Platinum Group Metals Ltd. Reports Second Quarter Results
4875-2010-8553\
838 – 1100 Melville Street
Vancouver, BC V6E 4A6
P: 604-899-5450
F: 604-484-4710
News Release No. 22-451
April 14, 2022
Platinum Group Metals Ltd. Reports Second Quarter Results
(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 six months ended February 28, 2022, and provides a summary of recent events and
outlook. The Company is focused on advancing the Waterberg Project located on the Northern
Limb of the Bushveld Complex in South Africa (the “Waterberg Project”). The Waterberg
Project is planned as a fully mechanised , shallow, decline access palladium, platinum, gold
and rhodium (“4E”) mine and is projected to be one of the largest and lowest cost
underground platinum group metals (“PGM” or “PGMs”) mines globally.
The Company’s near-term objectives are to advance the Waterberg Project to a development
and construction decision , including the arrangement of construction f inancing and
concentrate offtake arrangements. The Company is also advancing research and
development through Lion Battery Technologies Inc. (“ Lion”) using platinum and palladium
in lithium battery technolog ies in collaboration with Anglo A merican Platinum Limited
(“Anglo”) and Florida International University (“FIU”).
For details of the condensed consolidated interim financial statements for the six months
ended February 28, 2022 (the “Financial Statements”) and Management’s Discussion and
Analysis for the six months ended February 28, 2022 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 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.
Recent Events
On February 11, 2022 , the Company repa id the remaining $3.0 million principal balance
and outstanding interest of a senior secured loan facility with Sprott Private Resource Lending
II (Collector), LP and the other lenders party thereto (the “2019 Sprott Facility”). After this
repayment, the Company became debt free and the pledge of its South African assets as
security was fully released.
On February 11, 2022, the C ompany completed a non -brokered private placement of
3,539,823 common shares at a price of $1.695 per common share to existing major beneficial
shareholder, Hosken Consolidated Investments Limited (“HCI”), resulting in proceeds to the
Company of $6.0 million (the “Private Placement”). Pricing of the Private Placement was
set to be consistent with the equity consideration paid by the Company to purchase and cancel
PLATINUM GROUP METALS LTD. …2
its outstanding $19.99 million 6 7/8% Convertible Senior Subordinated Notes (“Convertible
Notes”) as described below . The Private Placement allowed HCI to return to a near 26%
interest in the Company, as it held prior to the purchase and cancellation of the Convertible
Notes.
On February 11, 2022, the Company reported the privately negotiated purchase and
cancellation of the Company’s Convertible Notes maturing on July 1, 2022. The Company
issued to the holders, on a private placement basis, an aggregate of 11,793,509 Common
Shares of the Company at a price of $1.695 per share in consideration for the $19.99 million
principal outstanding balance of the Convertible Notes. The Company settled accrued and
unpaid interest on the Convertible Notes in cash.
On October 14, 2021, the Company reported completion of a geotechnical drilling campaign
at the Waterberg Project consisting of 46 boreholes drilled along the planned centerline of
two sets of twin declines and box -cut positions. A total of 5,966 metres of drill core were
recovered and a total of 2,696 metres of core were geotechnically logged from within the zone
of interest. Downhole geophysical surveys were conducted . Core samples of all major
geotechnical units encountered were collected and subjected to laboratory testin g.
Geotechnical qualified persons monitoring the drill programme determined that in general,
the rock mass encountered along both decline routes is competent and can support the
planned excavations with no major problem areas expected.
On July 6, 2021 , Waterberg JV Resources Proprietary Limited (“ Waterberg JV Co. ”)
completed the registration of a mining right at the Minerals and Petroleum Titles Registration
Office (the “Waterberg Mining Right”). The Waterberg Mining Right was notarially executed
by the Department of Mineral Resources and Energy (“DMRE”) on April 13, 2021, and remains
active.
On June 15, 2021, the U.S. Patent and Trademark Office issued Patent No. US 11,038,160
B2 entitled “Battery Cathodes for Improved Stability” to FIU. The patent covers a preparation
method using PGM catalysts in carbon materials for use as cathodes with increased emphasis
on Lithium Sulphur Batteries. The patent broadens protection for Patent No. US 10,734,636
B2 issued to FIU on August 4, 2020, covering the composition of carbon cathodes containing
PGMs. Under a sponsored research agreement, Lion has exclusive rights to battery
technology being developed by FIU , including patents granted. Lion was jointly formed in
2019 by Platinum Group and Anglo to accelerate the development of next-generation battery
technology using platinum and palladium.
