Platinum junior Platmin (TSX:PPN, AIM:PPN) sent vibrations  through the western Bushveld surrounding its Pilanesberg project yesterday as it detonated a blast in its first open pit destined to produce 250,000 ounces of platinum group metal ounces by the middle of next year.

Pilanesberg mining manager Cobus Bronn flipped a switch on a detonating instrument from a bushy hill on the property overlooking the open pit and a storm of dust exploded into the air.  

The cloud of thick dust conjured for the benefit of onlookers settled after a minute and a clear view of the pit being carved out on the Tuschenkomst property and neighbouring properties to the east and south, namely Barrick's Sedibelo and Anglo Platinum's Zandspruit, reappeared. 

Platmin chief executive officer Ian Watson explained the company was currently focused on getting the open pit mine on its Tuschenkomst property into production by October this year when the company will start stockpiling ore for processing through its massive plant under construction here.  

However, Platmin was simultaneously looking at expansion and consolidation around its first platinum project to reach production. The Pilanesberg project encompasses two open pit mines, the second on the company's Ruighoek property to the south of Tuschenkomst. The Ruighoek pit will start production in the seventh year of production at the first pit.

Sedibelo and Zanspruit both contain extension blocks of the platinum deposit running through Platmin's Tuschenkomst and Watson indicated it would be logical for Platmin to acquire these.  

He declined to say how ongoing talks with the other two companies was going, but confirmed that these probable extensions of the Tuschenkomst pit would add about three years to the current mine life of 16 years.

Barrick was currently in the process of defining the resource on its Sedibelo property in order to give the companies a firm indication of resources that could be added to the Pilanesberg mine.  

The open pit on the Tuschenkomst property is currently about 30m deep, but will run to a depth of 180km to exploit both the Merensky and UG2 reefs that respectively contain grades of 4.01g/t and 6.10g/t in the measured and indicated resources.

The feasibility study of the Pilanesberg mine with 4.4m ounces of 3PGM and gold mineral reserve assumed a conservative basket metals price of $960/ounce, but resource prices have risen since so the company is constantly upgrading the resource and adding to its size.   

On the other side of the green hill, more to the west on the Tuschenkomst property, Platmin has laid the concrete foundations for its metallurgical processing plant that includes a UG2 and Merensky plant as well as a Dense Media Separation plant feeding the Merensky plant. The UG2 plant starts processing ore from the mine-making UG2 reef in March next year with the Merensky plant following in June.

Watson said Platmin was currently negotiating offtake agreements for a term only with two majors that had smelting capacity, but the company was looking at other smelting options for the future as its eastern limb projects will also come online.  

Although first concentrate from Pilanesberg will be produced in the first half of next year, the company will only see cash flow from this production in September next year as there is a waiting period before concentrate is fed through a smelter. Platmin is paid once product is produced from the smelter.

In the meantime, Platmin might see some interesting corporate action involving Anglo Platinum's Zandspruit and Barrick's contiguous properties before the end of the year.