JOHANNESBURG (miningweekly.com) – Project developer Platinum Group Metals (PTM) has warned that its liquidity will be constrained until the second stage of the sale of its Maseve mine to Royal Bafokeng Platinum (RBPlat) is completed.
PTM and RBPlat in November 2017 executed definitive agreements for a two-stage transaction valued at about $74-million.
PTM announced last week that stage one, which entailed the sale of the Maseve concentrator plant, near Rustenburg, as well as certain surface rights to RBPlat, had been completed and that it had received payment of R646.72-million, or about $54.5-million, from RBPlat.
The majority of these funds are being used to repay debt owed to Sprott Resources Lending Partnership, while $7.52-million will be used to reduce its debt owed to Liberty Metals & Mining (LMM).
However, PTM still owes LMM about $60.9-million.
During the second stage of the sales transaction, RBPlat will acquire 100% of the shares in Maseve, the holding company of the Maseve mine, and all shareholder loans owed by Maseve, for an aggregate consideration of about $16-million, of which about $855 000 is payable to a minority shareholder of Maseve.
PTM on Thursday reiterated that it continues to work with RBPlat to complete the second stage of the transaction, which is subject to the Department of Mineral Resources’ approval of the transaction under Section 11 of the Mineral and Petroleum Resources Development Act. This is expected to occur in the weeks ahead.
Meanwhile, PTM plans to increase its profile by focusing on the competitive nature of its large-scale Waterberg project’s palladium reserves, at a time when palladium is attracting market attention and palladium supply is estimated to be in deficit.
PTM’s key business objectives currently are to advance the Waterberg project – a bulk mineable underground deposit in northern South Africa, which has the potential to be a low-cost dominantly palladium mine – by completing a definitive feasibility study (DFS) by early 2019 and deciding on whether or not to continue with construction of the mine.
The DFS entails a drill programme to increase the confidence in certain areas of the known mineral resource. Technical teams from all Waterberg project partners, including platinum miner Impala Platinum, and appointed independent engineers, are involved in the technical planning and oversight of the DFS.
The partners plan to file a mining right application for Waterberg this year.
PTM on Thursday reported a narrowing of its net loss to $26.8-million for the six months ended February 28, compared with the net loss of $58.7-million posted for the six months to February 28, 2017.
During the six months to end-February, the company spent about $3.9-million at the Waterberg project for engineering and exploration activities.
At period end, $24.9-million in net costs had been capitalised to the Waterberg project.