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

Location
Limpopo, South Africa.

Client
Waterberg JV Resources is a collaboration between Platinum Group Metals (37.05%); Japan Oil, Gas and Metals National Corporation, or Jogmec (21.95%); black economic-empowered partner Mnombo Wethu Consultants (26%); and Impala Platinum Holdings, or Implats (15%). As a result of Platinum Group’s 49.9% ownership in Mnombo, the company has an effective interest in the Waterberg JV of 50.02%.

Project Description
The Waterberg project has a number of highly attractive characteristics, which indicate it will be a low-cost, shallow, bulk mineable project, with significant scale and growth potential.

On a 100% project basis using a 2.5 g/t cutoff grade, the 2016 prefeasibility study (PFS) estimates probable reserves at 12.32-million platinum, palladium, gold and rhodium (4E) ounces, comprising 61% palladium, 30% platinum, 8% gold and 1% rhodium plus 191-million and 333-million pounds of copper and nickel.

The independent PFS announced by PTM in October 2016 for the Waterberg project modelled a 744 000 oz/y 4E mine with an 18-year life.

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.

The Waterberg is palladium-dominant and the PFS has estimated that Waterberg could produce 472 000 oz/y of palladium.

Potential Job Creation
It is estimated that the project will create 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
Jogmec has signed a memorandum of understanding (MoU) with Hanwa for the transfer of a part of Jogmec’s interest in the Waterberg JV project to Hanwa.

Jogmec currently holds a 21.95% interest in the project and is planning to transfer a 9.755% interest to Hanwa.

Upon completion of the transfer, Hanwa will also acquire Jogmec’s right of first refusal to certain metal produced by platinum producer Implats from the Waterberg project.

Hanwa won a public tender on February 23 to acquire an interest in the project. Jogmec and Hanwa will now start negotiations on the terms of the transfer. 

If negotiations are concluded successfully, Hanwa will secure the right to a supply of refined platinum group metals for exhaust emission catalytic converters, fuel cells for cars, and nickel and other metals for rechargeable batteries. This transaction will allow for potential significant stable supply of metals to Japanese industries.

PTM CEO Michael Jones has said that Hanwa’s experience in the global metals and industrial complex will add another dimension to the JV.

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.