Platinum Group Metals Ltd. Announces Increased Confidence in Large Scale, Palladium Dominant Deposit with Strong Gold Credit at Waterberg JV South Africa Measured and Indicated Mineral Resources Increased by 1.46 million PGE Ounces to 26.34 Million Ounces
788 – 550 Burrard Street
Vancouver, BC V6C 2B5
P: 604-899-5450
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News Release No. 18-381
October 25, 2018
Platinum Group Metals Ltd. Announces Increased Confidence
in Large Scale, Palladium Dominant Deposit with Strong Gold
Credit at Waterberg JV South Africa
Measured and Indicated Mineral Resources Increased by 1.46
million PGE Ounces to 26.34 Million Ounces
New Measured Category Mineral Resource of 6.26 Million 4E
Ounces
T Zone Measured and Indicated Grade Increased 16%
(Vancouver/Johannesburg) Platinum Group Metals Ltd. (PTM-TSX; PLG -
NYSE.AMERICAN) (“Platinum Group” or the “Company”) announces positive results from
additional drilling and mineral resource assessment on the Waterberg Project’s palladium
dominant deposit. The 2018 drilling program has increased confidence in the estimated
Mineral Resources for the project, with 6.26 million 4E ounces now recognized in the higher
confidence Measured Category. Mineral Resources estimated in the combined Measured
and Indicated Categories have increased by 1.4 6 million 4E ounces to 26.34 million 4E
ounces. Inferred Mineral Resources are estimated at 7.0 million 4E ounces . All of the
preceding estimated at a 2.5 g/t 4E (palladium, platinum, rhodium and gold) cut-off grade.
See tables below.
The updated Measured and Indicated Mineral Resource totaling 26.34 million 4E ounces is
comprised of 63.04% palladium, 29.16% platinum, 6.37% gold and 1.43% rhodium (242.5
Million Tonnes at 3.38 g/t 4E , versus 218.3 Million Tonnes grading 3.55 g/t 4E Indicated
in the 2016 Pre-feasibility Study (the “2016 PFS”) titled “Independent Technical Report on
the Waterberg Project including Mineral Resource Update and Pre-Feasibility Study” dated
October 19, 2016).
The T zone Measured and Indicated Mineral Resources have increased in grade from 3.88
g/t 4E in 2016 to 4.51 g/t 4E in 2018. See tables below.
The new increased confidence level Mineral Resources are being used for detailed mine
planning in an ongoing Definitive Feasibility Study (the “DFS”). The DFS is being managed
by Platinum Group and a Technical Committee including all partners of the project
operating company Waterberg JV Resources Pty Ltd. (“Waterberg JV Co.”).
The ongoing DFS is considering two large scale underground bulk mining and milling
options of 600,000 tonnes per month and a more modest , but still large , first phase at
250,000 to 350,0000 tonnes per month.
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Platinum Group holds a 50.02% effective interest in Waterberg JV Co., with the Japan, Oil,
Gas and Metals National Corporation (“JOGMEC”) holding a 2 1.95% interest , Impala
Platinum Holdings Ltd. (“Implats”) holding a 15% interest and empowerment partner
Mnombo Wethu Consultants (Pty) Ltd. holding the balance of the joint venture. JSE listed,
broad based empowerment group, Hosken Consolidated Investments Limited has recently
purchased more than a 15% ownership interest in Platinum Group Metals Ltd.
Platinum Group plans to file a National Instrument 43-101 report on the updated Mineral
Resources within 45 days of this announcement. In addition, a SAMREC 2016 compliant
Mineral Resource statement has been prepared and signed -off by the competent person
(Mr. Charles J Muller).
R. Michael Jones, CEO and co-founder of Platinum Group said, “Waterberg is characterized
by thick, near surface mineralized zones, which are potentially amenable to low cost, safe,
bulk mechanized mining methods. The deposit remains open at depth and to the northwest
on strike. T he rare palladium dominance of the deposit is well suited to current and
projected demand trends for the catalytic converter needs of the global auto market.”
