Author: Lawrence Williams
Canada's Platinum Group Metals is hugely excited about its Waterberg palladium/platinum/gold discovery in South Africa to the north of the Bushveld Complex.
LONDON (MINEWEB) - South Africa remains comfortably the world’s largest platinum group metals (pgm) producer, but many of the existing mines have difficulty keeping their heads above water at current pgm prices due to their unsuitability for mechanisation because of the narrowness of the Merensky and UG2 platinum bearing reefs that are being mined. Mechanisation has been tried in some applications in the wider UG2 reefs, but not successfully and it is difficult to see how the situation for the mines can improve bar a very sharp increase in platinum and palladium prices.
However, there are some very interesting prospects arising to the immediate north of the main Bushveld Igneous Complex which hosts the platinum bearing reefs. While the occurrences being found are of lower grades than the typical Merensky and UG2 reef horizons, they are hugely thicker, appear to have grade consistency, are at shallow depth and easily mechanisable. Two of the leading players on these wide platinum mineralisation horizons are Robert Friedland’s Ivanhoe Mines (formerly Ivanplats), and fellow Canadian explorer and developer, Platinum Group Metals.
We have covered the Friedland prospect in these pages before (see Ivanplats – separating the fact from the hype), but Platinum Group Metals, which is also developing the Western Bushveld Joint Venture project on the traditional narrow Merensky reef horizon, perhaps reckons to have found an even more impressive deposit and is very confident on the prospects for its Waterberg project where it is exploring in a jv with Japan’s JOGMEC.
The company recently announced an updated independent Inferred Resource estimate for the Waterberg Joint Venture of 167 Million tonnes grading 3.26 grams per tonne of platinum, palladium and gold for a total of 17.5 million ounces with significant copper and nickel credits. The ratio of palladium to platinum is higher than is typical on the Bushveld Complex which does, to an extent, lower the overall value of the mix – but then the palladium supply/demand situation does appear to be more favourable for increased price growth for the metal ahead. (The approximate make-up of the overall resource is 60% palladium, 30% platinum and 10%gold).
The resource estimate includes the “T1”, “T2” and “F” layers in an extension of the Bushveld Complex discovered in late 2011 by Platinum Group Metals in conjunction with its joint venture partners, JOGMEC and a private empowerment partner. Platinum Group owns an effective 49.9% interest in the Joint Venture. These deposits appear to be thicker, and shallower, than Ivanhoe’s Flatreef and possibly of better grades. There is thought to be huge potential to the north with the Waterberg extension which the structure runs into. Platinum Group Metals owns 87.5% of this section and is awaiting permitting, expected shortly, to drill this.
Platinum Group Metals CEO, Michael Jones, in talking to Mineweb at the recent Denver Gold Forum was obviously very excited about this new resource and perhaps its true potential will not become apparent until the full extent of this deposit is known. While it is already sizeable, the land holding there is extensive, particularly once the prospecting right has been approved over the Waterberg extension to the north and if drilling eventually shows the deposit to extend as far as the company is anticipating, the resource could be many times bigger than that inferred to date.
Currently the most profitable South African platinum mine is Anglo American Platinum’s Mogalakwena operation – where similarly thick deposits are mined by open pit methods. Jones reckons Waterberg could be just as profitable through the introduction of high tonnage room and pillar mining accessed from surface declines and at a fraction of the capital cost incurred in developing a typical deep level narrow reef platinum mine.
The three platinum bearing reef horizons at Waterberg vary from around 2.3m to 30m in thickness, so hugely different from the Merensky reef horizon where the platinum bearing reef is only inches thick. As Jones comments this is very much a ‘different animal’ from the Merensky and UG2 reef mines and a potential industry changing deposit. However, exploration is in relatively early stages and it would be unlikely that a mine on this deposit could be brought on stream until well into the second half of the decade. Jones describes Waterberg as the second best pgm deposit in the world – only beaten by Mogalakwena.
As Jones commented in his presentation at the Denver Gold Forum, what has been found already could be described at a 10.5 million ounce palladium deposit, or a 5 million ounce platinum deposit – or perhaps a 1.7 million ounce gold deposit! A Preliminary Economic Assessment is already under way by one of South Africa’s top engineering firms, TWP, and is due for completion towards the end of the year.
Meanwhile Platinum Group Metals already has its Western Bushveld Joint Venture (WBJV) operation under development and Jones reckons that because it is at relatively shallow depth in comparison with most of the other current South African underground platinum mines and the grades are good it will be among the lowest quartile in costs of the current South African mining operations making it a decently profitable operation at current pgm prices. Here the platinum accounts for around 64% of the orebody. Palladium 27%, rhodium 5% and gold 4%.
The WBJV operation is expected to start producing concentrate by 2015. Platinum Group Metals owns 74% and its jv partner, Wesizwe, the balance. Mill construction will start next year with all key equipment already ordered. The plant is being constructed by another of South Africa’s top engineering companies, DRA.
To read the entire article on Mineweb, click here.
About Platinum Group Metals Ltd.
Platinum Group Metals Ltd. is focused on the development of platinum assets in South Africa. The flagship Western Bushveld Joint Venture (WBJV) platinum mine is in construction with first production scheduled for mid-2015. The WBJV is one of the last remaining shallow, high grade PGM assets in the Bushveld Complex. Steady state production is targeted at 275,000 ounces (4E) per year over a twenty year mine life. Platinum Group has made a significant new PGM discovery on the North Limb of the Bushveld Complex at the Waterberg Project in Joint Venture with the Japanese state company JOGMEC. The current resource stands at 17.5 million ounces (3E) inferred. The Waterberg deposit remains open along strike to the north beyond the Joint Venture property boundary where Platinum Group holds an effective 87% interest. A Preliminary Economic Assessment on the Waterberg JV is in process with completion due in late 2013.
Platinum Group is listed as PLG on the NYSE MKT and PTM on the TSX in Toronto.
Contact Platinum Group Metals Ltd. Investor Relations at:
Toll Free: 1-866-899-5450
E-mail: info@platinumgroupmetals.net
