APP.L Regulatory News (APP)

13 Jun 2005 07:30

African Platinum Plc13 June 2005 African Platinum plc (formerly Southern African Resources Plc)Ticker: APP (formerly SFU)Index: AIMSector: Exploration Leeuwkop platinum project progresses to next level after positivepre-feasibility study * Study confirms proven techniques will generate robust returns * Leeuwkop ranked as one of most attractive development opportunities in Bushveld Complex * Project to proceed to bankable feasibility study, expected completion in H106 * Projected full production of 300,000 ounces per annum * Fully mechanised room and pillar mine design London, 13 June 2005 - The board of Aim-listed exploration and developmentcompany African Platinum (formerly Southern African Resources) has given thego-ahead to a bankable feasibility study on the company's flagship Leeuwkopproject following the publication of a favourable pre-feasibility report. Thetechnical study was undertaken by independent leading industry consultants. The company said today the pre-feasibility results were largely in line with thescoping study and confirmed that the size, grade and location of the Leeuwkopdeposit made it one of the most attractive development opportunities on theentire South African Bushveld Complex, the world's premier platinum region. Chief executive Roy Pitchford said the pre-feasibility study had shown thatproven techniques would generate robust returns at Leeuwkop. "The project returns a 15% IRR at long-term metal prices and exchange rates,which compares very favourably with a large number of currently proposedprojects that can only achieve break-even. (At current metal prices andexchange rates, the IRR is 19%.) The pre-feasibility found no fatal flaws andwe don't anticipate that any will be encountered by the bankable study either,we expect the final bankable document to be released during the first half of2006" he said. The pre-feasibility confirms the recently published resource estimate of some 50million ounces (8 million indicated plus 42 million inferred) of 4E (the threeplatinum group metals plus gold) but says it is expected that continuedexploration by Afplats in the greater Leeuwkop area will double this over time.In addition the study has provided sufficient confidence to announce 5.4 millionounces of probable reserves. "Even at its present size, the resource is a very substantial one, whichunderlines Leeuwkop's long-term stand-alone ability as a PGM producer,"Pitchford noted. The report says that of the mining scenarios outlined in the optimisationanalysis, a fully mechanised 250 000 tonnes per month operation on the UG2orebody alone would provide the highest returns. The UG2 chromite reef waschosen on the basis of its higher and more consistent grade and reef width.Primary access to the orebody will be via a twin vertical shaft system and asthe mining will be supported by an on-reef decline system, there will be onlyone production level, sited at the reef intersection. Mining over the life ofmine will be between 1 000 and 1 500 metres below surface. The mine design isbased on a fully mechanised room and pillar mining method. The mine is scheduled to produce approximately 300 000 ounces of 4E concentrateeach year. The beneficiation plant proposed is a standard mill-float-millplant, widely used in the South African platinum industry. The estimatedconcentrator recovery rate is an initial 75%, rising to 78% over the first threeyears of operation. Full production will be 250 000 tonnes per month at anaverage head grade of 4.17g/t. Operating costs to concentrate are estimated atR177 or USD25 per tonne milled. Capital required to develop the project to the end of year six - when it willhave achieved steady-state production - totals ZAR1.9 billion. Peak fundingnet of revenues is ZAR1.7 billion. At steady-state production the operation isexpected to produce operating margins in excess of 40% at current metal prices.The estimated pay-back period is 4.5 years from start of milling and 9.5 yearsfrom the start of the project. A summary of the pre-feasibility study can bedownloaded from the Afplats website at www.afplats.com. Afplats was listed on the AIM market of the London Stock Exchange in 2002 and iscurrently filing for a secondary listing on the American Stock Exchange. Itchanged its name from Southern African Resources last month to reflect itsexclusive focus on platinum group metals. AFRICAN PLATINUM PLC ENQUIRIES:Chief Executive - Roy Pitchford+27 (0)82 419 2581 or +44 (0)77 9390 9985 Investor & Media Relations - Kathy du Plessis+27 (0)11 728 4701 or +27 (0)83 266 5847 (Mobile)platinum@dpapr.com or info@afplats.com Website: www.afplats.com DISCLAIMER: Investing in all equities, including natural resources-relatedequities, carries risks which should be taken into consideration when making aninvestment. This announcement contains forward-looking statements regardingAfrican Platinum plc, including the development of its mining developmentprojects. Actual results relating to any and all of these subjects may differmaterially from those presented. This information is provided by RNS The company news service from the London Stock Exchange