This press release has been prepared by the qualified persons named herein. A Technical
report is planned to be filed shortly on SEDAR at www.sedar.com and the SEC’s EDGAR
site at www.sec.gov. Investors should refer to detailed Technical Report for further
information and risks and opportunities.
WATERBERG SETTING, INDUSTRY POSITION AND CUT OFF GRADES
The Waterberg deposit is a new discovery located on the far north of the Northern Limb of
the well-known Bushveld Complex (“BC”) in South Africa, which is host to a majority of
the world’s platinum and rhodium reserves and a substantial proportion of the world’s
palladium reserves (together with gold, known as Platinum Group Elements or “PGE”). The
deposit was discovered in 2011 and 2012 by the Company, with the supp ort of JOGMEC,
by drilling through sedimentary cover rocks to find a new and previously unexplored part
of the BC.
Conventional PGE deposits in South Africa are platinum dominant and usually 1.0 meter to
1.2 meters thick. These deposits are mined manually, largely with hand drilling or with low
profile equipment in some of the thicker reef areas . Conventional, manual mining is
experiencing increasing costs for labour, as well as increased operating costs and safety
issues as these mines become deeper. Economic pressure in recent years has been forcing
the closure of these types of mines . Exploration in the North ern Limb of the B IC has
increased recently as a result of the successful operation and expansion of a large
mechanized open pit PGE mine and the discovery of another thick, mechanized capable
PGE deposit in addition to Waterberg. Waterberg, having been geologically confirmed as
a part of the BC, is unusual in that it is both near surface and palladium domin ant in its
metal balance.
All of the joint venture partners have been involved in the development of the latest Mineral
Resource model, appropriate cut-off grades, economic parameters and Mineral Resource
model criteria. It has been determined in relation to basic working costs and in
consideration of the overall resource envelope for the deposit , that at a 2.0 g/t cut -off
grade the deposit has a reasonable prospect of economic extraction. At the 2.0 g/t 4E cut-
off grade, Mineral Resources estimated in the combined Measured and Indicated Categories
total 35.60 million 4E ounces. Inferred Mineral Resources are estimated at 12.69 million
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4E ounces for the project at the 2.0 g/t 4E cut-off grade. See tonnage and grade details
by element in the tables below.
Notwithstanding the above, for purposes of the DFS, sensitivity analysis and comparison
to the 2016 PFS, which utilized a 2.5 g/t 4E cut-off grade, a Mineral Resource estimate at
a 2.5 g/t cut -off grade is the preferred scenario. The headline numbers for this press
release are therefore from the new 2018 Mineral Resource estimate at a 2.5 g/t 4E cut-off
grade.
The capital and operating costs for input to the 2018 Mineral Resource estimate were taken
from the 2016 PFS along with updated metal prices and exchange rates. Palladium prices
are currently at levels well above the three-year trailing average. See the Mineral Resource
tables and discussion below for information regarding the potential for economic extraction
and cut-off grades. Decline ramp access, l arge scale underground mining methods and
working costs, along with standard flotation concentrate recovery methods and 2016 PFS
level extraction rates and recoveries, were utilized for the 2018 c ut-off grade
determinations.
KEY RESULTS
Mineral Resource Update Details
Since the October 2016 Waterberg Mineral Resource estimate was completed, the joint
venture, at the direction of its Technical Committee , has completed a further 61,394
meters of drilling in 143 new drill holes targeting the T and the F Zones. An additional 125
deflections from the mother holes were also drilled. A total of approximately 26,000 new
assay samples were completed along with 5,000 reference samples and quality control
blanks.
Mineral Resource categories were determined by assay confidence, geological confidence,
kriging efficiencies, number of samples, regression slope and search volumes. The Mineral
Resource model approach was modified from the 2016 PFS to include a planned set of
factors, including eliminating isolated blocks, a minimum vertical thickness of 2.5 meters
and up to 5 meters of internal waste to be included in zones with potential for large bulk
mining approaches.
