Name and Location
Styldrift 1 expansion project, North West, South Africa.

Client
Royal Bafokeng Platinum (67%) (RBPlat) and Anglo American Platinum (33%) (Amplats).

Project Description
The Styldrift project area is adjacent to the existing Boschkoppie mining area and is located about 5.5 km from the existing Bafokeng Rasimone Platinum Mine (BRPM).

The project will exploit one of the last major Merensky mining blocks on the Western Bushveld.

Styldrift 1 will deliver an underground operation, which will be accessed through a twin vertical shaft system, with the main shaft being sunk to 758 m and the services shaft to 723 m.

The configuration of the main shaft will allow for a single-deck personnel-and-material cage compartment that can transport 185 people; a cage counterweight compartment; two Merensky reef skip compartments, each designed to accommodate a 22 t skip; and two future two skip compartments, each accommodating a 13 t skip.

The services shaft will comprise a personnel-and-equipment cage compartment, with the capacity to transport 22 people, and a cage counterweight compartment.

Four winders will be used during the project construction phase and three during the production phase. The height of the main shaft headgear is 58.6 m and the service shaft 41.3 m.

Concentrator capacity will be 2.76-million tonnes a year.

Initially, wide-reef trackless mining methods will be used, to be followed by a combination of wide reef trackless mining and narrow-reef conventional mining methods.

The mine will process 230 000 t/m of Merensky reef and 20 000 t/m of waste at steady state.

Value
The miner reduced the budgeted capital expenditure for the Styldrift I project from R11.4-billion to R11.01-billion in November 2013, with R2.5 billion having been funded to date. RBPlat has an obligation to fund 67% of the total project.

Duration
Production ramp-up is expected to start in July 2015 and steady state – at 230 000 t/m – in July 2018.

Latest Developments
During 2013, RBPlat made steady progress with the Styldrift 1 project. Overall project progress at year-end was 39.2 %, compared with a planned progress of 37.5% – a gain of 1.7%.

Sinking of the main and services shafts progressed to 708 level (shaft loading level), with 2 304 m of lateral development and 235 m of raise boring for the ore passes and silos completed.

The number of contracting companies on site escalated to 11 in December and is expected to increase to 21 in 2014, when the project reaches its peak planned yearly progress (20%) for the mining and infrastructure portion of the project.

Following the board’s approval of the change of scope and RBPlat’s revised concentrator strategy, the project’s overall budget was reduced from R11 801 million to R11 014 million, a saving of R787 million. Total capital expenditure for 2013 was R681-million and the cumulative project expenditure by year-end was R2.511-billion against an earned value of R2.705-million. This reflects a saving of R194-million on the work completed to date. Total capital commitments increased to R3.149-billion at year-end.

Further, RBPlat has made a strategic decision to upgrade the existing BRPM concentrator to accommodate the Stydrift ore in favour of building a standalone concentrator at Styldrift. This upgrade will result in a R750-million rediction in capital for RBPlat.

The upgrade will also require a significantly reduced stockpile of about 300 000 t of high-grade Merensky ore, compared with 900 000 t of high-grade Merensky ore required for the standalone concentrator.

Meanwhile, following the successful conclusion of a R700-million fundraising through a bookbuild offering, RBPlat plans raise an additional R800-million through a rights offering.

The R1.5-billion in capital raised will be used to fund the Styldrift 1 project.

The terms of the rights offering have been finalised and the offer is now unconditional in terms of the JSE listing requirements.

The company intends to raise the R800-million by issuing 14.55-million new ordinary shares at R55 a share. These shares will rank on equal footing with existing issued ordinary shares in the company.

The listing and trading of the shares available under the rights offering will start at 09:00 on April 7, with the offer closing on April 11.

Key Contracts and Suppliers
WorleyParsons (main project engineering, procurement and construction management contractor); Anglo technical division (mine shaft design); Mining & Engineering Technical Services (Mets − services shaft headgears); Shaft Sinkers (main and services shafts and associated works); Louwill Engineering (main and services shafts’ headgears and winder house structural manufacturing and erection); FLSmidth Minerals (main shaft personnel and material winder mechanical portion); Actom (formerly Alstom Industry − main shaft personnel and material winder electrical portion); Coilmech (service winder mechanical and electrical portions); Stefanutti Stocks Civils Wramatshe joint venture (civils Phase 2 contract – main bulk surface civils); Sarens (cranes); Sandvik Mining (underground production trackless equipment).

On Budget and on Time?
Overall, the project remains on schedule to commence with stoping ramp-up in July 2015, reaching steady state in June 2018.

Contact Details for Project Information
RBPlat communications manager Kea Kalebe, tel +27 14 573 1487, fax +27 86 219 5131 or email kkalebe@bafokengplatinum.co.za.
WorleyParsons, tel +27 11 218 3000.
Mets, tel +61 8 9421 9000 or fax +61 8 9325 8311.
Shaft Sinkers, tel +27 11 445 4300.
Louwill Engineering, tel +27 11 818 5186, fax +27 11 818 5185 or email mail@louwill.co.za.
FLSmidth Minerals, tel +45 36 18 10 00, fax +45 36 44 11 46 or email info@flsmidth.com.
Actom, tel +27 11 820 5111 or fax +27 11 820 5100.
Coilmech, tel +27 11 452 4063, fax +27 11 452 6104 or email info@coilmech.co.za.
Stefanutti Stocks, tel +27 11 571 4300, fax +27 11 571 4370 or email holdings@stefstocks.com.
Sarens, tel +27 11 861 3800, fax +27 11 861 3899 or email info@sarenssa.co.za.
Sandvik Mining business development manager, EMEA, Bjorn Gohre, tel +27 11 570 9676.