Northam concludes Booysendal feasibility study

Key features

  • Modular approach confirmed
  • Tonnages:
    • Module 1 - 120 000 tonnes milled per month
    • Module 2 - 120 000 tonnes milled per month
  • Production and sales volumes:
    • Module 1 - 130 000 (3PGM+Au) per annum
    • Module 2 - 115 000 (3PGM+Au) per annum
  • Financing decision to follow on the completion of value engineering process
  • Northam Board approval and construction of mine expected in early 2010
  • First module capex - R3 billion (2009 terms)
  • Combination of steady state Zondereinde mine and significant greenfields growth at Booysendal provides compelling PGM investment opportunity

Northam Platinum Limited is pleased to report that the Booysendal feasibility study report is complete and is in the process of being compiled, while a review of the design and layout is under way. Final board approval for the project is expected early in calendar year 2010.

Northam's acquisition of the Booysendal project became effective in August 2008, with work on the feasibility study having begun in June 2008. Booysendal is located on the eastern limb of the Bushveld Complex, near the town of Lydenburg.

Commenting on the results of the study, Northam CEO Glyn Lewis said today, "The feasibility study has confirmed our approach to the project. Booysendal is living up to our expectations and is likely to be a significant, long-life producer, and one of the new-generation PGM mining projects of the future.

"The mining plan confirms that a modular approach, initially focussing on the UG2 reef, should be implemented. The plan is to mine at a rate of 150 000 tonnes per month and upgrade this production through a Dense Media Separation ("DMS") plant to produce a concentrator feed of 120 000 tonnes per month. The second module will have a similar production profile when it is brought into operation, resulting in a total concentrator fed of 240 000 tonnes milled per month. For module 1, at full capacity, in mid 2009 money terms, the average operating cost is expected to be R410 per tonne mined.

"These operating parameters are expected to give rise to sales of some 130 000 ounces (3PGM+Au - platinum palladium, rhodium, gold) per annum on completion of module 1, rising by a further 115 000 ounces (3PGM+Au) per annum, to a total of 245 000 ounces (3PGM+Au) for both modules.

"The capital cost for module 1 is expected to be R3.0 billion (in 2009 terms) over a five-year period with similar capital expenditure anticipated for module 2. Our intention remains to fund the project through a combination of a rights issue, internal retentions and medium-term bank debt."

Northam will begin the construction of an access road and water pipeline and start the boxcut for the module 1 on-reef decline in the first half of 2010. First concentrate from module 1 is anticipated in 2013, reaching full production in 2015. Module 1's life-of-mine is expected to exceed 20 years, during which period further production expansions would be developed.

The national power utility, Eskom, has undertaken a feasibility study for an 80MVa substation to be situated on the Booysendal property. Eskom is currently also in the process of conducting the Environmental Impact Assessment (EIA) study for the transmission lines from the nearby Steenberg sub-station. The application for the first 20MVa has been submitted and a budget quote is awaited. Our critical path analysis has identified the supply of electricity as a key factor.

The conversion of Booysendal's old order mining right to a new order mining right over nine of the 11 farms was executed on 10 September 2009. The application for new order mining rights on the remaining two farms and the transfer of the Der Brochen extension is in progress.

The scale of Booysendal, together with the accessibility of the reef horizon from surface, provides the project with significant inherent flexibility and growth potential. Further expansions of the mine (such as increasing the UG2 mining rate, or exploitation of the Merensky reef) will be the subject of a further feasibility study.

Further updates will be provided to the market in due course.

Key features: Booysendal feasibility study

Key features of the Booysendal project arising from the feasibility study are:

Modular approach

  • The UG2 reef will be optimally mined by developing on a modular basis. Each module aims to produce 150 000 run-of-mine (RoM) tonnes per month. The North Shaft complex, comprising four declines (three on reef and one in the footwall) makes up module 1, with a similar decline configuration considered for the South Shaft or module.
  • In order to minimize the environmental impact, a reverse decline system (which has a smaller total footprint than a conventional adit) will be used to access the primary decline cluster to allow for the efficient transport of ore, men, material and machinery and access to the Merensky reef horizon.
  • Depending on prevailing economic circumstances and power availability, construction of the second module should begin in 2013.

