Dual-listed Eastern Platinum (Eastplats) and its subsidiary Barplats Mines have entered into an agreement with Union Goal Offshore Solution for the construction, mining and processing of the tailings resource, and the subsequent offtake of chrome concentrate from the Barplats Zandfontein Upper Group 2 tailings facility located at the Crocodile River mine, in South Africa.
Union Goal will finance and supply Barplats with the chrome processing circuit, related technology and knowhow, while Barplats would develop and operate the retreatment project.
The chrome circuit is designed to improve on recoveries of chrome concentrate compared with traditional technology. This could expand available resources for mining and processing.
The estimated capital requirements for Barplats are R164-million, which are expected to be funded from cash on hand, a R42.2-million upfront project payment from Union Goal and revenue from the retreatment project. The parties have presourced equipment and the construction phase is estimated to take seven months to complete.
Eastplats anticipates the retreatment project to result in revenue producing operations, through offtake of the chrome concentrates produced to Union Goal, when production starts this year.
Barplats would recover the retreatment project capital from Union Goal during operations at a rate of R25/t run-of-mine (RoM). All chrome concentrate would then be delivered to Union Goal from the retreatment project based on full cost recovery from Union Goal of all operation costs for the mining, processing, deposition and logistics.
Further, Union Goal would pay Barplats fees of R31.17/t RoM and defer payment terms for the chrome circuit of up to 33 months subject to a Barplats put and Union Goal call option for the repurchase of the chrome circuit by Union Goal in the event that either party is not satisfied with the agreed pricing for the chrome circuit once its operational capacity is established.
Eastplats CEO Diana Hu said the company was pleased to come to an agreement with Union Goal and begin construction immediately on the chrome recovery project, which would again establish Barplats as an operator.
Union Goal's business partners include major direct mine operators and traders of chrome ores and concentrates.
Union Goal also deals directly with downstream consumers through trading, direct and technological investments into ferrochrome producers and has other interests directly with the stainless steel industry.