Additional drilling and assay work completed since the October 2016 Mineral Resource
estimate and 2016 PFS has resulted in the updated 2018 Mineral Resource estimate as
follows, effective September 27, 2018:
T-Zone 2.5 g/t Cut-off September 2018 100% Project Basis
Mineral
Resource
Category
Cut-off Tonnage Grade Metal
4E Pt Pd Rh Au 4E Cu Ni 4E
g/t t g/t g/t g/t g/t g/t % % kg Moz
Measured 2.5 3 098 074 1.19 2.09 0.05 0.90 4.23 0.160 0.090 13 105 0.421
Indicated 2.5 18 419 181 1.34 2.31 0.03 0.87 4.55 0.197 0.095 83 807 2.694
M+I 2.5 21 517 255 1.32 2.28 0.03 0.88 4.51 0.192 0.094 96 912 3.116
Inferred 2.5 21 829 698 1.15 1.92 0.03 0.76 3.86 0.198 0.098 84 263 2.709
F-Zone 2.5 g/t Cut-off September 2018 100% Project Basis
Cut-off Tonnage Grade Metal
4E Pt Pd Rh Au 4E Cu Ni 4E
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Mineral
Resource
Category
g/t t g/t g/t g/t g/t g/t % % kg Moz
Measured 2.5 54 072 600 0.95 2.20 0.05 0.16 3.36 0.087 0.202 181 704 5.842
Indicated 2.5 166 895 635 0.95 2.09 0.05 0.15 3.24 0.090 0.186 540 691 17.384
M+I 2.5 220 968 235 0.95 2.12 0.05 0.15 3.27 0.089 0.190 722 395 23.226
Inferred 2.5 44 836 851 0.87 1.92 0.05 0.14 2.98 0.064 0.169 133 705 4.299
T-Zone 2.0 g/t Cut-off September 2018 100% Project Basis
Mineral
Resource
Category
Cut-off Tonnage Grade Metal
4E Pt Pd Rh Au 4E Cu Ni 4E
g/t t g/t g/t g/t g/t g/t % % kg Moz
Measured 2.0 3 440 855 1.13 1.97 0.04 0.90 4.04 0.160 0.080 13 901 0.447
Indicated 2.0 22 997 505 1.22 2.06 0.03 0.79 4.10 0.186 0.090 94 290 3.031
M+I 2.0 26 438 360 1.21 2.05 0.03 0.80 4.09 0.183 0.089 108 191 3.478
Inferred 2.0 25 029 695 1.17 1.84 0.03 0.60 3.64 0.137 0.069 91 108 2.929
F-Zone 2.0 g/t Cut-off September 2018 100% Project Basis
Mineral
Resource
Category
Cut-off Tonnage Grade Metal
4E Pt Pd Rh Au 4E Cu Ni 4E
g/t t g/t g/t g/t g/t g/t % % kg Moz
Measured 2.0 75 332 513 0.82 2.00 0.05 0.14 3.01 0.079 0.191 226 833 7.293
Indicated 2.0 273 272 480 0.80 1.85 0.04 0.14 2.83 0.073 0.181 772 103 24.824
M+I 2.0 348 604 993 0.83 1.86 0.04 0.14 2.87 0.075 0.183 998 936 32.117
Inferred 2.0 121 535 227 0.70 1.62 0.04 0.13 2.50 0.067 0.162 303 722 9.765
Waterberg Aggregate Total 2.5 g/t Cut-off September 2018 100% Project Basis
Mineral
Resource
Category
Cut-off Tonnage Grade Metal
4E Pt Pd Rh Au 4E Cu Ni 4E
g/t t g/t g/t g/t g/t g/t % % kg Moz
Measured 2.5 57 170 674 0.96 2.19 0.05 0.20 3.40 0.091 0.196 194 809 6.263
Indicated 2.5 185 314 816 0.99 2.11 0.05 0.22 3.37 0.100 0.177 624 498 20.078
M+I 2.5 242 485 490 0.98 2.13 0.05 0.22 3.38 0.098 0.181 819 307 26.342
Inferred 2.5 66 666 549 0.96 1.92 0.04 0.34 3.26 0.108 0.146 217 968 7.008
Waterberg Aggregate Total 2.0 g/t Cut-off September 2018 100% Project Basis
Mineral
Resource
Category
Cut-off Tonnage Grade Metal
4E Pt Pd Rh Au 4E Cu Ni 4E
g/t t g/t g/t g/t g/t g/t % % kg Moz
Measured 2.0 78 773 368 0.83 2.00 0.05 0.18 3.06 0.083 0.186 240 734 7.740
Indicated 2.0 296 269 985 0.83 1.86 0.04 0.19 2.92 0.082 0.174 866 393 27.855
M+I 2.0 375 043 353 0.86 1.87 0.04 0.18 2.95 0.083 0.176 1 107 127 35.595
Inferred 2.0 146 564 922 0.78 1.66 0.04 0.21 2.69 0.079 0.146 394 830 12.694
4E = Platinum Group Elements (Pt+Pd+Rh+Au). The cut -offs for Mineral Resources have
been established by a qualified person after a review of potential operating costs and other
factors. The Mineral Resources stated above are shown on a 100% basis, that is, for the
Waterberg Project as a whole entity. Conversion Factor used – kg to oz = 32.15076.