Access to the reef

  • A modified room and pillar mining method will be employed to extract the UG2 reef, which will be transported to surface via a footwall conveyor system connected to the reverse declines. This will allow for maximum flexibility in the mine design and easy future access to the Merensky reef horizon.

Throughput

  • Each module will produce approximately 150 000 tonnes per month of RoM ore with a DMS circuit to be used to remove 30 000 tonnes per month of low grade/waste material so as to improve the grade of ore delivered to the UG2 concentrator plant.

Anticipated costs

  • The average operating cost for North Shaft is expected to be R410 per tonne mined. There may be a marginal increase in operating cost once the second module is producing, principally as a result of logistical costs arising from the need for a surface cable ropeway conveyor from the second module to an expanded metallurgical facility, and the marginally lower grade UG2 that is anticipated at South Shaft.

Environmental permitting

  • Environmental permitting for the first on-reef decline has been approved. The Environmental Management Plan (EMP) amendment for the reverse declines and plant infrastructure is currently underway. Approval is expected in the first half of 2010. Extensive environmental surveys and studies have been undertaken so as to minimise both the footprint of the mine, and its impact on the environment.

Timing and production build-up

  • The construction of North Shaft is planned to begin in the second half of 2010, with the first PGM concentrate being produced in 2013, after commissioning of the processing plant.
  • " Construction of the South Shaft should begin in 2013, with the first PGM ounces being produced in 2016.

Estimated Production Ramp up
Estimated PGE Production Build up

 

Capital costs

  • The project capital cost for module 1 is estimated at R2.97 billion (in 2009 terms). The project capital cost at module 2 is estimated to be similar (in 2009 terms).

Estimated Capital Expenditure

Smelting

  • Given the proposed implementation at Booysendal of Northam's successful vertical sparger technology in the UG2 concentrator circuit, it is anticipated that the current smelter capacity at Northam's Zondereinde mine will be adequate for the treatment of module 1 UG2 concentrate.
  • Accommodating concentrates from module 2 would require an upgrade of smelter capacity and extensions to the crystallizing and electro-winning circuits.

Power supply

  • Eskom has completed the feasibility study for an 80 MVa substation to be situated at Booysendal and is doing the EIA study for the transmission lines from Steenberg. Northam has submitted an application for the first 20 MVa and Eskom is in the process of preparing the budget quote. Critical path analysis has identified electricity as a key factor and significant attention is being paid to this aspect. The spare capacity at Mototolo (which, by agreement, is available to Northam) is adequate for the construction of the necessary mining infrastructure.
 

About Northam and Booysendal

Northam Platinum Limited (Northam) is the only fully independent, black-owned and controlled integrated PGM producer listed on the JSE Limited (JSE). The company wholly owns and operates the cash-generative Zondereinde platinum mine and metallurgical complex on the upper end of the western limb of the South African Bushveld Complex near the town of Thabazimbi.

Northam is planning to develop its wholly-owned 103 million ounce (3PGM+Au) Booysendal project, which is located near Lydenburg on the eastern limb of the Bushveld Complex. In addition, the company holds a 7.5% interest in the Pandora joint venture, a PGM mining operation on the western limb of the Bushveld Complex, near Brits, in partnership with Anglo Platinum, the Bapo Ba Mogale community and Lonmin.

The company has a combined resource base of 130 million ounces (3PGE+Au) (including 8.1 million ounces (3PGE+Au) in mineral reserve at Northam's Zondereinde mine). The progressive development of Booysendal will add some 245 000 ounces (3PGM+Au) to the company's existing annual output of some 300 000 ounces (3PGM+Au) with more than 50 years life-of-mine. As an independent, fully integrated PGM producer, Northam has full control over the entire PGM beneficiation stream of its metals from mine to market.

Distributed by:

Russell & Associates, Johannesburg
Tel: +27 (0)11 880 3924
Fax: +27 (0)11 880 3788

Northam will be hosting a presentation of the feasibility study results. Details as follows:

  • Date and time: Thursday 8 October 2009 at 11:30
  • Venue: Glenhove Conference Centre, 52 Glenhove Road, Melrose Estate
  • Details of the webcast and audio facilities are available on the home page