On February 5, 2021, the Company entered into an Equity Distribution Agreement with BMO
Capital Markets Corp. (“BMO”) to sell its common shares from time to time for up to $50.0
million in aggregate sales proceeds in “at-the-market” transactions (the “2021 ATM”). As of
February 28, 2022, the Company had sold 7,960,324 common shares at an average price of
$3.11 per share pursuant to the 2021 ATM for net procee ds of $ 24 million, after share
issuance costs of $0.8 million. No offers or sales of common shares were made in Canada,
to anyone known to be a resident of Canada or on or through the facilities of the Toronto
Stock Exchange (the “TSX”) or other trading markets in Canada.
PLATINUM GROUP METALS LTD. …3
On January 28, 2021 , the DMRE granted Waterberg JV Co. the Waterberg Mining Right.
The Waterberg Mining Right was notarially executed by the DMR on April 13, 2021, and was
registered at the Mineral and Petroleum Titles Registration Office on July 6, 2021.
Results For The Six Months Ended February 28, 2022
During the six months ended February 28, 2022, the Company incurred a net loss of $ 6.0
million (February 28, 2021 - $6.6 million). In the current period, general and administrative
expenses were $2.4 million (February 28, 2021 - $1.9 million) with the increase primarily due
to legal fees for the Africa Wide trial , which took place during October 2021. For more
information about the Africa Wide trial, see Note 9 of the Financial Statements. In the current
period, interest expense of $1.6 million was recognized (February 28, 2021 - $2.5 million)
with the reduction due to reduced overall debt outstanding during the current period. The
currency translation adjustment recognized in the period was a loss of $2.4 million (February
28, 2021 - $3.3 million gain) with the variance due to the Rand decreasing in value relative
to the U.S. Dollar during the current period.
At February 28, 2022, finance income consisting of interest earned and property rental fees
in the period amounted to $51 thousand (February 28, 2021 - $48 thousand). Loss per share
for the period amounted to $0.07, as compared to a loss of $0.09 per share for the six months
ended February 28, 2021.
During the six months ended February 28, 2022, $9.4 million of principal was repaid against
the 2019 Sprott Facility , eliminating the principal balance due . During the period the
Company also fully settled the Convertible Notes.
Amounts receivable (including 2021 ATM proceeds receivable) at February 28, 2022, totalled
$0.33 million (August 31, 2021 - $0.48 million) while accounts payable and accrued liabilities
amounted to $ 0.9 million ( August 31 , 20 21 - $2.46 million). A mounts receivable were
comprised mainly of value added taxes repayable to the Company in South Africa. Accounts
payable consisted primari ly of Waterberg engineering fees, accrued professional fees and
regular trade payables.
Total expenditures on the Waterberg Project, before partner reimbursements, for the six-
month period were approximately $1.9 million (February 28, 2021 - $0.9 million).
At February 28 , 202 2, $ 43 million in accumulated net costs had been capitalized to the
Waterberg Project (February 28, 2021 - $40 million). Total expenditures on the property
since inception from all investor sources to February 28, 2022, are approximately $80 million.
For more information on mineral properties, see Note 3 of the Financial Statements.
Outlook
The Company’s key business objective is to advance the Waterberg Project to a development
and construction decision. PTM is the operator of the Waterberg Project as directed by a
technical committee comprised of representatives from joint venture partners Impala
Platinum Holdings Ltd. (“ Implats”), Mnombo Wethu Consultants (Pty) Ltd. (“ Mnombo”),
PLATINUM GROUP METALS LTD. …4
Japan Oil, Gas and Metals National Corporation (“JOGMEC”) and Hanwa Co. Ltd. (“Hanwa”).
Before project financing and a construction decision can be undertaken, arrangements will be
required for project concentrate offtake or processing.
A Waterberg JV Co. budget in the amount of R40 million (approximately $2.7 million) for the
fiscal period ending August 31, 2022 , was approved by the partners to the joint venture on
March 9, 2022 . The Company is working to advance project permitting, engineering,
infrastructure servitudes , surface access and community relationships. The Company
continues to work closely with regional and local communities and their leadership on mine
development plans to achieve optimal outcomes and best value to all stakeholders.
