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PLN - Platmin Limited - Platmin declares commercial production
Platmin Limited
Incorporated in the accordance with the laws of Canada
Registration number: 610178-0
Share code on TSX: PPN
Share code on AIM: PPN
Share code on JSE: PLN
ISIN: CA72765Y1097
For immediate release
PLATMIN DECLARES COMMERCIAL PRODUCTION; PRODUCTION UP 33% Y-O-Y
TUSCHENKOMST/SEDIBELO WEST, "ONE OREBODY-ONE MINE"
NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE
SERVICES
May 13, 2011: TORONTO: Platmin Limited ("Platmin" or "the Company"; TSX/AIM:
PPN; JSE: PLN) today announced production results from its Pilanesberg
Platinum Mine ("PPM") and financial results for the quarter ended March 31,
2011. This release should be read in conjunction with the Company`s March 31,
2011 Quarterly Financial Statements and Management Discussion & Analysis for
the March 31, 2011 quarter, available at www.platmin.com and filed on
www.sedar.com.
Production of 19,148 4E ounces (4E ounces in this release refers to platinum,
palladium, rhodium and gold) for the quarter ended March 31, 2011 was some
33% higher than Q1 FY2010 (14,393 4E ounces). CEO Tom Dale noted that
although modest reef stockpiles had been generated during the quarter,
various operating pressures had limited volumes through the concentrator.
Sales revenue for the quarter of US$26.040 million reflects an average basket
price of US$1,570 per 4E ounce, some 15% higher than Q1 FY2010 (US$1,370 per
4E ounce). Rand strength reduced the basket price improvement in rand terms
to 7% (Q1 FY2011 ZAR10,959; Q1 FY2010 ZAR10,249).
From January 1, 2011, PPM declared commercial production and the results of
operations are now reported in the statement of income. As the build-up
continues, the Company recorded a net loss for the quarter ended March 31,
2011 of US$34,834 million, or US$0.04 per share.
The principal focus of Platmin is to build up PPM`s production from its
Tuschenkomst Pit to the levels it forecast in the bankable feasibility study
("BFS"). The build-up profile remains materially unchanged with monthly
production forecast to reach 12,000 4E ounces by end 2011 provided the
planned volumes of waste stripping can be achieved. Current planning provides
for the monthly level of metals output forecast in the BFS by end 2012 of 20
000 4E ounces, again subject to the achievement of the planned volumes of
waste stripping.
Dale highlighted that although budgeted volumes of waste stripping had not
been achieved, and that this remained the core operating focus and challenge,
improved control of the sequencing of waste stripping had helped generate
modest reef stockpiles. Management aims to accelerate the build-up of
stockpiles to ensure processing flexibility.
PPM assumed joint managerial responsibility for the plant with the appointed
contractor during February 2011 and volumes milled started to improve during
the second half of April. The replacement of 3 inclined grizzlies with
vibrating feeders, effectively debottlenecking the run of mine bins, combined
with the pressures created by the bulk test of UG2 reef through the dense
medium separator ("DMS") and the steadily increasing volumes of hard sulphide
ores, has improved the feed to the concentrator. The results of the bulk test
of upgrading the high grade UG2 reef through the concentrator were promising
and slight modifications to the plant should provide the flexibility to also
upgrade the Merensky and Pseudo reefs through the DMS.
On March 23, 2011 Platmin announced the acquisition of an incremental 5.99
million 4E inferred resource ounces (42.57 million tonnes at a grade of 4.38
g/t), contained within the western portion of the Sedibelo PGM Project
Concession ("Sedibelo West") from the Bakgatla Ba Kgafela Tribe ("Bakgatla")
and Itereleng Bakgatla Mineral Resources (Proprietary) Limited ("IBMR"), for
a total purchase consideration payable in cash of US$75.000 million
(US$82.000 million including VAT). This is equivalent to US$12.50 per 4E
inferred resource ounce.
Sedibelo West is contiguous with and down-dip of the eastern boundary of the
Tuschenkomst property, where the PPM opencast mining operation is currently
taking place.
The Sedibelo West purchase consideration and VAT thereon was classified as
restricted cash at March 31, 2011, and subsequently transferred to an escrow
account, pending the DMR`s approval for Sedibelo West to be incorporated into
PPM`s Tuschenkomst Mining Rights.
The acquisition of Sedibelo West will add value to PPM by:
- significantly increasing the resource base accessible from the existing
Tuschenkomst pit;
- extending the current life of mine;
- providing operational flexibility, once waste stripping is complete,
particularly in the north pit;
- directly accessing sulphide ore with high recoveries (in the absence of
oxide and transitional ore).
Optimisation and mine planning studies to maximize the value of the enlarged
PPM/Sedibelo West property have begun, and should be concluded during the
2011 financial year.
Platmin`s balance sheet remains strong.Following the successful conversion of
all of its US$135.000 million worth of debentures the company holds
unrestricted cash totalling US$177.000 million and has no material debt.
In line with it`s policy, Platmin has not sold forward any of its production.
Other significant developments since the beginning of 2011 include:
- On February 28, 2011, the Pallinghurst promissory note of US$26.000 million
entered into on March 22, 2010 was repaid in full, together with accrued
interest and structuring fees, totalling US$28.822 million;
- On March 23, 2011 Platmin acquired an effective 50% interest in power and
water rights and certain other assets pertaining to the larger Sedibelo area.
