Name and Location
Styldrift I expansion project, North West, South Africa.

Client
Royal Bafokeng Platinum, or RBPlat (67%), and Anglo American Platinum (33%).

Project Description
The Styldrift project area, adjacent to the existing Boschkoppie mining area, is located about 5.5 km from the existing Bafokeng Rasimone Platinum Mine.

The project will exploit one of the last major Merensky mining blocks on the Western Bushveld.

Styldrift I will deliver an underground operation, which will be accessed through a twin vertical shaft system, with the main shaft being sunk to 758 m and the services shaft to 723 m.

The configuration of the main shaft will allow for a single-deck personnel-and-material cage compartment that can transport 185 people; a cage counterweight compartment; two Merensky reef skip compartments, each designed to accommodate a 22 t skip; and two future skip compartments, each accommodating a 13 t skip.

The services shaft will comprise a personnel-and-equipment cage compartment that can transport 22 people, and a cage counterweight compartment.

Four winders will be used during the project construction phase and three during the production phase. The height of the main shaft headgear is 58.6 m and the service shaft 41.3 m.

Concentrator capacity will be 2.76-million tonnes a year.

Initially, wide-reef trackless mining methods will be used, followed by a combination of wide-reef trackless mining and narrow-reef conventional mining methods.

The mine will process 230 000 t/m of Merensky reef and 20 000 t/m of waste at steady state.

Net Present Value/Internal Rate of Return
Not stated.

Value
The project is estimated R11.01-billion.

Capital expenditure for the six months ended June 2015 amounted to R980-million bringing, the total current project expenditure to R4.793-billion.

Duration
Steady-state production is expected in the first quarter of 2019.

Latest Developments
As at the end of June 2015, the project had reached an overall completion of 58%, which was 0.9% below the planned completion of 56.7%.

The focus in the first half of the year was on the completion of the Main shaft vertical equipping activities. The shaft has now been commissioned, with the rock winder hoisting first rock on June 2015.

Surface silos, offices, change houses and the lamp room have also been commissioned and are operational.

Execution of the Styldrift I project progressed through a period during which the principal shaft and sinking contractor on the project (Shaft Sinkers) was unable to perform the work required, woing to its financial constraints. As a result, RBPlat Shaft Sinkers’ contract in January 2015 to limit the impact of the termination and ensure as smooth a transition as possible RBPlat simultaneously engaged Aveng Mining. Aveng took over the balance of the Shaft Sinkers scope of work as of mid-March 2015.

Further, given the backdrop of this sustained depression in the platinum group metals market, which is expected to remain depressed in the medium term, the RBPlat board has made a strategic decision to materially reduce construction-related activities and related capital expenditure at the Styldrift I project.  The company states in its iterim results that “It is not deemed appropriate to ramp up these high-quality Merensky ounces into a currently depressed market at prevailing market prices, and neither is it deemed prudent to burden the balance sheet by raising further funding with its related excessively restrictive and/or dilutive terms and conditions that would apply in the current environment.”

The company intends to reduce the level of activities at Styldrift I so that expenditure can be serviced from excess cash flows, generated from operations at RBPlat’s existing BRPM operations and revenue from on-reef development at Styldrift I.

RBP has said it will continuously monitor the situation and make the necessary adaptive decisions as market conditions change or improve.

Key Contracts and Suppliers
WorleyParsons (main project engineering, procurement and construction management contractor); Anglo Technical Division (mine shaft design); Mining & Engineering Technical Services, or Mets (services shaft headgears); Shaft Sinkers (main and services shafts and associated works until January 2015, when RBPlat terminated its contract); Louwill Engineering (main and services shafts’ headgears and winder house structural manufacturing and erection); FLSmidth Minerals (main shaft personnel and material winder mechanical portion); Actom - formerly Alstom Industry (main shaft personnel-and-material winder electrical portion); Coilmech (service winder mechanical and electrical portions); Stefanutti Stocks Civils Wramatshe joint venture (civils Phase 2 contract – main bulk surface civils); Sarens (cranes) and Sandvik Mining (underground production trackless equipment).

On Budget and on Time?
Not stated.

Contact Details for Project Information
RBPlat executive corporate affairs Mpueleng Pooe, tel +27 10 590 4515 or email mpueleng@bafokengplatinum.co.za; or investor relations manager Lindiwe Montshiwagae, tel +27 10 590 4510 or email lindiwe@bafokengplatinum.co.za.
WorleyParsons, tel +27 11 218 3000.
Mets, tel +61 8 9421 9000 or fax +61 8 9325 8311.
Louwill Engineering, tel +27 11 818 5186, fax +27 11 818 5185 or email mail@louwill.co.za.
FLSmidth Minerals, tel +45 36 18 10 00, fax +45 36 44 11 46 or email info@flsmidth.com.
Actom, tel +27 11 820 5111 or fax +27 11 820 5100.
Coilmech, tel +27 11 452 4063, fax +27 11 452 6104 or email info@coilmech.co.za.
Stefanutti Stocks, tel +27 11 571 4300, fax +27 11 571 4370 or email holdings@stefstocks.com.
Sarens, tel +27 11 861 3800, fax +27 11 861 3899 or email info@sarenssa.co.za.
Sandvik Mining EMEA business development manager Bjorn Gohre, tel +27 11 570 9676.