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Numbers may not add due to rounding. Mineral Resources do not have demonstrated
economic viability but there must be a reasonable expectation for eventual economi c
extraction. A 5% and 7% geological loss has been applied to the Measured, Indicated and
Inferred categories respectively. Effective Date September 27, 2018. The upper and lower
bound metal prices used in the determination of cut-off grade for resources estimated are
as follows: US$983/oz -US$953/oz Pt, US$993/oz -US$750/oz Pd, US$1 325/oz-
US$1 231/oz Au, US$1 923US/oz-US$972/oz Rh, US$6.08/lb-US$4.77/lb Ni, US$3.08/lb-
US$2.54/lb Cu, US$/ZAR15-US$/ZAR12.These metal prices are based on the estimated 3
year trailing average prices and the spot prices at the time of commencement of the Mineral
Resource estimate modelling. The lower cut-off was tested against the higher metal price
in the range and the higher cut-off was tested against the lower price in the range.
Total aggregate 2.5 g/t 4E cut-off grade Mineral Resources at Waterberg on a 100% project
basis have increased slightly since those reported in October 2016.
1. The Mineral Resources are classified in accordance with the SAMREC 2016 standards.
There are certain differences with the "CIM Standards on Mineral Resources and
Mineral Reserves"; however, in this case the QP believes the differences are not
material and the standards may be considered the same, but SAMREC 2016 stipulates
different disclosure requirements . A separate SAMREC compliant Mineral Resource
statement has been prepared and signed-off by the competent person (Mr. Charles J
Muller). Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability but there are reasonable prospects for eventual economic
extraction. Inferred Mineral Resources have a high degree of uncertainty.
2. A cut-off grade of 2.0 g/t and 2.5 g/t 4E for both the T and the F-Zones is applied to
the selected Mineral Resources.
3. Cut off for the T and the F-Zones considered costs, smelter discounts, concentrator
recoveries from previous engineering work completed on the property by the
Company. The Mineral Resource model was cut-off at an arbitrary depth of 1 ,250
meters, although intercepts of the deposit do occur below this depth.
4. Mineral Resources were completed by Mr. CJ Muller of CJM Consulting.
5. Mineral Resources were estimated using kriging methods for geological domains
created in Datamine from 437 original holes and 585 deflections. A process of
geological modelling and creation of grade shells using indicating kriging was
completed in the estimation process.
6. The estimation of Mineral Resources has taken into account environmental, permitting
and legal, title, and taxation, socio-economic, marketing and political factors.
7. The Mineral Resources may be materially affected by metals prices, exchange rates,
labor costs, electricity supply issues or many other factors detailed in the Company's
Form 20-F annual report.
8. The data that formed the basis of the estimate are the drill holes drilled by Platinum
Group, which consist of geological logs, the drill hole collars surveys, the downhole
surveys and the assay data. The area where each layer was present was delineated
after examination of the intersections in the various drill holes.
