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

Location
Limpopo, South Africa.

Client
Platinum Group Metals (PTM) currently holds a 50.02% interest in the Waterberg project. Impala Platinum (Implats) owns a 15% interest and black-empowerment company Mnombo Wethu Consultants holds a 26% interest. PTM owns a 49.9% interest in Mnombo. Japan Oil, Gas and Metals National Corporation (Jogmec) holds a 21.95% interest in the project and is planning to transfer a 9.755% interest to its partner Hanwa Co. South African JSE-listed black empowerment investment holding company Hosken Consolidated Investments, with a $1.1-billion market capitalisation, recently bought a 14.11% stake in PTM.  All partners are active in the oversight of the project. Implats holds an option to increase its stake to 50.01%.

Project Description
The Waterberg project has several highly attractive characteristics that are indicative of its being a low-cost, shallow, bulk mineable project with significant scale and growth potential.

Current probable reserves at the  project are estimated at 12.3-million ounces comprising 61% palladium, 30% platinum, 8% gold and 1% rhodium (4E) plus 191-million and 333-million pounds of copper and nickel respectively.

At a 2.5 g/t cutoff grade, probable reserves comprise 102.7-million tonnes at 3.73 4E g/t, consisting of 2.29 g/t palladium, 1.11 g/t platinum, 0.29 g/t gold, 0.04 g/t rhodium, 0.08% copper and 0.15% nickel. Much of the Waterberg project area still remains to be drilled and assessed.  The Waterberg deposit remains open down dip and along strike.  The reserves are a subset of a larger indicated resource.

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

The PFS envisages the project producing a flotation concentrate from a processing plant. The concentrate will be sold or toll-treated for the 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 who have 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. 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
A drilling programme at the Waterberg project has increased confidence in the estimated mineral resources for the project, with 6.2-million 4E ounces now recognised in the higher-confidence measured category.

Categories on the palladium dominant deposit have increased by just over 1.4-million 4E ounces to 26.3-million 4E ounces.

Inferred mineral resources are estimated at about seven-million 4E ounces.

The new mineral resource estimates are being used for detailed mine planning in an ongoing definitive feasibility study (DFS), which is considering two large-scale underground bulk mining and milling options of about 600 000 t/m.

A more modest, but still large, first phase is planned to be between 250 000 t/m and 350 000 t/m.

“Waterberg is characterised by thick, near-surface mineralised zones, which are potentially amenable to low-cost, safe, bulk mechanised mining methods,” PTM CEO and co-founder Michael Jones has noted.

The deposit remains open at depth and to the north-west on strike.

The Waterberg JV has applied for a mining right and detailed consultation with communities, local municipalities, the Limpopo provincial government and South African national authorities is ongoing.

The application for a mining right has been accepted by the South African Department of Mineral Resources.

The completion of the DFS is expected at the end of March 2019.

Key Contracts and Suppliers
Worley Parsons (independent PFS) and Stantec Consulting International and DRA Projects SA (lead independent project engineers).

On Budget and on Time?
Yes.

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