Wesizwe Platinum Limited · JSE:WEZ
Wesizwe Platinum — Investor Presentation (March 2014)
25 slides from Wesizwe Platinum's investor presentation, Mar 13, 2014
Slide 1: Bakubung Platinum Mine Optimisation Study
BAKUBUNG PLATINUM MINE OPTIMISATION STUDY Investor Presentation Paul Smith 13 March 2014
Slide 2: Disclaimer
Disclaimer Opinions expressed herein are by nature subjective to known and unknown risks and uncertainties. Changing information or circumstances may cause the actual results, plans and objectives of Wesizwe Platinum Limited (the “Company”) to differ materially from those expressed or implied in
Slide 3: Competent Persons Statement
Competent Persons Statement The following competent persons approved the findings of the Optimisation Study insofar it relates to the: Mineral resource: The Mineral Resource inputs to the Mineral Reserve estimates are the responsibility of Stewart Nupen and the modifying factors used in the Mineral
Slide 4: Why optimise?
Why optimise? Optimisation commissioned to find opportunities to improve the business case for Bakubung Mine whilst taking into account recent changes in the South African Platinum business environment such as: • Lower metal prices. • Increasing cost pressures • The social climate and the need for i
Slide 5: Learning points from other mines in the sector
LEARNING POINTS FROM OTHER MINES IN THE SECTOR • Challenges faced by a number of existing operations: o There is a lack of mineable face – poor reserve development o Inadequate logistics (people, material and rock) o Inadequate workshop facilities o Inefficient working cycles • Leading to: o Inadequ
Slide 6: Objectives
OBJECTIVES The objectives for the Optimisation project were: • Decrease time to full production • Maintain or improve production • Efficiency • Flexibility • Ensure Sustainability • Minimize operating costs • Reduce business risk • Reduce nominal capital expenditure
Slide 7: Optimisation key project results
OPTIMISATION KEY PROJECT RESULTS The optimisation project has resulted in a optimised plan which has enabled higher metal output, greater capital efficiency and a higher production resilience . MEASURE BFS OPTIMISED VARIANCE NPV R4.4Bn R6.5Bn + R 2.1 Bn Reef Tons/Month (@ Full Production) 230 158 25
Slide 8: Optimisation key project results cont.
OPTIMISATION KEY PROJECT RESULTS cont . . MEASURE BFS OPTIMISED VARIANCE Rand/Ton Mined (Real - Jan 2014) R 468 R 490 R 22 Rand/Ounce 4E/Month LOM R 3 544 R 3 422 - R 122 CBE Capital Rand/Ton/Milled LOM R 164 R 128 - R 36 CBE Capital Rand/Ounce LOM R 1 296 R 933 - R 363 CBE Capital Rand/Ounce/Month
Slide 9: Production profile comparison
PRODUCTION PROFILE COMPARISON
Slide 10: Key project outcomes and improvement drivers: early production and higher rate
KEY PROJECT OUTCOMES AND IMPROVEMENT DRIVERS Early Production • Revised and shortened shaft complex • New level positions and mining layouts • Revised shaft pillar strategy • Development on double shift full calendar operations Higher Production Rate • Improved Logistics o Provision of auxiliary sha
Slide 11: Key project outcomes and improvement drivers: ounces and capex
KEY PROJECT OUTCOMES AND IMPROVEMENT DRIVERS More Ounces Per Month in the Early Years • Maximized production from Merensky reef o Introduction of BFS UG2 mechanized mining method to the Merensky reef horizon o Revised mine design and level positions for early Merensky reef mining o Detailed rock eng
Slide 12: Shaft shortening
SHAFT SHORTENING Crusher Level Dams and Silos Shaft Bottom Over Run Optimised Layout BFS Layout Optimised Layout BFS Layout
