Platinum Group Reports Q1 2014 Financial and Operating Results
VANCOUVER, BRITISH COLUMBIA and JOHANNESBURG, SOUTH
AFRICA--(Marketwired - Jan 10, 2014) - Platinum Group Metals Ltd.
(TSX:PTM)(NYSEMKT:PLG) ("Platinum Group" or the "Company") reports
the Company's financial results for the three months ended November
30, 2013. For details of the consolidated financial statements (the
"Financial Statements") and Management's Discussion and Analysis
for the three months ended November 30, 2013 please see the
Company's filings on SEDAR (www.sedar.com) or on EDGAR
(www.sec.gov). Shareholders may request a copy of the complete
Financial Statements from the Company free of charge and are
encouraged to visit the Company's website at
www.platinumgroupmetals.net.
The Company's cash position at November 30, 2013 was $79.9
million(1). At present the Company holds approximately $237 million
in cash after receiving net proceeds of $166 million on December
31, 2013 pursuant to the closing of a bought deal financing (see
details below).
Platinum Group is focused on the construction of the WBJV
Project 1 platinum mine ("Project 1") located near Rustenburg,
South Africa. The Company is also focused on further 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 Japan Oil, Gas and Metals National
Corporation ("JOGMEC") and Mnombo Wethu Consultants (Pty) Ltd.
("Mnombo"). The Company has also expanded its exploration on to
prospecting rights covering 530 square kilometres immediately
adjacent and north of the Waterberg JV Project property (the
"Waterberg Extension Project").
The Company's owners' team oversees engineering, procurement,
construction and management firm DRA Mineral Projects (Pty) Ltd.
and underground mining contractor JIC Mining Services. Including
subcontractors there are approximately 1,000 persons at present
involved in underground development, mining and construction
activities at Project 1.
Platinum Group is finalizing a preliminary economic assessment
on the Waterberg JV Project with engineering firm WorleyParsons
TWP. In addition, eight drill rigs are ramping up on the Waterberg
JV Project and Waterberg Extension Project following the holiday
break with the objective of expanding and upgrading the newly
discovered Waterberg platinum deposit.
Recent Highlights
- On December 9 2013, the Company announced a bought deal
financing for 148.5 million common shares of the Company at a price
of $1.18 per share resulting in gross proceeds of $175.23 million.
The offering closed December 31, 2013 with net proceeds to the
Company after fees, commissions and costs of approximately $166
million.
- On December 9, 2013, the Company announced that Hole WE 08 at
the Waterberg Extension Project returned preliminary assay values
of 5.26 grams/tonne "3E" platinum, palladium and gold (1.40g/t Pt,
3.59 g/t Pd and 0.27 g/t Au) over 53.22 metres (from 555.50 metres
to 608.72 metres, estimated true thickness of approximately 44
metres). Hole WE 08 is located approximately 340 metres northward
along strike from previously announced hole WE 02 (15.63 metres
grading 3.16 g/t 3E, 1.11 Pt g/t, 1.92 g/t Pd, 0.13 g/t Au) and
approximately 1,600 metres directly along strike from the Waterberg
JV Project deposit. The mineralization in WE 08 has geological
units and layering that is consistent with the deposit to the
south. The intercept in WE 08 is open for expansion along strike
and up and down dip.
- On 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
metres and 1.4 kilometres north of the known 5.4 kilometre long
Waterberg platinum deposit, intersected "Super F" mineralization
grade and average true thickness of 11 metres in the predicted
position and geology with metal ratios consistent with the
Waterberg platinum deposit.
- Drilling on the Waterberg Extension Project in November 2013
added 4.7 kilometres of confirmed F zone mineralization to the
north of the Waterberg platinum deposit area and has now identified
23 kilometres of new Bushveld Complex, including the initial 5.4
kilometre long Waterberg platinum deposit.
- On 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 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.
- In 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 its 26% share of an approved six 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 calculates 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 the 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 an
alternative, qualified black economic empowerment partner.
- On 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 metres below surface with the resource estimate
restricted to 1,000 metres vertical.
Results For The Period
During the three months ended November 30, 2013, the Company had
net income of $0.47 million (November 30, 2012 - net loss of $1.7
million). General and administrative expenses during the period
were $1.4 million (November 30, 2012 - $0.8 million), gains on
foreign exchange, due primarily to a stronger Rand at period end,
were $0.9 million (November 30, 2012 -$0.2 million loss). Finance
income consisting of interest earned and property rental fees in
the year amounted to $1.0 million (November 30, 2012- $0.6
million). Earnings per share for the period amounted to $0.00 per
share, as compared to a loss of $0.01 per share for the comparative
period of fiscal 2012.
Accounts receivable at November 30, 2013 totalled $3.2 million
while accounts payable and accrued liabilities amounted to $18.1
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 administration.
