JOHANNESBURG (miningweekly.com) – Struggling Bauba Platinum intends generating cash flows from chrome mining to fund its continued search for platinum group metals (PGMs), in Limpopo province.

JSE-listed Bauba Platinum, headed by CEO Syd Caddy, is a platinum group metals (PGM) exploration company working to develop the Bauba project, and in a Stock Exchange News Service announcement on Thursday says that the starting up of small-scale chrome mining on the Moeijelik farm will require a capital expenditure of R2-million.

Funds generated will be used to commission ten additional exploration boreholes in properties that are said to contain 71.24-million PGM ounces.

Bauba’s primary business objective is the exploration, evaluation and development on Eastern Limb of the Bushveld Igneous Complex, where a number of neighbouring companies are mining platinum from both Merensky and upper group two reefs.

The Bauba Platinum farms lie within the Leolo mountain range in Limpopo province, 40 km from the town Steelpoort and 250 km northeast of Johannesburg.

Bauba has advised shareholders that a non-binding term sheet has now been signed to enable the Bauba Platinum to assess the potential of exploiting the previously excluded mineral rights on the farms Moeijelik 412 KS and Waterkop 113 KT.

The mineral rights have been assessed at R250-million and the company has agreed to issue ordinary shares of no par value at a price of 65c an ordinary share for its 60% of the payment.

The remaining 40% is owned by the BaPedi nation through their shareholding in Bauba A Hlabirwa Mining Investments, a Bauba subsidiary in whose name the prospecting rights are held.

The mineral rights on the farm Moeijelik 412 KS have previously been geologically assessed through exploration drilling and contains a known chrome resource.

An application has been submitted to the Department of Mineral Resources to extract a bulk sample of 100 000 t of chrome ore for metallurgical test work to assess quality and potential financial viability.

Depending on these results, application will be made for additional small-scale mining permits along the 'strike' of the resource area.

The necessary applications will then be made to extract chrome ore, using a contract mining company that has experience in mining in the area over an extended period and an offtake agreement will be entered into for the run-of-mine material.

Exploration has progressed well in the northern cluster after poorer-than-expected results in the central cluster.

Bauba acquired its platinum properties from the shareholders of Ndarama Mineral Resources and Bauba A Hlabirwa Mining Investments.