PODCAST - A new age dawning in SA platinum - Jones
Platinum Group Metals CEO, Mike Jones, speaks about the group's new Waterberg discovery, the future of the platinum industry in South Africa and his experience of the country as an investment destination.
mineweb.com
Interviewer: Geoff Candy
Posted: Friday , 14 Mar 2014
Download this interview
GEOFF CANDY: I am on the sidelines of PDAC 2014, and I am sitting with Mike Jones, he is the CEO at Platinum Group Metals. Mike, you have just given a fascinating presentation about the new age dawning, as you call it, in the South African platinum sector. This is clearly a topic fraught with a lot of questions at the moment, the old guard of the country’s platinum reserves struggling at the moment. The PTM project sounds very good, could you just lay the scene for us.
MIKE JONES: It is a brand new discovery, it is at the Preliminary Economic Assessment (PEA) stage so we have a lot of work to do, but Worley Parsons did a fantastic job with our PEA and they see potential for steady state production level at 655,000 ounces a year for Waterberg One, so that is obviously significant in the sector, it is not a small deposit, it is 167m tonnes and we are still drilling with 12 drill rigs and we announced yesterday that the deposit goes for another 1.7km with consistent, thick F reef. So, it is a very different situation. And, as you point out, it comes at a very interesting time, where the deep mines are struggling, the labour relationship is struggling and the backdrop is very exciting for something new that can be mined mechanically and change the cost paradigm.
GEOFF CANDY: How did these big companies, that have been mining in SA for so long, miss something that was ostensibly in their back garden?
MIKE JONES: Well, it's good solid exploration work. We put a new business unit together 5 years ago, some of the top academics in SA, and asked them for their crazy ideas. And, as is typical around this PDAC conference, Canadians are the biggest explorationists around the world, we drill holes all over the place. And, the third hole hit in this particular case. In my career I have found six mines now and this one is the most significant. And, as I pointed out to the minister in the session this morning South Africa has spectacular rocks, you just need to drill.
GEOFF CANDY: It feels like platinum project in South Africa is a bit of a four-letter word at the moment. From a perception point of view, wondering the halls of the PDAC, what has the reception been like for a platinum project in South Africa.
MIKE JONES: I beg to differ, we were the number two financed company on the TSX in 2013, we raised over $355m from the major mining investors; people like to say that but it is not borne out by the facts. Second to Barrick, only, we were the most financed company for exploration and development for platinum in SA of any commodity, whether its gold, silver, vanadium it doesn't matter. The investors were interested in platinum because they see the long term future and they see the extraordinary nature of the deposits we have found. So, I think the rhetoric around SA and platinum not being attractive to investors, is frankly not borne out by the facts.
GEOFF CANDY: I suppose it helps that a lot of this project that can be mechanised which would alleviate a lot of the issues the rest of the sector is facing.
MIKE JONES: Well, the mechanisation changes the type of labour, these can be high paying jobs. You have the productivity in this situation to pay a significantly improved wage. And, a lot of the mines on the 1m thick reef are getting deep and its challenging and it is very fortunate for the world that we have new deposits coming on at a time when they are needed.
GEOFF CANDY: On the state of the minerals sector in SA, there has been a lot of noise about the uncertainty that is going on with the MPRDA amendment bill. Generally speaking, what has your experience been as a Canadian company coming into South Africa, what have you experienced?
MIKE JONES: First of all, our experience is that, we filed for a mining right on our Western Bushveld joint venture, it was granted in 11 months and we started construction. Prior to that, we were able to get a bulk sample permit to start our declines even before our 11 month process for our mining right. Looking around the world, I have also worked in Canada, the US, South America, I think South Africa has one of the best mineral regimes in the world, the minister is here, telling a positive story about how SA is very conscious about the investors needs and that the only way that poverty and unemployment is going to be alleviated is to find new mines and get new jobs and attract capital investments. So, I just don't see it. And, again, I go back to our financing, the facts are different. And, as far as the new amendment bill goes, as the Minister said today, lots of consultation with industry, which has been typical of the process going all the way back to 2004. And, we see a very positive environment going forward. And, one of the things the Minister was talking about was getting all the regulatory aspects right under one roof in her department and, our experience of the department is that it is extremely straight forward, its right by the book, they are doing their job and you get what you need to invest and, we are.
GEOFF CANDY: In terms of the platinum sector as a whole, how do you see things looking in 5 to 10 years. We have just heard Ivanplats speaking as well, what is the make up of the sector going to be like?
MIKE JONES: I think it is going to be very different. I think that these deposits have the potential to create a paradigm shift in the industry and we look forward to being part of that change. And, our investors do as well. We are backed by the biggest mining investors in the world, Blackrock, Liberty, Wellington, Fidelity, JP Morgan, those are our owners and they are voting with their check books that this is a very important change.
GEOFF CANDY: Where are you with the BEE deal, where are you sitting with Wesize?
MIKE JONES: Wesizwe are in dilution, we cash-called them a second time, they elected to dilute again so they are diluting approximately 10 percentage points now. The final number is in arbitration but, regardless we will have over 80% to 82%. Those diluted points will be contributed to Mnombo which is our BBE partner on the North Limb. We think Mnombo is a very financeable BEE company because of its share in Waterberg, we have had a lot of interest in that and Macquarie is actually running a process for Mnombo to be funded as well. So we are just really fortunate that we a have a world class asset that is attracting funding, not only for us but for our BEE partner. |