Total expenditures by the Company for development and purchases
of property and equipment for Project 1 during the period totaled
approximately $33 million, before including the effects of foreign
currency exchange rate fluctuations. Expenditures by the Company
during the period for exploration on the Waterberg JV Project and
the Waterberg Extension Project were approximately $2.1 million,
with a further $0.4 million being funded by joint venture partner,
JOGMEC.
To date approximately 3,153,000 man hours of construction work
has been completed at the Project 1 platinum mine and approximately
$254 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. 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, however the project schedule is being
affected by delays.
Outlook
As a result of the successful equity financing closed on
December 31, 2013, the Company plans to re-establish a full
construction pace at Project 1. Prior to January 2014 the Company
had withheld the execution of significant new contracts for Project
1 pending the completion of additional debt or equity financing.
Also as a result of the equity financing closed on December 31,
2013, the Company has allocated a 2014 budget for the Waterberg JV
Project and Waterberg Extension Project of approximately $15
million.
In addition to the construction of Project 1, the Company's key
business objectives for calendar 2014 will be:
- to close the US $195 million project loan facility, or complete
an alternate financing for Project 1, in order to secure all of the
funding required for the completion of Project 1, including mill
completion, underground development and the establishment of
sustained operations;
- the completion of a preliminary economic assessment on the
initial Waterberg JV Project deposit during the first quarter of
calendar 2014; and
- to continue exploration and definition drilling on the
Waterberg JV Project and Waterberg Extension Project with eight or
more drill rigs during 2014.
About Platinum Group Metals Ltd.
Platinum 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 period.
Qualified Person
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
The Toronto Stock Exchange and the NYSEMKT LLC have not reviewed
and do not accept responsibility for the accuracy or adequacy of
this news release, which has been prepared by management.
This press release contains forward-looking information within
the meaning of Canadian securities laws and forward-looking
statements within the meaning of U.S. securities laws
("forward-looking statements"). Forward-looking statements are
typically identified by words such as: believe, expect, anticipate,
intend, estimate, plans, postulate and similar expressions, or are
those, which, by their nature, refer to future events. All
statements that are not statements of historical fact are
forward-looking statements. Forward-looking statements in this
press release include, without limitation, statements regarding the
completion of the New Project Loan Facility, the Company's ability
to secure alternative financing, the Company's plans with respect
to future exploration, development and production on the Company's
projects including mine construction at Project 1, the dilution of
Africa Wide's interest in Maseve and the ability of the Company to
sell such diluted interest to another bona fide black economic
empowerment partner. Although the Company believes the
forward-looking statements in this press release are reasonable, it
can give no assurance that the expectations and assumptions in such
statements will prove to be correct. The Company cautions investors
that any forward-looking statements by the Company are not
guarantees of future results or performance, and that actual
results may differ materially from those in forward looking
statements as a result of various factors, including, but not
limited to, variations in market conditions; the nature, quality
and quantity of any mineral deposits that may be located; metal
prices; other prices and costs; currency exchange rates; the
Company's ability to obtain any necessary permits, consents or
authorizations required for its activities; the Company's ability
to access further funding and produce minerals from its properties
successfully or profitably, to continue its projected growth, or to
be fully able to implement its business strategies and other risk
factors described in the Company's Form 40-F annual report, annual
information form and other filings with the SEC and Canadian
securities regulators, which may be viewed at www.sec.gov and
www.sedar.com, respectively.
Cautionary Note to U.S. Investors Regarding Estimates of
Inferred Mineral Resources
This press release uses the terms "inferred mineral
resources." We advise U.S. investors that while these terms are
recognized and required by Canadian regulations, the SEC does not
recognize them. "Inferred mineral resources" have a great amount of
uncertainty as to their existence, and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an "inferred mineral resource" will ever be upgraded
to a higher category. Under Canadian rules, estimates of "inferred
mineral resources" may not form the basis of a feasibility study or
prefeasibility studies, except in rare cases. The SEC normally only
permits issuers to report mineralization that does not constitute
"reserves" as in-place tonnage and grade without reference to unit
measures. U.S. investors are cautioned not to assume that any part
or all of an inferred resource exists or is economically or legally
mineable.
(1) The Company holds cash in Canadian dollars, United States
dollars and South African Rand, and changes in exchange rates may
create variance in the cash holdings reported in Canadian dollars.
All amounts herein are reported in Canadian dollars unless
otherwise specified.
Platinum Group Metals Ltd., VancouverR. Michael
JonesPresident(604) 899-5450 / Toll Free: (866) 899-5450Platinum
Group Metals Ltd., VancouverKris BegicVP, Corporate
Development(604) 899-5450 / Toll Free: (866)
899-5450www.platinumgroupmetals.net
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