JOHANNESBURG (miningweekly.com) – South Africa-focused miner Platinum Group Metals (PTM) expected the peak funding for its 82.9%-owned flagship Western Bushveld joint venture (WBJV) Project 1 to increase by 2% on the back of escalating operating costs.

The estimated rise to $514-million emerged on the back of increased estimated costs of construction; regulatory changes, which stipulated the installation of a vinyl liner for the tailings storage facility; a decline in market prices for metals; and delays to ramp-up plans.

In a second-quarter update to shareholders, PTM, which reported an estimated peak funding of around $502-million in its first-quarter update in January, warned that the peak funding estimate could be further impacted should there be any delays in underground development and production ramp-up of the project.

The platinum explorer’s total project expenditure for development, construction, equipment and other costs during the six months to February 28, reached C$85.8-million.

As at February 28, about $377-million had been injected into WBJV Project 1, which was currently 78% complete and on track for first production in the fourth quarter of this year, followed by a two-year ramp-up to 275 000 oz of 4E (platinum, palladium, rhodium and gold) a year.

Meanwhile, PTM was progressing its Waterberg Extension projects and Waterberg JV with the Japan Oil, Gas and Metals National Corporation (Jogmec).

In the period under review, PTM invested C$6.1-million for exploration on the Waterberg projects, with a further C$2.4-million funded by Jogmec.

The group was currently calculating an updated resource for the Waterberg palladium and platinum deposits, with completion expected in mid-2015, while the prefeasibility study for the Waterberg JV project as a potential large-scale, fully mechanised, decline-accessible mine continued.

As at February 28, PTM had a cash balance of C$145.1-million, incurring a net loss of C$1.3-million in the first half of the year.