TSX- and NYSE-listed Platinum Group Metals (PTM) achieved several business objectives in 2019, including the approval of a definitive feasibility study (DFS) for its 50%-owned Waterberg palladium project, in South Africa.
The company is awaiting the granting of a mining right and the start of project engineering in the first quarter of this year.
Additionally, Impala Platinum (Implats) is due to announce its decision on whether it will exercise its purchase and development option to increase its stake in the project to 50.01%.
PTM owns 50% of the Waterberg joint venture, while Implats owns 15%, Hanwa 9.7%, Japan Oil, Gas & Metals National Corporation (Jogmec) 12% and Mnombo Wethu Consultants the balance.
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.
The Waterberg DFS, which was published in September last year and approved by shareholders in December, indicates that the project could be one of the largest and potentially lowest cash cost underground platinum-group metals mines globally.
The DFS outlines a fully mechanised, shallow, decline access mine capable of producing 420 000 oz/y of platinum, palladium, rhodium and gold (4E) with a 45-year mine life.
Meanwhile, PTM had taken steps to cut costs and reduce debt in 2019. In the three months ended November 30, 2019, the company had realised a net gain of $550 000, compared with a net loss of $5.6-million in the three months ended November 30, 2018.
PTM stated that the spot metal basket price per 4E ounce for the Waterberg project had increased by an aggregate of about 25% since spot prices for the DFS had last been measured on September 4, 2019.
“The market outlook for strong palladium demand and the potential for continued palladium supply deficits indicates a bright future for Waterberg's dominant metal,” the company said.