Pilanesberg

At a glance

The Pilanesberg project currently includes Mineral Resources on the Tuschenkomst, Ruighoek, Witkleifontein and Rooderand properties and Mineral Reserves on the Tuschenkomst and Ruighoek properties.

Ownership

72.39% held through Boynton, with the balance of 26.80% held by Platmin’s BEE partner, the Moepi group of companies. A small holding making up the balance may be distributed amongst Boynton’s shareholders on a pro rata basis at a later stage.

Location

Western Limb of the Bushveld Complex in South Africa’s North West Province, around the Pilanesberg intrusion and adjacent to Barrick's Sedibelo project.

Enlarge Map showing Pilanesberg operations

Total project area

14,511 hectares.

Access and infrastructure

Good surfaced roads link the project area to Rustenburg, nearby airports and rail links. Electricity is supplied by the state-owned power utility Eskom to local chrome and platinum mines. An established water network is in place.

Total Mineral Resources

In April 2007, Platmin announced an updated Mineral Resource estimate for Tuschenkomst of 66.8 million tonnes (Mt) at 2.09 g/t 3PGE+Au for a total of 4.49 Moz and for Ruighoek of 12.0 Mt at 3.07 g/t 3PGE+Au for a total of 1.18 Moz. The Tuschenkomst Mineral Resource is within the Measured and Indicated categories and is based on bulk mining from the top of the Merensky to the base of the Lower Pseudo Reef (the “silicate ore”) and selectively mining the UG2 Reef. This silicate ore horizon includes up to four PGE reefs with some discordant mineralization present in the parting material. The Indicated Mineral Resource estimate on the Ruighoek property assumes all reefs will be selectively mined. These Indicated and Measured Mineral Resources form the basis of the Pilanesberg feasibility study which was announced in July 2007. Additional Inferred Mineral Resources that have been defined on the Witkleifontein and the Rooderand (Portion 3) properties as well as deeper portions of the Ruighoek property have not been included in the feasibility study.

Mineral Resources and Mineral Reserves of the Pilanesberg project are attributable to Platmin by virtue of its 72.39% ownership in Boynton as summarised.

Feasibility Study

The Pilanesberg Project feasibility study completed by SRK Consulting indicated a robust project based on:

• Proven and Probable platinum group elements (PGE) Mineral Reserves totalling 4.4 Moz of 3PGEs + gold (3.2 Moz attributable to Platmin). 3PGEs are platinum, palladium and rhodium.
• Life of Mine (LoM) 16 years with production planned to commence early 2009 with an average production rate of 250,000 oz/year 3PGE+Au in concentrate for the first 11 years.
• Total capital expenditure over the construction period is ZAR1.67 billion with a peak funding requirement of ZAR2.65 billion in month 26.
• Metal prices over the project's life have been estimated at:

• Base Case Internal Rate of Return (“IRR”) of 21.7% in real terms and 31.3% in nominal terms (ungeared or unleveraged after tax).
• Base Case Net Present Value at an 8% real discount rate (ungeared after tax) (“NPV (8%)”) of ZAR1.82 billion (US$260 million).
• Payback period on capital of 2.5 years following first production.
• Average operating margin of 46% over LoM.
• The presence of ruthenium and iridium in ores and concentrates which will be co-produced with the 3PGEs has the potential to improve project values, positively affecting the IRR and NPV of the project.

Engineering firm Dowding Reynard & Associates (DRA) has been appointed to implement the design and construction phase of the project. Mining will be based on extracting a total of 5 million tonnes of ore per year from two open pits at Tuschenkomst and Ruighoek which will be processed through a central concentrating facility situated on the Tuschenkomst property. This will enable production to be ramped up rapidly to reach steady-state production of 250,000 3PGE+Au oz/year (100%) within the first year of production, 2009. Production is planned to reach a peak of 296,000 3PGE+Au oz/year in 2010.

In the last calendar quarter of 2007 Platmin raised capital in a public offering and private placement for gross proceeds of C$92.8 million. The offering was underwritten by a syndicate of underwriters jointly led by RBC Capital Markets and GMP Securities L.P., and including Haywood Securities Inc. The net proceeds will be used principally to advance development of the Pilanesberg Project.