PTM’s Maseve ramp up dogged by DMR safety blitzes

VANCOUVER (miningweekly.com) – The ramp up of South Africa-focused miner Platinum Group Metals’ (PTM’s) cornerstone Maseve mine has been hampered in recent weeks by safety blitzes in the North West province by the inspectorate branch of South Africa's Department of Mineral Resources (DMR).

The company noted on Tuesday that this had caused intermittent Section 54 work stoppages at Maseve, causing a loss of some planned production and compounding existing development delays.

PTM said that it had addressed concerns raised by the DMR, adding the company had redoubled its focus on safely increasing mined tonnage at grade from planned blocks, while at the same time reducing costs.

PTM is in the process of changing underperforming contractors and increasing stope mining, while reducing contractor redundancy, improving efficiencies and reducing costs.

According to the Vancouver-based company, the Maseve mine has demonstrated positive grade-thickness-confirmation-to-block-model estimates, as well as positive recovery-to-design specifications. Mining teams are currently accessing Block 11, and mined tonnage from this important block is starting to come on line. Block 11 is modelled to be flat dipping with good grade and thickness and is the most important block to the near-term mine plan.

The block is host to some of the best grade thickness ore at the Maseve mine and is an important part of the next several years of scheduled mining. Block 11 is a large, well-drilled and stable mining block estimated to host more than 545 000 platinum, palladium, rhodium and gold (4E) Merensky reef ounces, held in 3.07 t grading 5.53 g/t 4E in the indicated category.

The seam thickness, where accessed, is about 2 m, with a well developed and near-flat dipping Merensky reef present as modelled. Vertical channel sampling has returned assays of 7.4 g/t 4E, over a true width of 193 cm. This block is amenable to bord-and-pillar stoping, using mechanised mining methods.

PROJECT DELAYS
Despite monthly output of 4E, as well as Maseve's associated copper and nickel in concentrate, increasing, PTM had in September lowered its guidance for concentrate production – on a 100% project basis from April 2016 to April 2017 – from 110 000 oz 4E to 91 500 oz 4E. The Maseve mine is fully constructed and is in the ramp-up phase of production.

During the year ended August 31, the company widened its net loss to $36.65-million, compared with the previous-year loss of $3.97-million. It also booked an impairment charge against the carrying value of the Maseve mine of $41.37-million at the end of the fiscal fourth quarter ended August.

Output at Maseve is behind schedule owing to challenges related to the ramp-up of stoping tonnes, resulting in a loss of planned revenue from operations. Poor contractor performance and late completion of underground infrastructure, causing bottlenecks in the movement of waste and ore out of the mine, in part caused difficulties and delays. Feed to the plant since commissioning started in February has comprised substantial low-grade development stockpiles and a combination of mined stoping tonnes and development tonnes from primary headings, where the Merensky reef is present.

Looking forward, Merensky reef tonnes mined are scheduled to increase as PTM accesses and develops key mining blocks. The company noted that delays in development and stoping have delayed production, which will have a negative impact on working capital requirements until enough mined material is produced to allow mine operations to generate positive cash flow.

PTM’s key business objectives for fiscal 2017 will be to safely ramp up the Maseve mine and to advance its Waterberg project through feasibility studies and preparations for a mining right application.

The company noted that a 38% rise in palladium prices so far this year had created an increased interest in the Waterberg project, which holds a probable mineral reserve of 102.7-million tonnes for 12.32-million 4E ounces, and indicated resources of 24.9-million 4E ounces, with the deposit remaining open on strike to the north and below a 1 250 m arbitrary depth cutoff.