VANCOUVER (miningweekly.com) – Precious metals project developer Platinum Group Metals (PTM) has widened its net loss for the first fiscal quarter ended November 30 to $12.44-million, or $0.08 a share, compared with a net loss of $2.45-million, or $0.03 a share, a year earlier, the Vancouver-based company reported late on Thursday.

During the first quarter, the company recognised closure and care-and-maintenance costs for the Maseve mine, in South Africa, amounting to $5.92-million, compared with nil in the comparative period, owing to all mine operating costs and revenues being capitalised to the company’s carrying value of the Maseve mine during the comparable period of 2016.

PTM has made the decision to exit conventional platinum mining by agreeing to sell its position in the Maseve mine to Royal Bafokeng Platinum (RBPlat) in a transaction valued at about $74-million, the proceeds of which will be used to repay a majority of the company’s secured debt.

The company’s key business objectives are to advance the Waterberg project and repay its secured lenders. PTM is refocusing its efforts on the competitive nature of the large-scale Waterberg palladium reserves, at a time when palladium is attracting market attention owing to rising prices, boosted by an estimated palladium supply deficit.

PTM said accounts payable and accrued liabilities totalled $7.72-million, comprising contract severance and closure costs, care-and-maintenance costs, drilling expenses, engineering fees, accrued professional fees and regular trade payables. Accounts receivable at November 30, 2017, totalled $630 000.

PTM has secured a further $5-million bridge loan from Sprott Resource Lending Partnership, of which it has already drawn $2.75-million to fund direct expenditures relating to the closure and ongoing care and maintenance of the Maseve Mine, reasonable corporate overhead expenditures and outstanding amounts owing to the secured lenders.

Amounts due to the lenders before closing of the RBPlat deal total about $107.75-million, including the $2.75-million portion of the new bridge loan drawn to date and a termination fee for the Maseve mine production payment obligation of $15-million, if paid by March 31. PTM said that all of the $74-million RBPlat proceeds are to be applied to the company’s secured debt. 

As part of restructuring arrangements agreed with the secured lenders, PTM must raise $20-million in subordinated debt and/or equity within 30 days of the first lien loan facility of about $40-million being repaid from the RBPlat proceeds, and raise a further $10-million in subordinated debt and/or equity before June 30.

WATERBERG ADVANCEMENT
PTM has set aside $5-million from a recent $30-million investment in the Waterberg project by Impala Platinum Holdings to fund its share of a definitive feasibility study currently under way on the Waterberg project, of which it remains the operator.

The company advised that the Waterberg JV – a joint venture (JV) between between PTM; Japan Oil, Gas and Metals National Corporation; Mnombo Wethu Consultants; and Implats – plans to advance the Waterberg project the DFS stage and a construction decision for $10-million, paid pro-rata by Waterberg JV shareholders.  

Drilling to increase the confidence in certain areas of the known mineral resource to the measured category is under way, and technical teams from all of the partners, including Implats and independent engineers are involved in the technical planning and oversight of the DFS. The Waterberg JV plans to file a mining right application during 2018. 

OTM continues to actively assess corporate and strategic alternatives with advisers BMO Nesbitt Burns and Macquarie Capital Markets Canada.