Progress: The mining right for the Leeuwkop project, Afplats’ primary asset, was finally granted in April 2008. Much of the past financial year was spent completing preparatory work for shaft sinking and finalising a detailed mine design.
Additional evaluation work was undertaken on the project which indicated that mechanised footwall development with conventional stoping would be more suitable for the orebody than the mechanised bord-and-pillar mining method originally proposed. The mine and project design are currently being revised and a detailed project proposal is being prepared for presentation to the board in November 2008. The revision of the mining plan, together with the delay in the granting of the mining right, has pushed the project's timeline out by at least two years.
The new mine plan, which is based on conventional mining methods that involve less risk in terms of the orebody, will also enable the mining of a higher head grade, in turn resulting in increased planned platinum production. However, conventional mining requires a longer lead time in building up to full production with a consequent increase in the capital cost. Production is now scheduled to begin in FY2013. Ore mined will be stockpiled until the plant is commissioned.
Leeuwkop's current power allocation from Eskom is sufficient for shaft sinking and planned development, including that of the underground infrastructure. Negotiations are underway to secure the additional power required to operate the underground mine, surface infrastructure and refrigeration and concentrator plants.
Should the revised project be approved by the board and long-term power supplies be secured, shaft sinking operations could begin as early as January 2009.
Capital: Of the total of R370 million capital expenditure approved for initial development of the project, actual expenditure amounted to R145 million with an additional R130 million having been committed.
As a consequence of the higher cost of implementing a conventional mining layout and escalating project costs in recent years, capital expenditure for the revised Leeuwkop project is currently estimated at R6 billion (in real terms).
Growth: Project completion is scheduled for FY2015. Full production in terms of the new plan is estimated at between 160 000oz and 180 000oz of platinum (previously between 140 000oz and 160 000oz).
Negotiations are progressing with Afplats' BEE partners on the consolidation into one legal entity of the Imbasa and Inkosi properties with that of Leeuwkop. All prospecting rights for these properties have been granted and preliminary prospecting and drilling work to determine the future potential of the Imbasa and Inkosi properties have begun.
Implats - Annual Report 2008
| Forward-looking statements