AMN - SOUTH AFRICA: Implats secures Waterberg stake

Platinum Group Metals reports the closing of the first phase of the transaction involving the Waterberg Platinum Group Metal (PGM) Project in South Africa with Impala Platinum Holdings (Implats), Japan Oil, Gas and Metals National Corporation (JOGMEC), Mnombo Wethu Consultants and Waterberg JV Resources Proprietary Ltd.

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 project.

Platinum Group Metals CEO R Michael Jones 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 (DFS).

"Waterberg represents a large-scale PGM resource with an attractive risk profile given its shallow nature, which facilitates fully mechanised 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.”

Implats has purchased a 15% interest in Waterberg Resources, which holds the Waterberg project, for US$30 million and has the option to increase its stake to 50.01% through additional purchases and earn-in arrangements totalling US$166 million following the completion of a DFS. Implats also has a right of first refusal to smelt and refine Waterberg concentrate.

If Implats exercises its option to advance to a 50.01% interest, 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.

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.

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.

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