OPERATIONS

Ga-Phasha joint venture

The Ga-Phasha PGM Project (Ga-Phasha) was acquired by Anooraq in September 2004, pursuant to the RTO. Ga-Phasha is a 50/50 joint venture with Rustenburg Platinum Mines, a wholly owned subsidiary of Anglo Platinum.

Ga-Phasha is located on the North Eastern Limb of the Bushveld Complex, approximately 45 km north-northwest of the Limpopo Province town of Steelpoort and 250 km northeast of Johannesburg. The project area consists of four farms Paschaskraal, Klipfontein, De Kamp, and Avoca, which cover an area of approximately 9 700 ha. It lies immediately between the Lebowa Platinum Mine to the West and Twickenham Platinum Mine to the East, both of which are owned by Anglo Platinum. Ga-Phasha is located approximately 80km from the Polokwane smelter.

A total of 327 diamond drill holes had been drilled on the farms Paschaskraal and Klipfontein to the date of the January 2004 mineral resource estimate: 108 drill holes intersected the Merensky Reef; 176 drill holes intersected the UG2 Reef; and 83 drill holes were drilled for geotechnical purposes mainly in connection with the originally planned shaft in the southern portion of the Paschaskraal Farm. The average vertical thickness of the UG2 Reef is 0.74 m and of the Merensky Reef is 1.17 m.

Current Ga-Phasha activities

Under a preliminary development plan, proposed in 2001-2002, the UG2 Reef was seen as the principal target reef horizon for mining, with mineralization being processed through a joint concentrator situated on Anglo Platinum’s adjacent Twickenham property. However, Anglo Platinum and Anooraq are currently of the view that the value of Ga-Phasha could be optimised by exploiting both the Merensky and UG2 Reef horizons.

An increased number of approaches were considered to optimise mining of the deposits. As a result of the findings, the JV partners have now agreed to continue with studies to advance the project and have appointed Read, Swatman & Voigt (Pty) Ltd (RSV) as the independent project manager to conduct a pre-feasibility study (PFS).

The pre-feasibility study will consist of a phase 1 study to exploit the UG2 Reef to a depth of some 650 m below surface, and will also seek to identify a single preferred option by which to proceed to the bankable feasibility study (BFS). The pre-feasibility study will also contemplate optimising economies of scale between the JV partners' OPERATIONS on the North Eastern Limb of the Bushveld Complex, and in that regard, will evaluate the possible usage of joint infrastructure and processing facilities. The PFS is scheduled for completion by the end of the first quarter of 2007.