Platinum Group Reports 2013 Annual Results
November 26, 2013
(Vancouver/Johannesburg) Platinum Group Metals Ltd.
(PTM-TSX; PLG-NYSE MKT) (“Platinum Group” or the “Company”) reports
the Company’s financial results for the year ended August 31, 2013.
For details of the consolidated financial statements (the “Financial
Statements”) and Management’s Discussion and Analysis for the year
ended August 31, 2013 please see the Company’s filings on SEDAR (www.sedar.com) or on EDGAR (www.sec.gov). Shareholders are encouraged to visit the Company’s website at www.platinumgroupmetals.net. Shareholders may request a copy of the complete Financial Statements from the Company free of charge.
Company’s cash position at August 31, 2013 was $121.94 million,
including $10.15 million in restricted cash. At present the Company
holds approximately $83.0 million in cash with none being restricted.
The Company holds cash in both Canadian dollars and South African Rand,
and changes in the exchange rate may create variance in the cash
holdings reported in Canadian dollars. All amounts herein are reported
in Canadian dollars unless otherwise specified.
Group has made the transition from exploration and engineering to mine
construction at the Western Bushveld Joint Venture Project 1 platinum
mine (“Project 1”) located near Rustenburg, South Africa. The Company
is also focused on the exploration and initial engineering on the newly
discovered Waterberg platinum deposit located near Mokopane, South
Africa where the Company is the operator of the Waterberg joint venture
project (the “Waterberg JV Project”) with the Japanese Oil, Gas and
Metals National Corporation (“JOGMEC”) and Mnombo Wethu Consultants
(Pty) Ltd. (“Mnombo”) and has also expanded its exploration on to the
prospecting rights covering 530 square kilometers immediately adjacent
and north of the Waterberg JV Project property (the “Waterberg
Company has moderated the pace of its Project 1 mine construction
while it works on finalizing a US$195 million project loan mandate,
updated project finance plans for Project 1 and tests the scale of the
Waterberg discovery. In the short term the Company is particularly
focused on exploration drilling with large scale step outs over 20
kilometers underway on the approximately 87% owned Waterberg Extension
November 14, 2013 the Company reported the first available assay
results from drilling on the Waterberg Extension Project in two
intersections confirming the northward extension of the “Super F”
zone. Drill holes WE-01 and WE-02, located respectively 700 meters and
1.4 kilometers north of the known 5.4 kilometer long Waterberg
platinum deposit, intersected “Super F” mineralization grade and
average true thickness of 11 meters in the predicted position and
geology with metal ratios consistent with the Waterberg platinum
deposit. Assays for additional holes are currently in process.
Drilling had commenced on the Waterberg Extension Project in
mid-October after prospecting rights were granted by the South African
Department of Mineral Resources.
on the Waterberg Extension Project in November 2013 added 4.7
kilometers of confirmed F zone mineralization to the north of the
Waterberg platinum deposit area and has now identified 23 kilometers of
new Bushveld Complex, including the initial 5.4 kilometer long
Waterberg platinum deposit. The reported intercepts remain open for
expansion up and down dip and along strike. Drilling on the Waterberg
Extension Project continues at this time.
November 11, 2013 the Company announced a new mandate letter with
Barclays Bank PLC, Absa Corporate and Investment Bank, a division of
Absa Bank Limited, Caterpillar Financial SARL and Societe Generale
Corporate & Investment Banking who have agreed to use commercially
reasonable efforts to arrange a new project loan facility for up to US
$195 million (the “New Project Loan Facility”) to continue development
of the Project 1 platinum mine. The new mandate letter will build
upon previous technical and legal due diligence, and is subject to the
finalization of a facility agreement, among other conditions.
