Name of the Project
Waterberg platinum group metals (PGM) project.

Location
Limpopo, South Africa.

Client
Platinum Group Metals, or PTM (58.62%); and Japan, Oil, Gas and Metals National Corporation, or Jogmec (28.35%). Empowerment partner Mnombo Wethu Consults holds the balance of the shares.

Project Description
Producing an estimated 744 000 oz of platinum, palladium, rhodium and gold (4E) a year, the Waterberg project will be one of the largest PGM mine complexes in South Africa based on 2015 production numbers.

An independent prefeasibility study (PFS) on the Waterberg project has estimated an initial probable mineral reserve of 102.7-million tonnes for 12.32-million 4E ounces.

Indicated resources have been updated to 24.9-million 4E ounces and the deposit remains open on strike to the north and below a 1 250 m arbitrary depth cutoff.

The PFS envisages a low-cost, multidecline, fully mechanised mining complex along an initial 13 km deposit strike, with two 300 000 t/m mills to be built in close sequence. Access to the mining complex is planned through three decline ramp clusters. Decline ramps can be built over 24 to 36 months, whereas vertical shafts, shaft infrastructure and equipping can take up to seven years.

The PFS specifies that the project will use an engineering, procurement and construction management contractor, and a mining contractor for the development of the mine, overseen by an experienced in-house PTM team.

Mining will be completed using fully mechanised methods and the thickness of the zones will drive the mining method selection.

A fleet of about 400 trackless machines, including drill rigs, loaders, dump trucks and other trackless machines will be used for mining and development.

Flotation testwork completed on the project has shown that the Waterberg ores are amenable to treatment using conventional flotation without regrinding.

The process plant has been designed to have two 300 000 t/m mill floats in two phases.

Phase 1includes, 3.6-milliontonne-a-year concentrator module and associated infrastructure, planned to start in month 36.

Phase 2 includes the construction of the second 3.3-million-tonne-a-year module to take production to 7.2-million tonnes in month 53.

Jobs to be Created
It is estimated that the Waterberg project will create an estimated 3 361 new primary jobs for highly trained people with transferable skills.

Net Present Value/Internal Rate of Return
The project has an estimated after-tax net present value (NPV), at an 8% discount rate, of $320-million using three-year trailing average metal prices.

At a discount rate of 8% using investment bank consensus average metal prices, the project has an NPV of $507-million.

The project has an after-tax internal rate of return (IRR) of 13.5% using a three-year trailing average price deck. Using investment bank consensus average metal prices, the project has an IRR of 16.3%.

Value
Peak funding has been estimated at $914-million.

Jogmec funding is in place to advance the project through to the completion of a feasibility study.

Duration
The project is expected to have a 3.5-year construction period.

The project includes a construction decision following the completion of the feasibility study and first production three years later.

Latest Developments
PTM and Jogmec are advancing their Waterberg platinum and palladium project to feasibility stage (FS).

The FS is currently out to tender with several well-known specialist engineering firms. Under a current commitment, Jogmec, which holds 28.35% in the project, will fund $5.3-million towards the completion of the FS.

Drilling targeted at the conversion of indicated resources into measured resources will restart this month, with geotechnical drilling for assessing the locations for foundations. Mine excavations are also being planned, along with further metallurgical drilling, to refine recovery curves and plant designs.

Detailed mine planning and scheduling will be completed using a new resource model following the fill-in drilling.

Key Contracts and Suppliers
Worley Parsons (independent PFS).

On Budget and on Time?
Not stated.

Contact Details for Project Information
PTM VP corporate development Kris Begic, tel +1 604 899 5450.