JOHANNESBURG (miningweekly.com) – Eastern Platinum’s (Eastplats’) independent technical report (ITR), chrome mineral reserve estimate and economic assessment on its Barplats Zandfontein UG2 tailings storage facility (TSF), located at Crocodile River mine, has been completed, the dual-listed miner said on Monday.
The ITR, undertaken by Sound Mining, confirmed mineral resource estimates of 13.68-million tons at an average grade of 20.72% chromium oxide and a mineral reserve estimate of 6.4-mineral tons, containing 1.4-million tons of chromium oxide at an average grade of 22.36%.
“Eastplats is pleased with Sound Mining’s confirmation of the mineral reserves and project economics, which could enable near-term revenue opportunities for the company,” said Eastplats CEO Diana Hu.
The report recommended further investigations into the platinum group metals (PGMs) opportunities and suggested that Eastplats consider a feasibility study on PGM recovery in the TSF, as there may be substantial value there.
Estimated capital costs for the project were projected at R219-million, while an operating cost of R71.26 per run-of-mine (RoM) ton processed had been reported.
“The project is forecast to generate a positive cash flow in month ten and break-even in month 25. Positive cash flows averaging R12.9-million a month, after payment of royalties, are forecast over the remaining life of mine,” Eastplats noted.
Average total cost of production after capital, operating cost and royalties, excluding further exploration drilling, corporate overhead and financing costs is estimated to be R110.03/RoM ton processed.
The report showed an estimated after-tax net present value of R42.2-million, using a 13% discount rate, with an annualised internal rate of return of 24% over 33 months.
At a free-on-mine price of R870.79/t for 40% chrome concentrate, the project could achieve a cash margin of 10% and an operating margin of 14%.