Name of the Project
Styldrift I expansion project.

Location
South Africa’s North West province.

Client
Royal Bafokeng Platinum.

Project Description
The Styldrift project area is located about 5.5 km from the existing Bafokeng Rasimone Platinum Mine (BRPM).

The project will exploit one of the last major shallow Merensky mining blocks on the Western Bushveld.

Styldrift I will deliver an underground trackless operation, which is accessed through a twin vertical shaft system, consisting of the Main shaft being shaft sunk to 758 m and Services shaft sunk to 723 m.

The configuration of the Main shaft has been equipped and commissioned and allows for a single-deck personnel-and-material cage compartment that can transport 185 people; a cage counterweight compartment; two Merensky reef skip compartments, each designed to accommodate a 22 t skip; and two future skip compartments, each capable of accommodating a 13 t skip. The Services shaft will comprise a personnel-and-equipment cage compartment that can transport 22 people, and a cage counterweight compartment. Equipping of the services shaft started in June 2016.

Jobs to be Created
Not stated.

Net Present Value/Internal Rate of Return
Not stated.

Value
The project is estimated at R11.01-billion.

Duration
Steady-state production is expected in the first quarter of 2020.

Latest Developments
In the latter half of 2015, the Royal Bakokeng Platinum (RBPlat) board made the decision to align construction activities on the Styldrift I project with the material reduction in platinum group metal prices prevailing at the time.

This proactive approach entailed the implementation of a revised mining and construction plan, which was executed
during 2016. The slowdown in development rate at Styldrift I in 2016 allowed RBPlat to preserve cash and improve its project management model, but delayed ramp-up.

The plan focuses on developing key shaft infrastructure on 600, 642 and 708 levels, as well as the decline clusters to the north and south on 600 and 642 levels to accelerate the establishment of stoping sections. This will enable the mine to sustainably deliver 50 000 t/m in 2017 and affords Styldrift I the flexibility to effectively respond to market developments and align its ramp-up accordingly.

Even though the steady progress was made during the year, development progress of 5 km was below the 6.8km planned for the year, as a result of changes in in RBPlat’s support methodology and localised geotechnical conditions experienced on 600 and 642 levels.

The initiatives introduced during the second half of the year, which included the introduction of dump trucks, mobilisation of additional bolters, load-haul dumpers, secondary support crews and the recruitment of key trackless supervisory and operating staff, helped to mitigate these impacts.

The treatment plant at BRPM was also upgraded to 250 000 t/m during the year to treat the growing volumes being delivered by Styldrift.

Towards the latter half of 2016, the progress made at Styldrift I, as well as the rand basket price improvements, allowed for RBPlat to commit to the next phase of expansion at Styldrift I, which will ramp the mine up to 150 000 t/m at a capital cost of R4.75-billion by the end of 2018. This expansion phase makes allowance for all the key underground infrastructure required to meet a 230 000 t/m production level and includes an overland conveyor belt to the BRPM concentrator complex, all underground silos and associated conveyor belt systems, the required water handling and pumping facilities, stores and two ventilation shafts.

The second phase, which will increase production capacity to 230 000 t/m, remains deferred until the expenditure required for the additional 100 000 t/m processing module and underground infrastructure provides an acceptable return.

The additional surface and underground infrastructure required to achieve 230 000 t/m includes a 100 000 t/m concentrator module; completion of Settler No 2; and establishing and equipping six additional stoping sections, including all trackless fleet, as well as associated on- and off-reef access development.

Key Contracts and Suppliers
WorleyParsons (main project engineering); Anglo Technical Division (mine shaft design); Mining & Engineering Technical Services, or Mets (services shaft headgears); Shaft Sinkers (main and services shafts and associated works until January 2015, when RBPlat terminated its contract); Louwill Engineering (main and services shafts headgears and winder-house structural manufacturing and erection); FLSmidth Minerals (main shaft personnel and material winder mechanical portion); Actom – formerly Alstom Industry (main shaft personnel-and-material winder – electrical portion); Coilmech (service winder – mechanical and electrical portions); the Stefanutti Stocks Civils Wramatshe joint venture (civils Phase 2 contract – main bulk surface civils); Sarens (cranes); Sandvik Mining (underground primary trackless fleet); Fermel (secondary trackless fleet); Master Drilling, Murray & Roberts and Redpath (vertical raiseboring); and Howden (surface fan supply and installation).

All procurement and construction management are currently owner-managed.

On Budget and on Time?
The overall capital cost of the project has increased. This has been attributed to:
• increased time-related escalation, owing to the scaling down of operations announced in August 2015 and the subsequent delay in ramp-up;
• the cost-plus contracting strategy adopted with RBPlat’s main shaft sinking contractor (Shaft Sinkers) during 2015 in an attempt to avoid a potential six-month delay that would be incurred if a new contractor were to be mobilised owing to the financial demise of Shaft Sinkers;
• changes in mine design and the implementation of new technologies to minimise the impact of revised legislative requirements related to vehicle collision avoidance; and
• increased trackless fleet purchase costs associated with the substantial weakening of the rand against the euro over the past three years.

Styldrift’s project expenditure amounted to R970-million for the year, bringing the cumulative project expenditure to R6.46 billion to date.

Contact Details for Project Information
RBPlat executive: corporate affairs Mpueleng Pooe, tel +27 10 590 4515 or email mpueleng@bafokengplatinum.co.za; or investor relations manager Lindiwe Montshiwagae, tel +27 10 590 4510 or email lindiwe@bafokengplatinum.co.za.