Production build up progresses at Pilanesberg Platinum Mine

/NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES NEWSWIRE SERVICES/

Platmin reorganizes to achieve 250,000 PGM ounces per annum

TORONTO, Jan. 14 /CNW/ - Platmin Limited ("Platmin" or "the Company"; TSX/AIM: PPN; JSE: PLN) today announced results for the quarter and nine months ended 30 November 2009. These results relate principally to Pilanesberg Platinum Mine (PPM), the first of the Company's Platinum Group Metals (PGM) producers, which is building up to an annualized production target of 250,000 PGM ounces (3 PGMs + Au).

In announcing these results, Tom Dale the recently appointed CEO of Platmin, said: "The production build-up at PPM has progressed further during the November quarter. Metal dispatched and sold improved by over 50% and mine operations improved steadily with run-of-mine (ROM) tonnages up by 24% on the previous quarter. The Company should reach its targeted production rate of 250,000 PGM ounces per annum early in calendar 2011, which is approximately one year later than originally anticipated. Once in full production, PPM will be well placed to play a key role in the consolidation of PGM interests in the Pilanesberg area."

Important features of quarterly performance were:-

    
    -   Net loss of US$2.3 million or US$0.01 loss per share (previous
        quarter - net profit of $6.6 million or US$0.02 earnings per share).
        Quarter-on-quarter, the net variance is largely due to the $8.8
        million reduction in foreign exchange gains, from $11.1 million in Q2
        to $2.3 million in Q3;
    -   13,406 PGM (3PGM + Au) ounces dispatched and sold (previous quarter -
        8,782 PGM ounces);
    -   A PGM basket price received of $1,175/oz (ZAR8,787/oz), up from the
        previous quarter of $1,036/oz (ZAR8,032/oz). Quarter-on-quarter, the
        higher basket price offset the strength of the Rand against the US
        Dollar;
    -   Revenue from metal sales (revenue) of US$16.2 million (previous
        quarter - US$11.0 million);
    -   Capitalized development and operating costs of US$31.0 million or US
        $14.7 million net of revenue. As a development stage company,
        revenues are offset against capitalized project development and
        operating costs. (Previous quarter - US$20.6 million or US$9.6
        million net of revenue);
    -   Topsoil and overburden removal of 3.340 million cubic meters
        (previous quarter 2.263 million cubic meters);
    -   Reef tonnages delivered to the ROM pad of 680,261 tonnes (previous
        quarter 546,999 tonnes);
    -   Final commissioning of the UG2 and Merensky circuits of the
        concentrator plant and the 10 MVA standby diesel power plant,
        subsequent to the quarter end;
    -   Appointment of Tom Dale, mining veteran, as CEO on 1 December 2009;
    -   Organizational restructuring implemented to separate the management
        of operations and development;
    -   Appointment of additional senior mining staff to bolster planning and
        operational capacity in support of the long term strategy.
    

Important features for the nine months ended 30 November 2009 were:-

    
    -   Net loss of US$9.2 million or loss per share of US$0.02 (previous
        year to date net profit of US$2.7 million or earnings per share of US
        $0.02). Period-on-period, the variance is largely due to the $10.4
        million reduction in foreign exchange gains, from $13.7 million in
        2008 to $3.3 million in 2009;
    -   The delivery of PGM concentrate from April 2009;
    -   23,995 PGM ounces dispatched and sold;
    -   PGM basket price received of $1,074/oz (ZAR8,437/oz);
    -   Revenue from metal sales of US$27.9 million;
    -   Capitalized development and operating costs of US$81.1 million or
        US$53.2 million net of revenue. (Previous year - US$23.9 million);
    -   Topsoil and overburden removal of 9.543 million cubic meters
        (previous year - 5.392 million cubic meters);
    -   Reef tonnages delivered to the ROM pad of 1,871,512 tonnes.
    

Commenting on the progress, Tom Dale today said, "Platmin has delivered on several important fronts, including securing new order mineral rights, consummating an effective Black Economic Empowerment (BEE) transaction and the cost-effective establishment of world-class mining and processing infrastructure. In a relatively short space of time, PPM has evolved from an exploration/development company into an operating mining company. In line with this evolution we have put in place the additional mining skills required to achieve our targets."

