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)  owns 50% of the Waterberg Joint Venture (JV), while Impala Platinum (Implats) owns 15%; Hanwa 9.7%; Japan, Oil, Gas & Metals National Corporation (Jogmec) 12%; and Mnombo Wethu Consultants the balance.

These JV partners executed a formal amended purchase and development option agreement with Implats in April 2020, which entails Implats’ funding 100% of an implementation budget and work programme, valued at about R55-million.

Implats still has a few months to decide whether it wants to increase its shareholding in the project to 50.01% and contribute $165-million to the project’s development, including work programme spend. Implats is expected to make a construction decision during the third quarter of this year.

Under the purchase and development option, Implats may elect to increase its stake in the Waterberg JV from 15% to 50.01% by buying an additional 12.195% equity interest from Jogmec for $34.8-million and earning a further 22.8% interest by making a firm commitment to an expenditure of $130-million in development work.

Implats made a strategic investment of $30-million in November 2017 to buy a 15% stake in the project.

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, using 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, and shareholders, as well as provincial and national governments.

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
PTM reported in May 2020 that it was possible for production to start in the first quarter of 2024, following decline establishment in the first quarter of 2021. Steady-state production of 420 000 oz/y could be achieved from 2027.

Latest Developments
PTM has said that a key business objective in the months ahead is to advance the Waterberg project into a development and construction decision following the positive results of the DFS, which provided a solid value assessment for the project.

Currently, the long-term market outlook for the metals to be produced at the project remains positive, and the company has received interest from other potential strategic partners in the project, following Implats’ decision not to exercise its purchase and development option.

The work programme, substantially paid for by Implats, is under way and will focus on project optimisation, operational readiness and risk mitigation.

The programme is being undertaken in compliance with South African health orders aimed at halting the spread of the Covid-19 virus, PTM has said.

PTM is expecting the granting of a mining right for the Waterberg project as the next major milestone, with the expected grant of the right delayed, owing to the current stay-at-home order and possible future restrictions in South Africa amid the spread of Covid-19.

Concentrate offtake negotiations with Implats are also in progress; PTM and the Waterberg JV Co have begun a process to assess commercial alternatives for mine development financing and concentrate offtake, subject to Implats' right to match offtake proposals.

Several parties are in discussions with the company.

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.