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

Location
About 85 km north of Mokopane, in Limpopo, South Africa.

Project Owner/s
Waterberg Joint Venture (JV) Resources, or Waterberg JV Co, a JV between Platinum Group Metals, or PTM (37.05%); Impala Platinum Holdings, or Implats (15%); HJ Platinum Metals (21.95%) comprising Japan Oil, Gas and Metals National Corporation, or Jogmec (12.195%) and Hanwa Co (9.755%); and black economic-empowerment partner Mnombo Wethu Consultants (26%). As a result of PTM's 49.90% ownership in Mnombo, the company has an effective interest in the Waterberg JV of 50.02%.

Project Description
The 2019 definitive feasibility study (DFS) mine plan envisages production of 4.8-million tonnes of ore a year and 420 000 platinum, palladium, rhodium and gold ounces a year in concentrate.

The mine will initially access the orebody using two sets of twin decline tunnels, with fully mechanised longhole stoping methods and paste backfill used for mining. Paste backfill allows for a high mining extraction ratio, as mining can be completed next to backfilled stopes without leaving internal pillars.

Maintaining safety and reliability are key mine design criteria. As a result of the scale of the orebody, bulk mining on 20 m to 40 m sublevels using large underground equipment, and conveyors for ore and waste transport, will provide high efficiency.

Potential Job Creation
The project will create about 1 100 new highly skilled jobs.

Net Present Value/Internal Rate of Return
The project has an after-tax net present value, at an 8% discount rate, of $982-million and an internal rate of return of 20.7%. This is based on the 2019 DFS prices of palladium  – $1 546, platinum – $980, gold – $1 548 and rhodium – $5 036 ($/R:15).

Capital Expenditure
Capital expenditure is estimated at $874-million, including $87-million in contingencies. Peak project funding is estimated at $617-million, based on 2019 commodity prices and costs.

Latest Developments
While developing the Waterberg project, PTM has reported that it is advancing discussions and related agreements concerning the possible offtake of mineral products from the project.

Before project financing and a construction decision can be undertaken, arrangements will be required for project concentrate offtake or processing.

PTM has said that obtaining reasonable terms for offtake of Waterberg project concentrate from an existing smelter or refinery in South Africa is considered the preferred option and that discussions with such parties are ongoing.

In addition to seeking reasonable terms for Waterberg concentrate offtake from an existing smelter or refinery in South Africa, the company notes that it is considering alternative offtake options.

Thus far, the Waterberg JV has approved, in principle, the preconstruction work programme for the project, which includes about $21-million to be invested in the project over a 23-month period that culminates in August 2024.

The work programme is focussed on project infrastructure, including establishing initial road access, water supply, essential site facilities, a first phase accommodation lodge, a site construction power supply from State utility Eskom and the advancement of the Waterberg social and labour plan.

The Waterberg JV is also conducting work to update a 2019 version of the DFS, which includes a review of the project’s cutoff grades, mining methods, infrastructure plans, scheduling, concentrate offtake, dry stack tailings, costing and other potential revisions to the project's financial model.

From the work programme, an initial budget – which has been completed as planned – of about $2.5-million was approved for expenditure by March 31, including for items such as 32 infill boreholes, several geotechnical boreholes and an exploration borehole.

Going forward, a Stage 2 work budget of $3.6-million has been approved. The Stage 2 budget programme, currently under way, includes updating the DFS’s engineering, preconstruction engineering, and electrical power supply engineering and the permitting and licensing of construction aggregate borrow pits identified near the Waterberg mine site.

The initial budget and the Stage 2 budget are being funded pro rata by the JV partners, while subsequent expenditures in accordance with the work programme are subject to expected approvals for the next sequential time period starting September 1.

PTM continues to work closely with regional and local communities and their leadership on mine development plans to achieve the best outcomes and value for all stakeholders.

The 2019 DFS states that additional smelting capacity may need to be built in the local PGMs industry to be able to treat the flotation concentrate from Waterberg and the other potential platinum reef miners.

PTM is thus assessing the economic feasibility of building a matte furnace and base metal refinery in South Africa, with or without partners.

A matte furnace and base metal refinery are envisioned as a separate business from Waterberg JV that could provide fair market concentrate offtake terms to the Waterberg JV and possibly to other local PGM miners.

In this regard, PTM has noted that discussions with potential participating partners and investors are ongoing.

PTM is also assessing the economic feasibility of building a matte furnace and base metal refinery outside of South Africa to process Waterberg concentrate.

Working with a potential partner in a jurisdiction with less expensive grid electricity and water, PTM has completed a trade-off study that indicates that savings on electricity and water substantially offset the cost of additional concentrate transportation outside South Africa.

However, before concentrate could be exported from South Africa, a formal government approval would be required, with PTM undertaking the relevant studies to investigate this option. 

Key Contracts, Suppliers and Consultants
Stantec Consulting International and DRA Projects SA (DFS).

Contact Details for Project Information
PTM, tel +27 11782 2186 or email info@platinumgroupmetals.net.