Name and Location
Maseve platinum mine (formerly Western Bushveld Joint Venture Project 1), North West, South Africa.

Client
Development of the Maseve project has been conducted through Maseve Investments 11. As of August 31, 2015, this company is majority-owned by Platinum Group Metals (PTM) subsidiary PTM RSA, which holds 82.9%. The remaining 17.1% ownership is held by Africa Wide Mineral Prospecting and Exploration, which was, in turn, 100% owned by JSE-listed Wesizwe Platinum.

Project Description
The Maseve platinum mine comprises projects 1, 2 and 3.

The mine plan for Project 1 has been revised.

The new plan envisages the construction of a platinum mine and a concentrator to produce between 234 000 oz/y and 300 000 oz/y of combined platinum, palladium, rhodium and gold (4E) in concentrate. During nine years of peak production, about 275 000 oz/y of 4E in concentrate will be produced from the project’s Merensky reef horizon.

The Merensky reef will be mined at widths of between 93 cm and 176 cm and the upper group two reef will be mined at widths of between 105 cm and 205 cm.

The mining and development plan includes conventional hand-held drilling equipment, electrical drills and scrapers, as well as winch cleaning, which is similar to the successful conventional mining operations at the adjacent mines.

Declines and primary access to the deposit have been designed for development using mechanised equipment.

Ore will initially be hauled out of the mine using mechanised equipment and transported by conveyor from Year 4 to the end of the mine’s life. The project has an estimated 22-year life-of-mine.

The concentrator has been designed and recosted, based on treating the optimal 140 000 t/m. The revised mine plan has increased this treatment rate to 160 000 t/m and, for the concentrator to treat the increased quantity of reef, the recovery has been reduced to a discount of up to 2.5% for treatment over the nominal nameplate capacity.

Net Present Value/Internal Rate of Return
The project's independent feasibility model developed a post-tax net present value of $431-million, at a 5% discount rate.

Value
Peak funding for the project has increased from $502-million in the first quarter of 2015 to $514-million.

Of the required capital cost, a fully funded $100-million for the Phase 1 surface establishment and the underground decline development programme has been allocated.

Duration
Production ramp-up is scheduled for the fourth quarter of 2015.

Latest Developments
PTM produced about 1 700 4E ounces in April, following the commissioning of its Maseve mine plant on March 31.

PTM has indicated that during February, March and April, most of the milled tonnes were sourced from lower-grade development muck mined from primary development along the rich Merensky reef of the country’s fabled Bushveld Igneous Complex.

The company reported last month that owing to continued performance that has lagged behind the mine plan schedule, lower metal prices, delays in production ramp-up or a stronger South African rand could all result in further financing requirements. As a result, an updated mine plan has called for production of about 110 000 oz to the end of April 2017, compared with previous guidance for 116 000 oz in the 2016 calendar year.

Currently, stoped mining tonnes are increasing as a percentage of mill feed. Mining to date has exposed 29 ends in the Merensky reef and have been set up, with mining continuing in these areas. PTM has reported reconciliation from underground sampling to grade thickness in the current National Instrument 43-101-compliant technical report for the Maseve resource plans is “good”.

Primary headings into the important Block 11, for planned mechanised room and pillar mining, are within 250 m and two-and-a-half months of initial access.

Meanwhile, PTM has advised that it will issue 131 654 common shares to Sprott Resource Lending Partnership and 131 654 common shares of the company to Liberty Metals & Mining Holdings to amend their respective $40-million working capital facilities.

Effective from May 3, the amendments provided the company with increased flexibility to accommodate the production ramp-up delay.

Under the amendments, the provision whereby Maseve had to reach and maintain a three-month rolling average at least 60% of planned production for a three-month period, has been extended by three months, now starting six months from March 31. The provision that Maseve must reach and maintain at least 70% of planned production on a three-month rolling average has been postponed by three months until nine months from completion.

The shares issued represented about $400 000 each, priced at the five-day volume weighted average price on the TSX of C$4.18 a share, less a 7.5% discount, converted to US dollars.

Key Contracts and Suppliers
Société Generale, Barclays Bank, Absa Capital, Standard Bank of South Africa and Caterpillar Financial (lead finance arrangers); Turnberry Projects (prefeasibility study and overall feasibility study); Wardrop Engineering (decline access); GRD Minproc (concentrator design); Grinaker-LTA Mining (vertical shaft design); Golder Associates Africa and Oryx Environmental (public consultation and environmental permitting work); DRA Mining (engineering, procurement and construction management) and JIC Mining Services (underground decline tunnels).

On Budget and on Time?
The delay in the finalisation of project finance arrangements from plans announced and proposed earlier in 2013, including the project loan and delays in other funding, will likely cause a delay in the current target date of mid-2015 for the start of concentrate sales from the mine.

Contact Details for Project Information
PTM investor and media enquiries, tel +1 604 899 5450, fax +1 604 484 4710 or email info@platinumgroupmetals.net.
Wesizwe Platinum, Sirkien van Schalkwyk, tel +27 11 994 4600, fax +27 11 994 4601 or email Sirkien@wesizwe.com.
Turnberry Projects, tel +27 11 781 0116 or fax +27 11 781 0118.
Wardrop Engineering, email info@wardrop.com.
GRD Minproc, tel +27 11 514 0005.
Grinaker-LTA Mining, tel +27 11 578 6000 or fax +27 11 578 6161.
Golder Associates Africa, tel +27 14 597 0442 or fax +27 14 592 2842.
Oryx Environmental, tel +27 11 880 5204.
DRA Mining, tel +27 11 202 8600.
JIC Mining Services, tel +27 11 564 9400, fax +27 11 315 3789 or email general@jic.co.za.