first phase has been successfully bedded down.
Nelson said: “Our shareholders are happy for us to diversify into platinum, and we have looked at more proposed platinum projects than gold projects over the last six months.
“We are seriously considering a possible hard rock platinum mining venture, but you know how these things go. They can fall over at the last minute.’
Nelson added the Phoenix project was running on schedule, with procurement of major equipment completed. Plant construction is scheduled to start in mid-May, with plant commissioning scheduled for October this year.
The first phase full production rate of 20,000 tonnes per month of dump material treated is expected to be achieved in the first quarter of 2012.
In February, when Pan African released its interim results for the six months to end-December, Nelson indicated the company is looking to grow both organically and through M&A activity, using its strategic relationship with empowerment partner Shanduka Resources.
Pan African reported a 58% rise in attributable profits in the six months to end-December on the back of a 32% rise in gold revenues, because of higher gold recovery grades and lower operating costs at Barberton Mines.
The writer owns shares in Pan African.
