Vancouver-based project developer Platinum Group Metals’ (PTM’s) 82.9% owned Western Bushveld joint venture (WBJV) Project 1, located near Rustenburg, South Africa, is about 90% complete and on track for planned production this year.
PTM says cold commissioning of the processing plant equipment is planned to start in August, with initial concentrate production on track to start in the fourth quarter, as planned.
The TSX- and NYSE MKT-listed company reports that it recently updated the mineral resources and mineral reserves for Project 1 to account for the planned increased use of mechanised mining methods, where the deposit is estimated to be thicker and accessible from nearby completed underground development.
The updated reserves have been calculated using the current three-year trailing metal prices and current cost estimates, updated detailed surface and underground drilling results, and a revised mine plan.
PTM forecasts platinum, palladium, rhodium and gold (4E) output of 116 000 oz during fiscal 2016 on a 100% basis, and 185 000 oz of 4E in fiscal 2017 contained in concentrate. The operation is expected to reach steady state at around 250 000 oz/y of 4E.
Excluding a smelter discount, on-site costs are estimated to be $526/oz of 4E for the life-of-mine on the Merensky reef, including copper, nickel and other minor elements as a credit, and $774/oz of 4E on the upper group two reef. The planned increased use of mechanised mining methods in areas near current development and a slightly weaker South African currency have resulted in a similar cost guidance to earlier estimates despite increased labour and other cost escalation in rand terms.
“We have done well at 90% completion on the project construction using a well-known plant design and our proven team. We are operationally ready with our experienced owner’s team. Underground trackless mechanised development is planned to be used for more of the mining, compared with our original design, thereby improving ramp- up and flexibility,” CEO Michael Jones says.
PTM expects to complete final conditions for the drawdown of the $40-million Sprott working capital facility in the fall of 2015.