Platinum Group Metals Ltd. Reports First Quarter Results And Provides Waterberg Palladium Project Update
838 – 1100 Melville Street
Vancouver, BC V6E 4A6
P: 604-899-5450
F: 604-484-4710
News Release No. 19-386
January 11, 2019
Platinum Group Metals Ltd. Reports First Quarter Results
And Provides Waterberg Palladium Project Update
(Vancouver/Johannesburg) Platinum Group Metals Ltd. (PTM:TSX; PLG:NYSE American)
(“Platinum Group” “PTM” or the “Company”) reports the Company’s financial results for the
three months ended November 30, 201 8 and provides a summary of recent events and
outlook. The Company has focused its business on the palladium dominant large scale, bulk
mineable Waterberg Project in South Africa (the “Waterberg Project”). A Definitive Feasibility
Study, (“DFS”) for the Waterberg Project is advancing well . A technical committee of
Waterberg JV Resources Pty Ltd. (“Waterberg JV Co.”) is overseeing the DFS with participation
from all partners. A formal Mining Right Application has been filed and community
consultation is ongoing. Power and water planning for the project is advancing well including
work under a regional water co -operation agreement with the Capricorn Municipality and
engineering and permitting work with power utility Eskom.
Impala Platinum Holdings Ltd. (“ Implats”) made a strategic investment of $30.0 million in
November 2017 to purchase a 15% stake in the Waterberg Project, from which the Company
received $17.2 million for its 8.6% project interest sold. Implats may elect to increase its
stake to 50.01% by additional share purchases from Japan Oil, G as and Metals National
Corporation (“JOGMEC”) for an amount of $34.8 million and a commitment to expenditures
of $130 million for development work on the Waterberg Project. Implats will also have a right
of first refusal to smelt and refine Waterberg Project concentrate.
On October 25, 2018, the Company announced positive results from additional drilling, which
increased confidence to a measured resource category for certain areas targeted for early
mining, and published an updated independent mineral resource assessment. The updated
resource assessment has been provided to the independent engineers for the mine design,
scheduling and capital cost estimation as part of the DFS. The Waterberg deposit is dominated
by palladium and also contains platinum, rhodium and gold (together known as “4E”) as well
as copper and nickel.
For details of the condensed consolidated interim financial statements for the three months
ended November 30, 2018 (the “Financial Statements”) and Management’s Discussion and
Analysis for the three months ended November 30, 2018 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 receive a hard
copy of the complete Financial Statements from the Company free of charge upon request.
All amounts herein are reported in United States dollars (“USD”) unless otherwise specified.
The Company holds cash in Canadian dollars, United States dollars and South African Rand .
Changes in exchange rates may create variances in the cash holdings or results reported.
PLATINUM GROUP METALS LTD. …2
Recent Events
On January 11, 2019, the Company delivered a payment of $8.0 million to Liberty Metals &
Mining Holdings, LLC (“LMM”) in partial settlement of a secured loan facility (the “LMM
Facility”) due to LMM . The amount paid represented net proceeds from the recent sale of
4.52 million common shares of JSE listed Royal Bafokeng Platinum Ltd. (“RBPlat”). The shares
were received by the Company in April 2018 upon completion of stage two of the sale of the
Maseve Mine to RBPlat (the “Maseve Sale Transaction”).
On November 16, 2018, the Company filed a National Instrument 43-101 technical report
related to the updated independent mineral resource estimate for the Waterberg Project
announced on October 25, 2018 . The report, entitled “Technical Report on the Mineral
Resource Update for the Waterberg Project Located in the Bushveld Igneous Complex, South
Africa” is dated October 22, 2018 (with the effective date of the mineral resources being
September 27, 2018 ) (the “Waterberg Technical Report”) and was prepared by Charles J
Muller, B. Sc. (Hons) (Geology), Pr. Sci. Nat., of CJM Consulting (Pty) Ltd. A copy of the
Waterberg Technical R eport can be found at www.sedar.com, at www.sec.gov and on the
Company’s website.
On October 25, 2018, the Company published an updated independent mineral resource
estimate for the Waterberg Project on a 100% basis , with 6.26 million 4E ounces now
recognized in the higher confidence Measured category. Mineral resources estimated in the
combined Measured and Indicated categories increased by 1.46 million 4E ounces to 26.34
million 4E ounces (242.5 million tonnes at 3.38 g/t 4E comprised of 63.04% palladium,
29.16% platinum, 6.37% gold and 1.43% rhodium) . Inferred mineral resources are
estimated at 7.0 million 4E ounces (66.67 million tonnes at 3.26 g/t 4E). 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. All of the preceding was estimated at a 2.5 g/t 4E cut -off grade, which is the
preferred scenario for the project.
