Perth-based engineering company GRD Minproc Ltd has been awarded the engineering, procurement and construction management contract for West Perth-based Platinum Australia Ltd's Smokey Hills platinum project.
Perth-based engineering company GRD Minproc Ltd has been awarded the engineering, procurement and construction management contract for West Perth-based Platinum Australia Ltd's Smokey Hills platinum project.
Industry benchmarks suggest this contract could be worth between almost $5 million and as much as $7 million.
The full text of a GRD announcement is pasted below
Platinum Australia Limited has advised that leading international engineer GRD Minproc Limited has been chosen to carry out the engineering, procurement and construction management (EPCM) contract on the US$40.5m Smokey Hills PGM Project in South Africa.
GRD Minproc, a subsidiary of GRD Limited, will design and build a processing plant and related infrastructure. The project is located in the Limpopo Province, north of Johannesburg, and will produce 4E PGM (Platinum Group Metal).
GRD Limited Chief Executive Cliff Lawrenson said the award of the Smokey Hills contract was further evidence of GRD Minproc's growing presence and reputation in the African resources sector.
"We offer the market technical expertise in diverse commodities, backed up with quality project delivery," Mr Lawrenson said.
"We have been involved in Smokey Hills since the study phase and the award of the EPCM contract reinforces our philosophy of conception to operation."
In 2007, GRD Minproc has been awarded contracts for the following African projects:
- Tenke Fungurume Copper/Cobalt Project in the Democratic Republic of Congo for Freeport-McMoran Copper and Gold Inc.
- The redevelopment of the Syama Gold Mine in Mali for Resolute Mining Limited.
- The Munali Nickel Project in Zambia for Albidon Limited.
The full text of a company announcement is pasted below
Platinum Australia Limited (ASX:PLA) (AIM:PLAA) is pleased to announce that the EPCM (Engineering, Procurement and Construction Management) contract for the construction of the processing plant and related infrastructure for the Smokey Hills Project has been awarded to GRD Minproc (Pty) Ltd ("Minproc").
PLA Managing Director John Lewins said: "We are extremely pleased to have the continued involvement of Minproc in our Smokey Hills Project (the "Project") into the construction phase following their role as Lead Engineer for the Bankable Feasibility Study ("BFS"). Minproc will run the construction from their Johannesburg office where they employ around 200 professional and technical personnel with support, where required, from their main Perth Head Office".
"Minproc combines the knowledge and experience gained from developing many successful projects in Australia with experience in Africa where it currently has active projects in South Africa, Namibia, Ghana, Democratic Republic of Congo and Zambia. We believe that this knowledge and experience combined with their knowledge of the Smokey Hills Project from completing the BFS makes them by far the best choice to construct the project".
"The award of this contract combined with the recent approval of the debt component of ZAR256 million (US$37 million) for the Project by Standard Bank of South Africa moves the Smokey Hills Project firmly into the development phase and into an excellent position to complete construction and move into full production in the shortest possible timeframe once the mining right is received."
Smokey Hills Project
The Smokey Hills Project is located on the eastern limb of the Bushveld Complex in the Limpopo Province, 300 kilometres north of Johannesburg.
PLA commenced a resource definition drilling program on the project in July 2005 and a BFS with GRD Minproc as the Lead Engineer in October 2005. The results of the BFS showed the Project to be extremely attractive and very robust and able to generate returns of over 70% on the Base Case assumptions and in excess of 600% using July 2006 metal prices and exchange rate.
The Company envisages commencing operations at Smokey Hills initially as an open cut and then progressing to a shallow underground mine. During the initial phase while the plant is under construction PLA proposes to mine ore for toll treatment through a nearby plant to generate early cash flow. This phase would last for approximately 12 months after which ore would be treated through the on-site plant at a rate of 720,000 tonnes per annum, producing
approximately 95,000 ozs 4E PGM (Platinum + Palladium + Rhodium + Gold) in a flotation concentrate. This would be toll treated or sold to any one of a number of smelters in South Africa, the nearest of which is less than 100 kilometres distant.
PLA signed a formal Sale Agreement with Smokey Hills Platinum (Pty) Ltd ("SHP") to acquire up to 80% of the Project through the staged acquisition of 100% of SHP in May 2004. With this staged acquisition now complete PLA has an 80% interest in the Project with the balance of the Project being held 5% by the local community and 15% by Corridor Mining Resources, a company owned by the Limpopo Provincial Government.