TSX-listed Platinum Group Metals says development on the WBJV Project 1 platinum mine is progressing well.The company has advised that north mine twin declines are now developed to a length of approximately 1 220 m, while an underground drive along the strike of the deposit has now advanced on the Merensky reef for approximately 130 metres with no major offsets. Further, the first raise position into the Merensky reef panel has been reached and the raise will commence shortly. The declines themselves are continuing and turns into development headings targeting mine blocks below the current development level are now underway. Crews are currently achieving the planned advance rates at the north mine, assured Platinum Group Metals. Meanwhile, the company pointed out that a second set of twin declines at the south mine are being developed into the ore body 1.8 Km south of the north mine portal, while the advance to date of south mine declines is approximately 60 m. Platinum Group Metals admits that the development of these declines is progressing slower than anticipated due to poorer ground conditions than expected in the first 50 m vertical from surface. However, the company noted that south declines are expected to move out of poor near surface conditions in the next month and development rates will improve.
Subsequent to slower development rates in the south mine and a one month project delay as a result of Section 54 safety work stoppages, the targeted start date for first concentrate production has been adjusted by six months to mid-2015. The ramp-up profile for production from this date forward over the following two years is similar to previous projections.Nonetheless, Platinum Group Metals confirms that surface development is on track and surface earthworks and lay down areas are well advanced. Major mill components have been ordered and expected deliveries for all major components remain on schedule. Also, power and water requirements are expected to be provided as required. Eskom is currently installing transformers for the initial 10 MVA service to site. The company and Eskom are working on a plan to provide the site with a further 10 MVA for commissioning and early production requirements, which will be sufficient for all mining and milling operations until the full 40 MVA service is delivered. The operation does not require more than 20 MVA for several years. Regarding finances, the company says it is seeing escalation in rand terms at Project 1 in areas such as labour, diesel fuel, power and certain supplies, adding that these escalations have been consistent with those seen in the South African mining industry in general over the last 18 months. The company’s original cost estimates were modelled at 8 rand to the US dollar. With the rand currently at or near 10 rand to the dollar these cost escalations are substantially offset in dollar terms and the net effect of escalation and project delays at present is estimated at less than a 10% increase from previous cost estimates. Major service contracts and equipment purchase contracts are collectively in keeping with previous cost estimates.