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

Location
Limpopo, South Africa.

Client
Platinum Group Metals (PTM) currently holds a 50.02% interest in the Waterberg project. Impala Platinum (Implats) owns a 15% interest and black empowerment company Mnombo Wethu Consultants holds a 26% interest. PTM owns a 49.9% interest in Mnombo. Japan Oil, Gas and Metals National Corporation (Jogmec) holds a 21.95% interest in the project and is planning to transfer a 9.755% interest to their partner Hanwa Co. South African JSE-listed black empowerment investment holding company Hosken Consolidated Investments, with a $1.1-billion market capitalisation, recently bought a 14.11% stake in PTM.  All partners are active in the oversight of the project. Implats holds an option to increase its stake to 50.01%.

Project Description
The Waterberg project has several highly attractive characteristics that are indicative of its being a low-cost, shallow, bulk mineable project with significant scale and growth potential.

Current probable reserves at the g project are estimated at 12.3-million ounces, comprising 61% palladium, 30% platinum, 8% gold and 1% rhodium (4E) plus 191-million and 333-million pounds of copper and nickel respectively.

At a 2.5 g/t cutoff grade, probable reserves comprise 102.7-million tonnes at 3.73 4E g/t, consisting of 2.29 g/t palladium, 1.11 g/t platinum, 0.29 g/t gold, 0.04 g/t rhodium, 0.08% copper and 0.15% nickel.  Much of the Waterberg project area still remains to be drilled and assessed.  The Waterberg deposit remains open down dip and along strike.  The reserves are a subset of a larger indicated resource.

The independent prefeasibility study (PFS) announced by PTM in October 2016 for the Waterberg project modelled a 744 000 oz/y 4E mine with an 18-year mine life.

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

The Waterberg is palladium-dominant and 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 3 361 new primary jobs for highly trained people who have 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.

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
PTM has announced that work on a definitive feasibility study (DFS), being completed by Waterberg JV Resources, with the company serving as operator, and with input from Implats and Jogmec, is proceeding according to plan. 

The latest phase of 38 000 m of infill drilling has been completed safely and on budget, bringing the total drill testing completed on the project to about 346 000 m.  The company plans to publish an updated resource model and technical report for the Waterberg project, including results from the latest drilling, in the third quarter of this year. This new resource model will form the basis for mine planning and reserve estimation in the DFS. 

The DFS remains on track for completion at the end of the first quarter of 2019. Independent engineering for the DFS is under way as planned by the jointly appointed engineering firms Stantec Consulting International and DRA Projects SA along with input from technical specialists from each of the joint venture partners.

“We have successfully completed the infill drill programme and are working very closely with all our partners, stakeholders and engineers to maximise the value of this extraordinary deposit – all at a time when the interest in palladium, the project’s primary metal, is increasing,” PTM CEO Michael Jones has said.

Recent infill drilling as described above has intersected areas of 40 m to 100 m of vertical thickness 4E mineralisation as expected in the Super F areas of the current resource model.  The recent intercepts compare favourably to the mine plan in an independent PFS for the project published in October, 2016.  Assay results from the latest drilling continue to be received.

Key Contracts and Suppliers
Worley Parsons (independent PFS) and Stantec Consulting International and DRA Projects SA (engineering).

On Budget and on Time?
Yes.

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