Nickel miner Sally Malay Mining Ltd announced today that it has withdrawn from Platinum Australia Ltd's Panton PGM Project in the Kimberley.
In December 2005, Sally Malay entered into an agreement with Platinum Australia, agreeing to use spare capacity at its mill to treat high-grade ore from the Panton PGM project and produce a saleable concentrate.
Sally Malay was expected to earn a 50 per cent interest in the first 1.5 million tonnes of ore from the project.
Under the terms of its agreement with Platinum Australia, Sally Malay spent over $1.1 million on metallurgical test work and obtaining a bulk sample of the ore from trial mining.
The next stage was to complete a feasibility study in regards to mining and processing the ore at the company's mill.
The decision to withdraw was based primarily on the metallurgical test results, and Sally Malay's commitment to the Copernicus project.
Findings from the test work determined that the ore from Panton PGM could not produce a saleable concentrate product after treatment from Sally Malay's existing circuit, and due to mining dilution, the PGM grades of the sample ore were lower than expected.
The Copernicus project is a joint venture between Sally Malay and Thundelarra Exploration Limited to carry out mining activities on the Copernicus tenement, 35 kilometres south of the Sally Malay processing plant.
Ore from the Copernicus project is expected to be fed into the company's plant by mid 2008. Sally Malay has a 60 per cent interest in the project.