Maroelabult acquired to boost Northam synergy
Northam Platinum will spend R20m to buy the mothballed Maroelabult mine to “considerably accelerate” bringing its Eland operation into production, CEO Paul Dunne says.
In yet another deal from Northam, agreement was reached with Canada’s TSX- and JSE-listed Eastern Platinum to buy Maroelabult mine, which neighbours Eland.
Eland, in which Xstrata and Glencore invested R14bn to buy and build, was shut in 2015. Northam bought the mine and large concentrator for R175m and has outlined plans to restart the mine in a R2bn project.
Eland has two decline shafts and Maroelabult will add a third, giving access to stoping areas, while Northam will accelerate development into the Eland block of reserves and resources.
Eland was planned to reach an output target of 100,000oz of platinum group metals (PGMs) by 2025 and four years later reach steady-state production of 150,000oz .
Asked whether the addition of Maroelabult will result in higher production, Dunne said the new property will “considerably accelerate our timeline to bring Eland to steady-state production”.
“We will need very little capital to bring Maroelabult to account and to do the development into the Eland ore body,” he said, declining to put a number on the capital spend or how much sooner Eland will reach steady-state production.
The Maroelabult resource base is small, but it gives Northam flexibility in tackling Eland. Maroelabult has a 232,000oz resource of four PGMs and a 188,400oz reserve. The ore body is a natural extension to the one Eland is mining and costs Northam $7.30 per reserve ounce to add to its portfolio. This is a good price for the industry.
“Eastplats is pleased to close this transaction with Eland and to monetise Maroelabult. The company obtains an immediate cash savings while Eland can exploit the resources for which it is better located and positioned,” said Eastplats CEO Diana Hu.
The Eland mine is the latest addition to Northam, which has Zondereinde, the deepest platinum mine in the world, and the shallow, mechanised Booysendal property at which it is building new shallow declines to feed the sister concentrator to the one at Eland, a 250,000 tons-amonth plant.
With all three mines in production, Northam will have PGM output of 1-million ounces a year. Dunne was confident the process to secure the Maroelabult mining rights will be quick, given the ability to create jobs and swiftly bring a mothballed mine back into production.
Northam will take over management of Maroelabult on November 1, as well as assume R6m a month of maintenance costs. It will not take over any rehabilitation provision that Eastern Platinum has set aside for the mine, but start its own fund instead, Dunne said.
WE WILL NEED VERY LITTLE CAPITAL TO BRING MAROELABULT TO ACCOUNT AND TO DO THE DEVELOPMENT INTO THE ELAND ORE BODY