Name and Location
Garatau platinum project, Limpopo, South Africa.

Client
Nkwe Platinum.

Project Description
The optimised bankable feasibility study (BFS) on the project envisions the development of a 3.6-million-ton-a-year operation, producing about 330 000 oz/y of platinum over an initial 17-year mine-life.

Unlike the original BFS, the updated BFS takes into account only the Merensky reef and the value of the underlying upper group two (UG2) reef on the adjacent farm, De-Kom, which forms part of the project.

The Garatau project has a measured mineral resource of 14.2-million ounces of platinum, palladium, rhodium and gold  (3PGE+Au) and an inferred mineral resource of 9.1-million ounces of 3PGE+Au across the Garatouw and De Kom properties.

Whereas the previous BFS proposed twin vertical shafts in the centre of the orebody, sunk to a depth of 1 000 m, the optimised BFS proposes to construct a 5 m x 5 m early access ramp (EAR) from the surface to the depth of Merensky reef. Thereafter, a vertical shaft will be constructed from depth to surface using rapid raiseboring. After completion, the EAR and the vertical shaft will be available to transport ore material and personnel.

The BFS indicates that the EAR, with its modification, could be extended to provide later access to the UG2, with the potential to rapidly develop a second discrete vertical shaft to surface for the extraction of UG2 ore.

Value
The BFS estimates the funding required to develop the mine at R5.335-billion.

Duration
First production is expected in 2015 and steady-state production is expected in 2017.

Latest Developments
Nkwe is preparing the Garatau project for full-scale mine production and has said that it will likely establish a mechanised mine, describing this decision as a “necessity”.

“Nkwe believes that the strategy to design a mechanised mine is proving to be prescient, [as] recently there has been general acknowledgement in the industry that large-scale mechanisation is not an option but rather a necessity, owing to its robust economics and operating efficiencies,” the company says in a quarterly report.

After intensive exploration and predevelopment work at Garatau, a total resource of 39.94-million ounces of platinum-group elements and gold has been independently estimated, with further resource estimates and classification pending.

An early works programme (EWP) to prepare the project for full-scale mine construction has been designed and work on the water-use licence, environmental authorisations, main engineering, procurement and construction management contract and block plan is currently under way.

During the EWP, the company will finalise water and power supply for construction, complete bulk earthworks and establish a trackless workshop on surface.

It is envisaged that the EWP will start in the first quarter of 2015 and be completed by the end of the year.

In April last year, Nkwe announced a strategic partnership with Zijin Mining in respect of the development of Nkwe’s South African platinum group metals (PGM) assets and, in particular, the flagship Garatau project.

During the quarter, Nkwe announced the completion of a convertible bond transaction with Zijin subsidiary Jin Jiang Mining.

As part of this partnership, Jin Jiang invested $20-million in Nkwe through a placement of three-year convertible bonds.

Following issue of the convertible bonds, Nkwe and Jin Jiang agreed to an immediate conversion of the $20-million bonds and the company issued Jin Jiang 202.5-million shares in satisfaction of all the bonds being converted.

The conversion means that Nkwe has expedited the previous debt-to-equity timelines with Jin Jiang, which provided Nkwe with a strong balance sheet as it moves into the key project development phase.

Key Contracts and Suppliers
DRA (optimised BFS).

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Nkwe Platinum, tel +27 11 445 2161 or fax +27 11 445 2166.
DRA, tel +27 11 202 8600, fax +27 11 202 8807 or email dra@drasa.co.za.