The Company is considering commercial alternatives for mine development, financing and
concentrate offtake. Studies to assess the economic feasibility of constructing a dedicated
Waterberg matte furnace to process Waterberg concentrate as an alternative to a traditional
concentrate offtake arrangement are underway. The NI 43-101 definitive feasibility study
technical report for the Waterberg Project entitled “Independent Technical Report, Waterberg
Project Definitive Feasibility Study and Mineral Resource Update, Bushveld Complex, South
Africa” dated October 4, 2019 , stated that “Additional smelting capacity may need to be
constructed in the industry to be able to treat the flotation concentrate from Waterberg and
the other potential Platreef miners. ” Discussions with potential pa rticipating partners in a
possible matte furnace facility are in process . Parallel d iscussions are also underway with
South African smelter operators considering concentrate offtake arrangements for the project.
Implats currently holds a right of first refusal to match concentrate offtake terms offered to
Waterberg JV Co. by bona fide third parties (the “Offtake ROFR”). Processing of Waterberg
concentrate through a matte furnace owned by Waterberg JV Co. or by one or more of the
Waterberg JV partners would not be subject to the Offtake ROFR as such an entity would not
be a “bona fide third party”. Any transaction between Waterberg JV Co. involving one or
more shareholders must be entered into on a bona fide arms-length basis and for fair value.
Under the terms of the Waterberg JV Co. shareholders agreement, Hanwa holds the exclusive
right to purchase or direct the sale of all or part of the Waterberg Project concentrate or metal
contained therein.
The market for PGMs has steadily improved over the last several years resulting in higher 4E
metal basket pri ces. Supply chain disruptions resulting from the global pandemic and
exacerbated by the recent conflict in Ukraine continue to negatively impact global auto
production. Notwithstanding weak auto demand, PGM prices have been supported by
geopolitical tensi ons and the threat of Russian PGM exports being cut, representing a
significant supply risk. Resolution of the conflict could remove some price support. Visibility
on the resolution of supply chain issues is difficult to predict but PGM prices could strengthen
in the medium term based on pent up auto demand once auto production normalizes. Major
South African PGM producers are entering wage negotiations and additional supply risk could
materialize should strike action occur. The projected market penetra tion of battery electric
vehicles in the future could soften the market for palladium in the longer term as demand for
internal combustion engines with catalytic converters is potentially reduced. Other metals to
be produced at Waterberg, being platinum, rhodium, gold, copper and nickel, are expected to
see strong demand and prices in the longer term.
PLATINUM GROUP METALS LTD. …5
The Company’s battery technology initiative through Lion represents a new opportunity in the
high-profile lithium battery research and innovation field. The investment in Lion by the
Company and Anglo creates a potential vertical integration with a broader industrial market
development strategy to bring new technologies u sing palladium and platinum to market.
Lion has concluded a sponsored research agreement with FIU. The U.S. Patent and Trademark
Office has issued three patents to FIU to date. Several more patent applications are in
process. Technical results from Lio n’s research may have application to most lithium-ion
battery chemistries and the scope of Lion’s research work is being expanded.
Environmental, Social and Governance
In late 2021, Platinum Group submitted its inaugural Environmental, Social and Governance
(“ESG”) disclosure submission with Digbee Ltd. (“ Digbee”), a United Kingdom based
company with a mining-focused expert network and ESG disclosure platform aimed at
facilitating improved disclosure and better access to capital markets for mining companies
with strong ESG practices. Digbee has been endorsed by leading financial firms such as
Blackrock, BMO, and Dundee Corporation. Digbee's reporting framework is aligned with global
standards, including the Equator Principles, which provide a fram ework for financial
institutions to assess environmental and social risks in projects. For more details refer to the
Company’s 2021 Form 20-F and Annual Information Form (“AIF”). As well as the discussions
within this news release, the reader is encouraged to also see the Company’s disclosure made
under the heading “Risk Factors” in the Company’s 2021 Form 20-F and AIF.
Qualified Person
Rob van Egmond, P.Geo., a consultant geologist to the Company and a former employee, is
an independent qualified person as defined in National Instrument 43 -101 Standards of
Disclosure for Mineral Projects (“NI 43-101”). Mr. van Egmond has reviewed, validated and
approved the scientific and technical information contained in this news release and has
previously visited the Waterberg Project site.
About Platinum Group Metals Ltd. and the Waterberg Project
Platinum Group Metals Ltd. is the operator of the Waterberg Project, a bulk underground
palladium and platinum deposit located in South Africa. The Waterberg Project was
discovered by Platinum Group and is being advanced by Waterberg JV Co.
On behalf of the Board of
Platinum Group Metals Ltd.
