World News: 23:08 GMT Friday 11th January 2019. [Platinum Group Metals Ltd. via Globe Newswire via SPi World News]
VANCOUVER, British Columbia and JOHANNESBURG, South Africa, Jan. 11, 2019 (GLOBE NEWSWIRE) -- (PTM:TSX; PLG:NYSE American) (“Platinum Group” “PTM” or the “Company”) reports the Company’s financial results for the three months ended November 30, 2018 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, Gas 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 () or on EDGAR (). Shareholders are encouraged to visit the Company’s website at . 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.
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, 2017 – $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.
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.
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.
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.
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.
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
Globe Newswire: 23:08 GMT Friday 11th January 2019
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