JOHANNESBURG (miningweekly.com) − South Africa’s black-owned Royal Bafokeng Platinum (RBPlat) said on Monday its organic growth strategy could result in a R10-billion investment in the Styldrift 2 project.

CFO Martin Prinsloo said on Tuesday that the company was “very excited” about this project, which is down dip from Styldrift 1.

“The Styldrift 2 project would form a substantial component of the resources of our total business. What we have now embarked upon is to prove those resources and convert them from inferred resources to indicated resources,” he told Mining Weekly Online.

RBPlat has started a drilling programme, with a target of 52 000 m set for 2011. To date, 26 000 m has been completed. COO Nico Muller said the results have indicated that reef intersections were well defined and relatively undisturbed.

The aim is to upgrade the resource to a position that would then enable the start up of various studies, such as the concept, prefeasibility and feasibility studies, needed to approve the project and then to mine the area.

But, Prinsloo pointed out that this was a long-term project. “The Styldrift 1 project will take seven years to build before it starts production. This would be a similar case for the Styldrift 2 project. We can only put specific numbers on the table once we have completed the required studies, but we wanted to raise the flag and announce that there is a really high value property that we are working on to upgrade its value.

“From today, we are looking at a 12-year period before Styldrift 2 can factor into our business on the same magnitude as Styldrift 1,” he explained.

IMPROVED RECOVERIES IN PRODUCTION

The 18-month-old company, which operates the Bafokeng Rasimone Platinum Mine, reported improved recoveries in production for the six months ended June 30, despite operating in a challenging environment.

The 4E platinum-group metal (PGM) ounces in concentrate remained steady at 142 100 oz compared with 141 200 4E oz in the first half of 2010.

Section 54 stoppages from the Department of Mineral Resources cost the company 14 lost shaft days, equivalent to about 55 000 t, while self imposed safety stoppages were equivalent to a loss of four shaft days.

A key feature in production recovery has included the coextraction of UG2.

“This is valuable for us as our strategy has been to focus on mining Merensky. UG2 provides us with flexibility and was certainly the right decision for this six-month period. There was a decline of 11% in the amount of Merensky mined, but this was fully made up by the additional UG2 mined and helped us to maintain production at the level we wanted to,” Prinsloo explained.

RPBlat reported a 3% increase in revenue to R1.5-billion, while headline earnings a share dropped 20% from the same period last year to 105c.

“The safety stoppages impacted on business. Mining is a volumes business and it is important to keep volumes sustained as one operates. The main difference for the headline earnings against the R1.32 for last year was owing to the weighted average issue of shares of 137-million compared with the 133-million shares in issue after the company listed.

“If you take that effect out, one would be comparing headline earnings a share of R1.10 for the first six months in 2010, to the R1.05 in 2011. This is a 5% decline as a result of additional costs for achieving and maintaining production levels as that of 2010,” Prinsloo explained.

But, the company reported a healthy and near-cash position of R1.29-billion, with CEO Steve Phiri stating that the company was in a comfortable position for the future, but remained cautious.

The Syldrift and Boschkoppie extension projects were progressing well, with the Styldrift 1 project currently two months ahead of schedule and reflecting a cost saving budget of R233.4-million. The Styldrift project would take the production up to 610 000 oz by 2017.

Safety continued to remain a key focus, with a 4% reduction in lost-time injury frequency rate and a 32% improvement in serious injury frequency rate.
 

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