Slide 13: Level positions
LEVEL POSITIONS SOUTH BLOCK CENTRAL BLOCK BFS Layout 78 81 84 87 93 Merensky Reef UG2 Reef SOUTH BLOCK CENTRAL BLOCK 69 Optimised Layout 72 78 84 88
Slide 14: Enhanced logistics
ENHANCED LOGISTICS Benefits • Bulk shift capability increased from 1000 to 1800 persons/hour • Transportation by chairlift close to workings • Flexibility in the face of winder delays • Horizontal and Vertical Rock handling capacity increased from 251 000 tons/month to 265 000 tons/month • Horizonta
Slide 15: People transportation – chair lifts
LOGISTICS AND OPERATIONAL SUPPORT PEOPLE TRANSPORTATION – Chair Lifts
Slide 16: Logistics and operational support: conveyor belt
LOGISTICS AND OPERATIONAL SUPPORT CONVEYOR BELT 84 LEVEL 78 78 LEVEL LEVEL CONVEYOR FEED TRUCK FEED
Slide 17: Optimal blasting arrangements
OPTIMAL BLASTING ARRANGEMENTS • The multi level layout and auxiliary shaft enable two blasts per day for the entire mine. • All mechanized development and stope panels can be blasted twice a day as opposed to a single blast per day in most operating platinum mines. • The twin haulage system enables
Slide 18: Surface layout
SURFACE LAYOUT BENEFITS OF OPTIMISED SURFACE LAYOUT: • More streamlined flow of people, equipment and machinery • Enhanced security and access control • Grouping of facilities for operational efficiency • Provision for covered storage for pre-mix and other rain sensitive products • Provision for seg
Slide 19: Shaft head operating cost
SHAFT HEAD OPERATING COST (R/ton Jan 2014) Equipment Management Labour Stores Maint. Utilities Sundry Processing Total Replacement Costs Waste Development R 4.23 R 0.84 R 0.26 R 0.20 R 0.00 R 5.53 Merensky Stoping R 60.14 R 44.85 R 10.84 R 7.49 R 0.00 R 123.32 UG2 Stoping R 61.79 R 45.14 R 11.98 R 8
Slide 20: Waste development reduction
WASTE DEVELOPMENT REDUCTION (January 2014 terms) Development BFS m³ Optimised m³ m³ saved Rand saved category (millions) Capital (CBE) 621 864 557 657 64 167 R 177 SIB Capital 319 392 207 866 111 526 R 307 Working Cost 407 312 180 483 226 829 R 624 Total 1 348 568 946 046 402 522 R 1 108
Slide 21: Capital expenditure considerations
CAPITAL EXPENDITURE CONSIDERATIONS MAJOR CAPITAL SAVINGS: • Shaft Barrel and Pillar • Capital Footprint Development MAJOR CAPITAL INCREASES: • Grout Plant • Auxiliary Shaft • Chairlifts • Conveyors • TM3 Equipment
Slide 22: Capital expenditure considerations
CAPITAL EXPENDITURE CONSIDERATIONS Current Approved CBE Optimised CBE Variance Main Area Description Real Nominal Real Nominal Real Nominal Esc. Esc. Esc. Cost Cost Cost Cost Cost Cost 000: Common Surface Infrastructure 153 8 161 182 3 185 29 -5 24 100: Shaft Surface Complex Infrastructure 719 313 1
Slide 23: Financial modelling
FINANCIAL MODELLING Summary of changes (change in NPV): • Improvements o New Production Profile + R 4 636 M o New project capital expenditure + R 1 616 M o New sustaining capital expenditure +R 949 M • Decreases o New operating costs - R 1 712 M o Overhead, Management & pre-production costs - R 2 01
Slide 24: Headline risks and mitigation
HEADLINE RISKS Headline Risk Mitigation Bulk services: Power and Water Power: Elevating to Ministerial level A Supply Water: Constant Management The new plan accommodates the Sinking and construction Contractor performance to date and lower than B Performance contractual level performance during sin
Slide 25: Thank you
SS wesizwe THANK YOU
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