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 Consultants holds the balance of the shares.

Project Description
An independent prefeasibility study (PFS) announced by PTM in October 2016 for the Waterberg project modelled a 744 000 oz/y platinum, palladium, gold and rhodium (4E) mine with an 18-year life.

On a 100% project basis, using a 2.5 g/t cutoff grade, the PFS estimated probable reserves at 12.32-million 4E ounces – 102.7-million tonnes at 3.73 4E g/t, comprising 1.11 g/t platinum, 2.29 g/t palladium, 0.29 g/t gold and 0.04 g/t rhodium.

The PFS envisages the Waterberg project producing a flotation concentrate from a processing plant to be sold or toll treated for the local South African market.

Based on the PFS the project is expected to produce up to 285 000 t/y of concentrate at peak production. The concentrate is modelled to contain about 80 g/t 4Es plus copper at between 1% and 9.2%, and nickel at between 1.1% and 5%. Base metal levels for Waterberg are similar to the common Merensky concentrate, which make it metallurgically compatible for blending with other high-chrome concentrates.

The PFS has estimated that Waterberg could produce 472 000 oz/y of palladium.

Jobs To Be Created
It is estimated that the 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 to the completion of a feasibility study.

Duration
The project is expected to have a 3.5-year construction period. It also includes a construction decision following the completion of the feasibility study and first production three years later.

Latest Developments
PTM and Jogmec have selected SFA Oxford to assess potential offtake options and commercial terms for the Waterberg PGMs project.

SFA will assist in formulating a metallurgical processing strategy that will include identification of all mineral processing options, evaluating commercial terms, processing routes and specific smelter options.

The work undertaken by SFA will add to the work being done by an independent engineering qualified person in these areas and is expected to make a significant contribution to the economics to be outlined in the definitive feasibility study that is in progress.

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.