RUSTENBURG (miningweekly.com) – Gold-mining junior Pan African Resources broke ground on its Phoenix platinum project, in South Africa's North West province, on Wednesday.

CEO Jan Nelson said the start of bulk earth works at Phoenix was an important milestone in the JSE- and Aim-listed company’s foray into platinum.

Plant construction is scheduled to start in mid-May, with plant commissioning
planned for October 2011.

The Chrome Tailings Retreatment Plant (CTRP) at Phoenix would produce at a rate of 20 000 t/m, which would equate to 12 222 oz of PGM 4E a year.

Nelson said Pan African planned to double production at CTRP.

“The aspect which attracted Pan African to this project is that it is a high profitability project with a low mining cost. At the moment, the company expects to be mining at a cost of $370/oz with a $30 reserve for contingencies. Based on a basket platinum price of $1 600/oz, the project will show a profit margin of $1 100/oz,” he said.

Nelson added that once the company mastered the extraction of platinum from chrome tailings, Pan African would look to double the resource at Phoenix to one-million tons within two years of ramping up the project to full production.

“In addition, the company is looking at a number of hard rock based platinum projects which are close to prefeasibility study stage and onwards. So Phoenix definitely marks the entrance of the company into the platinum market, but with the expansion at Phoenix, as well as other projects which the company is looking at, the company still has plans to grow its platinum portfolio significantly over the next five years,” Nelson said.

Pan African produces about 100 000 oz/y of gold from its Barberton operations in Mpumalanga.
 

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