Canadian junior miner Platinum Group Metals, or PTM, is hoping to start mining platinum in South Africa within five years, PTM CEO Michael Jones said this week at the Mining Indaba.
PTM’s key asset is its joint venture with world number one platinum-miner Anglo Platinum (AngloPlat) and empowerment group African Wide. PTM has the right to operate the joint venture.
PTM has a 37% stake in the venture, AngloPlat 37% and African Wide 26%.
If a decision is made to mine, the joint venture will enter into a concentrate purchase agreement with AngloPlat.
The joint venture has a 6Â 700ha area near Sun City in the North West province. This is adjacent to AngloPlat’s Bafokeng Rasimone Platinum Mine (BRPM), which has its own concentrator.
However, at this stage the area is only at the inferred resource stage, Jones said. This means that the knowledge about the mineralisation is very low and a lot more drilling and exploration needs to be done.
During 2005, about R7,5-million is budgeted to be spent on exploration and drilling at the joint venture. During the first half of 2005, the joint venture is looking to complete a scoping study on the 3,7-million-ounce resource at the 6Â 700ha plot.
Within three years, PTM hopes to complete a bankable feasibility study and start producing platinum metal within five years.
“The bankable feasibility will be key,” Jones said.
It is still early days, but the joint venture could end up with a mine on the scale of BRPM, which produced 280Â 900 ounces platinum group metals and gold in 2003, he added.
“It is too early to pin in that [production] number,” Jones said.
The advantage of the joint venture is that it is in the established western Bushveld area near AngloPlat’s BRPM mine, AngloPlat’s Rustenburg mine and close to Impala Platinum’s Impala lease area.
Other parts of the Bushveld complex, such as the Eastern Limb, haven’t been as successful as the Western Limb, which is much more established and profitable.
“AngloPlat says that the joint venture area is the last piece of near-surface Merensky reef on the planet,” Jones said.
At this stage, PTM’s staff is small with 12 employees in South Africa and 11 in Canada.
In addition to the joint venture, PTM also has the Tweespalk and War Springs projects in South Africa, both of which are at the exploration stage.
Key to the project’s viability is the outlook for the rand exchange rate and the platinum price, as well as the continued demand for the metal from China.
“We really believe the demand from China will continue,” Jones said.
The positive thing about South Africa’s Mineral and Petroleum Resources Development Act, which became effective on April 1 2004, is that it has “cracked open a closed shop”, he added.
“We see this as an opportunity rather than a threat,” Jones stated.
PTM is currently listed on the Toronto Stock Exchange’s venture capital market, and following the recent changes announced by the South African government, PTM could consider a secondary listing on the JSE Securities Exchange, Jones said.
PTM stock also trades in the over-the-counter market in the United States.
However, according to Jones, given PTM’s size, having to do the paper work and compliance for three different jurisdictions could prove to be too onerous.
“At this stage, we have no exposure to the South African investors, only the US and Canadian capital markets,” he added.
A positive thing about having South African investors is that they will understand the Bushveld complex where all of South Africa’s platinum is mined, Jones stated.
Heading up PTM’s South African operations is John Gould, who worked for gold-miner Harmony Gold before joining PTM. — I-Net Bridge