Precious metals producer Northam Platinum could produce at full capacity of some 400 000 t/m from its newly acquired Booysendal project from 2014/15, an official said on Monday.

One feature that its bankable feasibility study (BFS) on the project, which is currently under way, would interrogate, is generating additional power using wind energy. The BFS is scheduled for completion in the second half of 2009.

Meanwhile, Northam group geologist Damian Smith told Mining Weekly Online that there had been “informal advances” between neighbouring Aquarius Platinum, the company that he said was “more in need of resources than Northam”.

This was after speculation over a possible deal between the two companies that would allow them to exploit synergies between the southern portion of the Booysendal property and Aquarius’ contiguous Everest South asset.

Northam CE Glyn Lewis said that his company would spend some R50-million on completing the BFS, with construction and site establishment set to begin in the early part of 2010. The entire mine was estimated to cost some R7,1-billion.

“If that should come to pass then, given Booysendal is a near surface deposit – access is via decline systems – it should be a rapid ramp-up from development though to full tonnage,” Smith stated.

“We could conceivably look at full tonnage from 2014/15 onwards.”

However, while Northam had enough power and water secured for the development phase of the mine, it would need additional electricity to ramp up to full production capacity.

Lewis said that this had led the miner to consider building the mine in 120 000-t/m modules, as well as interrogating alternative power sources, such as coal-fired generation and renewable power.

Elaborating on this, Smith commented that one potential power source that Northam would look at was wind power.

The company would require additional power to the tune of 60 MW to 80 MW to reach Booysendal’s full capacity tonnage, he noted. “We expect that Eskom should have dealt with most of their power issues by the time that we are going to need to draw additional power at Booysendal, but we are also looking at alternative sources.”

‘INFORMAL ADVANCES’

Asked whether there had been any communication between Aquarius and Northam regarding any deal between the two, Smith said: “There have been advances, those have been of an informal nature.”

“We have not addressed those up to now,” he stated, pointing out that Northam had thus far been focusing on completing its acquisition of Booysendal.

“We are committed to developing a mine at Booysendal, that will be a Northam mine,” Smith asserted. “And, only when we have the planning firmed up for that mine will we be able to really sit down and discuss other corporate action with Aquarius, or any other party for that matter.”

“I think they are more in need of resources than Northam,” he added.

Lewis quipped of Aquarius CEO Stuart Murray: “Tell him to put something on the table.”

CORPORATE ACTIVITY

On the corporate activity front, Smith said that Northam saw itself as more of an “assister” than a predator, and echoed Lewis' assertions that there would be opportunities for further corporate action.

Lewis said that there were many junior platinum companies that would have an increasingly difficult time raising project financing, which had “all but dried up”.

And Smith highlighted that Northam was in a strong cash position, with the potential to grow its production base.

“There are a number of juniors that have viable projects in the Bushveld, however, with the recent credit crunch, the ability to raise capital for new projects is becoming ever more difficult,” he said.

“We believe that a number of these juniors will struggle to develop their own projects and that would give us an opportunity to enter into agreements with them on whatever level is required.”

However, he dismissed the notion that Northam would play a predatory role in South Africa’s Bushveld Complex.

“I think we would prefer to see ourselves as a potential assistor to some of the juniors. We certainly wouldn’t like to see ourselves as predators.”

“We believe that with our processing technologies and ability to treat concentrate from various producers, we could offer a viable alternative to some of what has been a stranglehold from some of the majors over time,” added Smith.

“We would prefer to work with people rather than to snub them out.”

PRODUCTION OUTLOOK

Meanwhile, Smith said that Northam was in the position to return to production levels above the 300 000 oz of platinum-group metals, including gold, during the 2009 financial year.

This was after the company produced 292 989 oz in concentrate during the year to June 30 – nearly 10% less than the previous year’s figure. Having lost 26 days over the 12-month period to safety stoppages played a significant role in that reduction.

“All things being equal, if we are not challenged by safety stoppages and power outages, then I think certainly we should be able to get back over the 300 000-oz production level,” stated Smith.

“Production in the first months of this financial year has been going very well, and we expect that to continue. There’s been sterling work from the production team at Northam,” he added.