These rights, the acquisition of the Sedibelo West PGM property, and the
commonality of shareholders across other neighbouring properties, leaves
Platmin well placed to participate in any further consolidation of adjacent
properties on the Western Limb of the Bushveld Complex;
- On March 23, 2011, Kgosi Molefe John Pilane, the appointed traditional
leader of the Bakgatla, was invited to join the Board of Platmin;
- On March 31, 2011, the Company announced that all the conditions precedent
for the conversion of all the convertible debentures had been fulfilled and
that conversion had taken place. As a consequence, 160,714,286 new Platmin
common shares have been issued and Platmin now has 910,395,053 common shares
in issue;
- An application to amend the Environmental Management Plan to convert the
open void being created at the Tuschenkomst Pit into a water storage facility
has been prepared and will be lodged with the DMR during May 2011. Should
such application be granted, the cost of rehabilitating the pit will reduce
and a portion of the restricted cash held to meet the rehabilitation costs
would be released. Such amount will be determined upon final approval by the
DMR.
For further information:
Charmane Russell
Russell & Associates
+27 11 880 3924
+27 82 372 5816
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This market release contains ``forward-looking information`` which may
include, but is not limited to, statements with respect to the future
financial and operating performance of Platmin Limited (the "Company" or
"Platmin"), its subsidiaries and affiliated companies (which together with
Platmin is referred to as "the Platmin Group" or "the Group"), and its
mineral projects, the future price of 4E metals (4E refers to platinum,
palladium, rhodium and gold), 4E production levels, mining rates, the future
price of other base metals, future exchange rates, the estimation of mineral
resources and reserves, the realization of mineral resource estimates or
their conversion into reserves, costs and future costs of production, capital
and exploration expenditures, including ongoing capital expenditure at the
Pilanesberg Platinum Mine ("PPM"), costs and timing of the development of new
deposits, costs and timing of the development of new mines, costs and timing
of future exploration, requirements for additional capital, government
regulation of mining operations and exploration operations, timing and
receipt of approvals, licenses, and conversions under South African mineral
legislation, environmental risks, title disputes or claims, limitations of
insurance coverage and the timing and outcome of regulatory matters. Often,
but not always, forward-looking statements can be identified by the use of
words such as ``plans``, ``expects``, ``is expected``, ``budget``,
``scheduled``, ``estimates``, ``forecasts``, ``intends``, ``anticipates``,
"targeted" or ``believes`` or variations (including negative variations) of
such words and phrases, or state that certain actions, events or results
``may``, ``could``, ``would``, ``might`` or ``will`` be taken, occur or be
achieved.
Forward-looking statements in this market release, amongst others, forecast
production reaching a monthly rate of 12,000 4E ounces by end FY2011 and
20,000 4E ounces by end FY2012 provided the planned volumes of waste
stripping can be achieved; lodging of an amended Environmental Management
Plan in May 2011; recovery rates and grade; targets, estimates and
assumptions in respect of 4E metal prices and production; allocation of funds
for current commitments; and the timing and completion of definitive
feasibility engineering studies at the Mphahlele, Grootboom and Loskop
Projects.
Such forward-looking statements are based on a number of material factors and
assumptions, including, that contracted parties provide goods and/or services
on the agreed time frames, that budgets and production forecasts are
accurate, that equipment necessary for construction and development is
available as scheduled and does not incur unforeseen break downs, that no
labour shortages or delays are incurred, that plant and equipment function as
specified, that geological or financial parameters do not necessitate future
mine plan changes, that no unusual geological or technical problems occur,
and that grades and recovery rates are as anticipated in mine planning.
Forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause the actual results, performance or achievements
of the Platmin Group to be materially different from any future results,
performance or achievements expressed or implied by the forward-looking
statements. Such factors include, among others, general business, economic,
competitive, political and social uncertainties; the actual results of
current exploration and mining activities; development and operational risks;
title risks; regulatory risks; conclusions of economic evaluations and
studies; fluctuations in the value of the United States dollar relative to
the Canadian dollar or South African rand; changes in project parameters as
plans continue to be refined; future prices of .4E metals; possible
variations of ore grade or recovery rates (including the existence of
potholes, faults and other geological conditions that may affect the
existence or recovery of resources and reserves); failure of plant, equipment
or processes to operate as anticipated; accidents, labour disputes,
industrial unrest and strikes and other risks of the mining industry;
political instability, insurrection or war; the effect of HIV/AIDS on labour
force availability and turnover; delays in obtaining governmental approvals
or financing or in the completion of development or construction activities,
as well as those factors communicated in the section entitled ``Risk
Factors`` of Platmin`s current annual information form ("AIF") and its final
short form prospectus dated May 5, 2010, which can both be viewed at
www.sedar.com. Although Platmin has attempted to identify important factors
that could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other factors
that cause actions, events or results to differ from those anticipated,
estimated or intended.
Forward-looking statements contained herein are made as of the date of this
market release MD&A and Platmin disclaims any obligation to update any
forward-looking statements, whether as a result of new information, future
events or results or otherwise. There can be no assurance that forward-
looking statements will prove to be accurate, as actual results and future
events could differ materially from those anticipated in such statements.
Accordingly, readers should not place undue reliance on forward-looking
statements due to the inherent uncertainty therein.
Investment Bank and Sponsor:
Investec Bank Limited
13 May 2011
Date: 13/05/2011 15:02:01 Supplied by www.sharenet.co.za
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