Strategic alternatives update
Platinum Group Metals continues to work with BMO Capital Markets and Macquarie Capital to review and assess strategic alternatives. Platinum Group Metals has received several proposals and is actively engaged in evaluating a number of specific opportunities at both the asset and corporate levels.
Several expressions of interest have been received for the Maseve mine assets.
Platinum Group Metals recognises the opportunity for significant regional synergies in the Western Bushveld region.
In addition to the execution of its own revised mine plan at Maseve Platinum Group Metals is actively exploring possible synergies, sale of assets, joint ventures, direct investment and custom milling.
Platinum Group Metals has active interest in its Waterberg project from multiple parties in South Africa and internationally with discussions ongoing.
Interest in Waterberg is driven by the strategic nature of the Waterberg deposit as one of the only significant primary platinum and palladium assets globally with a thick, low cost, fully mechanised mine plan.
The deposit is in contrast to narrow, high cost, deep level platinum mining. Platinum Group Metals regards Waterberg as an important core asset.
Maseve platinum mine
Platinum Group Metals has successfully changed the operating plan at Maseve and lowered its cost structure to align with a reduced production ramp up profile. Production guidance will be provided as operations commence under the new operating plan in the months ahead.
Contractor terminations and consultations with labour unions have been completed in a positive climate of mutual respect and in accordance with the South African Labour Act.
All major contracts and union agreements have been settled and agreed promptly, in-line with Platinum Group Metals’ budgeted plan. This has allowed for detailed manpower planning for the new mine plan going forward.
Details of the new mine plan are in final preparation in consultation with the continuing mining contractor, Redpath South Africa. Changes to the management and supervision of the mine have also been made with a focus on near term performance.
The Maseve mine has good potential in terms of grade, underground developed access, completed infrastructure and a mill that operates in line with design criteria.
During the transition period, restructuring work has focused on improvements to the underground infrastructure.
Under the new mine plan, a hybrid method will be utilised, consisting of mechanised primary access development and conventional stoping.
The focus will be to achieve positive cash flow with tight cost control, as soon as possible. As previously announced Platinum Group Metals is expected to require US$15 million to $20 million to achieve this objective.
Platinum Group Metals is exploring further debt, the sale of assets or equity as methods of financing.
At the Waterberg project, Platinum Group Metals has completed a detailed shareholders agreement with JV partners the Japan Oil, Gas and Metals National Corporation (JOGMEC )and Mnombo Wethu Consultants.
Platinum Group Metals is awaiting approval by the Department of Mineral Resources for the transfer of the project prospecting permits into the project holding company, Waterberg JV Resources.
Platinum Group Metals plans for Waterberg JV Resources to apply for a mining right in 2017. Funding for the Waterberg Project is currently provided by JOGMEC as part of their earn-in commitment.
Engineering, drilling, hydrological and geological work for a planned definitive feasibility study for the Waterberg project is ongoing.
Feature image credit: Platinum Group Metals