Name and Location
Western Bushveld Joint Venture (WBJV) Project 1, North West, South Africa.

Client
The WBJV comprises project operator Platinum Group Metals, or PTM (74%), and Wesizwe Platinum (26%). PTM currently holds 54.75% in Projects 1 and 3 of the WBJV, with a right to subscribe to a further 19.25%. JSE-listed Wesizwe Platinum holds the other 26%, plus 100% of Project 2.

Project Description
The WBJV comprises Projects 1, 2 and 3.

The mine plan for Project 1 has been revised.

The new plan envisages the construction of a platinum mine and concentrator to produce between 234 000 oz/y and 300 000 oz/y of combined platinum, palladium, rhodium and gold (4E) in concentrate. During nine years of peak production, about 275 000 oz/y of 4E in concentrate will be produced from the project’s Merensky reef horizon.

The Merensky reef will be mined at widths of between 93 cm and 176 cm and the upper group two (UG2) reef will be mined at widths of between 105 cm and 205 cm.

The mining and development plan includes conventional hand-held drilling, electrical drills and scrapers, as well as winch cleaning, which is similar to the successful conventional mining operations at the adjacent mines.

Declines and primary access to the deposit have been designed for development using mechanised equipment.

Ore will initially be hauled out of the mine with mechanised equipment and transported by conveyor from year four to the end of the mine’s life. The project has an estimated 22-year life-of-mine.

The concentrator has been designed and recosted, based on treating the optimal 140 000 t/m. The revised mine plan has increased this treatment rate to 160 000 t/m and, for the concentrator to treat the increased quantity of reef, the recovery has been reduced to a discount of up to 2.5% for treatment over the nominal nameplate capacity.

Value
Peak funding for 100% of the project has been reduced from $507-million to $443-million.

Of the required capital cost, a fully funded $100-million for Phase 1 surface establishment and the underground decline development programme are in progress.

Duration
The targeted date for first concentrate production has been adjusted by six months to mid-2015.

Latest Developments
PTM has reported that  development on the WBJV Project 1 platinum mine is progressing well. 

The north mine twin declines have developed to a length of about 1 220 m. An underground drive along the strike of the deposit has advanced on the Merensky reef to about 130 m, with no major offsets. The first raise position into the Merensky reef panel has been reached and the raise will start shortly. 

The declines  are continuing and the turns into development headings targeting mine blocks below the current development level are under way. Crews are achieving the planned advance rates at the north mine.

A second set of twin declines at the south mine are being developed into the orebody, 1.8 km south of the north mine portal. The south mine declines have advanced an estimated 60 m. The development of these declines is progressing slower than expected, owing to poorer ground conditions in the first 50 m vertically from the surface. The south declines are expected to move out of poor near-surface conditions in July, improving development rates. 

As a result of the slower development rates in the south mine and a one-month project delay, owing to Section 54 safety work stoppages, the targeted start date for first concentrate production has been adjusted by six months to mid-2015. The ramp-up profile for production from this date in the following two years is similar to previous projections.

Surface development is on track.

Surface earthworks and lay down areas are well advanced. Major mill components have been ordered and deliveries for all major components remain on schedule. 

Power and water requirements are expected to be provided as required. 

Eskom is installing transformers for the initial 10 MVA service to site. 

PTM and Eskom are working on a plan to supply the site with a further 10 MVA for commissioning and early production requirements, which will be sufficient for all mining and milling operations until the full 40 MVA service is delivered. The operation does not require more than 20 MVA for several years.

Key Contracts and Suppliers
Société Generale, Barclays Bank, Absa Capital, the Standard Bank of South Africa and Caterpillar Financial (lead arrangers); Turnberry Projects (prefeasibility study and overall feasibility study); Wardrop Engineering (decline access); GRD Minproc (concentrator design); Grinaker-LTA Mining (vertical shaft design); Golder Associates Africa and Oryx Environmental (public consultation and environmental permitting work); DRA Mining (engineering, procurement and construction management); and JIC Mining Services (underground decline tunnels).

On Budget and on Time?
PTM has reported an escalation in rand terms at the project in areas such as labour, diesel fuel, power and certain supplies. It notes that these escalations are consistent with those seen in the South African mining industry in general over the past 18 months. 

The company’s original cost estimates were modelled at R8/$.  With the rand currently at or near R10/$, these cost escalations are substantially offset in dollar terms and PTM estimates that the net effect of escalation and project delays is currently at less than a 10% increase, compared with previous cost estimates.  Major service contracts and equipment purchase contracts are collectively in keeping with previous cost estimates.

Contact Details for Project Information
PTM investor and media enquiries, tel +1 604 899 5450, fax +1 604 484 4710 or email info@platinumgroupmetals.net.
Wesizwe Platinum, Sirkien van Schalkwyk, tel +27 11 994 4600, fax +27 11 994 4601 or email Sirkien@wesizwe.com.
Turnberry Projects, tel +27 11 781 0116 or fax +27 11 781 0118.
Wardrop Engineering, email info@wardrop.com.
GRD Minproc, tel +27 11 514 0005.
Grinaker-LTA Mining, tel +27 11 578 6000 or fax +27 11 578 6161.
Golder Associates Africa, tel +27 14 597 0442 or fax +27 14 592 2842.
Oryx Environmental, tel +27 11 880 5204.
DRA Mining, tel +27 11 202 8600.
JIC Mining Services, tel +27 11 564 9400, fax +27 11 315 3789 or email general@jic.co.za.