JOHANNESBURG (miningweekly.com) – Emerging platinum miner Atlatsa’s Bokoni mines complex continues its upward operational trend, increasing production of platinum-group metals (PGMs) by 9% to 46 777 oz in the quarter ended June 30.

It also lifted tons milled by 16% quarter-on-quarter to 420 274 oz.

CEO Harold Motaung attributed the increase to an improved underground mining performance, together with an increase in output from the Klipfontein Merensky opencast operation, which increased production from 703 oz in the first three months of this year to 2 978 oz in the second quarter.

Delivered grades were, however, lower as a result of an increase in lower-grade opencast material and increased secondary development at the underground operations.

Recovered grade narrowed 4%, from 3.72 g/t in the second quarter of 2013, to 3.58 g/t in the three months under review.

“Despite a lackluster PGM basket price, our second quarter performance was pleasing, supported by another quarterly increase in tons milled and PGM ounces produced.

“The Klipfontein opencast mine continues to perform to expectations, supplementing concentrator feed and revenue at the Bokoni mine, while [the ramp-up of] our new-generation Brakfontein and Middelpunt Hill operations to steady state remains on track,” he commented.

Primary development increased 13% quarter-on-quarter to 2 797 m over the period as a result of good progress being made at the Brakfontein and Middelpunt Hill ramp-up projects, both on the decline shafts and lateral development.

This development rate was expected to be maintained over the next year as the operations focused on increasing face length to improve mining flexibility, while concurrently moving towards the steady-state targets of 100 000 t/m at Brakfontein and 60 000 t/m at Middelpunt Hill.

The Merensky opencast mine had reached steady state, with an ability to maintain a production rate of up to 40 000 t/m for the coming three years, as Bokoni’s underground mining operations ramped up to 160 000 t/m from its current 130 000 t/m base.  

FINANCIAL RESULTS
Atlatsa’s revenue increased 21% quarter-on-quarter as a result of the increased PGM basket price and higher production volumes, supported by the positive impact of a depreciating rand against the dollar.

The realised PGM basket price for the second quarter, at R12 114/oz, was 16% higher than the comparable prior year’s quarter.

Consolidated cash operating costs were 20% higher owing to a 16% increase in total tons milled and the Klipfontein opencast mine being in operation for the full second quarter.

“The cost increase is largely attributable to higher production, yearly wage increases, higher power utility charges during the winter months, higher stores costs as a result of higher working cost development metres, and increased contractor charges incurred as a result of the Bokoni mine’s accelerated development programme,” Motaung outlined.

Total capital expenditure for the quarter was $9.8-million, comprising 29% sustaining capital and 71% project expansion capital.

Operating activities generated cash of $5.8-million in the second quarter, compared with $4.6-million of cash used by operating activities in the second quarter of the previous year.

The basic and diluted loss improved 50% to 1c a share compared with 2c a share in the second quarter of 2013.

BOKONI RAMP-UP
Motaung noted that, on completion of the current ramp-up phase, Bokoni mine would be better positioned from both a unit cost and cash flow perspective, as it would operate from two shaft complexes as opposed to the current four-shaft system, thereby reducing costs associated with logistics and support services.

The complex’s aggregate operating costs would also be reduced by it moving from older, higher-cost shaft operations to lower-cost, new generation and more efficient shaft operations.

“The ramp-up will also enable access to higher-grade Merensky mining areas at the new-generation Brakfontein shaft complex, reduce overall sustaining capital expenditure and significantly reduce project capital expenditure,” the company maintained.

AMPLATS INTEREST
Meanwhile, Anglo American Platinum (Amplats) announced over the period that it was “moving forward with the repositioning of its portfolio”, including a review of its minority, nonmanagement joint venture participation interest in the Bokoni mine.

Atlatsa noted that the two parties remained committed as joint venture partners towards the completion of the 160 000 t/m underground steady-state ramp-up at Bokoni.

“Atlatsa is continuing its discussions with Amplats regarding Atlatsa’s intended growth plans for Bokoni and will make an announcement once a definitive strategic decision has been taken for this purpose,” it stated.

The Bokoni mine, nonetheless, remained “well positioned” to achieve its 10% year-on-year targeted growth rate on PGM ounces produced for 2014 as a result of its accelerated development programme, improvements to opencast mining performance and mine efficiency improvement initiatives.