Western Bushveld Join Venture Project 1
- Shallow decline access to Merensky Reef and UG2 Reef.
- First production of platinum, palladium, rhodium and gold (“4E”) targeted for Q4 2015.
- Scale: 275,000 ounces per year 4E steady state.
- USD$ 343 million invested in equipment, development and construction at Project 1 as of November 30, 2014.
- Peak funding estimate USD $ 502 million.
- Offtake Agreement – concentrate to be sold to Rustenburg Platinum Mines Ltd. (“Rustenburg”) smelter – 40 km by road. Rustenburg is a wholly owned subsidiary of Anglo American Platinum Limited (“Anglo Platinum”).
Formal construction of the WBJV Project 1 platinum mine began under a bulk sample permit in 2011 and has made significant progress over the past year. We are targeting first production for the fourth quarter of calendar year 2015 with a two year ramp-up to steady state production. At steady-state production level in 2017 the WBJV Project 1 platinum mine is scheduled to produce 275,000 4E ounces of PGMs. Based on shallow mining depths and good grade-thickness, relative to South African peers, the WBJV Project 1 platinum mine is expected to be competitive relative to the industry cash cost curve.
At the north decline, as of November 30, 2014 over 7,638 meters of access development has been completed. An ore stockpile of Merensky Reef development material has begun with approximately 106,084 tonnes on surface.
The mining plan involves using mechanized development to efficiently access a number of ore blocks at the same time while also providing flexibility during the mine ramp up. Our development plan involves accessing Merensky Reef blocks North, South and below our first intersection of the Merensky Reef layer.
An important part of the North Mine development completed during the year was the underground infrastructure to support the steady state production. The movement of materials, water, air and people all require services and infrastructure. This work has been completed with a view to steady state production in 2017-18 and the systems being built now are designed for the steady state level.
The South box cut is complete, and as of November 30, 2014 underground mining has advanced the material decline for approximately 949 meters and the conveyor decline for approximately 741 meters. In total over 2,206 meters of access development has been completed. Development rates are improving and are currently at or near the rate that is called for in the current schedule. The South decline Phase 2 development is behind the original planned schedule. The early development of the South declines progressed slower than anticipated due to poor ground conditions in the first 50 meters vertical from surface. Work to deal with these conditions included consolidation support, grouting, void filling and the installation of steel sets. The South declines are now advancing into more competent rock and the slower start to the South mine is incorporated into the most recent mine plan and ramp up schedule.
Processing and Infrastructure
The mill and concentrator at WBJV Project 1 is a design which our EPCM engineer DRA has built several times previously. The mill component procurement, manufacture, delivery and erection have gone very well and according to plan in 2014.
The foundations for major mill and concentrator components at WBJV Project 1 platinum mine have been completed. All of the major mill components have been delivered. The primary mill shell and related ends, trunions and gears have been installed. The filter press building and infrastructure is nearing completion. The filter press itself was recently tested in Finland and is currently on route to South Africa. Conveyors, crushers and the ore silo are well advanced. Ancillary servicing for the North decline site, including buildings, piping, cabling, fencing and security, has been completed. Steel erection of various components is in progress and the milling and concentrating facility is expected to be delivered on schedule.
Power infrastructure is on track with an initial 10 MVA installation complete and an additional 10 MVA service scheduled for completion in 2015. A full 40 MVA service is scheduled for delivery before steady-state production in 2017. The project has had regular electrical power delivery with no major interruptions.
Ground preparations for the WBJV Project 1 tailings storage facility commenced in late 2013 on surface rights owned by WBJV Project 1 operating and holding company Maseve Investments 11 (Pty) Ltd. (“Maseve”).
Major Items Completed on Time and on Budget in Calendar 2014
- Mill foundations and civil works for the primary mill.
- Water infrastructure for construction and development.
- Mill steel and bearings in place and mill delivered and lifted into position.
- Structural steel for mill and flotation circuits largely complete.
- Stands and civil works for the conveyor from North Mine to mills completed.
- North change house for 1,200 persons – exterior complete, interior in progress.
- South change house for 500 persons – exterior complete.
- Electrical substation and connections for North and South mines in place.
- Pollution control dams completed.
- Underground development along the Merensky Reef and first underground raises started.
- North Mine development to five blocks advancing as planned.
- Chairlift and conveyor in the North Mine commenced.
- Ore silo on surface and conveyor transfer points completed.
- Equipment maintenance shop completed.
- Two raise bore holes developed and fans installed for ventilation.
- South Mine declines advanced to the first turn and 500 meters from ore.
- Space for underground ore silos and underground workshop completed.
- Computer access control system installed and operational.
- Security control center and mill control buildings completed.
WBJV Project 1 is located on the paved highway near the 550,000 person city of Rustenburg where mining supplies and services are readily available. Comfortable accommodation is provided on site by the Company for site supervisors. The foregoing, combined with an experienced team working on a well-known design, has contributed to an efficient and on time construction process.