Stillwater starts small, aims high

North America’s only producing platinium group metals (pgm) mine just south of here has been in operation for only four months.

But already, plans are being laid by the operator, Stillwater Mining, to expand mine capacity by 43% to 1,000 tons per day. Also, another entirely seperate mine of comparable size is probable, The Northern Miner has learned from interviews with officials from project manager Chevron Resources and Manville Corp. Manville geologists discovered the 28-mile-long pgm-rich Johns-Manville Reef in 1973 after six years of determined work.

These two U.S. companies each has a one-third interest in this seminal platinum and palladium mine. Lac Minerals of Toronto is the third member of the joint venture. Lac entered the picture in September, 1985, by purchasing from Atlantic Richfield, ground in the area held by Anaconda, a Richfield subsidiary. The price at the time was $15 million(US) cash.

While the existing mine has the capacity to produce only 25,000 oz platinum and 75,000 oz of palladium per year, the area has the potential to expand very quickly to the point where it could supply all the strategic requirements of the United States for platinum and palladium, according to Michael Sharratt, Manville’s senior director of exploration.

Such plans would be on a scale similar to the ones which saw three platinum mines develop in South Africa, 15 years ago.

Last year, South Africa produced 2.35 million oz of platinum and about one million oz of palladium from deposits which are lower grade, narrower and flatter dipping than the Johns-Manville deposit. (These figures account for 83% and and 34% respectively of non-communist world supply of these metals.) The advantages South African mines have over the Stillwater mine are their higher platinum-to-palladium ratio and lower labor costs.

A small smelting facility in the Pristine Valley that has been carved out of the Beartooth Mountains by the east branch of the Stillwater River has not been ruled out by the three Stillwater partners either. Approval by the state and eventual construction would be a clear indication of a South African-scale platinium mining development in this area. It would take about one year to build such a facility, if and when it is approved.

“The local people here are very surprised at the large economic impact the mine has brought so far with such little environmental impact. In fact, environmental interest groups are taking much of the credit for what has been accomplished,” according to mill superintendent Gregg Hodges. “I think we’ve become accepted by the state and a smelter is not all that unlikely.”

The mill, a compact sulphide flotation unit designed by Kilborn Engineering, uses water which is 100% reclaimed from the mine’s tailings pond. And that pond is lined with 100-mm geotextile to prevent seepage into the local groundwater system. Mill exceeds mining rate

About $41 million has been spent on mine and mill development. To expand from the existing 700- to the proposed 1,000-ton-per-day capacity, an additional $10-$12 million in capital expenditures would be required, mainly for additional underground development.

At 700 tons per day, the mill is well ahead of mining rates by about 200 tons a day. The balance is made up from a surface stockpile. About 53,000 tons of ore remain in that stockpile.

Current ore reserves indicated by drilling would certainly justify the development of more mines in the area. There are an estimated 225 million oz of pgm contained in the east-west striking, Johns- Manville Reef — a pgm-bearing zone that has been traced for a distance of 28 miles.

Despite the fact that it pinches and swells both along strike and down dip, it is remarkably consistent in grade (about 1 oz pgm per ton), platinum-to-palladium ratio (about one-to-three) and tonnage, according to Mr Sharratt, who calls its discovery a remarkable achievement.

Officially, proven and probable reserves in the immediate mine area stand at 495,000 tons grading 0.88 oz pgm per ton.

The zone, which dips at about 70 degrees to the north, has been traced so far to a depth of about 7,000 ft. Widths vary from 1-15 ft, averaging about 6 ft. Conservative approach

Despite all the optimism, Stillwater Mining is still taking a conservative approach to mine development.

Platinum prices are a major concern to the joint venture partners when it comes to making the commitment to build more mines. In 1975 platinum markets took a turn for the worse when the U.S.S.R. for some unknown reason held off on supplies. Prices dropped from about $100(US) per oz to just $36. It was then that Manville went shopping for a partner to distribute the risk of mine development.

Since then the Russians have been very responsible in their marketing activities, mainly with China. But how much metal they hold in inventory and are capable of putting on the market remains a mystery.

The more recent increase in pgm prices to $600 for platinum and $140 for palladium has been attributed to a supply-demand imbalance in 1986 when supply fell 60,000 oz short of demand. While prices did go up, it was not as much of a rush as some expected.

Mining at the Stillwater mine so far, by cut and fill methods and a rate of about 500 tons per day from 15 stopes, has only taken place on the west side o f the valley. This work has been carried out in a very meticulous manner, The Northern Miner can report.

Very strict grade controls and detailed, on-site sampling has helped the company know exactly where it stands at all times.

Diamond drilling on 250-ft centres indicates where the zone is, then drilling on 50-ft centres determines individual stope locations. By crosscutting into the zone from a footwall drift, stopes are then developed with jacklegs, stopers and slushers. There are currently 15 active stopes and five under development, all on one level. Mine Superintendent Cherie Tilley estimates the company can economically mine this part of the deposit for a distance along strike of about three miles. Excluding financing costs, mining costs are a high $100 per ton. “Give us a couple of years underground and we’ll be as good as the South Africans,” Mr Tilley says. “All three partners are a little nervous now. But in three years, they’ll be able to relax,” exploration director Sharratt adds.

Plans to fully utilize a milling capacity of 1,000 tons per day would require mine development work on the east side of the valley. This rather conservative expansion plan will require additional equipment purchases and the hiring of about 100 more miners. Experienced cut- and-fill miners from closed down mines are readily available in the area. Some 120 non-unionized people are currently employed underground.

A portal on the east side of the valley has already been collared and drifting is in progress. The company is even considering the economics of using a tunnel-boring machine to drive the long drifts required in the footwall of the deposit.

A decision on the expansion program is expected to come from the three partners in August or September.