Toronto and JSE-listed Eastern Platinum (Eastplats) is preparing to resume underground operations at its Crocodile River Mine near Brits in North West by the fourth quarter of 2022.
The mine has been opened and shut a few times “due to economic considerations and problems with the mining method”, said Hannelie Hanson, GM for Eastplats in SA.
The mine has been under care and maintenance since August 2013 and restarting operations before the end of this year will require an investment of about $25m. If the company does succeed in resuming underground operations at the mine, it will create about 1,400 new mining jobs, Hanson said.
Operations at the Crocodile River Mine currently include re-mining and processing its tailings resource to produce platinum group metal and chrome concentrates from the Barplats Zandfontein tailings dam.
In 2021 an underground long-term plan and mine design study was completed, and a restart business execution plan got under way with the board’s approval and mandate to seek funding arrangements to restart underground operations at Crocodile River Mine in the second half of 2022.
The restart of underground operations will be at the Zandfontein section of the mine, which has reserves of 1.7-million ounces with an overall mine life of 22 years.
Once a restart of underground mining is approved by the board, the plan is to start mining at a rate of 480,000 tonnes run-of-mine a year for two years before doubling output and then ultimately reaching peak production of just over1-million tonnes a year.
Some of the changes to the mining method, which the company believes will make the operations more viable compared to previous operations, include on-reef development instead of on the footwall below the reef, and switching to hydro powered drilling for in-stope drilling, which is more energy efficient than the compressed air drilling previously used.
The total investment at the mine to date, in surface and underground infrastructure, amounts to about $632m.
The additional upfront capital costs required to restart the underground operations will largely comprise initial mining capital to the tune of $11.7m — to “re-equip the stopes, and winches refurbish the lamp room and getting equipment on site”, Hanson said.
She said Eastplats was confident it would be able to raise the capital and that the company was “looking at a mix of debt and equity” and that a number options were being pursued.
Eastplats’ share price was trading at about C$0.22 on the Toronto Stock Exchange on Monday.
At this price the share “is undervalued and undertraded”, Hason said, given the potential that will be unlocked when underground mining operations resume. “The market likes mines to mine underground, so we hope to see a positive movement in the share price soon,” she said.
The share had lost 8.7% in value on the JSE since the start of this year and was trading at R4.05 on Monday after previously achieving a high for the year to date of just over R5. Over the past 12 months the share price has gained about 10%.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.