Eland Platinum Gears Up in Bushveld
By Charlotte Mathews
28 May 2007 at 07:17 AM GMT-04:00
resourceinvestor.com
JOHANNESBURG (Business Day) -- Eland Platinum [JSE:ELD], which is building the Elandsfontein platinum mine on the western limb of the Bushveld complex near Brits, had spent R487.9 million ($68.7 million) in the past 15 months on building the mine and making acquisitions, it said yesterday.
The company listed on the JSE in March last year after raising R731 million ($102.9 million) after expenses from a private placement of shares in the previous year and shares placed ahead of the listing. It has since raised another R350 million ($49.3 million) through a share placement.
The shares started trading at R23.50. On Friday, the shares shed 70 cents to R116. Their strength reflects the rising platinum price, speculation that consolidation will occur among platinum producers and positive investor sentiment towards the company, which has so far kept to its production schedule.
The company is not yet making any revenue and posted an operating loss of R51.9 million ($7.3 million), reflecting mainly employee and consulting expenses. At the end of March, Eland Platinum held R530.2 million ($74.7 million) in cash. It said last month it had signed terms for Nedbank Capital to provide an R800 million ($112.7 million) project finance facility and a R100 million ($14 million) debt finance facility to complete development of the mine. The total estimated capital cost of the mine is expected to be about R1.5 billion ($211.3 million), including contingencies and escalation.
Eland Platinum is developing the mine in two stages. An opencast mine is scheduled to start operating in January and will have a four-year life, producing 160,000/oz of platinum group metals a year. By the third quarter of 2011 all production will be from an underground mine and by 2014 production will have built up to about 270,000/oz of four platinum group metals in concentrate. Eland is also building a concentrator for R638 million ($89.8 million).
Eland Platinum was targeting production of 1 million ounces of platinum group metals by 2015 through doubling output from Elandsfontein and from new projects, it said.
It was evaluating the potential of the Zilkaatsnek property, over which it was granted a prospecting licence in January, and the “triangle” area, a piece of land next to Elandsfontein which it acquired for R70 million ($9.8 million) last month, which would help to double Elandsfontein’s production.
Management said on Friday the company’s immediate priority would be to build up a stockpile of 600,000 tonnes of ore in readiness for the commissioning of the concentrator in October. |
