Platreef
Photo by: Ivanhoe Mines
TORONTO (miningweekly.com) – Africa-focused project developer Ivanhoe Mines’ TSX-listed shares on Wednesday morning rose C$0.11 apiece after the company released its preliminary economic assessment (PEA) of its flagship Platreef platinum group elements project.
The project is located in the heart of South Africa's Bushveld Igneous Complex, which is a most-important global platinum-producing region, having been likened to an ‘Aladdin’s Cave’ for its colossal mineral wealth.
The Johannesburg-based company said that the independent PEA used a base-case output scenario of 785 000 oz/y of platinum, palladium, rhodium and gold, with an estimated pre-production capital cost of about $1.7-billion.
The company said that the project, with the highest concentration of base metals among Africa's platinum group metals (PGM) producers, would rank at the bottom of the cash-cost curve, at an estimated $341/oz of PGMs plus gold, net of by-products.
The PEA estimated the project to have an after-tax net present value of $1.6-billion at an 8% discount rate, and an internal rate of return of 14.3%.
“Completion of the Platreef PEA is another significant step in the progression of our plan to develop this remarkable discovery into a world-class, underground mine,” executive chairperson Robert Friedland said.
Ivanhoe is planning to develop a large, mechanised underground mine through a phased development approach, starting with an initial capacity of four-million tonnes a year through which it would establish an operating platform, before expanding and ramping up to 12-million tonnes a year.
Ivanhoe said that the development phases would be implemented depending on market demand, smelting and refining capacity and capital availability. It could even consider an expansion beyond the third phase, subject to further study.
Just last week, Ivanhoe revealed that it had uncovered new thick high-grade mineralisation in an area that had become a new extension of the Flatreef platinum/palladium/nickel/copper/gold/rhodium discovery at the company's Platreef project.
Ivanhoe holds an indirect 90% interest in the Platreef project and the Japanese, through Itochu and Jogmec, have bought 10% of the Ivanhoe platinum project for $300-million.
Under South African law, the company had proposed transferring a 26% interest in the property to broad-based black economic-empowerment partner BBBEE SPV, after which Ivanhoe would own 64% of the project.
“We're looking forward to working with all of our stakeholders to advance the Platreef project to production, to create valued and skilled jobs and to significantly contribute to the socioeconomic development of the people of area communities who will have a voice in decision-making and a direct share in our success through our responsively structured, broad-based black economic-empowerment partner,” Friedland said.
Ivanhoe has two other base metals projects, namely the Kamoa copper discovery and the Kipushi copper/zinc/germanium mine, in the Democratic Republic of Congo.
The company’s stock rose as high as C$1.84 in early trading, but at noon traded at C$1.80 apiece.