LONMIN was in discussions with Sibanye-Stillwater to mine through a farm fence in order to minimise its project costs, said BusinessLive citing Ben Magara, CEO of the London-listed firm which is the subject of a takeover from Sibanye-Stillwater.
“We are in advanced discussions with Sibanye and the Department of Mineral Resources,” Magara told the publication. “We are spending some risk capital to get that project going,” he said of plans to mine laterally from its K3 shaft into Sibanye’s Siphumelele mining area.
Said Magara: “We are not there yet, but our haulages in preparation to mine that area”. The intention was to mine 40,000 tons a month from Siphumelele, keeping K3’s output at 280,000 tons a month and unit costs as low as possible.
“We could go on with this mining for five to ten years. Siphumelele would only get to it in 30 years. If we mine it now the net present value is clear,” he told BusinessLive. “The K3 project is a stand-alone commercial project.”
K3 is the biggest source of platinum group metals for Lonmin, accounting for about a quarter of production, said BusinessLive. Asked if the deal with Sibanye could be concluded before the end-February 2019 stop date for the merged company, Magara said: “Yes.”