Two Rivers

Background

In December 2001, an Anglovaal Mining Limited (Avmin) (55%) and Implats (45%) joint venture acquired the PGM mineral rights to the Dwarsrivier property, located on the eastern limb of the Bushveld Complex, south of the town of Steelpoort in the province of Mpumalanga, on which the Two Rivers project is to be developed. Corporate activity involving Avmin, African Rainbow Minerals (ARM) and Harmony resulted in the transfer of Avmin's share in Two Rivers to a new, empowered platinum entity, ARM Platinum, a division of ARM.

The joint venture partners in Two Rivers have given the go-ahead to this project, based on the success of trial mining in testing critical project assumptions. The mining and stockpiling of nearly 266,000 tonnes of UG2 ore, together with extensive access development, substantively validated geological and mining feasibility parameters. The concentrator will be a standard MF2 plant.

Mineral resources and reserves

While both the Merensky and UG2 reefs occur on the property, mining will focus initially on the UG2 reef. The UG2 mineral reserve totals 40.3 million tonnes at a grade of 3.48g/t (3PGE+Au mill grade). An added advantage is the platinum to palladium ratio of 5:3.

More detailed information is available in the Two Rivers resources and reserves section.

Mining

The underground mine will be accessed via a decline shaft system comprising a footwall conveyor decline and two on-reef declines: one for vehicle access and the other a chairlift installation for the transportation of employees. Underground mining operations will be fully mechanised.

Capital expenditure to take this project to commissioning stage is estimated to be approximately R1.2 billion. Half of this amount has been secured through Absa and Nedbank, with the partners contributing the balance in proportion to their respective holdings. Thus, Implats will contribute R270 million and ARM, R330 million.

All the required environmental and mining authorisations for project release have been approved by the Department of Minerals and Energy. The mine will employ around 1,000 people, including contractors.

Outlook

Currently, planned production is 2.2 million tonnes annually over a life-of-mine of 20 years. This will be supplemented by up to 400,000 tonnes per annum from the development ore stockpile and opencast material in the first few years and 300,000 tonnes of adit material thereafter.

Two Rivers is expected to yield 120,000 ounces of platinum, 68,000 ounces of palladium and about 20,000 ounces of rhodium at steady-state production. Full production is scheduled for FY2008.

In terms of the joint venture agreement, ARM will manage the project and Implats will undertake the processing and refining of the material mined through IRS as well as the marketing of the PGMs produced.

A review of recent progress at Two Rivers is available in the 2005 annual report.