Canada's Platinum Group Metals in 275,000-Ounce South African Project

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Written by Richard Finlayson, Senior International Editor, for Industrial Info Resources (Sugar Land, Texas)--The South African Department of Mineral Resources (DMR) has issued Platinum Group Metals (AMEX:PLG) (Vancouver, British Columbia) mining rights for a $443 million platinum mine north of Rustenburg.

The WBJV Project 1 mine is modeled to produce 275,000 ounces of platinum, palladium, rhodium and gold per year over a 22-year mine life. The mine will employ 2,300 people and is 74% owned. Maseve Investments 11 (Pty) Limited is the mine operating company. Maseve is 74% owned by Platinum Group Metals and 26% by Wesizwe Platinum Limited (JSE:WEZ) (Johannesburg, South Africa).

The two companies have invested $100 million in the project to implement site establishment and underground development to reach ore, under a bulk-sample permit from the DMR. A project finance debt facility for $260 million is in progress to fund expanded underground development and to construct a milling, concentrating and tailings treatment facility. The total capital cost estimate for the project, including the current $100 million investment, is $443 million.

The second phase of the project, including the start of underground access, is scheduled to start in the second quarter of this year. Offtake arrangements for concentrate are also planned for this quarter.

Mlibo Mgudlwa, vice president of PLG RSA Pty Limited, said, "The mining right process is very thorough on environmental matters, social and labor plans and the mine work program. All participants, including government, communities and interested parties, were engaged and the process was efficiently administered by the DMR. Our application was processed over a 12-month period by the DMR and stands as a positive example of the service delivery efforts spoken about by the minister of mineral resources over a year ago.

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