REUTERS

Toronto and JSE-listed platinum miner Platmin (PLN) has acquired an incremental 5.99 million 4E PGM inferred resource ounces - 42.57 million tonnes at a grade of 4.38g/t - contained within the western portion of the Sedibelo PGM Project concession (Sedibelo West) from the Bakgatla-Ba-Kgafela Tribe and Itereleng Bakgatla Mineral Resources (IBMR).

The company said on Wednesday that the aggregate consideration of the acquisition was US$75 million in cash - equivalent to $12.50 per 4E PGM inferred resource ounce.

Sedibelo West is contiguous with and down-dip of the eastern boundary of Tuschenkomst, Platmin's operating pit, where PGM production is building up.

Platmin said the acquisition of the Sedibelo West property would add significant value to the company by materially increasing the PGM mineral base accessible from the existing pit; extending the life of mine significantly; and providing operational flexibility, particularly in the north pit.

Optimisation studies to maximise the value of the enlarged Pilanesberg Platinum Mine (PPM) - Sedibelo West property have begun, and should be concluded during the 2011 financial year, it said.

A clear benefit of mining from PPM's existing pit through the farm boundary into Sedibelo West is the direct access to the sulphide ore which achieves higher recoveries than oxide or transitional ore.

In addition to the Sedibelo West purchase, Platmin has also acquired an effective 50% interest in an infrastructure vehicle, which has acquired all of Barrick's strategically important infrastructure rights and assets.

These include power and water rights as well as certain other assets which can be used for the development of the PGM deposits to the east of the existing operations - the Sedibelo Central, Sedibelo East and Magazynskraal projects.

Through this transaction, Platmin has not only secured all of its future power and water requirements, but has also positioned itself ideally for participation in further regional consolidation, it said.

This acquisition has been completed in partnership with the Bakgatla and Ivy Lane Capital - a Pallinghurst-related entity - which would jointly own the other 50% of the vehicle. The aggregate consideration for Platmin's 50% interest is approximately $12 million.

Platmin Chairman Brian Gilbertson welcomed these landmark transactions, which represent a significant first step towards Platmin's participation in the cost-effective development of the last shallow PGM resource on the western limb of the Bushveld Complex.

“Today's announcement cements a long-standing partnership between the Traditional Council of the Bakgatla and Platmin, and will deliver value to shareholders, community members and indeed to South Africa,” said Gilbertson.

“Nature's orebodies are not delineated by arbitrary farm fences. It was the Bakgatla's vision - and one we share - to develop PPM and Sedibelo West in the most productive manner: This means one orebody, one mine.

“The acquisition of the Sedibelo West deposit will create mining flexibility and extend the life of our Pilanesberg Platinum Mine with all the multiplier benefits of employment; foreign exchange: revenue to the fiscus; and the economic and regional socio-economic benefits that will be generated. Importantly, Platmin's world-class concentrator and other infrastructure will be used to process more PGM-bearing reef, making this one of the most productive acquisitions in the industry,” he said.

In addition, Gilbertson announced he had invited Kgosi Nyalala Pilane to join the board of Platmin so he could directly represent the Bakgatla-Ba-Kgafela Traditional Council in the company's affairs.

Pilane welcomed the development of an extended operation on communal land by responsible operators.

“The Bakgatla Traditional Authority's partnership with and investment in Platmin will support the tribal administration's ability to invest in ongoing community development programmes.

“The proceeds from the sale of these rights will inject significant funds and resources into our ongoing community development projects. These will benefit the more than 350,000 members of the Bakgatla community. This new mining venture in Moruleng initially created 2,500 casual jobs during the mine's construction phase and continues to provide employment and skills training for many community members.”

Platmin's primary asset is the Pilanesberg Platinum Mine, which is building up to full production from the Tuschenkomst pit. The focus of the company is on achieving the metal production forecasts predicted in the bankable feasibility study for the project and participating in the value creation of developing the western limb of the Bushveld Complex.

Platmin also hold interests in projects on the eastern limb. - I-Net Bridge