PLATINUM Group Metals (PTM) today unveiled details of its palladium-rich Waterberg PGM project which would create 3,361 jobs and cost just over $1bn to build.
This follows completion of a pre-feasibility study of the project by South African engineering group WorleyParsons which has scoped for a mine with steady-state production of 744,000 4E ounces in concentrate over 18 years. Mine construction is planned for some 3.5 years.
Of this steady-state production, 472,000 oz would be in palladium giving the Waterberg PGM Project a 6% market share of the metal in the current market, and a larger contributor to palladium output than Stillwater.
“Producing approximately 744,000 4E ounces per year, Waterberg would be one of the largest platinum group metals mine complexes in South Africa based on 2015 production numbers,” the company said.
4E is a term used to describe the production of platinum, palladium, rhodium and gold. PTM, an acronym that represents Platinum Group Metal’s listed code in Toronto, has an 58.62% effective interest in the project. The balance is owned by Japan Oil, Gas and Metals National Corporation (JOGMEC) and a black economic empowerment partner, Mnombo Wethu Consultants.
PTM said it would continue drilling the deposit, which is situated at the uppermost end of the northern limb of the Bushveld Complex in South Africa’s North West province, to completion of a feasibility study. The company also plans to file a mining right application.
“Waterberg is designed to be a low cost, multi-decline, fully mechanised mining complex along an initial 13km deposit strike length with two 300,000 tonne per month mills built in close sequence,” said R Michael Jones, CEO of PTM.
“At 744,000 ounces annual steady state production and a modelled 18 year mine life, Waterberg is very large and offers excellent exposure to the essential metals of platinum, palladium, rhodium and gold,” he said. “Amazingly, the deposit is still open,” he added.
Some of the metrics from the pre-feasibility study show on site life of mine average cost costs of $248 per 4E ounce including by-product credits and exclusive of smelter discounts. The after tax net present value is $320m and the net present value is estimated at $507m after-tax.
PTM said the mine would be safe and built in an area priortised by the South African government for economic development.
“The increased safety, improved working conditions, low costs and decline access for rapid development all provide attractive features compared to traditional platinum and palladium mines in South Africa,” the company said.
PTM recently downgraded maiden annual production from its Maseve mine to 91,500 oz of PGMs (4E) during the 12 months ended April 2017 from 110,000 oz 4E previously forecast.
This followed “production challenges” related to the ramp up of stoping tonnes. “Project construction savings have offset some but not all of the costs resulting from the delay,” it said. The mine was built for $500m via debt and equity finance.
PTM has targeted production of 110,000 oz/year of 4E in its first year increasing to 185,000 oz 4E in its second year before reaching steady-state production of 250,000 oz 4E.
“Difficulties and delays have been experienced in certain areas of underground infrastructure, causing bottlenecks in the movement of waste and ore out of the mine,” PTM said in a statement on September 19.
