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

Location
Limpopo, South Africa.

Project Owner/s
Platinum Group Metals (PTM) holds a 50.02% effective interest in the Waterberg Joint Venture (JV), while Japan, Oil, Gas and Metals National Corporation (Jogmec) holds a 12.195% interest, Impala Platinum Holdings a 15% interest, Hanwa a 9.755% interest and empowerment partner Mnombo Wethu Consultants the effective balance of the JV. JSE-listed, broad-based empowerment group Hosken Consolidated Investments has acquired a 19.90% ownership interest in PTM.  

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.

The deposit is also advantageous because of its having the highest palladium content among South African PGM mines.

According to a resource update announced in October 2018, the current measured and indicated mineral resource of the Waterberg deposit is 26.34-million comprising 63.04% palladium, 29.16% platinum, 6.37% gold and 1.43% rhodium (242.5-million tonnes at 3.38 g/t 4E) at a 2.5 g/t 4E cutoff grade on a 100% project basis. Reserves will be updated as part of the planned 2019 definitive feasibility study.

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

Capital Expenditure
Peak funding has been estimated at $914-million. Funding is in place to advance the project to the completion of a feasibility study.

Planned Start /End Date
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 has extended the completion date of a definitive feasibility study (DFS) for the Waterberg project to August to accommodate a new design plan.

The DFS is being managed by PTM and a technical committee. The Waterberg JV partners are considering the use of tailings and concrete as backfill to fill in mined-out stopes, which will allow for the extraction of mineralised material that would otherwise be left as support pillars.

PTM expects the extraction of pillars to positively impact on the tonnes and ounces for reserves while reducing the project’s tailings footprint and increasing safety.

The new DFS design will incorporate two decline systems, rather than the three envisioned in the design set out in the project’s prefeasibility study.

As a result of the DFS design optimisation, more time and money are needed to complete the DFS. It had initially been set for completion in March.

Further, the Waterberg JV partners have approved a change order for R21.5-million to fund the additional work.

Meanwhile, as part of the DFS, an environmental authorisation and mining right application are being advanced.

The DFS team is also working with a Canadian training specialist to incorporate local skills development into the DFS, while PTM has advanced its cooperation agreement with the Capricorn municipality to supply water to the project and planned increases in water delivery to the local community as a component of the mine plan.

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.