AMN - SOUTH AFRICA: Hanwa now holds 9.755% of Waterberg

Platinum Group Metals Ltd reports that the transaction between the Japan, Oil, Gas and Metals National Corporation (JOGMEC) and Hanwa Co Ltd covering the sale of an interest in the Waterberg Palladium Project in South Africa has been completed. Hanwa has, therefore, completed its acquisition of 9.755% of JOGMEC’s 21.95% interest.

In February 2018, JOGMEC held a public tender to transfer the 9.755% stake with Hanwa winning the bid. Hanwa and JOGMEC then started the process required to complete and finalise the transfer.

On October 24, 2018, Hanwa and JOGMEC officially entered into a transfer agreement. Upon the recent grant of approval from the government of the Republic of South Africa, the entire transfer procedure has been completed.

JOGMEC will continue to be an active joint venture partner and will also continue the promotion of Japanese interests globally through mineral exploration and providing vital information on mineral resources.

Under the terms of the transaction, Hanwa has also acquired the marketing right to solely purchase all the metals produced from the Waterberg project at market prices. The transaction secures a key future source of platinum group metals and nickel used for automobile catalytic converters, fuel cells and secondary batteries for industries in Japan.

The current measured and indicated mineral resource of the Waterberg deposit stands at 26.34 million ounces 4E. This comes from 242 million tonnes with an average grade of 3.38 g/t 4E - platinum, palladium, rhodium and gold.

The deposit is amenable to fully mechanised mining with production costs estimated to be the lowest of PGM mines in South Africa. The deposit is also advantageous because of the highest palladium content (63.04%) amongst South African PGM mines. The mineral reserves and resources will be updated as part of the definitive feasibility study in process.

Palladium prices have outperformed recently due to strong demand from autocatalyst manufacturers and a limited supply response capability from traditional producers in Russia and South Africa. Industry analysts expect deficits to continue.

Following the Hanwa transfer, Platinum Group continues to hold a 50.02% effective interest in Waterberg JV Co, JOGMEC now holds a 12.195% interest, Impala Platinum Holdings Ltd (Implats) holds 15%, Hanwa holds 9.755% and empowerment partner Mnombo Wethu Consultants (Pty) Ltd holds the effective balance of the joint venture.

JSE-listed, broad-based empowerment group, Hosken Consolidated Investments Limited (HCI) has recently acquired a 19.90% ownership interest in Platinum Group Metals Ltd.

Implats made a strategic investment of US$30 million in November 2017 to purchase its 15% stake in the Waterberg project. Implats acquired an option to increase its stake to 50.01% by additional share purchases from JOGMEC for an amount of US$34.8 million and a commitment to expenditures of US$130 million for development work on the Waterberg project and to arrange project financing.

Implats also acquired a right of first refusal to smelt and refine Waterberg project concentrate. The Implats option is exercisable within 90 days of completion of the Waterberg definitive feasibility study which is in the final stages of completion.

Hanwa is a Japanese trading company which supplies a broad spectrum of products, including steel, non-ferrous metals, metals and alloys, food, petroleum, chemicals, machinery, lumber and many other items, to an equally diverse range of customers. The company has solid positions in all these businesses.

As a trading company that performs many important roles, Hanwa will continue to enter more business fields in response to changes in the operating environment in order to meet the needs of customers.

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