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 the Services shaft 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
Project construction and development activities for the first six months ended June 30, 2017, continued to focus on establishing the infrastructure, stoping face length and operational resourcing required to support the 150 000 t/m expansion phase announced during the fourth quarter of 2016.

During the reporting period 3 328 m of capital development was completed on 600 and 642 levels, with 238 000 t of ore being delivered to the concentrator at a built-up head grade of 2.53 g/t (platinum, palladium, rhodium and gold).

Despite the increase in development and construction performance, progress was lower, as well as associated expenditure budgeted for the reporting period. The lower expenditure, however, does not impact on the 2018 fourth quarter 150 000 t/m key milestone as performance remains within project execution tolerances.

Key activities currently under way include:
• the construction of the overland belt,
• the equipping of the services shaft,
• the construction of ventilation Shaft No 3,
• construction of silos No 3 and 4,
• the construction of the permanent trackless workshop and ancillary service bays construction at 600 level,
• the start of construction of the Settler No 1 slipe and line activities, and
• the construction of the conveyor belt on 600 and 642 level.

In line with project execution resource requirements, there are currently 23 mining and construction crews operational on site, with specialised construction works outsourced, including:
• eight trackless crews on 600 level — dedicated to the on-reef infrastructure and decline development,
• two trackless crews on 642 level — dedicated to off-reef development for ore handling infrastructure and declines,
• one trackless crew on 708 level — dedicated to complete off-reef development work related to pumping and ore handling infrastructure,
• 12 infrastructure construction crews — dedicated to the workshop, conveyor belt, silo, settler and bulkhead construction, as well as the equipping of the services shaft.

RBPlat has been aware of the need to prudently manage cash flow and its associated timing relative to project progress and the 150 000 t/m ramp-up requirements to maintain a healthy balance sheet amid the current challenging market environment. As such, RBPlat’s approach has been one of aligning capital spend with the prevailing market conditions by deferring noncritical-path project work where possible, which will not impact on the company’s ability to achieve 150 000 t/m by the end of 2018.

Capital expenditure on the project for the six months to June 30, 2017, amounted to R776-million, bringing total capital expenditure for the project to date to R7.23-billion. Noncritical capital expenditure deferred includes construction of items, such as additional access roads, surface parking, stores, a training centre, change house upgrades and noncritical store items.

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 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 associated with 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.