Name of the Project
Maseve platinum mine (formerly Western Bushveld Joint Venture Project 1).

Location
The Maseve platinum mine is located about 35 km from Rustenburg, in North West, South Africa.

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

Project Description
Maseve comprises projects 1, 2 and 3.

The mine plan for Project 1 was revised in July 2015. 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 over a 22-year mine life.

The project will use a twin decline system to access the underground workings. Men, material and rock will initially be transported by trackless mobile machinery during the development phase. At steady-state production, men and rock will be transported by chairlift and conveyor systems respectively.

Mining methods have been adapted from the updated feasibility study to include geological, geotechnical, engineering and timing modifications. Maseve will be operated as a trackless development (access development is off-reef and production development is on-reef) and a partially conventional, hybrid and bord-and-pillar mechanised mine using diesel mobile mining equipment. The overall on-reef/hand-held methods applied in the conventional and hybrid mining methods have not changed significantly from the conventional methods described in the previous study. The thicker reef (partially owing to the lower cutoff grade and additional drilling information) and a deliberate drive towards a higher degree of mechanisation allows for a bord-and-pillar mining method to be applied in the deeper, shallower-dipping areas of the mine.

The mine design is focused on reducing waste footwall development by replacing most of the previously footwall-located off-reef production development in the earlier design with on-reef production development. This accommodates the trackless mining method approach and delivers a faster run-of-mine production build-up.

The concentrator has been designed and recosted to treat 165 000 t/m from 145 000 t/m initially.

The design offers flexibility to treat a blend of Merensky and upper group two reefs at a predetermined ratio. The Merensky reef is the target of initial mining. The mining ramp-up to steady-state production of 165 000 t/m is over a three-year period.

Construction of the concentrator will be undertaken in two phases, initially with a mill float (MF1) circuit during the ramp-up period. The completion of the mill-float-mill float circuit will be decided only after reviewing the mining production ramp-up in 2017.

The MF1 circuit will treat between 80 000 t/m and 115 000 t/m at a grind of just over 60% passing 75 μm.

Jobs to be Created
Not stated.

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
Not stated.

Duration
Formal construction of Maseve began in 2011 and the mine was officially commissioned in 2016; it is now in the ramp-up phase.

Latest Developments
PTM has concluded contractor terminations and consultations with labour unions as it revamps the operating plan for the Maseve platinum mine.

PTM has successfully lowered its cost structure to align with a reduced production ramp-up profile after transitioning the operation to a more hybrid mining method with a smaller labour force.

This will allow for detailed labour planning for the new mine plan going forward, with changes being made to the management and supervision of the mine, focusing on near-term performance.

PTM has indicated that details of the new mine plan are in final preparation in consultation with the continuing mining contractor, Redpath South Africa.

The company will provide a revised production guidance within the next few months.

With a restructure cost of between $15-million and $20-million, PTM is also exploring further debt, the sale of assets or equity as methods of financing.

Meanwhile, Royal Bafokeng Platinum has made a conditional nonbinding expression of interest for a “possible transaction” surrounding the Maseve business.

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), Redpath South Africa (mining contractor).

On Budget and on Time?
Output at Maseve is behind schedule, owing to challenges related to the ramp-up of stoping tonnes, resulting in a loss of planned revenue from operations.

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.