South Africa-focused platinum developer Nkwe Platinum, which is currently preparing its South Africa-based Garatau project for full-scale mine production, said last week that it would likely establish a mechanised mine, describing this decision as a “necessity”.

“Nkwe believes that the strategy to design a mechanised mine is proving to be prescient, [as] recently there has been general acknowledgement in the industry that large-scale mechanisation is not an option but rather a necessity due to its robust economics and operating efficiencies,” the company said in a quarterly report.

After intensive exploration and predevelopment work at Garatau, a total resource of 39.94-million ounces of platinum-group elements and gold had been independently estimated, with further resource estimates and classification pending.

An early works programme (EWP) to prepare the project for full-scale mine construction had been designed and work on the water use licence, environmental authorisations, main engineering, procurement and construction management contract and block plan was currently under way.

During the EWP, the company would finalise water and power supply for construction, complete bulk earthworks, and establish a trackless workshop on surface.

It was envisaged that the EWP would start in the first quarter of 2015 and be completed by the end of the year.

Meanwhile, in April last year, the ASX-listed company announced the formation of a strategic partnership with Zijin Mining in respect of the development of Nkwe’s South African platinum-group metals (PGM) assets and, in particular, the flagship Garatau project.

During the quarter, Nkwe announced the completion of a convertible bond transaction with Zijin subsidiary Jin Jiang Mining.

“As part of this partnership, Jin Jiang invested $20-million in Nkwe through a placement of three-year convertible bonds.

“Following the issue of the convertible bonds, Nkwe and Jin Jiang agreed to an immediate conversion of the $20-million bonds and the company issued Jin Jiang 202.5-million shares . . .,” it stated.

The conversion meant that Nkwe had expedited the previous debt-to-equity timelines with Jin Jiang and provided Nkwe with a strong balance sheet as it moved into the key project development phase.

In 2011, Nkwe agreed a farm-in agreement with ASX-listed Realm Resources for the company’s Rooderand prospect, on the western limb of the Bushveld Complex.

Under the terms of this agreement, Realm would earn 51% of Rooderand in return for its expenditure of $2-million over a two-year period and the issuance of five-million shares in Realm.

“The company has subsequently reached agreement with Realm and Johannesburg-listed Chrometco to alter the agreement that Nkwe had with Realm, which would see Realm, Nkwe and Chrometco establish a standalone company focused on advancing PGM and chrome assets in South Africa,” Nkwe outlined.

Under the new agreement, Nkwe would receive a total of 45-million shares in Chrometco in two tranches – effectively holding a 16% stake in Chrometco.