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
PTM has reached an agreement with a syndicate of underwriters, led by BMO Capital Markets, to raise $25-million.

PTM recently advised that, for it to achieve positive cash flow and maintain its working capital covenants under existing loan facilities, it needed to source between C$5-million and C$15-million of additional funding.

Under the terms of the bought-deal financing, the underwriters will buy 17.13-million shares at $1.46 apiece, for gross proceeds of $25-million. PTM will use the net proceeds of the offering for underground development and production ramp-up of the Maseve mine, working capital during start up, and general corporate purposes.

PTM’s stated objective is to turn the Maseve mine to positive cash flow in the first half of 2017. The production ramp-up at the cornerstone Maseve 4E mine has been behind schedule since commissioning in April 2016, owing to poor mining contractor performance and delayed infrastructure completion.

PTM has granted the underwriters an overallotment option, exercisable at the offering price for a period 30 days following the closing, to buy up to a further 15% of the offering.

The offering is expected to close on January 31, subject to customary closing conditions.

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.