Platinum Group Metals: Impala Platinum completes strategic investment for 15% stake in Waterberg PGM Project for US $30 million
Thursday, Nov 09, 2017
Platinum Group Metals Ltd. (TSX:PTM) (NYSE American:PLG) (“Platinum Group”, “PTM” or the “Company”) is pleased to report the closing of the first phase of the transaction involving the Waterberg platinum group metal (“PGM”) Project (the “Waterberg Project”) announced on October 16, 2017 with Impala Platinum Holdings Ltd. (JSE:IMP) (“Implats”), Japan Oil, Gas and Metals National Corporation (“JOGMEC”), Mnombo Wethu Consultants (Pty) Ltd. (“Mnombo”), and Waterberg JV Resources Proprietary Ltd. (“Waterberg Resources”).  Platinum Group Metals has received consideration of US$17.2 million from Implats for the sale of an 8.6% interest in the Waterberg Project and JOGMEC has received US $12.8 million for the sale of a 6.4% interest in the Waterberg Project.

R. Michael Jones, CEO of Platinum Group Metals said, “We are very pleased to close the first phase of this transaction and to welcome Implats to the Waterberg team.  We will immediately get to work on the Definitive Feasibility Study.  Waterberg represents a large-scale PGM resource with an attractive risk profile given its shallow nature, which facilitates fully mechanized production with the potential for the project to have amongst the lowest operating costs in the PGM sector.  The deposit is dominated by palladium at a time when prices and interest in this essential metal are increasing.”

Transaction Summary:


1. Implats has purchased a 15.0% interest in Waterberg Resources, which holds the Waterberg Project, for US$30.0 million (the “Initial Purchase”);
   
2. Implats has the option to increase its stake in Waterberg Resources (the “Call Option”) to 50.01% through additional purchases and earn-in arrangements totaling US $166.0 million following the completion of a Definitive Feasibility Study; and
   
3. Implats has a right of first refusal to smelt and refine Waterberg concentrate.

If Implats exercises its Call Option to advance to a 50.01% interest in Waterberg Resources, JOGMEC will retain a 5% interest and certain metal marketing rights to final metal related to the project, while Platinum Group would retain a 31.96% direct and indirect interest in Waterberg Resources.  The transaction agreements also provide for the transfer of equity and the issuance of additional equity to one or more broad based black empowerment partners, at fair value.  For full details of the transaction please see the Company’s news release dated October 16, 2017.

The Waterberg Project has a number of highly attractive characteristics and is designed to be a low-cost, shallow, bulk mineable project with significant scale and growth potential. The participation of Implats, the world’s second largest platinum producer with fully integrated mine to market operations, represents a significant step in the advancement of the Waterberg Project towards potential development and production.

The secured lenders to Platinum Group, Sprott Resource Lending Partnership, among other lenders (“Sprott”), and Liberty Metals & Mining Holdings, LLC (“LMM”), have provided their consent to the Call Option, which consent is conditional on the satisfaction of certain conditions by the Company.  Sprott and LMM have also agreed to terms and conditions upon completion of which they will provide their consent to the sale of the Maseve Mine to Royal Bafokeng Platinum Limited (“RBPlat”) (the “Maseve Sale Transaction”) (see news release dated September 6, 2017).

The Company and RBPlat are in the process of obtaining regulatory approvals and completing the negotiation of agreements required for the closing of the Maseve Sale Transaction.  RBPlat paid a deposit of Rand 41.37 million (US $3.0 million) into escrow on October 9, 2017.  The Maseve Mine is on care and maintenance and the Company does not plan any further investment at Maseve.  In the event that the Maseve Sale Transaction did not complete for any reason, the Company would pursue other expressions of interest to purchase the mine.  Based on the Company’s intended sale of the Maseve Mine and the above facts, the Company has determined that the Maseve Mine is no longer a material property of the Company in the context of National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”).

About Impala Platinum Holdings Limited

Impala Platinum Holdings Limited is one of the world’s foremost fully integrated producers of platinum and associated PGEs. The group produces approximately a quarter of the world's supply of primary platinum. Implats produced 1.53 million ounces of platinum and 3.1 million ounces of PGEs in FY2017.  Implats’ operations are located on the Bushveld Complex in South Africa and the Great Dyke in Zimbabwe, the two most significant PGE-bearing ore bodies in the world. In Southern Africa Implats is structured around five main operations namely Impala, Zimplats, Marula, Mimosa and Two Rivers with headquarters based in Johannesburg, South Africa.

About Platinum Group Metals Ltd.

Platinum Group, based in Johannesburg, South Africa and Vancouver, Canada.  Platinum Group and its partners JOGMEC and Mnombo originated the grass-roots exploration that discovered the Waterberg deposit and a new portion of the Bushveld PGM complex in 2011.

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 seventy percent of the world's primary platinum production.

For more information, please visit: http://www.platinumgroupmetals.net

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