Junior platinum miner Eland Platinum made its debut on the JSE on Wednesday after raising R525-million via a private placing. The capital is to go towards building the Elandsfontein platinum project at a cost of R1,4-billion, with peak funding of one billion rand.
Eland Platinum managing director David Salter said the company expects the Elandsfontein project’s bankable feasibility study to be completed by June and site preparation for construction to begin in the third quarter of 2006.
First concentrate from open-pit operations is expected in the first quarter of 2008, followed by first concentrate production from underground ore in the fourth quarter of 2009.
The company is aiming for profitable platinum production by the first quarter of 2008.
The Elandsfontein project is located on the southeastern part of the Western Limb of the Bushveld Igneous Complex in the North-West province. The project is about 12km east of Brits.
To the west of the Elandsfontein platinum project is the operating Maroelabult section of Barplats’s Crocodile River mine, and to the south west is the ferrochrome operations of Hernic Ferrochrome.
Eland Platinum holds a 65% equity interest in Eland Platinum Mines, which acquired the Elandsfontein platinum project from Anglo Platinum for about R119,75-million.
AngloPlat has conducted extensive exploration at the Elandsfontein platinum project including 69 drill holes, high resolution aero-magnetic survey, land satellite imagery as well as mineralogical and metallurgical investigations.
Eland is currently conduction an in-fill drilling programme, comprising about 57 holes.
The Ngazana empowerment consortium, led by former government minister Penuell Maduna, owns a 26% stake in Eland Mines.
Eland Platinum intends to develop a 250 000 tonne per month operation, producing about 280 000 ounces of platinum group metals (platinum, palladium, rhodium and gold) in concentrate per year at Elandsfontein, which would be sold to AngloPlat in terms of an offtake agreement for a period of at least five years.
The projected life of mine was in excess of 33 years.
Salter said Eland Platinum was likely to raise between R525-million and R604-million in project finance in the third quarter of 2006.
In December 2005 the company raised R180-million in seed capital, of
which R50-million was left over, Salter added.
Outside the Elandsfontein project, Eland Platinum is looking at other opportunities, including the Zilkaatsnek property for which the company has prospecting rights, he said.
Elands Mines entered into a five-year lease agreement for the surface rights of Zilkaatsnek with Sky Exploration in November 2005 for a rental of R5 000 per annum escalating annually by a rate of CPIX.
Once the Elandsfontein mine is completed it could easily be doubled in size within a space of fours years, depending on market conditions, Salter said.
Depending on the final plan of the Elandsfontein project, the mine could employ 1 700 to 2 000 people, he added.
At 10:40am, Eland’s shares on the JSE were quoted at R23,90, valuing the company at R1,523-billion, with 2,561-million shares having changed hands — making Eland the top traded stock on the JSE by value.
The stock’s price range since the start of Wednesday’s session has been between R23 and R25.
The R525-million private placing was completed at a price of R21 per Eland share. ‒ I-Net Bridge