Name and Location
Western Bushveld joint venture (WBJV) Project 1, North West, South Africa.

Client
The WBJV comprises project operator Platinum Group Metals, or PTM (74%), and Wesizwe Platinum (26%). PTM currently holds 54.75% in Projects 1 and 3 of the WBJV, with a right to subscribe to a further 19.25%. JSE-listed Wesizwe Platinum holds the other 26%, plus 100% of Project 2.

Project Description
The WBJV 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, 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 four to the end of the mine’s life. The project has an estimated 22-year life-of-mine.

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.

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 100% of the project has been reduced from $507-million to $443-million.

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

Duration
Production ramp-up is scheduled for the fourth quarter of 2015.

Latest Developments
PTM continues to advance construction at its WBJV Project 1 according to plan and cost budget estimates.

PTM’s focus for this year will remain on the successful start-up of production at Project 1.

Driving this objective, the group has outlined that it has expanded key operational leadership roles in recent months, appointing a general mine manager, production manager, equipment specialist, engineering specialist, safety and environment manager and training superintendent.

The development is currently 70% complete and more than 7 638 m of access development had been completed at the North mine decline by November 30.

The stockpiling of Merensky reef development material began over the quarter ended November 30, with about 106 084 t on surface, while the South boxcut has been completed.

Underground mining during 2014 advanced the material decline to an estimated 949 m and the conveyor decline to 741 m.

In total, over 2 206 m of access development has been completed at the South mine.

Project 1 is planned to be in production in the fourth quarter of the year and, after a planned two-year ramp-up period, steady-state production is scheduled at 275 000 oz of 4E.

The company’s current cash position is expected to be enough to complete the mine build to initial production, CEO Michael Jones has said.

Meanwhile, the company is planning to release a resource update for its Waterberg JV project in the first quarter of this year.

The major items completed during the 2014 calendar year included the construction of the foundations and civil works for the primary mill, while the structural steel for mill and flotation circuits are largely complete.

The mill bearings are in place and the mill itself has been delivered and lifted into position.

Power infrastructure remains on track, with an initial 10 MVA installation complete and an additional 10 MVA service scheduled for completion later this year.

The stands and civil works for the conveyor from the North mine to the mills has been completed, while the exterior of the North mine change house, which can accommodate 1 200 people, is complete, and the interior is in progress.

The exterior of the South change house, which will accommodate 500 persons, has also been completed.

Advancing the project’s basic infrastructure, PTM states that the electrical substation and connections for the North and South mines are in place, as well as water infrastructure for construction and development.

The pollution control dams have been completed, while development along the Merensky reef and first underground raises has started.

“In terms of mining activities, the North mine development [of] five mine blocks is advancing as planned, while construction of the chairlift and conveyor has started.

“Civils and most of the steelwork for the surface ore silo and conveyor transfer points has been completed, while the equipment maintenance shop is now in place,” PTM outlines.

The site’s computer access control system has been installed and is operational, while the security control centre and mill control buildings are nearing completion.

The social and labour plan, safety, environment and government reports have been filed and have received “good feedback”.

By the end of the three months ended November 2014, about $343-million of development and construction investment had been completed at Project 1 within a total peak-funding estimate of $502-million.

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?
The delay in the finalisation of project finance arrangements from plans announced and proposed earlier in 2013, including the project loan and delays in other funding, will likely cause a delay in the current target date of mid-2015 for the start of concentrate sales from the mine.

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.
Turnberry Projects, tel +27 11 781 0116 or fax +27 11 781 0118.
Wardrop Engineering, email info@wardrop.com.
GRD Minproc, tel +27 11 514 0005.
Grinaker-LTA Mining, tel +27 11 578 6000 or fax +27 11 578 6161.
Golder Associates Africa, tel +27 14 597 0442 or fax +27 14 592 2842.
Oryx Environmental, tel +27 11 880 5204.
DRA Mining, tel +27 11 202 8600.
JIC Mining Services, tel +27 11 564 9400, fax +27 11 315 3789 or email general@jic.co.za.