Platinum mining a growth area for Canada

Making this point in a recent edition of The Canadian Mineral Industry is Donald Cranstone of Energy, Mines and Resources Canada, who explains that platinum group metal (pgm) exploration inside the country is in its early stages. “Much more work is needed before exploration success for these metals can be adequately evaluated,” he writes.

Top producer nation continues to be South Africa, which accounts for about 80% of the world’s newly mined platinum. According to Cavelti Capital Management of Toronto, South Africa is poised to increase its output of the precious metal by about 30% during the next five years.

Total South African platinum mine production in 1988 was estimated to be about 2,540,000 oz; Canadian output of the mineral, mined as a byproduct mainly in the Sudbury basin area of Ontario, amounted to an estimated 137,000 oz. South African reserves

In order to compete with South Africa, Cranstone says Canada needs to find relatively high grade, low-cost deposits; he cites the South African Bushveld intrusion as containing 2-3 billion oz of pgm, an amount some 300 times greater than world pgm output two years ago.

These South African reserves, Cranstone says, are found in the Merensky “Reef”, Lower Zone, Platsreef and UG-2 zones, where the grade ranges between 0.12 oz and 0.35 oz per ton. “All have favorable ratios at higher-priced platinum and rhodium to lower-priced palladium,” he writes.

The volatile platinum price was recently trading in the $525(US) per oz range (in 1988, the metal traded between $450 and $630), while rhodium has been selling in the $1,250 per oz range. Palladium of late has been trading in the $130-$135 per oz range. Prior to 1986, little exploration for pgm took place in Canada, Cranstone says. He attributes the increased exploration activity to (1) European legislation phasing in requirements for motor vehicle pollution control devices, which are manufactured with pgm (2) general uneasiness about heavy dependence for pgm on basically one country, South Africa (3) and higher prices for the metals since 1985. Exploration plays

“In 1986 and 1987, some 40 mineral exploration companies looked for pgm in at least 30 exploration projects in the Appalachian, Canadian Shield and Cordilleran geological regions,” Cranstone writes.

“Most of these projects involved re-examination of already known nickel-copper deposits and occurrences with a small pgm content, but some searched for pgm associated with chromite in ultramafic- mafic layered complexes, as well as in more exotic deposit types.”

Canadian deposits uncovered to date have been either low grade or with low platinum-to-palladium ratios. “Some of the deposits currently being explored or evaluated might turn out to be economically mineable, but only if their pgm content is combined with recoverable nickel, copper, cobalt, gold and silver,” Cranstone writes.

Areas mentioned as being explored for their pgm potential are the Wellgreen copper-nickel deposit in the Yukon, the Anaconda copper deposit near Marathon, Ont., the Big Trout Lake layered intrusion in Ontario and the Fox River sill in Manitoba.

The Lac des Isles project in northwestern Ontario is being prepared for production by Madeleine Mines. North America’s only producing platinum operation is the Stillwater mine in Montana, where palladium is mined in a 3:1 ratio to platinum.

Reporting an increase in global diamond sales in 1988 of 36% was De Beers Consolidated Mines. Diamond sales amounted to a record $4.17 billion(US) last year.

A spokesman for De Beers’ Central Selling Organization called 1988 an exceptional year for sales. He said increased economic expansion and a weak U.S. dollar contributed to the sales performance. Japanese and European buyers were among the more active.

A privately-owned, $750-million nuclear reactor may be in the works for Saskatchewan, one of Canada’s two uranium producing provinces (Ontario is the other). Western Project Development Associates is reported to have a short list of four proposed sites for the reactor, all of the sites located north of Prince Albert.

A survey of 1987-88 gold production costs by Metals Economics Group of Halifax indicates worldwide costs have risen steadily since 1985, encouraged largely by the buoyancy of the gold price.

According to the research firm, 50% of production was turned out at $230(US) per oz or less, up 21% from the 1986 levels of $190 or less. In Japan, Sumitomo’s Hishikari mine reported a cost of $30 per oz, while East Rand Proprietary Mines in South Africa reported a cost of $581 per oz.

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