a surprise decision on October 18, 2013, Africa Wide Mineral
Prospecting and Exploration (Pty) Ltd. (“Africa Wide”), a subsidiary of
Wesizwe Platinum Ltd. (“Wesizwe”), elected to not fund a 213 million
Rand (approximately US $21.8 million) cash call for their 26% share of
an approved 6 month forward construction budget for Project 1. This
resulted in the requirements for a new lending mandate (as described
above) and a restructured loan facility for Project 1. The Company
estimates that, as a result of its decision, Africa Wide’s share in the
Project 1 operating company, Maseve Investments 11 Pty Ltd. (“Maseve”),
will be diluted by approximately 5% based on a formula in Maseve’s
shareholders’ agreement, reducing Africa Wide to an approximately 21%
interest. Africa Wide contends the dilution will be approximately 3.5%
and Africa Wide’s actual dilution has been
submitted to arbitration. The Company is currently working on a plan
to sell Africa Wide’s diluted percentage in Maseve to another bona fide
black economic empowerment partner.
September 3, 2013 the Company announced an updated independent
inferred resource estimate for the Waterberg JV Project of 167 million
tonnes grading 3.26 grams per tonne of platinum, palladium and gold
(0.98 g/t Pt, 1.97 g/t Pd, 0.32 g/t Au, Ken Lomberg QP) for a total of
17.5 million ounces with significant copper and nickel credits. The
estimate includes the “T1”, “T2” and “F” layers in an extension of the
Bushveld Complex discovered in late 2011. The shallowest edge of the
known deposit is approximately 130 meters below surface with the
resource estimate restricted to 1,000 meters vertical.
April 24, 2013 the Company announced that Project 1 operating company
Maseve had executed a binding life of mine concentrate off-take
agreement for Project 1 with Rustenburg Platinum Mines Ltd. (“RPM”), a
wholly owned operating subsidiary of Anglo American Platinum Limited.
The agreement was executed following a competitive tender process and
the exercise of a first right of refusal by RPM.
January 4, 2013 the Company announced the closing of a public offering
of 225 million common shares for aggregate gross proceeds of $180
million (the “Offering”). BMO Capital Markets, RBC Capital Markets and
GMP Securities L.P. acted as joint bookrunners on the Offering and
Raymond James Ltd., Stifel Nicolaus Canada Inc., CIBC and Cormark
Securities Inc. acted as co-managers on the offering.
Results For The Year Ended August 31, 2013
the year ended August 31, 2013, the Company incurred a net loss of
$12.07 million (August 31, 2012 – net loss of $10.20 million). General
and administrative expenses during the period were $6.94 million
(August 31, 2012 - $5.4 million), losses on foreign exchange, due
primarily to a weaker Rand at period end, were $8.25 million (August
31, 2012 –$3.59 million), while stock based compensation expense, a
non-cash item, totalled $1.17 million (August 31, 2012 - $2.01
million). Finance income consisting of interest earned and property
rental fees in the year amounted to $5.00 million (August 31, 2012-
$3.94 million). Loss per share for the year amounted to $0.04 per
share, as compared to a loss of $0.06 per share for the comparative
year of fiscal 2012.
receivable at August 31, 2013 totalled $6.93 million while accounts
payable and accrued liabilities amounted to $25.06 million. Accounts
receivable were comprised primarily of value added taxes repayable to
the Company in South Africa and amounts receivable from partners.
Accounts payable included contract construction fees, drilling
expenses, engineering fees, accrued professional fees and regular trade
payables for ongoing exploration and development costs and
Total expenditures by the Company for
development and purchases of property and equipment for Project 1
during the year totaled approximately $69 million, before including the
effects of foreign currency exchange rate fluctuations. Expenditures
by the Company during the year for exploration on Waterberg were
approximately $8.65 million, and a further $4.6 million was funded by
joint venture partner, JOGMEC.
At the current time approximately 3,141,000 man hours of construction
work has been completed at the Project 1 platinum mine and
approximately $190 million has been invested in construction, equipment
and underground development. Underground development has reached the
Merensky Reef, and initial mining blocks are in planning and early
development. Stockpiling of early ore is underway. Crusher, mill and
flotation circuit foundations are constructed to above ground level.
