Junior platinum firm Jubilee Platinum and Sylvania Resources, the platinum group metals (PGM) producer with tailings retreatment operations and shallow mining exploration interests located on South Africa's PGM-rich Bushveld Igneous Complex, on Thursday said that they plan to set up two new companies to hose their smelting and processing activities.
Releasing the details of their framework agreement detailing their joint activities under their strategic partnership, the companies said a new company would be set up to undertake smelting and refining activities using Jubilee's ConRoast technology.
The ownership structure of the smelting company would be split so that Jubilee hold 70 percent and Sylvania holds the remaining 30 percent.
Jubilee and Sylvania have agreed to incorporate a second company to undertake the processing of future platinum tailings opportunities.
The ownership structure of this tailings processing company would be structured so that each company holds a 50 percent stake.
But the companies said Sylvania's current tailings and Northern limb operations would not form part of the tailings processing company arrangement.
"The two new companies to be formed pursuant to the Framework Agreement will allow for the processing and treatment of considerable low grade and high chrome concentrate resources on the Bushveld which have previously been deemed uneconomic," the companies said in a joint statement to the JSE.
Jubilee and Sylvania originally joined forces to offer a total processing capability for the processing and refining of low grade and high chrome concentrate PGM (platinum Group metals) tailings or hard rock resources.
Jubilee CEO Colin Bird said these new companies combine the joint operating capability of Jubilee and Sylvania to take PGM containing dump material into metal.
"The ongoing arrangement provides the platinum industry with a formidable total capability solution for the processing of PGM tailings and high chrome concentrates," said Bird.
The partnership is focused on the world's largest PGM producing region in South Africa's Bushveld complex.
Sylvania has agreed to make available all uncommitted concentrate from existing tailings operations and Northern Limb projects to the new smelting company.
The smelting company will commit to install up to three 10 MW ConRoast furnaces with centralised refining facility.
Metallurgical testing of Sylvania's tailings and in-situ PGM resources by Jubilee and Braemore has already been completed and deemed that recovery through Sylvania is currently undertaking an exploration programme at its Northern Limb licenses acquired in 2009 and a measured resource is expected within the first half of 2010 with the results informing a decision as to develop the smelting facility.
"It is expected that the smelting operation will be commissioned within 3 years," the companies said.
Sylvania managing director Terry McConnachie said the formation of the joint venture companies offers Jubilee and Sylvania the benefit of fully exploiting the synergies offered by a mine to metal strategy free of the traditional constraints imposed on high chrome, or relatively low grade concentrates.
"This in turn is a significant step in unlocking the value of the assets acquired under the takeovers of Great Australian Resources and SA Metals last year," said McConnachie.
The companies have also agreed that any future platinum tailings processing opportunities will be jointly exploited.
"This allows the combined entities to tackle new tailings projects that are not currently exploitable by either Sylvania or Jubilee individually," said McConnachie.