On October 10, 2018, the Company announced that a recently filed Mining Right Application
(Press Release September 4, 2018) for the Waterberg Project had been accepted by South
Africa’s Department of Mineral Resources. The application is supported by the Company and
all of the Waterberg Project partners including Implats, JOGMEC and Mnombo Wethu
Consultants (Pty) Ltd. The process of consultation under the Mineral and Petroleum Resources
Development Act, 2002 and current Environmental Assessment regulations has commenced.
Results For The Three Months Ended November 30, 2018
During the three months ended November 30, 2018, the Company incurred a net loss of $5.6
million (November 30, 2017 – net loss of $12.4 million). General and administrative expenses
during the quarter were $1.3 million (November 30, 2017 - $1.4 million), losses on foreign
exchange were $ 1.2 million ( November 30 , 201 7 – $3.1 million) due to the US Dollar
increasing in value relative to the Company’s functional currency of the Canadian Dollar.
At November 30, 2018, finance income consisting of interest earned and property rental fees
in the period amounted to $0.3 million (November 30, 2017 - $0.1 million), while a gain on
marketable securities of $0.9 million was recognized in the current quarter (November 30,
2017 - $Nil). Loss per share for the quarter amounted to $ 0.02 as compared to a loss of
$0.08 per share for the three months ended November 30, 2017.
PLATINUM GROUP METALS LTD. …3
Accounts receivable at November 30, 2018 totalled $0.2 million (November 30, 2017 - $0.9
million) while accounts payable and accrued liabilities amounted to $ 4.2 million (November
30, 2017 - $7.7 million). Accounts receivable were comprised of mainly of amounts receivable
for value added taxes repayable to the Company in South Africa and amounts due from joint
venture partners and related parties. Accounts payable at November 30, 2018 related mostly
to ongoing work at the Waterberg Project with the decrease as compared to November 30,
2017 being primarily due to settlement of payables related to mine closure costs.
Total expenditures on the Waterberg Project, before partner reimbursements, for the quarter
were approximately $3.0 million (November 30, 2017 - $0.4 million). At November 30, 2018,
$34.3 million in accumulated net costs had been capitalized to the Waterberg Project. Total
expenditures by all parties on the property since inception are approximately $65 million.
For more information on mineral properties, see Note 4 of the Financial Statements.
Outlook
The Company’s key business objective is to advance the Waterberg Project. The Waterberg
project is dominated by palladium at a time when palladium supply is estimated to be in
deficit. Mines with palladium as their primary economic mineral are rare.
Waterberg JV Co. plans to advance the Waterberg Project to completion of a DFS by
approximately May 2019. The DFS is being managed by Platinum Group and a technical
committee of Waterberg JV Co. with detailed technical input, at all stages, from all of the
Waterberg Project partners.
The ongoing DFS is considering two large scale underground fully mechanized bulk mining
and milling options, one at 600,000 tonnes per month and a more modest, but still large, first
phase at 250,000 to 350,000 tonnes per month. Waterberg JV Co. has filed a Mining Right
Application and community consultation is ongoing in a positive climate of mutual respect.
An environmental assessment process is ongoing and many public meetings have already
been completed. Significant feedback from the meetings has been considered in the DFS
designs. Local training and employment are key components of the DFS to maximize the
value of the project for all stakeholders.
In the near term, the Company’s liquidity will be constrained until financing has been obtained
to repay and discharge remaining amounts of secured debt and for working capital purposes.
The Company remains focussed on completing the Waterberg DFS. At the same time the
Company has started reviewing several new business opportunities focused on platinum group
element metals, including extraction opportunities and potential new uses. The Company will
continue to work closely with its major shareholders and lenders on the steps ahead.
The Company continues to actively assess corporate and strategic alternatives with advisor
BMO Nesbitt Burns Inc.
PLATINUM GROUP METALS LTD. …4
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 and is responsible for preparing the technical
information contained in this news release. He has verified the data by reviewing the detailed
information of the geological and engineering staff and independent qualified person reports
as well as visiting the Waterberg Project site regularly.
About Platinum Group Metals Ltd.
Platinum Group is focused on, and is the operator of, the Waterberg Project, a bulk mineable
underground palladium deposit in northern South Africa. Waterberg was discovered by the
Company. Waterberg has potential to be a low cost dominantly palladium mine and Implats,
a smelter and refiner of platinum group metals, recently made a strategic investment in the
Waterberg Project.
On behalf of the Board of
Platinum Group Metals Ltd.
