Platinum Group Metals Ltd. [PTM-TSX, PLG-NYSE American] said Thursday it is upsizing a previously announced non-brokered private placement financing, with the intention of raising US$4 million for its Waterberg Project in South Africa.
The move comes on the heels of definitive feasibility study (DFS), published in September 2019, which concluded that that the Waterberg Project will be a fully mechanized, shallow, decline-accessed mine and will be one of the largest and potentially lowest cash cost underground platinum group metals mines in the world.
The project is being advanced by shareholders of Waterberg JV Resources (Pty) Ltd., including Platinum Group Metals, Impala Platinum Holdings Ltd. (Implats), Japan Oil, Gas and Metals National Corp. (JOGMEC), Hanwa Co. Ltd. and Mnombo Wethu Consultants (Pty) Ltd.
Implats owns 15% of the project, JOGMEC owns 12.95%, Hanwa acquired 9.75% of JOGMEC’s interest in the metal and marketing rights. Hosken Consolidated Investment (HCI), a South African black empowered holding company, listed on the JSE, owns 30.20% of Platinum Group Metals, which in turn owns 37.05% of the project. Mnombo has 26%. However due to Platinum Group’s 49.9% stake in Mnombo, Platinum Group’s effective interest in the Waterberg joint venture is 50.02%.
On Thursday, the company said it intends, subject to regulatory approval, to increase the size of the previously announced non-brokered private placement to 3.22 million common shares of the company at US$1.24 each, generating gross proceeds of US$4.0 million.
Platinum Group shares advanced on the news, rising 1.6% or $0.03 to $1.88. The shares are currently trading in a 52-week range of $1.37 and $2.92.
Platinum Group Metals made the initial discovery in November 2011. It is located in a new section of the Bushveld Complex, which is located in the central Transvaal and contains some of the world’s largest reserves of platinum-group metals. The Bushveld Complex is divided into an eastern and western lobe, with a further northern extension.
The definitive feasibility study forsees an annual production rate of 420,000 4E (platinum, palladium, rhodium and gold). The estimated project capital required is also estimated at US$874 million, including US$87 million in contingencies.
That is based on an updated measured and indicated mineral resource of 242 million tonnes at 3.38 g/t 4E or 26.4 million 4E ounces (using a 2.5 g/t 4E cut-off). Proven and probable reserves stand at 187 million tonnes at 3.24 g/t 4E or 19.5 million 4E ounces.
Platinum Group CEO Michael Jones said the definitive feasibility study (DFS) provides a clear outline of the world class nature of the Waterburg Palladium Deposit. “A large global team of approximately 100 independent professionals and specialists as well as excellent participation from our partner Implats, have contributed to an optimized plan that reduced capital from the earlier plan and significantly increased the mineral reserves for a 45-year life, 420,000 4E ounces per year (in concentrate) of steady state mine plan.”
The Waterberg Project is expected to create approximately 1,100 highly-skilled jobs and a significant investment in local training and business opportunities.
The project timeline includes a formal construction decision to be taken following the granting of a mining right, expected in the first quarter of 2020, with initial production expected 3.5 years later in late 2023, with ramp up to steady state by 2027. The deposit remains open and depth and on strike.