Platinum Group Metals Ltd. ("Platinum Group Metals" or the "Company") reports that the Waterberg Platinum and Palladium project (the "Waterberg Project") is advancing to the preparation of a Feasibility Study ("FS"), with the Japan Oil, Gas and Metals National Corporation ("JOGMEC"). An Independent Pre-Feasibility Study ("PFS") announced by the Company on October 19, 2016 for the Waterberg Project modelled a 744,000 ounce per year platinum, palladium, gold and rhodium ("PGM" or "4E") mine with an 18-year life. On a 100% project basis, using a 2.5 gram per tonne ("g/t") cut-off grade, the PFS estimated 12.32 million 4E ounces of probable reserves at Waterberg (102.7 million tonnes at 3.73 4E g/t, consisting of 1.11 g/t Pt, 2.29 g/t Pd, 0.29 g/t Au and 0.04 g/t Rh). For details see the "Independent Technical Report on the Waterberg Project Including Mineral Resource Update and Pre-Feasibility Study" dated October 19, 2016 (the "Waterberg Technical Report").
Because of the deposit's shallow depth, good grade and a fully mechanized mining approach, the Waterberg Project has the opportunity to be a safe mine within the lowest quartile of the South African 4E industry cost curve. The project reserves consist of 61.4% palladium and the PFS estimated that Waterberg could produce 472,000 ounces of palladium annually; more palladium than the Stillwater Mine produced in 2015, or about 6% of the world's palladium production in 2015.
Platinum Group Metals holds a direct and indirect 58.65% interest of the Waterberg Project. JOGMEC holds a direct 28.35% interest with the balance owned by a South African empowerment partner.
The FS is currently out to tender with several well-known specialist engineering firms. Under a current commitment, JOGMEC will fund approximately the next US $5.3 million in costs towards the completion of the FS.
R. Michael Jones, CEO of Platinum Group Metals, said "The PFS has modelled the Waterberg Project in a strong, globally competitive position as one of the very few large scale, primary palladium mines at a time when the market for palladium is very strong. Waterberg reserves are comprised of 61.4% palladium and are well suited to the current growth pattern in auto sales, which is moving predominantly to vehicles utilizing auto catalysts with a PGM metal mix rich in palladium."
Definitive Feasibility Study Work in Progress
Drilling targeting the conversion of indicated resources into measured resources, for higher confidence reserves, started in 2016 and will re-commence from April 2017. Geotechnical drilling for assessing the locations for foundations and mine excavations is also planned along with further metallurgical drilling to refine recovery curves and plant designs.
Detailed mine planning and scheduling will be completed using a new resource model following the fill-in drilling described above. Plant designs and metallurgical optimization will be completed as a component of the FS. A request for tender and scope of work has been issued for the FS engineering work to several specialist firms.
Important detailed infrastructure planning has commenced for the Waterberg Project, including power line environmental and servitude work by electrical utility Eskom and detailed hydrogeological work to source ground water. Eskom has progressed electrical power connection planning for a 65km, 140MW line to the project.
Detailed hydrological work is now underway to study the possible utilization of known sources for significant volumes of ground water. Another instance where groundwater sources currently supply a large scale mine in the Limpopo region has stimulated this research. Several boreholes proximal to Waterberg have already identified large volumes of ground water that because of mineral content, is not potable or suitable for agriculture. Hydrological and mill process specialists are investigating the use of this water as mine process water. Hydrological work so far has also identified several large-scale water basins that are likely able to provide potable and mine process water for the Waterberg Project and local communities. The Waterberg Project team is working on the possibility of assisting with regional infrastructure to source potable water for municipal use while also sourcing and providing mine process water. Meetings with local municipalities have been positive and co-operative in tone and are encouraging for future development.
Metals Markets, Offtake and Downstream Options
The PFS assumed the Waterberg Project would produce a flotation concentrate from a processing plant to be sold or toll treated into the local South African market.
Production of up to 285,000 tonnes of concentrate per annum is projected to be available at peak production. The concentrate is modelled to contain approximately 80 g/t 4Es plus copper at between 1% and 9.2% and nickel at between 1.1% and 5%. The concentrate does not contain any penalty elements such as chrome and is rich in sulphur, making it metallurgically desirable for blending with other high chrome concentrates.
Detailed work in relation to further downstream options is in progress. Based on the large volume of concentrate and the significantly lower operating cost without a smelter discount, several downstream options are being studied. A third-party specialist firm in metals markets and offtake analysis is being retained to begin a formal process.
Mining Right Application Work in Progress - Target Dates
The mining plan outline for the PFS will be filed as the mining work program for the mining right application. Detailed consultation and the identification of interested and affected parties for the mining right application process and the environmental assessment process are underway. Platinum Group Metals as the operator of the Waterberg Project has been able to draw on its in-house team who worked through this process for the Maseve Mine. Regional consultation has been positive and in a climate of strong mutual respect. The target for filing the mining right application is prior to the end of calendar 2017.
Completion of the FS is targeted for mid-2018 and the final budgets will be determined following engineering tenders.
Platinum Group Metals is pleased to be advancing a major platinum and palladium mine with the support of its partners at an important time of growing demand, supply challenges and a very positive palladium market.
Qualified Persons, Data Verification and Quality Control and Assurance
In addition to quality control and assurance procedures employed by the laboratories engaged to assay Waterberg core and rock samples, Platinum Group utilized a well-documented system of inserting blanks, duplicates and standards into the assay stream and has a strict chain of custody and independent lab re-check system for quality control. Further details are available in the Waterberg Technical Report at www.sedar.com and www.platinumgroupmetals.net.
Scientific and technical information in this press release related to mineral reserves and resources and other information has been reviewed and approved by R. Michael Jones, P.Eng., a non-independent Qualified Person and the CEO of the Company. He has verified the technical information for disclosure in this press release by reviewing the work of experienced Company geologists, consulting geologists and engineers and by visiting the site and reviewing the ongoing project database.