Platinum Group Reports Q2 2014 Financial and Operating Results
VANCOUVER, BRITISH COLUMBIA and JOHANNESBURG, SOUTH
AFRICA--(Marketwired - Apr 11, 2014) - Platinum Group Metals Ltd.
(TSX:PTM)(NYSEMKT:PLG) ("Platinum Group" or the "Company") reports
the Company's financial results for the six months ended February
28, 2014. For details of the consolidated financial statements (the
"Financial Statements") and Management's Discussion and Analysis
for the six months ended February 28, 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 February 28, 2014 was $203
million1. The Company received net proceeds of $165 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 489 square kilometres immediately
adjacent and north of the Waterberg JV Project property (the
"Waterberg Extension Project").
At Project 1 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 1,350 persons at
present involved in underground development, mining and
construction activities at Project 1.
Platinum Group is beginning a pre-feasibility study on the
Waterberg JV Project with engineering firm WorleyParsons TWP while
at the same time completing infill drilling on the project. In
addition, 13 drill rigs are currently active on the Waterberg
Extension Project and 1 rig is active on the Waterberg Joint
Venture with the objective of expanding and upgrading the newly
discovered Waterberg platinum deposit. An updated independent
resource estimate for the Waterberg JV Project and an initial
independent resource estimate for the Waterberg Extension Project
are both expected for public release in the next few weeks.
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.
Recent Highlights
- On March 4, 2014 the Company announced additional drilling
results for the Waterberg Extension Project, confirming the
extension of the Waterberg deposit northward on strike for
approximately 4.5 km from the known 5.4 km long deposit on the
Waterberg JV Project WE-022 intercepted 56.02 metres assaying 3.18
g/t 3E ( 0.87 g/t Pt, 2.13 g/t Pd, 0.18 g/t including 22.00 metres
assaying 4.11 g/t 3E (1.16 g/t Pt, 2.72 g/t Pd and 0.23 g/t Au).
The drilling results confirmed the extension of the "Super F Zone"
for an average intercept thickness of 31 meters and a true
thickness of 24 meters in five drill intersections.
- On February 14, 2014 the Company announced a positive
independent Preliminary Economic Assessment ("PEA") for the
Waterberg JV Project. The PEA recommends the project advance to the
pre-feasibility stage of development. Details of the PEA include:
- Steady state production of 655,000 ounces of platinum,
palladium and gold, "3E";
- A two year construction period planned in 2016 to 2018;
- A Project post-tax NPV (7.5% discount rate) of 5.1 billion Rand
or US$509 million (10R/US$);
- Peak Funding of 8.85 billion Rand or US$ 885 million
(10R/US$);
- Major Risks to be assessed at pre-feasibility including
smelting plans, water and power delivery and geotechnical work for
mine design along with normal increased resource, metallurgical and
cost confidence levels; and
- Opportunities include significant resource expansion,
optimization of mine plans, mine ramp up profiles, increased
metallurgical recoveries and smelter terms and consideration of
adjacent deposit exploration.
See details and the risks and cautions to investors in the
press release of February 14, 2013. The economic analysis
is based on inferred resources and is preliminary in nature.
Inferred resources are considered too speculative geologically to
have economic considerations applied to them that would enable them
to be categorized as mineral reserves. There is no certainty that
the PEA will be realized. The estimates in this preliminary
assessment are estimated at +/-30% accuracy on an engineering
basis. The complete PEA technical report on the Waterberg Joint
Venture property is filed on SEDAR
(www.sedar.com).
The PEA was completed by international and South African
engineering firm WorleyParsons. An NI 43-101 Technical report
entitled "Waterberg Mineral Project Preliminary Economic
Assessment" dated effective February 14, 2014 has been filed on
SEDAR and was prepared by Dr. Michael Roberts, MSc, PhD, SAIMM of
Worley Parsons TWP and Kenneth Lomberg, B.Sc. (Hons) Geology, B.
Com., M. Eng. Pr.Sci.Nat., MGSSA, of Coffey Mining (SA) Pty
Ltd.
- On December 31, 2013 the Company closed 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 $165
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 (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.
- 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 eliminates the
involvement of Africa Wide Mineral Prospecting and Exploration
(Pty) Limited ("Africa Wide"), a 100% subsidiary of Johannesburg
Stock Exchange listed Wesizwe Platinum Limited and will build upon
previous technical and legal due diligence, and is subject to the
finalization of a facility agreement, among other conditions.
- 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. (See report at
www.sedar.com).
Results For The Period
During the six months ended February 28, 2014, the Company had a
net loss of $3.3 million (February 28, 2013 - net loss of $1.4
million). General and administrative expenses during the period
were $4.5 million (February 28, 2013 - $4.2 million), gains on
foreign exchange, due primarily to a stronger Rand at period end,
were $0.75 million (February 28, 2013 -$1.52 million gain). Finance
income consisting of interest earned and property rental fees in
the period amounted to $2.7 million (February 28, 2013- $2.6
million). Net loss per share for the period amounted to $0.01 per
share, as compared to a loss of $0.01 per share for the comparative
period of fiscal 2013.
Accounts receivable at February 28, 2014 totalled $6.4 million
while accounts payable and accrued liabilities amounted to $11.2
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 $65 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 $4.7 million,
with a further $0.5 million being funded for the Waterberg JV
Project alone by joint venture partner, JOGMEC.
To date approximately 3.8 million man hours of construction work
has been completed at the Project 1 platinum mine and approximately
$281 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 are being fabricated
with a number of items now complete. A 10MVA electrical supply was
completed and energized in October. Two ventilation raises and fans
are now functional. Underground mining of multiple declines and
headings continues. Capital costs have generally been within
budget, and first concentrate production is targeted for calendar
fourth quarter of 2015. Underground development delays or delays in
the delivery of key components or services could result in delays
to the first concentrate production or ramp up.
On March 3, 2014 Africa Wide failed to pay approximately US
$21.52 million for its share of a unanimously approved cash call.
This follows their election on October 18, 2013 to not fund an
approximate US $21.8 million cash call for their 26% share of a
unanimously approved six month forward construction budget for
Project 1. The Company estimates that Africa Wide will dilute to
approximately a 17.1% holding in Maseve as a result of the second
missed cash call. Africa Wide disagrees with the dilution
calculation and the matter has been referred to binding arbitration
which will confirm the dilution formula. The Company is currently
working on a plan to sell Africa Wide's diluted interest in Maseve
to qualified black economic empowerment partner Mnombo.
Outlook
The Company's key business objectives and Milestones for
calendar 2014 are:
- to build the WBJV Project 1 platinum mine safely and in
accordance with the planned schedule and budget;
- to close the planned US $195 million new 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 pre-feasibility study on the initial
Waterberg JV Project deposit during calendar 2014 or early
2015;
- to continue exploration and definition drilling on the
Waterberg JV Project and Waterberg Extension Project with eight or
more drill rigs during 2014;
- to complete an updated independent resource estimate for the
Waterberg JV project and complete an initial independent resource
estimate for the Waterberg Extension Project; and
- to maintain and develop our strong relationship with JOGMEC and
the new partner expected in June 2014 as a result of the current
tender process for the transfer of JOGMEC's interest in the
Waterberg Joint Venture.
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.
Platinum Group Metals Ltd.R. Michael JonesPresident(604)
899-5450 or Toll Free: (866) 899-5450Platinum Group Metals Ltd.Kris
BegicVP, Corporate Development(604) 899-5450 or Toll Free: (866)
899-5450www.platinumgroupmetals.net
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