Mill components have been ordered and large surface civil works areas
are being constructed on schedule. A 10MVA electrical supply was
completed and energized in October. One ventilation raise and fan is
now functional and a second is in progress. Underground mining of
multiple declines and headings continues. Capital costs have
generally been within budget. The project schedule is being affected
by delays including a decision to hold back on additional construction
commitments. Until the
project financing is restructured and has greater certainty the
company believes moderating the pace of construction is prudent. First
concentrate production was planned for mid-2015 and will be delayed.
Technical Report Filed
The Company has today filed on SEDAR a National Instrument 43-101
technical report. The report, entitled “Technical Report on the
Exploration of the Waterberg Extension Project, South Africa (Latitude
23° 14' 00”S, Longitude 28° 55' 00”E)” is effective November 12, 2013
and was prepared by Kenneth Lomberg, B.Sc. (Hons) Geology, B. Com., M.
Eng. Pr.Sci.Nat., MGSSA, of Coffey Mining (SA) Pty Ltd. A copy of the
report can be found at www.sedar.com
and on the Company’s website. The Company controls an effective
86.974% interest in the Waterberg Extension Project and a private
empowerment partner holds the balance.
The Company’s key business objectives for
the remainder of 2013 and into 2014 will be to restructure and close
the proposed New Project Loan Facility or other financing for Project
1, continue with the underground development and mine construction at
Project 1 and continue exploration on both the Waterberg JV Project and
the Waterberg Extension Project.
of Phase 2 development at Project 1 began in January 2013 and will
utilize the Company’s cash on hand in measured stages until the
proposed New Project Loan Facility or other financing is completed and
in place. In the event that the New Project Loan Facility is not
completed and available to the Company by early calendar 2014, the
Company would likely need to alter its business plan. A first
alternative business plan would be the sourcing and completion of
alternative debt and/or equity financing in order to complete the
existing Phase 2 development schedule, although there is no guarantee
that such funding would be available to the Company. A second option
would be the suspension of Phase 2 development and initiation of the
potential sale of ore from already established underground workings at
Project 1. In this second scenario, a milling and concentrating
facility would not be immediately built, and the construction
of such facilities may be postponed until funding became available or
indefinitely if attractive off-take terms and costs could be confirmed.
Apart from its own drilling and exploration program on the Waterberg
Extension Project, the Company plans to continue working with its
joint venture partner, JOGMEC, who is providing 37% of funding, to
continue exploration and engineering work on the Waterberg JV
Project. A preliminary economic assessment is being undertaken for
the Waterberg JV Project and is targeted for completion at the end of
About Platinum Group Metals Ltd.
Group is based in Johannesburg, South Africa and Vancouver, Canada.
The Company’s business is currently focused on the construction of the
Project 1 platinum mine and the exploration and initial engineering on
the newly discovered Waterberg platinum deposit, where the Company is
the operator of the Waterberg JV Project with JOGMEC and Mnombo. The
Company has also expanded its exploration northward on to the Waterberg
Extension Project As a result of the resource scale and thickness of
the Waterberg deposit, the Waterberg JV Project and the Waterberg
Extension Project have increased in importance in the Company’s
business over the past year.
R. Michael Jones, P.Eng., the Company’s President, Chief Executive
Officer and a significant shareholder of the Company, is a
non-independent qualified person as defined in National Instrument
43-101 Standards of Disclosure for Mineral Projects and is responsible for preparing the technical information contained in this news release.
On behalf of the Board of
Platinum Group Metals Ltd.
“Frank R. Hallam”
CFO and Director
For further information contact:
R. Michael Jones, President
or Kris Begic, VP, Corporate Development
Platinum Group Metals Ltd., Vancouver
Tel: (604) 899-5450 / Toll Free: (866) 899-5450