PPM's original planned production build-up to an annualized rate of 250,000 PGM ounces by the end of 2009 was an ambitious target which has not been met. During the critical start-up phase, industry-wide industrial action precipitated "go slows" and work stoppages by contractor employees at PPM, significantly slowing the build-up. These disruptions adversely affected the mine's ability to achieve the balance between Merensky and UG2 ores required for stability and consistency in the processing plants during this period. Further contributory factors were:-

    
    -   Lower metallurgical recoveries from the weathered and oxidized ore
        mined at or near the surface along the north-south western corridor
        in the pit;
    -   The friability of this oxidized ore limiting the upgrade factor of
        ore processed through the DMS circuit. Recoveries and the
        effectiveness of the DMS circuit are expected to improve as mining
        progresses eastwards into the deeper, unaltered ore; and
    -   Higher-than-expected dilution owing to the structural complexity
        along the western boundary of the pit, adjacent to the north-south
        fault zones. Dilution is likely to decline as the knowledge of the
        ore-body increases and mine planning improves.
    

The Board has approved a revised mine plan which, subject to the normal uncertainties associated with mine planning during a start-up, will see the production of 28,000 PGM ounces dispatched and sold for the 10 month period ended December 31, 2009, rise to some 160,000 PGM ounces for the 12 month period ended December 31, 2010. This is planned to increase to an annualized production rate of 250,000 PGM ounces early in calendar 2011.

The delay of approximately one year in achieving full capacity and anticipated corporate activities in a consolidating industry will require additional funding. This is likely to be sourced through the combination of a short-term working capital facility and some longer term financing. Given the strong PGM price environment and improved investor sentiment towards the PGM sector, the international capital markets provide attractive opportunities. Platmin remains debt-free, un-hedged and continues to maintain a conservative funding structure during the build-up period to full production. These factors provide maximum flexibility for the Company's financial structuring.

Following his appointment as CEO, Tom Dale has created a new division within the Company focusing exclusively on exploration and development opportunities. This division will be headed up by Platmin veteran Terry Holohan, a PGM metallurgist with an extensive background in the business. As a first initiative, the team will conduct a Bankable Feasibility Study (BFS) over the nearby 20 million PGM ounce resource Magazynskraal property, which is controlled by Platmin's largest shareholders, the Pallinghurst Investors Consortium and BEE partner, the Bakgatla community.

In summary, Platmin is evolving into a significant PGM producer, with PPM set to deliver on the original BFS forecasts in the near term. The Company continues to enjoy several competitive strengths:

    
    -   Reserves that are amenable to lower-cost surface mining, with the
        ability to generate significant cash flows;
    -   A world-class PGM concentrator, designed for expansion and surrounded
        by platinum deposits, situated approximately 50km from the nearest
        competition;
    -   A suite of exploration and development projects providing ample
        opportunity for growth in the longer term.
    

Platmin's Chairman, Mr. Brian Gilbertson commented that, "Given the robust PGM markets, the significant progress made at the operations to date, the calibre of the orebody and the focus of the new management team, the Platmin is well positioned to become an important player in the South African PGMs industry."

About Platmin

Platmin is a mineral exploration, development and operating company engaged in the exploration for, and development of, Platinum Group Metals (PGM) deposits in South Africa. The Company has developed the Pilanesberg Project into the Pilanesberg Platinum Mine (PPM) and is exploring for PGMs on its other three key projects: Mphahlele, Grootboom and Loskop. Platmin's goal is to become a significant producer of PGMs through the development and operation of several mines on its key projects. Management's main priority is to achieve full capacity at PPM.

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, and its mineral projects, the future price of platinum or other Platinum Group Metals ("PGMs"), PGM production levels, mining rates, the future price of other base metals, future exchange rates, the establishment of debt and/or credit facilities, 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 remaining project development 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", 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 include, among others, the forecast average annualized production rate of 160,000 ounces of 3PGM+Au metals at PPM for the 12 month period ending December 31, 2010; and the ramp-up to steady state production at PPM to achieve the Bankable Feasibility Study ("BFS") numbers of about 20,000 ounces per month (250,000 ounces per annum on an annualized basis) by early calendar 2011.

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 timeframes, 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 functions as specified, that geological or financial parameters do not necessitate future mine plan changes, and that no unusual geological or technical problems occur.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Platmin and/or its subsidiaries and/or its affiliated companies 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 activities; 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 platinum or other PGMs; possible variations of ore grade or recovery rates; 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") which can 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 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.

SOURCE PLATMIN LIMITED

For further information: For further information: Charmane Russell, Russell & Associates, +27 11 880 3924, +27 82 372 5816

Organization Profile

PLATMIN LIMITED

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890