Platinum Group Metals Reports on Maseve Mine Operations
788 – 550 Burrard Street
Vancouver, BC V6C 2B5
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News Release No. 17-339
April 4, 2017
Platinum Group Metals Reports on Maseve Mine Operations
(Vancouver/Johannesburg) Platinum Group Metals Ltd. (PTM-TSX; PLG-NYSE MKT)
(“Platinum Group” or the “Company”) reports that during March 2017 the Maseve Mine
produced approximately 2,477 ounces of platinum, palladium, rhodium and gold (“4E”)
in concentrate. Production in March 2017 was the best level achieved since completion
of commissioning in 2016 and shows a positive trend. Production ramp-up is following a
positive trend but is behind schedule. Further improvement in the ramp -up rate is
required. The results for March demonstrate improved stoping and tramming as well as
the positive effects of Block 11 production coming online. Planned conveyor and silo
completions are on track targeted to be completed at the end of April and are expected
to facilitate and continue to improve performance.
Mining and Milling Overview
Improvements in stoping tonnes versus development during production ramp -up from
Block 11 are in progress at the time of writing. Production levels in January and into
February 2017 were hampered by the process of changing the prima ry underground
mining contractor, senior management changes, equipment operator performance and
slowly improving equipment availability. Production during February, 2017 was also
hampered by an extraordinary rain event over a period of days around February 20,
2017, which caused regional surface flooding and some underground flooding at the
Maseve Mine, resulting in several lost mining and milling days. Production in March was
improved, but was below target and did not offset the lower January and February
results.
A summary of monthly production for the second fiscal quarter plus the month of March,
2017 follows:
Month Dry Tonnes
Milled
Average
Grade
gms/tonne
Recovery % 4E Ounces in
Concentrate
December, 2016 39,297 1.51 79.2 1,509
January, 2017 34,661 1.53 79.2 1,351
February, 2017 29,146 1.59 80.3 1,193
March, 2017(1) 51,663 1.81 82.6 2,477
(1) Approximately 7,825 dry tonnes of ore mined in February, 2017 were milled in March, 2017.
Several important operational advancements were completed during the last few
months:
• Significant advancement into Block 11 in preparation for increased mining from this
important mining block was achieved. Double decline roadway access to Block 11
was competed at the end of December 2016. Five development ends and 17 mining
PLATINUM GROUP METALS LTD. …2
faces or “bords” are now active in Block 11, representing an increase of nine mining
faces since December, 2016. The work focus in Block 11 has changed from
predominantly development to mechanized bord and pillar mining.
• Redpath Mining South Africa is currently continuing with the construction of a 1.0 km
conveyor at their cost. During January, 2017 Redpath entered a letter of intent
whereby they would install, operate and maintain a 1.0 km conveyor towards Block
11, linking into underground si los and the existing 1.4 km conveyor to surface and
1.7 km conveyor system into the mill. Approximately 30% of this conveyor steel work
is installed and the construction is on track for completion at the end of April. Cost for
the conveyor installation to be borne by Redpath was estimated at Rand 25.0 million
(approximately US$1.8 million), which Redpath plans to recoup by way of a per tonne
charge.
• During the second fiscal quarter ended February 28, 2017 , approximately a 20%
monthly cost reduction has been completed through a process of rationalizing and
consolidating underperforming and redundant contractors. This process was
undertaken cooperatively with the involvement of affected contractors, the Nati onal
Union of Mineworkers, and on occasion, the Department of Minerals Resources. Many
mining services previously provided by several contractors are now consolidated
under the management of Redpath. As the changeover process is completed, the
Company expects to achieve improved production and cost efficiencies because of
these changes.
Block 11
The contribution of mined tonnage from Block 11 is a critical factor to achieving positive
cash flow at the Maseve Mine. Block 11 is a large, well -drilled and stable mining block
estimated to host 545,000 4E Merensky Reef ounces (3,066,512 tonnes at 5.53 gpt 4E
Indicated). This block is modelled as flat dipping at an average of nine degrees, with an
average seam thickness of 157 cm (as published in the technical report titled “An
Independent Technical Report on the Maseve Project (WBJV Project areas 1 and 1A)
located on the Western Limb of the Bushveld Igneous Complex, South Africa” dated
August 28, 2015, with an effective date of July 15, 2015). The flat dip and good quality
of Block 11 reef has been confirmed with over 100 meters of strike length exposed in
underground development.
