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Waterberg platinum group metals project, South Africa

19th July 2019

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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

Location
Limpopo, South Africa.

Project Owner/s
Platinum Group Metals (PTM) holds a 50.02% effective interest in the Waterberg Joint Venture (JV), while Japan, Oil, Gas and Metals National Corporation (Jogmec) holds a 12.195% interest, Impala Platinum Holdings a 15% interest, Hanwa a 9.755% interest and empowerment partner Mnombo Wethu Consultants the effective balance of the JV. JSE-listed, broad-based empowerment group Hosken Consolidated Investments has acquired a 19.90% ownership interest in PTM.  

Within 90 days of the completion and approval of the definitive feasibility study (DFS) by the Waterberg JV, Implats may elect to increase its stake in the project to 50.01% by additional share purchases from Jogmec for $34.8-million and a commitment to spend $130-million for development of the project.

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.

The deposit is also advantageous because of its having the highest palladium content among South African PGM mines.

According to a resource update announced in October 2018, the current measured and indicated 4E (platinum, paladium, rhodium and gold) PGM mineral resource of the Waterberg deposit is 26.34-million comprising 63.04% palladium, 29.16% platinum, 6.37% gold and 1.43% rhodium (242.5-million tonnes at 3.38 g/t 4E) at a 2.5 g/t 4E cutoff grade on a 100% project basis. Reserves will be updated as part of the planned 2019 definitive feasibility study.

In the independent prefeasibility study (PFS) announced by PTM in October 2016 for the Waterberg project, a 744 000 oz/y 4E mine with an 18-year mine life was modelled. The PFS envisaged the project producing a flotation concentrate from a processing plant. The concentrate will be sold or toll-treated for the South African market.

The Waterberg is palladium-dominant and the PFS has estimated that it 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%.

Capital Expenditure
Peak funding has been estimated at $914-million. Funding is in place to advance the project to the completion of a feasibility study.

Planned Start /End Date
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 will, this month, submit its DFS for the Waterberg project for a peer review by engineering firm SRK Consulting, before publishing it at the end of the third quarter.

The company has also filed a mining right application and an application for an environmental authorisation, following successful stakeholder consultations.

Meanwhile, PTM has started detailed infrastructure planning for the project.

Detailed hydrological work has indicated that there is sufficient groundwater resources for the project and to improve water accessibility to local communities. The Waterberg JV and the local Capricorn municipality are advancing plans for the development of water resources.

The establishment of servitudes for power line routes and detailed planning and permitting for an Eskom electrical service to the project are also advancing well. The company has said that community consultation on power line routes and the completion of an environmental-impact assessment are progressing.

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

On Budget and on Time?
Yes.

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

 

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Edited by Creamer Media Reporter

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