Variations to the proposed mining method and better terms on concentrate sales have moved the Blue Ridge platinum project in South Africa into economic territory, and owner Ridge Mining (RDG-L) has made a production decision.
The company has completed a revised feasibility study incorporating a new mining method for the project, in the Bushveld platinum camp about 150 km northeast of Pretoria. The new mining method, which Ridge dubbed “efficient cut mining,” cuts low and wide stopes in the platinum-bearing reefs, and allows stoping of higher-grade zones down-dip from lower-grade material.
Trial mining between May and August using the new method was successful, with 6,000 tonnes being extracted.
The new feasibility study, by consulting firm SRK, is based on a proven and probable reserve of 21.7 million tonnes grading 3.3 grams combined platinum, palladium, rhodium and gold per tonne. That includes about 10% held by an adjacent property owner.
The mine would produce about 75,000 oz. platinum, 35,000 oz. palladium, and 13,000 oz. rhodium per year, plus 1,600 oz. gold. Capital costs are estimated at US$143 million and cash operating costs at US$623 per oz. platinum. It would have an 18-year mine life.
The study estimated the net present value of the project at US$83 million, using a 10% discount rate. It has a 20.3% internal rate of return.
Construction is scheduled to start in the new year and should last 20 months.
Ridge has made an empowerment deal with Imbani Platinum under which Imbani provides project financing in exchange for an interest in the project. Under South African law 26% of the project must be held by historically-disadvantaged groups by 2014.
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