PLATINUM Group Metals (PTM) was assessing mine financing and metal offtake alternatives for its Waterberg Project in South Africa’s Limpopo province after Impala Platinum (Implats) announced in June it would not exercise an option agreement to become the project’s leader investor.
Commenting in a second quarter update on Wednesday, PTM said it had received “interest from other potential strategic partners in the Waterberg Project”.
In terms of an option agreement, Implats decided against extending its 15% stake in the joint venture to 50.01%, but it said it would carry on with development costs of an estimated R55m until the Waterberg Project had been granted a mining permit from the South African government.
The Waterberg Project has been scoped for first production of some 420,000 ounces of platinum group metals from 2023 following investment of as much as $617m. Full production, which would be predominantly of palladium, was planned for 2027.
Implats, which will retain its existing 15% stake in the project and follow its rights in terms of development costs, said it would like to conclude a PGM concentrate offtake agreement from Waterberg Project. In line with this prospect, however, PTM was in discussions with alternative offtakers to which Implats would have a matching right.
The award of the mining permit from the Department of Mineral Resources and Energy has taking longer than forecast owing to stay-at-home conditions imposed by authorities that are batting to contain the COVID-19 disease.
In the meantime, the work program on the Waterberg Project was focusing on operational readiness and risk mitigation, the company said. “The company plans to drive ahead with its core business objectives while reducing costs where possible in this period of market uncertainty,” PTM said.
For the nine months ended May 30, PTM reported a net loss of $5.9m (2019: net loss of $13.1m). Subsequent to the period end, on June 18, the company closed a $1.71m private placement after issuing an aggregate of 1.2 million shares at a price of $1.40 per share. Funds raised would be used to finance its contribution to the Waterberg Project.