The restructuring by Platinum Group Metals would involve a change in primary mining method and cost reductions to create a sustainable future for the mine.
The changes are operationally driven to align costs with a more gradual ramp-up of production using more selective mining methods.
[quote]The Maseve mine has good potential in terms of grades, underground developed access, completed infrastructure and a mill that operates in accordance with design criteria.
As a result of the anticipated restructuring process, there are a large number of employees in the service of independent contractors and staff of Maseve who could be affected.
Platinum Group Metals will work closely with all its contractors, including Redpath Mining South Africa, the largest mining contractor on site, to minimise job losses while making the operation self-sustainable. It is likely that Redpath will continue to be the main contractor at the mine.
Contractors will be paid in the normal course, and Platinum Group Metals will honour obligations to its employees.
Platinum Group Metals will work with all its contractors and staff under Section 189 and 189A of the Labour Relations Act in South Africa. Severance, job planning and other support will be provided. Platinum Group Metals will also work closely with organised labour during this process.
New opportunities for contractors and employees will be created as the newly planned mining method ramps up. In the long term, the hybrid method is more labour intensive offset with better planned grade compared to board-and-pillar mining.
“We see good potential for a sustainable mine at Maseve. The South African government and the local community have been very supportive of the Maseve mine, and we deeply value their assistance and support,” says Platinum Group Metals CEO, R. Michael Jones.
“We will work with our contractors, employees and other stakeholders in a climate of mutual respect, as we transition through the proposed restructuring process.”
The restructuring aims to reduce ongoing costs and achieve positive, sustainable cash flows as soon as possible, using already-established infrastructure. A “hybrid” mining method is under consideration, which would result in a transition from the current higher volume, mechanised board-and-pillar mining method.
Hybrid mining involves mechanised access drives using the mine’s current equipment as well as conventional manual methods for stoping. Both board-and-pillar and hybrid methods were included in the mine’s feasibility study.
Face grades at the Maseve mine have generally met estimates, but the fully mechanised mining method has resulted in excess dilution and therefore lower grades to the plant.
The Maseve concentrator plant has performed in excess of design criteria. Completed underground conveyor infrastructure will help reduce the trucking fleet required for mining from Block 11, the target for immediate mining.
Platinum Group Metals has notified the Department of Mineral Resources that a restructuring is required to create a viable operation and to ensure optimal mining of the resource, and that it will comply with the applicable provisions of Section 52 of the Mineral and Petroleum Resources Development Act.
As Platinum Group Metals develops and implements the new hybrid mining ramp-up plan, it will assess its new production guidance. Previous guidance will change. In coming months, Platinum Group will provide operational updates on the results of the hybrid mining ramp-up.
Platinum Group Metals has received waivers from its lenders related to working capital and production covenants to 31 October, 2017. Platinum Group Metals will assess the new plan’s ability to meet the lending covenants and loan requirements in the months ahead.
Platinum Group Metals may require further financing in debt, equity or from asset sales.
Platinum Group Metals continues to work with BMO Capital Markets and Macquarie Capital to review and assess corporate and asset level strategic alternatives.
Feature image credit: Platinum Group Metals