Frank R. Hallam
CFO, Corporate Secretary 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
www.platinumgroupmetals.net
Disclosure
The Toronto Stock Exchange and the NYSE American 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 completion of a DFS by approximately May
2019; Waterberg Project’s potential to be a bulk mineable, low cost, dominantly palladium mine
producing platinum and palladium based on a fully mechanized mine plan; the potential for the
Company to obtain financing to repay and discharge remaining amounts of secured debt and for
working capital purposes; new business opportunities; and corporate and strategic alternatives.
Mineral resource and reserve estimates are also forward -looking statements because such
estimates involve estimates of mineralization that may be encountered in the future if a production
decision is made, as well as estimates of future costs and values. 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
PLATINUM GROUP METALS LTD. …5
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 the Company’s inability to generate
sufficient cash flow or raise sufficient additional capital to make payment on its indebtedness, and
to comply with the terms of such indebtedness; additional financing requirements; the Company’s
credit facility (the “LMM Facility”) with Liberty Metals & Mining Holdings, LLC (“LMM”) is, and any
new indebtedness may be, secured and the Company has pledged its shares of Platinum Group
Metals (RSA) Proprietary Limited (“PTM RSA”), and PTM RSA has pledged its shares of Waterberg
JV Resources (Pty) Limited (“ Waterberg JV Co. ”) to Liberty Metals & Mining Holdings, LLC, a
subsidiary of LMM, under the LMM Facility, which potentially could result in the loss of the
Company’s interest in PTM RSA and the Waterberg Project in the event of a default under the LMM
Facility or any new secured indebtedness; the Company’s history of losses and negative cash flow;
the Company’s ability to continue as a going concern; the Company’s properties may not be
brought into a state of commercial production; uncertainty of estimated production, development
plans and cost estimates for the Waterberg Project; discrepancies between actual and estimated
mineral reserves and mineral resources, between actual and estimated development and operating
costs, between actual and estimated metallurgical recoveries and between estimated and actual
production; fluctuations in the relative values of the U.S. Dollar, the Rand and the Canadian Dollar;
volatility in metals prices; the failure of the Company or the other shareholders to fund their pro
rata share of funding obligations for the Waterberg Project; any disputes or disagreements with
the other shareholders of Waterberg JV Co., Mnombo Wethu Consultants (Pty) Ltd. or Maseve;
completion of a DFS for the Waterberg Project is subject to economic analysis requirements; the
ability of the Company to retain its key management employees and skilled and experienced
personnel; conflicts of interest; litigation or other administrative proceedings brought against the
Company; actual or alleged breaches of governance proce sses or instances of fraud, bribery or
corruption; the Company may become subject to the U.S. Investment Company Act; exploration,
development and mining risks and the inherently dangerous nature of the mining industry, and
the risk of inadequate insurance or inability to obtain insurance to cover these risks and other
risks and uncertainties; property and mineral title risks including defective title to mineral claims
or property; changes in national and local government legislation, taxation, controls, regulations
and political or economic developments in Canada and South Africa; equipment shortages and the
ability of the Company to acquire necessary access rights and infrastructure for its mineral
properties; environmental regulations and the ability to o btain and maintain necessary permits,
including environmental authorizations and water use licences; extreme competition in the mineral
exploration industry; delays in obtaining, or a failure to obtain, permits necessary for current or
future operations or failures to comply with the terms of such permits; risks of doing business in
South Africa, including but not limited to, labour, economic and political instability and potential
changes to and failures to comply with legislation; the Company’s common shares may be delisted
from the NYSE American or the TSX if it cannot maintain or regain compliance with the applicable
listing requirements; and other risk factors described in the Company’s most recent Form 20 -F
annual report, annual information form and ot her filings with the SEC 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’s business and potential interest in projects. Any forward-looking
statement speaks only as of the date on which it is made and, except as may be required by
applicable securities laws, the Company disclaims any intent or obligation to update any forward-
looking statement, whether as a result of new information, future events or results or otherwise.
Estimates of mineralization and other technical information included herein have been prepared
in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“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 study 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 report must be filed with the appropriate governmental authority. As a result, th e reserves
PLATINUM GROUP METALS LTD. …6
reported by the Company in accordance with NI 43-101 may not qualify as “reserves” under SEC
Industry Guide 7. In addition, the terms “mineral resource” and “measured mineral resource” 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 historically have not been permitted to be used in reports and
registration statements filed with the SEC pursuant to SEC Industry Guide 7 . 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. Accordingly, descriptions of the Company’s mineral deposits in this
press release may not be comparable to similar information made public by U.S. companies
subject to the reporting and disclosure requirements of SEC Industry Guide 7.