Name of the Project
Waterberg platinum group metals (PGM) project.

Location
Limpopo, South Africa.

Client
Waterberg is a joint venture (JV) between Platinum Group Metlas (37.05%), Japan Oil, Gas and Metals National Corporation, or Jogmec, (21.95%), black economic-empowered partner Mnombo Wethu Consultants (26%) and Impala Platinum Holdings, or Implats (15%). As a result of Platinum Group’s 49.9% ownership in Mnombo the company has an effective interest in the Waterberg JV of 50.02%.

Project Description
An independent prefeasibility study (PFS) announced by PTM in October 2016 for the Waterberg project modelled a 744 000 oz/y platinum, palladium, gold and rhodium (4E) mine with an 18-year life.

On a 100% project basis using a 2.5 g/t cutoff grade, the PFS estimated probable reserves at 12.32-million 4E ounces – 102.7-million tonnes at 3.73 4E g/t, comprising 1.11 g/t platinum, 2.29 g/t palladium, 0.29 g/t gold and 0.04 g/t rhodium.

The PFS envisages the Waterberg project producing a flotation concentrate from a processing plant to be sold or toll-treated for the local South African market.

Based on the PFS, the project is expected to produce up to 285 000 t/y of concentrate at peak production. The concentrate is modelled to contain about 80 g/t 4E plus copper at between 1% and 9.2%, and nickel at between 1.1% and 5%. Base metal levels for Waterberg are similar to the common Merensky concentrate, which make them metallurgically compatible for blending with other high-chrome concentrates.

The PFS has estimated that Waterberg could produce 472 000 oz/y of palladium.

Potential Job Creation
It is estimated that the project will create an estimated 3 361 new primary jobs for highly trained people with transferable skills.

Net Present Value/Internal Rate of Return
The project has an estimated after-tax net present value (NPV), at an 8% discount rate, of $320-million using three-year trailing average metal prices.

At a discount rate of 8% using investment bank consensus average metal prices, the project has an NPV of $507-million.

The project has an after-tax internal rate of return (IRR) of 13.5% using a three-year trailing average price deck. Using investment bank consensus average metal prices, the project has an IRR of 16.3%.

Value
Peak funding has been estimated at $914-million.

Jogmec funding is in place to advance the project to the completion of a feasibility study.

Duration
The project is expected to have a 3.5-year construction period. It also includes a construction decision following the completion of the feasibility study and first production three years later.

Latest Developments
The first phase of the transaction with Impala Platinum Holdings, involving the Waterberg PGM project announced on October 16, 2017, has been closed.

PTM has received $17.2-million from Impala Platinum (Implats) for the sale of an 8.6% interest in its Waterberg project, while Jogmec has received $12.8-million for the sale of a 6.4% interest in the project.

Implats has the option to increase its stake in Waterberg Resources to 50.01% through additional purchases and earn-in arrangements totalling $166-million following the completion of a definitive feasibility study. Implats also has a first right of refusal to smelt and refine Waterberg concentrate.

If Implats exercises its call option to advance to a 50.01% interest in Waterberg Resources, Jogmec will retain a 5% interest and certain metal marketing rights, while PTM would retain a 31.96% direct and indirect interest in Waterberg Resources.  The transaction agreements also provide for the transfer of equity and the issuance of additional equity to one or more broad-based black empowerment partners, at fair value.

Key Contracts and Suppliers
Worley Parsons (independent PFS).

On Budget and on Time?
Not stated.

Contact Details for Project Information
PTM VP corporate development Kris Begic, tel +1 604 899 5450.