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 (BRPM).

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 at R11.01-billion.

Duration
Steady-state production is expected in the first quarter of 2020.

Latest Developments
RBPlat, which has terminated major contracts at its Styldrift 1 project, has outlined a plan that could result in it hitting the ground running with a surfeit of mining flexibility in an improved platinum market.

The company told investors and analysts during an on-site visit to Styldrift 1 this month that it would develop nearly 7 km of underground infrastructure during 2016, of which nearly 6 would be on-reef and thus able to generate 70% of the R1-billion required.

The on-reef development will yield 39 000 oz of platinum at a basket price averaging R17 500/oz. The 30% funding shortfall could be provided by surplus cash from the company’s Bafokeng Rasimone Platinum Mine, also outside Rustenburg.

Development this year and the next will prepare Styldrift 1 for the rapid delivery of quality ounces from four 800 m sections, four equipped workshops and 32 predeveloped workshops from the first quarter of 2017 or whenever the ounces will be appropriately rewarded.

Deteriorating market conditions and cost escalations have resulted in an increased focus on mining and processing a more profitable Merensky reef, from which 75 000 oz will arise in 2017 and 116 000 oz in 2018.

Investec Securities has commented that platinum mining companies, such as RBPlat, have had to take increasingly drastic action to preserve balance sheets.

Thirty-two per cent less capital was spent on Styldrift 1 in the third quarter of this year than in the second quarter.

The mining and overland conveyor belt construction contracts have been terminated and most equipment supply and infrastructure contracts deferred.

By delaying the start of stoping at Styldrift I, the company aims to avoid the destruction of the value of quality Merensky ounces in a depressed market.

Instead, the business will position itself well to begin ramp-up when the market improves.

The current depressed market cycle is expected to prevail for the medium term and, accordingly, Styldrift I is now scheduled to reach steady state only in the first quarter of 2020.

Capital expenditure at the end of the third-quarter totalled R5.186-billion on a main shaft capable of hoisting 230 000 t/m of ore.

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?
Capital expenditure for the quarter ended September 30 amounted to R340-million, which is 40% higher than the same period in 2014, but 32% lower than expenditure in the second quarter of 2015.

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.