Production build up progresses at Pilanesberg Platinum Mine
/NOT FOR DISSEMINATION IN THE
Platmin reorganizes to achieve 250,000 PGM ounces per annum
In announcing these results,
Important features of quarterly performance were:-
- Net loss of US$2.3 million or US$0.01 loss per share (previous quarter - net profit of $6.6 million or US$0.02 earnings per share). Quarter-on-quarter, the net variance is largely due to the $8.8 million reduction in foreign exchange gains, from $11.1 million in Q2 to $2.3 million in Q3; - 13,406 PGM (3PGM + Au) ounces dispatched and sold (previous quarter - 8,782 PGM ounces); - A PGM basket price received of $1,175/oz (ZAR8,787/oz), up from the previous quarter of $1,036/oz (ZAR8,032/oz). Quarter-on-quarter, the higher basket price offset the strength of the Rand against the US Dollar; - Revenue from metal sales (revenue) of US$16.2 million (previous quarter - US$11.0 million); - Capitalized development and operating costs of US$31.0 million or US $14.7 million net of revenue. As a development stage company, revenues are offset against capitalized project development and operating costs. (Previous quarter - US$20.6 million or US$9.6 million net of revenue); - Topsoil and overburden removal of 3.340 million cubic meters (previous quarter 2.263 million cubic meters); - Reef tonnages delivered to the ROM pad of 680,261 tonnes (previous quarter 546,999 tonnes); - Final commissioning of the UG2 and Merensky circuits of the concentrator plant and the 10 MVA standby diesel power plant, subsequent to the quarter end; - Appointment of Tom Dale, mining veteran, as CEO on 1 December 2009; - Organizational restructuring implemented to separate the management of operations and development; - Appointment of additional senior mining staff to bolster planning and operational capacity in support of the long term strategy.
Important features for the nine months ended
- Net loss of US$9.2 million or loss per share of US$0.02 (previous year to date net profit of US$2.7 million or earnings per share of US $0.02). Period-on-period, the variance is largely due to the $10.4 million reduction in foreign exchange gains, from $13.7 million in 2008 to $3.3 million in 2009; - The delivery of PGM concentrate from April 2009; - 23,995 PGM ounces dispatched and sold; - PGM basket price received of $1,074/oz (ZAR8,437/oz); - Revenue from metal sales of US$27.9 million; - Capitalized development and operating costs of US$81.1 million or US$53.2 million net of revenue. (Previous year - US$23.9 million); - Topsoil and overburden removal of 9.543 million cubic meters (previous year - 5.392 million cubic meters); - Reef tonnages delivered to the ROM pad of 1,871,512 tonnes.
Commenting on the progress,
PPM's original planned production build-up to an annualized rate of 250,000 PGM ounces by the end of 2009 was an ambitious target which has not been met. During the critical start-up phase, industry-wide industrial action precipitated "go slows" and work stoppages by contractor employees at PPM, significantly slowing the build-up. These disruptions adversely affected the mine's ability to achieve the balance between Merensky and UG2 ores required for stability and consistency in the processing plants during this period. Further contributory factors were:-
- Lower metallurgical recoveries from the weathered and oxidized ore mined at or near the surface along the north-south western corridor in the pit; - The friability of this oxidized ore limiting the upgrade factor of ore processed through the DMS circuit. Recoveries and the effectiveness of the DMS circuit are expected to improve as mining progresses eastwards into the deeper, unaltered ore; and - Higher-than-expected dilution owing to the structural complexity along the western boundary of the pit, adjacent to the north-south fault zones. Dilution is likely to decline as the knowledge of the ore-body increases and mine planning improves.
The Board has approved a revised mine plan which, subject to the normal uncertainties associated with mine planning during a start-up, will see the production of 28,000 PGM ounces dispatched and sold for the 10 month period ended
The delay of approximately one year in achieving full capacity and anticipated corporate activities in a consolidating industry will require additional funding. This is likely to be sourced through the combination of a short-term working capital facility and some longer term financing. Given the strong PGM price environment and improved investor sentiment towards the PGM sector, the international capital markets provide attractive opportunities. Platmin remains debt-free, un-hedged and continues to maintain a conservative funding structure during the build-up period to full production. These factors provide maximum flexibility for the Company's financial structuring.
Following his appointment as CEO,
In summary, Platmin is evolving into a significant PGM producer, with PPM set to deliver on the original BFS forecasts in the near term. The Company continues to enjoy several competitive strengths:
- Reserves that are amenable to lower-cost surface mining, with the ability to generate significant cash flows; - A world-class PGM concentrator, designed for expansion and surrounded by platinum deposits, situated approximately 50km from the nearest competition; - A suite of exploration and development projects providing ample opportunity for growth in the longer term.
Platmin's Chairman,
About Platmin
Platmin is a mineral exploration, development and operating company engaged in the exploration for, and development of, Platinum Group Metals (PGM) deposits in
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This market release contains "forward-looking information" which may include, but is not limited to, statements with respect to the future financial and operating performance of Platmin Limited (the "Company" or "Platmin"), its subsidiaries and affiliated companies, and its mineral projects, the future price of platinum or other Platinum Group Metals ("PGMs"), PGM production levels, mining rates, the future price of other base metals, future exchange rates, the establishment of debt and/or credit facilities, the estimation of mineral resources and reserves, the realization of mineral resource estimates or their conversion into reserves, costs and future costs of production, capital and exploration expenditures, including remaining project development expenditure at the Pilanesberg Platinum Mine ("PPM"), costs and timing of the development of new deposits, costs and timing of the development of new mines, costs and timing of future exploration, requirements for additional capital, government regulation of mining operations and exploration operations, timing and receipt of approvals, licenses, and conversions under South African mineral legislation, environmental risks, title disputes or claims, limitations of insurance coverage and the timing and outcome of regulatory matters. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements in this market release include, among others, the forecast average annualized production rate of 160,000 ounces of 3PGM+Au metals at PPM for the 12 month period ending
Such forward-looking statements are based on a number of material factors and assumptions, including, that contracted parties provide goods and/or services on the agreed timeframes, that equipment necessary for construction and development is available as scheduled and does not incur unforeseen break downs, that no labour shortages or delays are incurred, that plant and equipment functions as specified, that geological or financial parameters do not necessitate future mine plan changes, and that no unusual geological or technical problems occur.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Platmin and/or its subsidiaries and/or its affiliated companies to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, general business, economic, competitive, political and social uncertainties; the actual results of current exploration activities; conclusions of economic evaluations and studies; fluctuations in the value of the
For further information: Charmane Russell, Russell & Associates, +27 11 880 3924, +27 82 372 5816
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