9. There is no guarantee that all or any part of the Mineral Resource will be upgraded
and converted to a Mineral Reserve. Mineral Resources do not have demonstrated
economic viability but there are reasonable prospects for eventual economic
extraction.
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Prill Splits
Prill Splits on Measured & Indicated Resources at 2.5 g/t Cut-Off Grade
Zone
Pt Pd Au Rh Cu Ni
% % % % % %
T-Zone 29.27 50.55 19.51 0.67 0.19 0.09
F-Zone 29.05 64.53 4.59 1.53 0.09 0.19
TOTAL 29.16 63.04 6.37 1.43 0.10 0.18
CONSTRUCTION AND DEVELOPMENT METHODOLOGY FOR RESOURCE CUT-OFFS
The 2016 PFS considered a large scale 600,000 tonne per month mine producing 744,000
4E ounces per year, which was the basis of the working cost estimates for cut-off grades
for this new 2018 Mineral Resource estimate. The current DFS is considering a 250,000
tonne to 350,000 tonne per month option in addition to the 2016 PFS 600,000 tonne per
month mining rate. Since both scales involve bulk underground mining methods, and the
same milling and recovery methods, the 2016 PFS costs were deemed to be appropriate
estimates for the determination of cut-off grade. A 2.5 g/t 4E cut-off grade has been
utilized as the preferred scenario for purposes of the DFS. The headline Mineral Resource
numbers for this press release ar e from the new 2018 estimate at a 2.5 g/t 4E cut -off
grade.
METALLURGICAL RECOVERY AND PROCESSING FOR CUT OFF DETERMINATION
Flotation test work in the 2016 PFS indicated that the Waterberg ores are amenable to
treatment by conventional flotation without the need for re-grinding. A standard flotation
concentrator can be used to produce a saleable concentrate, at a 4E grade of no less than
80 g/t, with no deleterious products. A 4E recovery rate in excess of 80% is expected at
the proposed mill feed grades in the 2016 PFS work. An 85% pay-rate was assumed for
the PGE’s from the smelter in determination of reasonable operating return for working
cost break-even and cut-off.
QUALIFIED PERSONS
The following Qualified Persons (“QPs”) have completed work in preparation of the 2016
PFS and are responsible for the contents of this press release:
▪ Independent Geological Qualified Person:
Mr. Charles J Muller
(B.Sc. (Hons) Geology) Pr. Sci. Nat. (Reg. No. 400201/04)
CJM Consulting (Pty) Ltd
▪ Competent Person (SAMREC):
Mr. Charles J Muller
(B.Sc. (Hons) Geology) Pr. Sci. Nat. (Reg. No. 400201/04)
CJM Consulting (Pty) Ltd
▪ Non Independent Engineering Qualified Person:
R. Michael Jones P.Eng.
This press release has been reviewed and approved by R. Michael Jones, P.Eng., a non -
independent Qualified Person and the CEO of the Company. He has verified the technical
information for disclosure in this press release by reviewing the work of the QPs on a test
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basis, visiting the site and meeting with the project QPs through the development of the
2016 PFS and the 2018 Mineral Resource estimate and ongoing DFS work.
DATA VERIFICATION, QUALITY ASSURANCE AND CONTROL
Scientific and Technical Information in this Press Release related to Mineral Resources has
been reviewed and approved by Charles J Muller, (BScHons) Pr Sci Nat (Reg. No
400201/04), an independent consulting geologist and resource estimator of CJM
Consulting, an independent qualified person as defined in National Instrument 43 -101 -
Standards of Disclosure for Mineral Projects (" NI 43-101"). He has verified the data by
reviewing the detailed assay and geological information and metallurgical work on the
Waterberg deposit. He is satisfied that the data is appropriate for the Mineral Resource
estimate by reviewing the core, assay certificates an d quality control information as well
as reviewing the procedures on sampling, chain of custody and data base records of the
Platinum Group exploration team.