Frank R. Hallam
President, CEO and Director
For further information contact:
Kris Begic, VP, Corporate Development
Platinum Group Metals Ltd., Vancouver
Tel: (604) 899-5450 / Toll Free: (866) 899-5450
www.platinumgroupmetals.net
PLATINUM GROUP METALS LTD. …6
Disclosure
The TSX 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.
The COVID-19 pandemic and related measures taken by governments create uncertainty and have
had, and may continue to have, an adverse impact on aspects of the Company’s business,
including employee health, workforce productivity and availability, travel restrictions, contractor
availability, supply availability, the Company’s ability to maintain its controls and procedures
regarding financial and disclosure matters and the availability of capital and insurance and the
costs thereof, some of which, individually or when aggregated with other impacts, may be material
to the Company. Effective April 5, 2022, South Africa lifted its National State of Disaster declared
in relation to the COVID-19 Pandemic and moved to reduce COVID-19 restrictions to below Alert
level 1, its lowest level of alert . In response to uncertainty caused by the COVID-19 pandemic,
the Company has implemented additional testing and monitoring protocols for its work at the
Waterberg Project site and elsewhere in South Africa.
This news 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”, “may”, “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 news release include, but are not limited to, statements regarding the application for an order
of the High Court and appeal of the mining right, the applicable procedures, timeline and potential
results thereof, the success of the Company’s objective to advance the Waterberg Project to a
development and construction decision, the success of the Company’s rebuttals to the appeals,
the success of the Company's defense of the claim of Africa Wide, the plan for and development
of the Waterberg Project and the potential benefits and results thereof, fin ancing and mine
development of the Waterberg Project, potential commercial alternatives for mine development
financing and concentrate offtake, financing and mine development of the Waterberg Project, the
size and cost of the Waterberg Project, Implat’s decision to exercise its right of first refusal with
respect to concentrate offtake, the economic feasibility of establishing a dedicated Waterberg
matte furnace, the appeals of the Waterberg Mining Right, work with local communities, support
from host communities and resolution of concerns through a mediation process, the availability of
construction financing on terms acceptable to the Company, the development of new battery
technologies and the potential benefits of utilizing palladium and platinum therein, the
commercialization thereof, potential vertical integration with a broader industrial market
development strategy, the success of Lion’s application for patent rights with respect to the use
of platinum group metals in lithium batteries, providing shareholder value, and Lion’s development
of next generation battery technology, a return to strength in the market for PGMs, the impact of
the conflict in Ukraine and any resolution thereof on the PGM market and the PGM supply chain,
the success of Lion’s and FIU’s research and development efforts, the expansion of Lion’s research
work into additional battery chemistries, the Company’s ability to better access capit al markets
due to its ESG practices, the outcome of the Company’s pre-construction work programmes at the
Waterberg Project, the ability of the Company to obtain all required permitting , surface access,
and infrastructure servitudes, the estimated strength of the market for platinum, palladium and
rhodium, the recovery of the car sales market, the effect of battery electric vehicles on the market
for palladium, the market demand for platinum, rhodium, gold, copper and nickel, the use of PGEs
in solutions to climate change, and the Company’s other future plans and expectations. Although
the Company believes any forward-looking statements in this news 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, inc luding possible adverse
PLATINUM GROUP METALS LTD. …7
impacts due the global outbreak of COVID -19 (as described above), the Company’s inability to
generate sufficient cash flow or raise additional capital, and to comply with the terms of any new
indebtedness; additional financing requi rements; and any new indebtedness may be secured,
which potentially could result in the loss of any assets pledged by the Company; 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, betw een
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; volatilit y in metals prices; the
uncertainty of alternative funding sources for Waterberg JV Co.; the Company may become subject
to the U.S. Investment Company Act; the failure of the Company or the other shareholders to
fund their pro rata share of funding obligat ions for the Waterberg Project; any disputes or
disagreements with the other shareholders of Waterberg JV Co. or Mnombo; 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 processes or instances of fraud, bribery or corruption;
exploration, development and mining risks and the inherently dangerous nature of the minin g
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 loca l 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 obtain 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
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 other 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 in tent
or obligation to update any forward -looking statement, whether because of new information,
future events or results or otherwise.
The technical and scientific information contained herein has been prepared in accordance with NI
43-101, which differs f rom the standards adopted by the SEC. Accordingly, the technical and
scientific information contained herein, including any estimates of mineral reserves and mineral
resources, may not be comparable to similar information disclosed by U.S. companies subject to
the disclosure requirements of the SEC.