Platinum Group Metals, the South Africa-focused miner currently developing the Waterberg Joint Venture (JV) and Waterberg Extension, cumulatively called the Waterberg projects, announced on Tuesday that its development and JV partner on the project, Japan Oil, Gas and Metals National Corporation (JOGMEC), has committed to fund the next US$20 million of JV funding at Waterberg.

In conjunction with JOGMEC’s firm funding commitment, Platinum Group Metals, JOGMEC and empowerment partner Mnombo Wethu Consultants have agreed to consolidate the Waterberg Joint Venture and the Waterberg Extension projects into one unitised project area, which will be known as the New Waterberg JV.Waterberg Platinum Group Metals

As a result of the consolidation announced today, and with the funding provided by JOGMEC, approximately 15 drill rigs and crews will immediately be returned to active status at the Waterberg site, the company said in a statement.

Going forward, Platinum Group Metals will increase its direct and indirect effective interest in the old Waterberg JV area from 49.98% currently to 58.62%, while it will decrease its effective interest the old Waterberg Extension from 87% to 58.62%.

Meanwhile, JOGMEC will decrease its interest in the old Waterberg JV from 37% to 28.35% and increase its interest in the old Waterberg Extension from zero to 28.35%.

Based on the most recent declared resource estimate for the Waterberg JV and the Waterberg Extension, as at June 2014, the exchange of interests described above are “ounce neutral” in that each party is exchanging the same number of inferred resource ounces. Platinum Group Metals will retain operatorship of the consolidated project and achieves a majority effective interest in the overall project.

Funding breakdown

In consideration of the further resource potential in the less explored old Waterberg Extension, JOGMEC has committed to fund a total of $20 million of exploration and development expenditures for the combined project over three years. The JOGMEC funded budget to March 31, 2016 is $8.0 million for the entire New Waterberg JV, including fill-in drilling, extension exploration drilling and pre-feasibility engineering.

Platinum Group Metals CEO Michael Jones says that the agreement enhances its long-standing strategy of advancing shallow, high-grade, low cost projects to create significant and sustainable value for its shareholders.

He goes on to say that the consolidation of the Waterberg Project eliminates project boundaries; reduces development, administration and infrastructure costs; creates strong efficiencies; and enables the most economic development of the deposit.

Jones also believes that the unified ownership structure also allows for superior mine planning and scheduling focused on the early exploitation of higher grade tons of Super F mineralisation, which may be planned with lower-cost mechanized processes in the ongoing prefeasibility study (PFS).”

A resource update covering the entire Waterberg deposit area is in progress and remains due to be completed in the second quarter of 2015. A further updated resource estimate for the New Waterberg JV overall is expected in approximately September 2015 prior to the completion of the PFS on the entire unitised Waterberg deposit.

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