During 2017, Block 11 is scheduled to build up to 70 -80% of mined ore flow. At full
production Block 11 is planned to provide up t o 76,000 tonnes a month of mined ore
flow. Historical monthly mined tonnes for Block 11 are recorded in the table below:
Month Block 11 Mined
Tonnes
Total Mined
Tonnes
Percentage
December, 2016 8,388 27,559 30.4%
January, 2017 16,614 28,733 57.8%
February, 2017 20,759 43,742 47.5%
March, 2017 29,690 49,610 59.8%
The rate of underground development and the increase of stoped tonnes versus
development at the Maseve Mine continues to be an important factor with respect to
mine ramp-up and production rates.
PLATINUM GROUP METALS LTD. …3
Labour
Mill operating contractor, Tailing Technology (“TT”), has reported to the Company that
the Association of Mineworkers and Construction Union (“AMCU”) was recently recognized
by them with approximately a 58% membership (approximately 62 people). AMCU has
provided a set of demands and TT is in negotiations with AMCU. TT and AMCU met with
the South African Commission for Conciliation, Mediation and Arbi tration on March 31,
2017 for mediation, u nfortunately no agreement was reached , and a s a result t he
commission is reported to have issued a strike certificate on April 3, 2017. If AMCU
wishes to take strike action, they must provide 48 hours written notice. TT advises the
Company that they are striving to find a solution and that they remain confident they will
be able to run the Maseve mill and limit any potential disruptions if AMCU chooses to go
on strike.
Outlook
Delays in underground development, stoping rates and planned tonnages have resulted
in ounce production delays. Such delays have had, and will continue to have, a negative
impact on working capital requirements until sufficient mined stoped material is produced
to allow mine operations to generate positive cash flow.
As a result of the production performance for the first calendar quarter , estimated
calendar 2017 annual production guidance, based on the current mine plan, is adjusted
from 100,000 ounces 4E to 85,000 ounces 4E.
The Company plans to report on the operational and financial details of its second fiscal
quarter ended February 28, 2017 on or before April 14, 2017.
The Company is currently working with BMO Ca pital Markets and Macquarie Capital to
review and assess corporate and asset level strategic alternatives.
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 mine 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. The Company is currently
focused on ramping up the Maseve Mine, its first near -surface platinum mine, to
commercial production and on expanding reserves.
Platinum Group has delineated new low cost, near surface reserves on the North Limb of
the Bushveld Complex on the Waterberg Project. Waterberg represents a new bulk type
of large scale, shallow low cost platinum, palladium and gold deposit. Waterberg is one
of the only large scale dominantly palladium deposits in the world.
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 Instrume nt 43 -101 Standards of Disclosure for Mineral Projects and is
responsible for preparing the technical information contained in this news release. He
PLATINUM GROUP METALS LTD. …4
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.
“Frank R. Hallam”
CFO 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 MKT 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 anticipated or potential developments at the Maseve Mine including
development and construction activities, conveyor details, improved stoping and
tramming, access to Block 11, mine plans, production tr ends and estimates, cost
estimates, contractor and labour developments, the potential for a strike and the
potential results thereof, and production and cost efficiencies; future cash flow and the
effects of developments on cash flow; corporate and asset l evel strategic alternatives;
the potential for expanding reserves; the potential economics of the Waterberg Project,
if developed; ramp-up and potential achievement of commercial production at the
Maseve Mine; 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 the y 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 g ive 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; the Company’s capital requirements may exceed its current
expectations; the uncertainty of cost, operational and econ omic projections; the ability
of the Company to negotiate and complete future funding transactions; variations in
market conditions; the nature, quality and quantity of any mineral deposits that may be
located; metal prices; other prices and costs; currenc y exchange rates; the Company’s
PLATINUM GROUP METALS LTD. …5
ability to obtain any necessary permits, consents or authorizations required for its
activities; 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 labour 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.
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" feasi bility 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 authori ty. As a result, the
reserves reported by the Company in accordance with NI 43 -101 may not qualify as
"reserves" under SEC standards. In addition, the terms "mineral resource", "measured
mineral resource", "indicated mineral resource" and "inferred 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 normally are not permitted to be used in
reports and registration statements filed with the SEC. Mineral resource s 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 securiti es 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; ho wever, 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.