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%, and 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 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 using 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.

Net Present Value/Internal Rate of Return
The project's independent feasibility model developed a post-tax net present value of $431-million, at a 5% discount rate.

Value
Peak funding for the project has increased from $502-million in the first quarter of 2015 to $514-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
Production ramp-up is scheduled for the fourth quarter of 2015.

Latest Developments
PTM has reported that it expects the peak funding for its WBJV Project 1 to increase by 2% on the back of escalating operating costs.

The estimated rise to $514-million has emerged on the back of increased estimated costs of construction; regulatory changes, which stipulate the installation of a vinyl liner for the tailings storage facility; a decline in market prices for metals; and delays to ramp-up plans.

PTM has warned that the peak funding estimate could be further impacted should there be any delays in underground development and production ramp-up of the project.

As at February 28, about $377-million had been injected into the WBJV Project 1, which is currently 78% complete and on track for first production in the fourth quarter of this year, followed by a two-year ramp-up to 275 000 oz/y of 4E.

Key Contracts and Suppliers
Société Generale, Barclays Bank, Absa Capital, Standard Bank of South Africa and Caterpillar Financial (lead finance 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.