MOKOPANE (miningweekly.com) – Canadian platinum aspirant Platinum Group Metals (PTM) on Wednesday flew journalists over the company’s new award-winning platinum find beyond the mapped northern limb of Bushveld Complex.

The shallow, mechanisation-facilitating deposit may have the potential to turn the new breed into best of breed should the deep, dark and dangerous old school mines continue to suffer escalating legacy issues.

The Japanese government and several big-brand institutional shareholders from North America and the UK have funded much of the $18-million worth of exploration drilling PTM has done so far – the company’s second South African platinum foray, following its Western Bushveld Joint Venture (WBJV) in the Rustenburg area, where  $200-million of a $500-million project has been expended, 600 people are on site, and the first sales of platinum concentrate are expected to take place in mid-2015.

The current inferred resource of the Waterberg project, north of Mokopane, formerly Potgietersrus, stands at 10-million ounces, in what was a Cinderella area that nobody bothered to drill.

The basic factors of mining deposits are grade, depth and thickness.

Waterberg’s grades average 3.5 g/t to 3.7 g/t, the orebody is at a relatively shallow 100 m and orebody thickness ranges from 2.5 m to 5.5 m.

“There are multiple layers and we’ve yet to see the end of it,” PTM president and CEO Mike Jones tells Mining Weekly Online in the attached video interview.

Journalists were shown large stretches of the 100 000 m of core drilled to date.

A top team of leading South African academics and industry geologists, which PTM put to work in 2007, generated the exploration targets that have surprised on the upside.

While Platreef is the name given to the mineralisation in the Bushveld’s northern limb, the mineralisation of this deposit - in an area beyond the mapped Bushveld - is different and is thus being referred to as having T-reef and F-reef.

This specialness was recognised in London last December when it was awarded the Global Exploration Discovery of the Year accolade.

“This is totally different to the Platreef in that it's 20% gold in its metal balance,” adds Jones, who began learning the science of the earth’s physical riches at his geology-professor father’s knee from a very early age.

“A lot of people try to push the deposits we have found at Waterberg into either the Platreef, UG2 or Merensky categories, but they’re not. They’re named the T-reef and the F-reef for a reason. They have their own stratigraphy. They are true layers.

“The Platreef is a jumbled mix of things along the floor of the Bushveld. The F-reefs are not. They’re actually a true magmatic layer that we can see with continuity for kilometres and it’s something brand new for South Africa,” he adds.

Japanese Oil, Gas and Metals National Corporation, or Jogmec, a Japanese State-owned company, put up the first $3-million for the Waterberg project, “and we’ve partnered since then”.

Listed as PTM on the TSX in Toronto and as PLG on the NYSE MKT, the company is already at an advanced stage of building the WBJV Project 1 platinum mine, where it owns 74%, the other 26% being held by Africa Wide Prospecting and Exploration, a wholly owned subsidiary of the Chinese-controlled JSE-listed Wesizwe Platinum.

PTM’s Waterberg discovery is north of Anglo Platinum’s rich Mogalakwena openpit mine and Ivanplats’ promising Flatreef project.

A total of 111 holes plus deflections on the mineralised layers have been completed and metallurgical testwork indicates the best flotation recoveries in the Waterberg deposit are from the T2 layer at 88%.

T2 also has the best average grade in the deposit and the layer is 130 m below surface.

Jones says PTM’s experience in South Africa has been good. “It’s a great place to mine. We went from an initial application to a full mining right in 12 months. You couldn’t do that in North America or Europe.”

He also managed to apply online from Vancouver for additional prospecting rights in the Waterberg project's extension area, using South Africa's much-maligned, but in this case highly successful, Samrad cadastre system.

ANOTHER NEW-BREED OPERATOR

Ivanplats chairperson Robert Friedland, another new-breed operator, has also been showing tremendous enthusiasm about his TSX-listed company’s Flatreef project in the northern limb's Platreef.

This Canadian company plans to build a long-life low-cost platinum mine in Limpopo, where platinum products will be manufactured onsite, workers will receive high pay, the new State mining company will be asked to participate and black empowerment will be the broadest South Africa has seen.

“Typically, we are seeing a 25 m to 35 m true thickness in this flat-lying orebody. As a consequence, it can be mined by room-and-pillar method. It will be highly mechanised and the labour component per unit of the platinum produced will be very low compared with traditional underground mining,” Friedland informed the African Mining Indaba in Cape Town, in February.

Ivanplats also has Japanese partners though a consortium led by the Itochu Corporation and including Jogmec.

All mining would be underground and “have no material deleterious impact on local populations”.

Ivanplats also intends to add value to the minerals downstream and is planning to include smelting and possible refining components in the project.

“It is our intention to build this project into the lowest-cost, longest-life new source of platinum in the world. It’s my personal belief it will be a negative cost producer of platinum-group metals and that the base-metal endowment is strong enough to cover more than 100% of the cash operating costs to produce platinum, palladium, gold and rhodium,” Friedland added.

The company is looking to sink a centralised shaft with 360-degree mechanised mining at a depth of 750 m and says its personnel will be more like skilled surgeons than miners.

FUNDING ARRANGEMENTS

PTM’s $180-million equity offering closed in January and credit approval of a $260-million senior loan facility announced last December for WBJV has participation from Barclays/Absa, Standard Bank, CAT Financial and Societe Generale.

“WBJV is special because it’s the last near-surface, high-grade platinum deposit in the western limb of the Bushveld Complex – right in the heart of a region that produces 70% of the world’s platinum,” says Jones.

He believes it is a good time to be developing the mine because he foresees platinum supply tightening as marginal shafts close owing to higher operating costs.

“Recent labour settlements in South Africa will impact costs for conventional platinum mines. As an emerging company with a near-surface, high-grade deposit we are positioned to be in the lower quartile in terms of cost and will perform well in a tight market,” Jones adds.

Nevertheless, the sector faces challenges, including the ongoing labour unrest that has hit platinum producers hard in recent months.

“Fortunately, we’ve had no labour issues on our site. While we are not immune from labour challenges going forward, I believe we can deal with them,” he adds.

Power supply in South Africa has been a concern. Eskom, the electricity utility, is challenged to meet demand in a growing economy, which results in power shortages.

But Jones is satisfied that WBJV, where the company has a strong team, will receive the power it needs.