The viability of the Kalplats Platinum Group Element deposit

Abstract

The Kalplats platinum group metal deposit is located in the Northwestern Province of South Africa, 80 km southwest of Mafikeng, in the Stella Layered Intrusion. The Stella Layered Intrusion intruded into the Kraaipan Greenstone Belt and is dated at 3.03 billion years. The Kraaipan Greenstone Belt is host to the 80 000 ounce per annum Kalgold Gold Mine. Platinum Group Element mineralized layers in the Stella Layered Intrusion are interpreted to occur in the overturned western limb of folds, formed by an eastward vergent compressional event. Three major reefs have been identified, namely the Lower Grade (LG) reef, the Mid Reef and the Main Reef. High grade reefs occur within these three. The average Pt:Pd ratio of the Main Reef is 1:1. Highest total precious metals content is concentrated in the Upper Main and Lower Main Reefs and the average grade for these two reefs is 4g/t. Open pit mining is suggested. The total inferred precious metals resource equates to 84Mt at an average grade of 1.4 g/t Pt+Pd+Au, for 3.9million ounces. Platinum, palladium and gold occur as fine grains. Maximum recoveries of approximately 72% are possible, from sulphide ore, using a twostage mill-float circuit. The estimated reserve (non-JORC compliant) is 26 Mt at an average grade of 2.01g/t Pt+Pd+Au, for 1.68 million ounces. A financial evaluation was done on the viability of the Kalplats deposit, using a discounted cash flow model. Future projections used were a R/$ exchange rate of R6-50 to the dollar and long-term metals prices of US$ 800/oz Pt, US$ 200/oz Pd and US$ 400/oz Au. The result of the discounted cash flow model was negative and indicated no return on capital and a negative Nett Present Value (NPV) of –R206 million at a discount of 13%. Factors impacting negatively on the viability of the project, include grade, metallurgical recovery, smelter fees, government royalties, metals prices and the Rand-US$ exchange rate.