Northam advises revised operating parameters for its Booysendal PGM project – Larger project than initially envisaged

Larger project than initially envisaged

The management of Northam Platinum Limited (Northam) advises that it has completed an optimisation exercise on the Booysendal feasibility study, released to the market in the fourth quarter of the 2009 calendar year. Following board approval, preparatory work is proceeding on creating access and other infrastructural installations at the company’s 100% owned Booysendal asset on the eastern limb of the Bushveld Complex, which contains a resource of more than 100 million ounces (3PGM+Au).

The purpose of the optimisation study was to determine whether further value could be extracted from the first phase of the Booysendal project. The results indicate that:

  • The start-up of production could be accelerated
  • That the mining layout could support a higher rate of production
  • This would result in lower unit operating costs

On surface, the concentrator plant layout has been optimised to take account of the higher run of mine (ROM) production, resulting in a more efficient process flow and a smaller environmental footprint. Commenting on the results of the optimisation process, Northam chief executive Glyn Lewis said today, “The value engineering process has been a more than useful exercise, with results yielding an enhanced return on a more robust project than we had initially envisaged.”

The optimisation study included a review and update of initial capital expenditure estimates. The total project capex has increased from R3.1 billion (June 2009 money terms) to R3.6 billion (March 2010 money terms) reflecting the effects of inflationary increases on the one hand, and on the other, the firmer estimates for a larger operation. Overall, the total capex estimate is slightly more efficient per unit of designed production (both in terms of tonnes milled and production ounces per annum (3PGM+Au)) .

The acceleration of production build-up follows on the rescheduling of construction: preparatory work is currently in progress to start the establishment of the on-reef boxcut in the first half of F2011. The remainder of the work, including the reverse decline adit, bulk earthworks for the concentrator and offices, permanent access ways and pipelines, will start as soon as the environmental permitting is obtained.

Mill throughput to the plant will increase to 150 000 tonnes per month) 187 500 ROM tonnes through the DMS), an increase of 25%.

The graph below indicates the accelerated schedule for production build-up:

Stockpile build-up

 

Power supply and energy efficiency measures

The revised mine design and higher rate of production are, at full capacity, expected to result in electricity consumption exceeding the ESKOM approved 20MVA during peak demand periods. These requirements will be fulfilled by self-generation of power on site (5MVA) during peak demand times. This will continue until ESKOM is able to supply additional power – currently estimated to be by 2015.

The revised design also makes provision for an energy management system and the introduction of energy recovery strategies. Orepass capacity is being improved which will minimise the requirement for decline conveyors to run during peak shift times. In addition, cycle efficiencies and optimised equipment selection will maximise output in each section, and at the same time reduce the number of sections required to operate.

In summary

  Optimised case Base case
Design capacity (ROM tpm) 187 500 150 000
First concentrate Jan 2013 May 2013
Total cash costs (ROM R/t) 364 404
Total cash costs (milled R/t) 455 505
     
Capital expenditure    
Establishment of mine (R million) 2 034 1 369
Concentrator (Rm) 1 125 1 009
Other (Rm) 465 668
Total (R million) 3 624 3 046

Funding

With capital expenditure requirements for Booysendal peaking in mid 2012, Northam remains confident that the development of the Booysendal mine can be funded from a combination of internal retentions and debt instruments. Significant progress has been made in exploring various options in this regard.

Distributed by:

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