Johannesburg - Lonmin says it has secured funding of $50 million – or R664 million – for its Bulk Tailings Treatment project.
The funding was secured through a specific project finance metal streaming arrangement.
It says the first tranche of project funding of $9 million – R119.6 million – has been received and work has already started on the project.
The BTT project involves the re-mining of Lonmin’s Easterns Tailings Dam.
It entails the reprocessing of 26 million tons of tailings material at a rate of 300 000 tons a month.
Commissioning and ramp up to full production is expected during the 2018 financial year, it says.
The platinum miner, which has the highest costs of the world’s three major platinum producers, says when the project reaches a steady-state, it should produce about 29 000 ounces of platinum a year.
This translates into about 55 000 ounces of platinum group metals at a yield of 0.5 grams a tonne.
“The project is part of Lonmin’s business plan and is expected to produce the lowest cost ounces in the Lonmin portfolio.”
CEO Ben Magara says the project is “part of our strategy to focus on low cost ounces to maximise our cash position and create value for all our stakeholders”.
The financing follows Lonmin’s rescue last year by a R5 billion bailout from shareholders.
It has been cutting costs and trimmed more than 5 400 jobs in an attempt to become profitable once again. In the first half of the year, Lonmin turned cash positive, but was still making a loss on a per share basis.
IOL