Northam Platinum has secured the first platform it needs to extract platinum group metals from the mothballed Eland mine it has bought from Glencore by agreeing a processing deal with Jubilee Metals.
Northam bought Eland for R175m in February 2017, but apart from studying what the best option for the mine and concentrator was in a weak platinum market, it had done little with the asset since then.
The agreement with Jubilee brings a base load to the concentrator and allows Northam to kickstart its own plans at the Eland complex. Northam CEO Paul Dunne has stated there are no immediate plans to restart the underground mine, bringing additional ounces to the market at this stage, but he has spoken of a possible tailings retreatment operation to begin extracting value from the complex.
Jubilee will underpin that strategy not only with 60,000 tonnes a month of material from its PlatCro business but also possibly from its Hernic tailings treatment operation close to Eland. The Hernic project delivered 4,897oz of six platinum group metals in the March quarter. It is highly likely the Hernic ounces will be fed into the Eland concentrator too.
“The structure of the agreement captures the intent of both companies to develop a lucrative partnership in the processing of platinum group metals and chrome-rich material,” said Jubilee CEO Leon Coetzer.
“It also opens the door to grow our partnership to engage in similar further opportunities with one of the world’s largest platinum producers,” he said.
Jubilee has a strategy of treating tailings from chrome operations, extracting chromite, which is used to make stainless steel, as well as platinum group metals as a byproduct.
The PlatCro deal will generate monthly revenue of $2.4m at today’s metal prices for the six metals the concentrator will extract. The metals in concentrate will be sold to Northam’s smelter at Zondereinde.
Jubilee will start stockpiling material ahead of the Eland processing plant from June, before work starts on 60,000 tonnes a month to extract 2,800oz of platinum group metals a month from February 2019.
The plan is to have 290,000 tonnes of material, or more than four months’ worth of feedstock, by January 2019, with Jubilee delivering 60,000 tonnes a month of fresh material from its PlatCro project to process 1.4-million tonnes of tailings. At the same time Northam will restart a chrome recovery plant to treat 10-million tonnes of chrome-rich tailings at Eland to extract 250,000 tonnes a year of chrome. It will send the residue containing platinum group metals to the concentrator.
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