Waterberg nudges toward construction decision

14th January 2022 By: Marleny Arnoldi - Creamer Media Online Writer

Waterberg nudges toward construction decision

Palladium bar
Photo by: Bloomberg

After completing a 46-hole drilling programme and having conducted various geophysical surveys in October last year, TSX- and NYSE-listed Platinum Group Metals (PTM) is ready to advance the palladium-dominant Waterberg project to a development and construction decision.

The company’s other near-term objectives include completing a construction funding package and securing concentrate offtake agreements.

Moreover, PTM continues to advance an initiative through Lion Battery Technologies, which is focused on developing technologies related to platinum and palladium use in lithium battery technology. Lion works in collaboration with Anglo American Platinum and Florida International University.

PTM is the operator of the Waterberg project, with joint venture (JV) partners being Impala Platinum (Implats); Mnombo Wethu Consultants; Japan Oil, Gas and Metals National Corporation; and Hanwa.

PTM had spent $41-million in accumulated net costs on the project as at November 30, while all investor sources’ investment totals just under $80-million.

The company explains that before a construction decision can be made, arrangements will be required for project concentrate offtake or processing. To this end, a Waterberg JV budget for the 2022 financial year is in development and under discussion with the partner.

Meanwhile, PTM continues to work closely with regional and local communities and their leadership on how the mine can be developed to provide optimal outcomes and best value for all stakeholders.

The company is assessing commercial alternatives for mine development, financing and concentrate offtake. Studies to assess the economic feasibility of establishing a dedicated Waterberg matte furnace to process concentrate as an alternative to a traditional concentrate offtake arrangement are under way.

Hanwa holds the exclusive right to buy or directly sell all or part of the Waterberg project concentrate or metal contained therein. Hanwa may, therefore, direct the processing and marketing of concentrate or contained metal at market prices.

MARKET MOVEMENT

The market for platinum, palladium, rhodium, and gold (4E) in particular, has improved since 2019, resulting in generally higher 4E metal basket prices in 2020 and 2021, reports PTM.

In 2021, the impact of a global shortage of semiconductors resulted in reduced global automotive production. The concurrent reduction in demand for 4E metals led to prices for each of them falling from their mid-year highs.

PTM says the effects of the semiconductor shortage are expected to ease this year or next.

Industry analysts estimate a return to strength in the market for platinum, palladium and rhodium based on projections for a recovery in car sales and the longer-term potential for the emergence of hydrogen-based technologies using 4E metals.

The projected market penetration of battery electric vehicles in the future is expected to soften the market for palladium in the longer term as demand for internal combustion engines with catalytic converters is potentially reduced.

On the other hand, platinum, rhodium, gold, copper and nickel are projected to experience strong demand in the longer term.