Name and Location
Western Bushveld joint venture (WBJV) Project 1, North West, South Africa.

Client
The WBJV comprises project operator Platinum Group Metals, or PTM (74%), and Wesizwe Platinum (26%). PTM currently holds 54.75% in Projects 1 and 3 of the WBJV, with a right to subscribe to a further 19.25%. JSE-listed Wesizwe Platinum holds the other 26%, plus 100% of Project 2.

Project Description
The WBJV comprises Projects 1, 2 and 3.

The mine plan for Project 1 has been revised.

The new plan envisages the construction of a platinum mine and a concentrator to produce between 234 000 oz/y and 300 000 oz/y of combined platinum, palladium, rhodium and gold (4E) in concentrate. During nine years of peak production, about 275 000 oz/y of 4E in concentrate will be produced from the project’s Merensky reef horizon.

The Merensky reef will be mined at widths of between 93 cm and 176 cm and the upper group two (UG2) reef will be mined at widths of between 105 cm and 205 cm.

The mining and development plan includes conventional hand-held drilling, electrical drills and scrapers, as well as winch cleaning, which is similar to the successful conventional mining operations at the adjacent mines.

Declines and primary access to the deposit have been designed for development using mechanised equipment.

Ore will initially be hauled out of the mine with mechanised equipment and transported by conveyor from year four to the end of the mine’s life. The project has an estimated 22-year life-of-mine.

The concentrator has been designed and recosted, based on treating the optimal 140 000 t/m. The revised mine plan has increased this treatment rate to 160 000 t/m and, for the concentrator to treat the increased quantity of reef, the recovery has been reduced to a discount of up to 2.5% for treatment over the nominal nameplate capacity.

Value
Peak funding for 100% of the project has been reduced from $507-million to $443-million.

Of the required capital cost, a fully funded $100-million for the Phase 1 surface establishment and the underground decline development programme has been allocated.

Duration
The targeted date for first concentrate production has been adjusted by six months to mid-2015.

Latest Developments
PTM has declared a dispute with Wesizwe Platinum subsidiary Africa Wide Prospecting & Exploration over the extent of dilution of Africa Wide’s interest in PTM’s WBJV Project 1, in South Africa.

Empowerment partner Africa Wide announced in November that it would not fund a R213-million (about $21.8-million) cash call for its 26% share of an approved six-month construction budget for Project 1.

PTM has said that, should it fail to secure a new lending facility and restructure the existing loan facility, it might have to change its business plan, which could involve suspending the project’s second phase and selling ore already mined from Project 1.

As a result of PTM’s decision, Africa Wide’s share in the Project 1 operating company, Maseve Investments 11, will be diluted by about 5%, based on a formula in Maseve's shareholders agreement, reducing Africa Wide’s interest to about 21%. Africa Wide, however, contends that the dilution will be about 3.5%.

The actual dilution percentage has been submitted to arbitration.

PTM is working on selling  Africa Wide's diluted interest in Maseve to another black economic-empowerment partner.

Key Contracts and Suppliers
Société Generale, Barclays Bank, Absa Capital, the Standard Bank of South Africa and Caterpillar Financial (lead arrangers); Turnberry Projects (prefeasibility study and overall feasibility study); Wardrop Engineering (decline access); GRD Minproc (concentrator design); Grinaker-LTA Mining (vertical shaft design); Golder Associates Africa and Oryx Environmental (public consultation and environmental permitting work); DRA Mining (engineering, procurement and construction management); and JIC Mining Services (underground decline tunnels).

On Budget and on Time?
The delay in the finalisation of project finance arrangements from plans announced and proposed earlier in 2013, including the project loan and delays in other funding, will likely cause a delay in the current target date of mid-2015 for the start of concentrate sales from the mine.

Contact Details for Project Information
PTM investor and media enquiries, tel +1 604 899 5450, fax +1 604 484 4710 or email info@platinumgroupmetals.net.
Wesizwe Platinum, Sirkien van Schalkwyk, tel +27 11 994 4600, fax +27 11 994 4601 or email Sirkien@wesizwe.com.
Turnberry Projects, tel +27 11 781 0116 or fax +27 11 781 0118.
Wardrop Engineering, email info@wardrop.com.
GRD Minproc, tel +27 11 514 0005.
Grinaker-LTA Mining, tel +27 11 578 6000 or fax +27 11 578 6161.
Golder Associates Africa, tel +27 14 597 0442 or fax +27 14 592 2842.
Oryx Environmental, tel +27 11 880 5204.
DRA Mining, tel +27 11 202 8600.
JIC Mining Services, tel +27 11 564 9400, fax +27 11 315 3789 or email general@jic.co.za.