INTERCEPTS Thu 24/07/2014

Nkwe ponders dramatic Garatau mining change

13th Jun 2012

JUNE 13 – A change of mining plan promises a lower cost and more robust economic operation at Nkwe Platinum’s Garatau platinum group metals project in the Bushveld complex, South Africa.

The change will see an initial R5.3B development of the Merensky Reef at Garatau, leaving the underlying UG2 Reef and adjacent Farm De‐Kom for future development.

An optimised bankable feasibility study prepared by DRA Mining Consultants reduces capital and operating costs and brings the mine to a steady state production much earlier than originally envisaged, with a dramatic impact on the cost of mining and production.

MD Maredi Mphahlele says focusing solely on the Merensky Reef also allows for further significant value from UG2 Reef and Farm De-Kom. “It is robust in its own right and when the UG2 resource is brought into the calculation, it points to a +40 year productive mine life,” he said.

Project NPV at 8% real discount rate is R6.9B, IRR 18.7% excluding UG2, capital payback 10 years for a mine life of 17 years. Total Merensky Reef mineable reserve is 10.8Moz @ 3.2g/t PGE.

Steady state production will be 3.6Mtpa at 3.2g/t for 330,000oz, 86% recovery. First production will be 2015, achieving steady state production in 2017. Fixed and variable cost R7,149/oz.

Nkwe says the optimised model improves cash flow by around R1B from early mining of the Merensky Reef, and the 3 year saving in time to mining provides a far more robust investment profile.

DRA’s proposal is to construct a 5x5m early access ramp from surface to the Merensky depth, then raise-bore a vertical shaft to surface. Both the ramp and vertical shaft will be available for transport of ore material and personnel.

The ramp, with modifications, can be extended to provide later access to the UG2 with the potential to rapidly develop a second vertical shaft.

 

HighGrade

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