Platinum Group Metals Ltd. Announces Proposed Sale of Maseve Mine
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788 – 550 Burrard Street
Vancouver, BC V6C 2B5
P: 604-899-5450
F: 604-484-4710
News Release No. 17-352
September 6, 2017
Platinum Group Metals Ltd. Announces
Proposed Sale of Maseve Mine
VANCOUVER, BRITISH COLUMBIA and JOHANNESBURG, SOUTH AFRICA – 05/09/17 –
Platinum Group Metals Ltd. (TSX:PTM) (NYSE American:PLG) (“Platinum Group” “PTM”
or the “Company”) announces that it has entered into a term sheet (the “Term Sheet”)
to sell Maseve Investments 11 Proprietary Limited (“Maseve”) to Royal Bafokeng
Platinum Limited (“RBPlat”) in a transaction valued at approximately US$74.0 million,
payable as to US$62.0 million in cash and US$12.0 million in RBPlat common shares.
RBPlat has today published its own news release regarding this transaction. Maseve is
the operating and holding company for the Maseve Mine, located on the Western Limb of
the Bushveld Complex near Rustenburg, South Africa. The Company owns an indirect
82.9% equity interest in Maseve. The cash proceeds of the sale will be used to repay
debt. Looking forward the Company plans to focus on its large-scale Waterberg project,
a palladium dominant development asset where the majority of the Company’s mineral
reserves and resources are located.
The Maseve sale transaction is to occur in two stages:
• RBPlat is to pay Maseve US$58.0 million in cash to acquire the concentrator plant and
certain surface assets of the Maseve Mine, including an appropriate allocation for
power and water (the “Plant Sale Transaction”). Maseve will retain ownership of the
mining right s, power and water rights as well as certain surface rights and
improvements. The payment to be received by Maseve will be remitted to the
Company’s South African subsidiary, Platinum Group Metals (RSA) (Pty) Ltd. (“PTM
RSA”), in partial settlement of loans due to PTM RSA. This first payment due from
RBPlat is conditional upon the satisfaction or waiver of certain conditions precedent,
including but not limited to the negotiation and execution of definitive agreements ,
the approval, or confirmed obligation, of the holder of the remaining 17.1% equity
interest in Maseve, Africa Wide Mineral Prospecting and Exploration Pro prietary
Limited, the approval of PTM’s secured lenders , the approval of the South African
Competition Commission (“Competition Approval”) and completion of due diligence
which may result in additional conditions . Closing of the Plant Sale Transaction is
anticipated in two to three months.
• RBPlat is to pay PTM RSA US$7.0 million in common shares of RBPlat plus
approximately US$4.0 million in cash to acquire PTM RSA’s remaining loans due from
Maseve, and is to pay PTM RSA and Africa Wide, in proportion to their respective
equity interests in Maseve, a further US$5.0 million by way of issuance of common
shares of RBPlat to acquire 100% of the equity in Maseve (the “Share Transaction”
and collectively with the Plant Sale Transaction, the “Maseve Sale Transaction”). The
second stage of the transaction is conditional upon implementation of the Plant Sale
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Transaction and, among other conditions, obtaining all requisite regulatory approvals
including but not limited to the Minister of Mineral Resources granting consent to the
transfer of the Maseve mining right to RBPlat in terms of section 11 of the Mineral
and Petroleum Resources Development Act (“Ministerial Consent”). The Company
estimates Ministerial Consent may be obtained during calendar 2018.
The RBPlat common shares to be issued pursuant to the Share Transaction will be priced
at their 30-day volume weight ed average price of the RBPlat common shares on the
Johannesburg Stock Exchange calculated on market close on the day preceding this
announcement.
RBPlat will be granted a management contract for the Maseve Mine and for carrying out
care and maintenance services during the period between the date of grant of the
Competition Approval and the date of Ministerial Consent . The Company will be
responsible for 50% of care and maintenance costs after Competition Approval until the
earlier of the date of Ministe rial Consent and the date upon which RBPlat utilizes the
surface infrastructure of the Maseve Mine for its own purposes. It is estimated that the
Company will require approximately US$10.0 million in additional working capital to
provide for its share of Maseve Mine costs until the Plant Sale Transaction is closed. The
Company is working with its strategic advisors and current secured lenders on debt,
equity and other strategic transactions for this financing.
R. Michael Jones, President and Chief Ex ecutive Officer of Platinum Group, stated "The
sale of Maseve will allow Platinum Group to settle a substantial portion of its outstanding
debt and focus on the advancement of its large-scale Waterberg Project. We do believe
we have settled upon terms which will benefit both companies and all stakeholders.
RBPlat owns and operates the adjoining Bafokeng Rasimone Platinum Mine and is the
logical buyer for the Maseve Mine. The future integration of the Maseve Mine into RBPlat’s
operations is expected to bring be nefits to local communities, both directly in terms of
job creation and corporate social investment, and indirectly through the associated
benefits of economic activity in the region."
PTM’s proceeds from the sale of Maseve and the Maseve Mine are to be repaid to secured
lenders who are collectively owed approximately US$89.0 million in principal and accrued
interest. Negotiations to settle or restructure the balance of amounts due and a
termination fee are ongoing. The Company’s secured lenders are working closely with
the Company.