Base metals and other major elements were determined by multi acid digestion with
Inductively Coupled Plasma ("ICP") finish and PGEs were determined by conventional fire
assay and ICP finish. Setpoint Laboratories is an experienced ISO 17025 SANAS accredited
laboratory in assaying and has utilized a standard quality control system including the use
of standards. Bureau Veritas South Africa and Genalysis of Australia with similar standards
and approaches have been used for assays and umpire checks. Platinum Group utilized a
well-documented system of inserting blanks and standards into the assay stream and has
a strict chain of custody and independent lab re-check system for quality control. Details
are available in the 2016 PFS filed on October 19, 2016 on the SEDAR website at
www.sedar.com and www.platinumgroupmetals.net .
The QPs have verified the data sufficiently for the reporting of Mineral Resources and an
outside independent review by Qualified Persons of the Mineral Resources identified low to
moderate risks and no critical errors in the estimate. The review report was considered by
the Independent QP. The QPs have reviewed and approved their relevant section of this
press release.
PROJECT OUTLOOK
The South African PGE industry is undergoing significant changes. The planned closure of
several deep conventional pla tinum and palladium mines has been announced and the
need to develop lower cost fully mechanized deposit opportunities has been recognized.
Implats announced on September 13, 2018 that its investment in Waterberg is a part of
its strategy towards lower‐cost, shallow, mechanized projects.
The updated Waterberg Mineral Resources announced today, are a required input to the
mine planning now underway for the DFS. The technical work for the Waterberg DFS is
being managed by an engaged Technical Committee of Waterberg JV Co. involving
members from all of the joint venture partners. Stantec Consulting International LLC
(“Stantec”) is working on the mine design for the DFS involving bulk underground fully
mechanized methods. Stantec’s bulk underground mine engineering and operating
experience at mines such as Grasberg (Indonesia, operated by Freeport -McMoran),
Platreef Project (South Africa, ope rated by Ivanhoe Mines Ltd.) and Young -Davidson
(Canada, operated by Alamos Gold Inc.) is directly applicable to the Waterberg Project.
Metallurgical test work for the DFS , including plant design , infrastructure design and
costing, are also progressing well, led by independent project engineer for plant design
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and metallurgy DRA Projects SA (Proprietary) Limited (“DRA”). DRA has managed the
design and construction of numerous large-scale PGE milling and concentrating facilities in
South Africa, including the recent expansion of milling infrastructure at the Mogalakwena
Mine (operated by Anglo American Platinum) located 60 km due south of the Waterberg
Project. Metallurgical work for the DFS is building on and optimizing 2016 PFS testing.
Implats holds a first right of refusal on the smelter offtake of Waterberg concentrate.
Waterberg JV Co. has applied for a mining right and detailed consultation with
communities, local municipalities, the Limpopo Provincial government and South African
national authorities is ongoing. The application for a mining right has been accepted by
the South African Department of Mineral Resources (the “DMR”) . Consultation with
stakeholders has been in a positive climate of mutual respect. A recent co-operation
agreement between Waterberg JV Co. and the local Capricorn Municipality for the
development of water resources to the benefit of local communities and the mine is
resulting in good advancement towards the identification of water supplies and the design
of distribution infrastructure. The establishment of s ervitudes for power line routes and
detailed planning and permitting for an Eskom electrical service to the project are also
advancing well.
The joint venture partners target the completion of the DFS at the end of March, 2019.
ABOUT PLATINUM GROUP METALS LTD.
Platinum Group, based in Johannesburg, South Africa and Vancouver, Canada, is focused
on the advancement of the large scale, near surface, palladium dominant Waterberg
Project in South Africa. Partners at Waterberg include Impala Platinum Holdings Ltd., the
Japan, Oil, Gas and Metals National Corporation and Mnombo Wethu Consultants (Pty)
Ltd., a South African empowerment company.
On behalf of the Board of
Platinum Group Metals Ltd.
“R. Michael Jones”
President and CEO
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
www.platinumgroupmetals.net
Disclosure
The Toronto Stock Exchange and the NYSE American 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
(collectively “forward -looking statements”). Forward-looking statements are t ypically
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 forw ard-looking statements. Forward-looking
statements in this press release include, without limitation, the timing and completion of a