Name of the Project
Waterberg palladium project.

Location
The Waterberg project is located 85 km north of Mokopane in Limpopo, South Africa.

Project Owner/s
Platinum Group Metals (PTM) is the operator of the Waterberg project, with joint venture partners being Japanese Oil, Gas and Metals National Corporation (Jogmec), Hanwa, Impala Platinum Holdings (Implats) and Mnombo Wethu Consultants.

Project Description
PTM has announced positive results from an independent definitive feasibility study (DFS) on the Waterberg project. The DFS provides a clear outline of the palladium deposit and has concluded that it can be one of the largest, fully mechanised, low-cost platinum group metals mines in the world.

The project has proven and probable reserves of 187.51-million tonnes at 3.24 g/t platinum, palladium, rhodium and gold (4E) for 19.48-million 4E ounces (using a 2.5 g/t 4E cutoff).

The life-of-mine on current mineral reserves extends to 2066 and the deposit remains open at depth and on strike.

Updated measured and indicated mineral resources are estimated 242-million tonnes grading 3.38 g/t 4E ounces, and the deposit remains open on strike to the north and below an arbitrary depth cutoff of 1 250 m.

The DFS mine plan envisages production at 4.8-million tonnes of ore a year and 420 000 4E ounces a year in concentrate. The mine will initially access the orebody using two sets of twin decline tunnels, with fully mechanised longhole stoping methods and paste backfill used for mining. Paste backfill allows for a high mining extraction ratio, as mining can be completed next to backfilled stopes without leaving internal pillars.

Maintaining safety and reliability are key mine design criteria. As a result of the scale of the orebody, bulk mining on 20 m to 40 m sublevels, with large underground equipment and conveyors for ore and waste transport, will provide high efficiency.

The Waterberg project is planned to produce a sulphide concentrate at a grade that is attractive to the current operating smelters in South Africa, with no significant penalty elements. Implats holds a first right of refusal for smelter offtake, while Hanwa, of Japan, holds the rights to market the final refined metal at market prices.

Potential Job Creation
The project will create about 1 100 new highly skilled jobs.

A significant investment in local training and business opportunities is part of the benefits to stakeholders, including local communities, shareholders, and provincial and national governments.

All-in Sustaining Costs/All-in Costs
Not stated.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at an 8% discount rate, of $982-million and an internal rate of return of 20.7%

Capital Expenditure
Capital expenditure is estimated at $874-million, including $87-million in contingencies. Peak project funding is estimated at $617-million.

Planned Start/End Date
The DFS project timeline includes a formal construction decision to be taken following the granting of the mining right, expected in the first quarter of 2020, with first production expected 3.5 years later.

The planned decline provides for rapid and low-cost access to the shallow orebody. Under the DFS mine plan, first production is estimated in late 2023, with ramp-up to steady state by 2027.

Latest Developments
Implats has asked to have the terms of its purchase and development option in the Waterberg platinum project joint venture (JV) amended.

Implats has, in consideration for the amendment, agreed to fund 100% of a $4-million implementation budget and work programme that will increase confidence in specific areas of the Waterberg project’s DFS.

Prior to the amendment, Implats would have to decide by April 17 whether it wanted to exercise its option to increase its shareholding in the project to 50.01%.

The end date of Implats’ purchase and development option has now been amended to 90 days, following the receipt of an executed mining right for the project.

The JV partners are awaiting the granting of a mining right, as well as environmental authorisation for the project.

The proceeds towards the work programme will be offset against Implats’ future development funding commitment, should it elect to exercise the option.

If Implats decides to exercise the option, it will acquire Jogmec’s stake in the project and earn a further 22.8% stake by spending $130-million on the project’s development.

Implats’ work programme on the DFS will include geotechnical drilling along the planned decline positions as set out in the DFS, as well as a detailed review of critical areas that could affect the implementation schedule and budget to mitigate execution risks.

The sustainability of water supply and a suitable housing strategy will also be progressed.

The Waterberg JV technical committee and board have approved the work programme that includes the initial work for early 2020.

PTM continues to manage the project, but Implats will direct the new work programme.

Key Contracts and Suppliers
Stantec Consulting International and DRA Projects SA (DFS).

Contact Details for Project Information
PTM, tel +27 11782 2186 or email info@platinumgroupmetals.net.