TORONTO (miningweekly.com) – The joint venture (JV) partners of the South Africa-based Waterberg JV and the Waterberg Extension have agreed to consolidate the platinum projects into a unitised project area, following a firm $20-million funding commitment from JV partner Japan Oil, Gas and Metals National Corporation (Jogmec).

JV partners Canadian explorer Platinum Group Metals (PTM) and black empowerment partner Mnombo Wethu Consultants had agreed to consolidate, in conjunction with Jogmec, which, in consideration of the further resource potential in the less explored old Waterberg Extension, had committed the $20-million to the funding of exploration and development expenditures for the combined project over three years. The Jogmec-funded budget to March 31, 2016, was $8-million for the entire new Waterberg JV, including fill-in drilling, extension exploration drilling and prefeasibility engineering.

NYSE- and TSX-listed PTM on Tuesday noted that as a result of the consolidation and with the funding provided by Jogmec, about 15 drill rigs and crews would immediately return to active status at the Waterberg site, on the northern limb of South Africa’s Bushveld Igneous Complex.

"Today's agreement enhances our long-standing strategy of advancing shallow, high-grade, low-cost projects to create significant and sustainable value for our shareholders. The consolidation of the Waterberg project eliminates project boundaries; reduces development, administration and infrastructure costs; creates strong efficiencies and enables the most economic development of the deposit.

“The unified ownership structure also allows for superior mine planning and scheduling focused on the early exploitation of higher grade tonnes of Super F mineralisation, which may be planned with lower-cost mechanised processes in the ongoing prefeasibility study,” PTM CEO Michael Jones advised.

PTM would increase its direct and indirect effective interest in the old Waterberg JV area from its current 49.98% to 58.62%, comprising 45.65% held directly and 12.97% held indirectly through Mnombo. PTM would decrease its effective interest in the old Waterberg Extension from 87% to 58.62%. Jogmec would decrease its interest in the old Waterberg JV from 37% to 28.35% and increase its interest in the old Waterberg Extension from zero to 28.35%. Mnombo would hold 26% of the new Waterberg JV project.

PTM noted that the exchange of interests were "ounce neutral" in that each party was exchanging the same number of inferred resource ounces.

The company would retain the responsibility of operating the consolidated project and achieved a majority effective interest in the overall project.

The current resource at Waterberg, before the update in progress, was 29-million ounces over about 10 km of strike length, comprising, on a 100% basis, an inferred resource of 287-million tonnes, grading 3.15 g/t 4E platinum group metals – 0.94 g/t platinum, 1.92 g/t palladium, 0.04 g/t rhodium, 0.25 g/t gold, comprising a ratio of 30%, 61%, 1% and 8%, respectively.