Canada-headquartered miner Platinum Group Metals (PTM) continues to progress a market study that seeks to identify potential global sources of platinum group metals (PGMs) concentrate that could augment the processing of concentrate produced at the joint venture (JV) Waterberg project, in South Africa, in Saudi Arabia.

The company announced a cooperation agreement with Ajlan & Bros Mining and Metals on December 20 last year, to determine the viability of establishing a standalone PGMs smelter and base metal refinery in Saudi Arabia.

Ajlan is a subsidiary of Ajlan & Bros Holdings, which is one of the largest private sector diversified conglomerates in the Middle East.

The cooperation agreement encompasses a global PGMs concentrate market study, a definitive feasibility study (DFS) for the proposed PGMs smelter and base metals refinery, as well as an option to form an incorporated 50:50 JV following completion of the smelter DFS.

By augmenting the processing of the Waterberg project’s concentrate, it minimises the risk of sourcing concentrate from only one project, PTM explains.

Upon the completion of the market study, and assuming a favourable outcome, Ajlan and PTM may together commission the smelter DFS at an estimated cost of $4-million.

The smelter DFS will assume the export of PGMs concentrate from the Waterberg project in South Africa to a port facility in Saudi Arabia and will encompass options related to infrastructure, location, technical specifications, capital and operating costs. All expenses related to the smelter DFS are to be split on a 50:50 basis between PTM and Ajlan, including certain costs already incurred by PTM in previous independent beneficiation studies.

PTM says Saudi Arabia offers an attractive investment climate that includes highly competitive energy costs, a lower taxation rate and significant government financing incentives.

An initial trade-off study has been completed to determine the viability of exporting PGMs concentrate from South Africa to Saudi Arabia.

PTM notes that shipping costs are generally offset by lower energy costs and water costs.

The company expects both the PGMs smelter and base metals refinery to benefit from existing infrastructure.

A key requirement, however, would be to secure a long-term permit for the export of unrefined precious metals in concentrate from South Africa.

Meanwhile, the directors and shareholders of the Waterberg JV, comprising PTM, Impala Platinum Holdings (Implats) with 15%, Mnombo Wethu Consultants with 26% and HJ Platinum Metals with 21.95%, in mid-December approved a Stage 3 budget of $1.62-million for continued work on the project.

This budget, spanning September 30 last year to February this year, is a subcomponent of a $21-million work programme that was approved in principle in October 2022.

In conjunction with its approval of the Stage 3 budget, Implats advised that owing to its own internal cost savings efforts, it would not be funding its 15% share of the budget, which will result in a 0.049% dilution to its current 15% position in the Waterberg JV.

Shareholders of the Waterberg JV have the right to contribute the cash contribution shortfall of any diluting shareholder, pro rata to the aggregate shareholding of all shareholders who elect to fund such shortfall.

PTM alone has elected to fund all of Implats’ funding shortfall for the Stage 3 budget.

Implats stated that it would consider the funding of subsequent cash calls as future circumstances allowed.

Total expenditures on the Waterberg project, before partner reimbursements, for the three months ended November 30, 2023, were about $1-million.

As at the end of November, PTM has accumulated $42.6-million in net costs to the Waterberg project, while total expenditures on the property since inception to November 2023 are about $86-million.

PTM continues to focus on advancing the bulk underground palladium and platinum Waterberg project to a development and construction decision.