Maseve mine
Platinum Group Metals is underway with the ramp up phase of production at its flagship asset - the Maseve mine - located on the Western Limb of the Bushveld Complex.

South Africa – Formerly known as the Western Bushveld Joint Venture Project 1, Platinum Group Metals’ Maseve mine will extract and process platinum group metals and associated minerals from the Merensky and UG2 Reefs over a 20 plus year mine life.

Having produced first concentrate in February largely with low grade stockpile material, commercial production is expected late in calendar 2016. [quote]

Platinum Group Metals has also completed construction of the Maseve mine surface milling facility. Hot commissioning and final checks and testing of the mill were completed in February and March 2016.

The Maseve mine mill ran for 20 days during hot commissioning in February 2016. A total of 66 231 t of low-grade stockpile material were milled from which 1 049 oz of 4E in concentrate were produced and shipped.

Commissioning was smooth and mill recoveries and performance has been good, the company said in an announcement.

Mill feed in April 2016 is scheduled to include a higher proportion of ore mined from planned mining blocks.

Underground Development

Grade reconciliation from underground sampling to the deposit block model has been good.  Underground development has accessed the Merensky Reef in more than 15 headings.

Platinum Group Metals Waterberg Joint Venture prospecting rights cover approximately 780 km² with a further 331 km² in accepted applications
Platinum Group Metals Waterberg Joint Venture prospecting rights cover approximately 780 km² with a further 331 km² in accepted applications

Despite the underground development programme being fully staffed and equipped, it is behind schedule. Company engineers and third party specialists are working to improve development rates.

Platinum Group Metals explains that the volume of stoping material must increase in accordance with the mine plan to meet production ramp-up plans and covenants according to existing loan facilities. “Continued performance behind the mine plan schedule, lower metal prices, delays in production ramp up or a stronger South African rand could all result in requirements for further financing,” the company said.

On January 12, 2016 the company announced an expanded diamond drilling programme at Waterberg to delineate and upgrade shallow mineral resources. Twelve drill rigs were mobilised to the Waterberg site for the expanded drill programme which was completed in late March 2016.

On March 17, 2016 the company reported new high grade T zone drilling results from the Waterberg deposit including;

  • Hole WB195 – 13.91 g/t 3E over 11.87 m (or 15.03 g/t 3E over 8.68 m, from 898.32 m to 907.00 m).
  • Hole WB186 – 5.84 g/t 3E over 19.00 m from 812.00 m to 831.00 m (this hole first announced December 4, 2015).
  • Hole WB200 – 5.92 g/t 3E over 7.56 m from 938.44 m to 946.00 m. A further two holes were later approved for deep drilling on the T zone, which are currently in progress.

Capital expenditure

During the six month period ending February 29, 2016, total expenditures by the company for development, construction, equipment and other costs for the Maseve mine totalled approximately $60.7 million.

Total expenditures on the Waterberg projects were approximately $3.4 million, all of which was funded by joint venture partner the Japan Oil, Gas and Metals National Corporation, or JOGMEC – allowing the project to advance and grow without a significant draw on the Company’s working capital.

2016 work plan

The company’s key business objectives for calendar 2016 will be to continue with underground development and production ramp up at the Maseve mine and to advance the Waterberg Project.

Development at the Maseve mine will continue to utilise a majority of the company’s $48.2 million cash on hand until production increases and positive cash flow is achieved.

Development work in blocks 12, 11, 10 and 9 in the north mine and block 16 in the south mine are critical to the underground mining plans and ramp up profile of production for the Maseve mine.

The company plans to continue work on the Waterberg Project with its joint venture partners.

An updated resource calculation for Waterberg is now due for publication. Publication of the update was delayed due to assay laboratory backlogs.

The updated resource calculation will be published imminently and will then be incorporated into pre-feasibility study work already in progress. The pre-feasibility study is planned to be complete in mid-calendar 2016.

The scope of the pre-feasibility study now includes portions of the Waterberg Extension Project, due to the May 2015 2nd amendment to the JOGMEC agreement.