In reaching its decision to sell the Maseve Mine, the Company considered the capital
required to implement a revised Maseve Mine plan, the metal prices required to deliver
an appropriate risk-adjusted return to investment of further capital and the alternative
investment or use of capital propositions available to the Company. Management's view
is that the sale of the Maseve Mine delivers the most attractive realization of value from
the Maseve Mine assets at this time. As reported in a news release dated July 17, 2017,
active mining had been suspended at Maseve. Lender and investor support for further
investment at Maseve in restructuring a more conventional mining format was
subsequently not available. The Company believes that its resources are better utilized
advancing the bulk mineable, large-scale project at Waterberg, a project that represents
a significant shift in South African platinum mining away from narrow reef underground
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mining. The recent rising palladium price is also a significant factor as it is the dominant
metal at Waterberg.
BMO Capital Markets and Macquarie Capital are acting as the Company’s financial
advisors with regard to the Maseve Sale Transaction. As previously disclosed, Platinum
Group and its advisors have been evaluating various strategic alternatives and t he
Company continues in active discussions with various parties with regard to assets other
than the Maseve Mine. Further updates will be provided to shareholders as appropriate.
About Platinum Group Metals Ltd.
Platinum Group, based in Johannesburg, South Africa and Vancouver, Canada, has a
successful track record with more than 20 years of experience in exploration, mine
discovery, mine construction and mining operations.
Formed in 2002, Platinum Group holds significant mineral rights and large-scale reserves
of platinum and palladium in the Bushveld Igneous Complex of South Africa, which is
host to over 70% of the world's primary platinum production.
Qualified Person
R. Michael Jones, P.Eng., the Company’s President, Chief Executive Officer and a
shareholder of the Company, is a non-independent qualified person as defined in National
Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and is
responsible for preparing technical information contained in this news release. He has
verified the data by reviewing the detailed information of the geological and engineering
staff and the Independent Qualified Person reports as well as visiting the site regularly.
On behalf of the Board of
Platinum Group Metals Ltd.
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 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 Maseve Sale Transaction including the potential to enter into definitive
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agreements, satisfy conditions precedent and consummate the Maseve Sale Transaction
as described herein; the anticipated terms and benefits of the Maseve Sale Transaction;
the Company’s intended use of proceeds derived from the Maseve Sale Transaction and
its plans following the Maseve Sale Transaction and Company’s expected additional
working capital requirement to provide for its share of Maseve Mine costs; RBPlat
assuming management of the Maseve Mine and the mine being placed on care and
maintenance; potential settlement or restructure of the Company’s secured debts;
potential sales of assets, debt or equity; the Company’s ability to obtain further funding;
corporate and asset level strategic alternatives; the potential economics of the Waterberg
Project, if developed; the Company’s key objectives; and the Company’s plans and
estimates regarding exploration, studies, development, construction, production, cash
flows and other activities and developments. Statements of mineral resources and
mineral reserves also constitute forward-looking statements to the extent they represent
estimates of mineralization that will be encountered on a property and/or estimates
regarding future costs, revenues and other matters. 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 risks related to indebtedness; risks related to the nature of the Term Sheet and
the uncertainty as to whether the parties can successfully negotiate a definitive
agreement in respect of the Maseve Sale Transaction; the risks that the terms of the
Maseve S ale Transaction will change, that the transaction will not close or that the
anticipated benefits thereof will not be realized; the Company’s capital requirements may
exceed its current expectations; the uncertainty of cost, operational and economic
projections; the ability of the Company to negotiate and complete future funding
transactions and settlement or restructure of debt; 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 and to effect the
Maseve Sale Transaction; the Company’s ability to produce minerals from its properties
successfully or profitably, to continue its projected growth, or to be fully able to
implement its business strategies; risks related to contractor performance and labor
disruptions; and other risk factors described in the Company’s Form 40-F annual report,
annual information form and other filings with the Securities and Exchange Commission
and Canadian securities regulators, which may be viewed at www.sec.gov and
www.sedar.com, respectively. Proposed changes in the mineral law in South Africa if
implemented as proposed would have a material adverse effect on the Company business
and potential interest in projects.
Cautionary Note to U.S. and other Investors
Estimates of mineralization and other technical information included or referenced in this
press release have been prepared in accordance with NI 43-101. The definitions of proven
and probable reserves used in NI 43-101 differ from the definitions in SEC Industry Guide
7. Under SEC Industry Guide 7 standards, a "final" or "bankable" feasibility stud y is
required to report reserves, the three-year historical average price is used in any reserve
or cash-flow analysis to designate reserves and the primary environmental analysis or
the report must be filed with the appropriate governmental authority. As a result, the
reserves reported by the Company in accordance with NI 43 -101 may not qualify as
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"reserves" under SEC standards. In addition, the terms "mineral resource", "measured
mineral resource", "indicated mineral resource" and "inferred mineral resour ce" are
defined in and required to be disclosed by NI 43 -101; however, these terms are not
defined terms under SEC Industry Guide 7 and normally are not permitted to be used in
reports and registration statements filed with the SEC. Mineral resources that are not
mineral reserves do not have demonstrated economic viability. Investors are cautioned
not to assume that any part or all of the mineral deposits in these categories will ever be
converted into reserves; "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 securities laws , estimates of inferred
mineral resources may not form the basis of feasibility or pre -feasibility studies, except
in rare cases. Additionally, disclosure of "contained ounces" in a resource is permitted
disclosure under Canadian securities laws; however, the SEC normally only permits
issuers to report mineralization that does not constitute "reserves" by SEC standards as
in place tonnage and grade without reference to unit measurements. Accordingly,
information contained or referenced in this press release containing descriptions of the
Company's mineral deposits may not be comparable to similar information made public
by U.S. companies subject to the reporting and disclosure requirements of United States
federal securities laws and the rules and regulations thereunder.