Name of the Project
Project 1 Maseve platinum mine (formerly Western Bushveld Joint Venture Project 1).

Location
North West, South Africa.

Client
Development of the project has been conducted through Maseve Investments 11. As of August 31, 2015, Platinum Group Metals (PTM) subsidiary PTM RSA majority-owns this company, with 82.9%. Africa Wide Mineral Prospecting and Exploration, 100% owned by JSE-listed Wesizwe Platinum, holds the remaining 17.1%.

Project Description
The Maseve platinum mine, located about 35 km from Rustenburg, 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 equipment, 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 4 to the end of the mine’s 22-year life.

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.

Jobs to be Created
Not stated.

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 currently.

Of the required capital cost, a fully funded $100-million for the Phase 1 surface establishment and underground decline development programme have been allocated.

Duration
Not stated.

Latest Developments
The ramp-up of PTM’s Maseve mine has been hampered in recent weeks by safety blitzes in the North West province by the inspectorate branch of South Africa's Department of Mineral Resources (DMR).

This has caused intermittent Section 54 work stoppages at the mine, causing a loss of some planned production and compounding existing development delays.

PTM has said that it has addressed concerns raised by the DMR, adding that the company has redoubled its focus on safely increasing mined tonnage at grade from planned blocks while reducing costs.

PTM is changing underperforming contractors and increasing stope mining while reducing contractor redundancy, improving efficiencies and reducing costs.

According to PTM, the Maseve mine has demonstrated positive grade-thickness-confirmation-to-block-model estimates, as well as positive recovery-to-design specifications. Mining teams are accessing Block 11, and mined tonnage from this important block is starting to come on line. Block 11 is modelled to be flat-dipping with good grade and thickness, and is the most important block to the near-term mine plan.

The block hosts some of the best grade thickness ore at the Maseve mine and is an important part of the next several years of scheduled mining. Block 11 is a large, well-drilled and stable, estimated to host more than 545 000 4E Merensky reef ounces, held in 3.07 t grading 5.53 g/t 4E in the indicated category.

The seam thickness, where accessed, is about 2 m, with a well-developed and near-flat dipping Merensky reef present as modelled. Vertical channel sampling has returned assays of 7.4 g/t 4E over a true width of 193 cm. This block is amenable to bord-and-pillar stoping using mechanised mining methods.

Looking forward, Merensky reef tonnes mined are scheduled to increase as PTM accesses and develops key mining blocks. The company has noted that delays in development and stoping have delayed production, which will have a negative impact on working capital requirements until enough mined material is produced to allow for mine operations to generate positive cash flow.

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?
Output at Maseve is behind schedule, owing to challenges related to the ramp-up of stoping tonnes, resulting in a loss of planned revenue from operations.

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.