Platinum Group thinking big on the Bushveld

VANCOUVER — With first phase construction well underway at Vancouver-based Platinum Group Metals (PTM-T, PLG-X) Western Bushveld joint-venture project 1 (WBJV 1), the company is now pushing forward at its promising Waterberg discovery on the North Limb — a newly-discovered area of South Africa’s prolific Bushveld complex that is receiving a significant amount of attention from explorers and investors alike.

Platinum Group holds a 74% interest in WBJV 1 under a partnership with Johannesburg Stock Exchange listed Wesizwe Platinum. The US$100-million first phase of the project is slated for a mid-2014 production date and focuses on the completion of declines into the ore body, as well as the construction of surface infrastructure.

On Oct. 12, the company announced it was closing in on a US$260-million senior loan facility, which will be finalized subject to credit approval and final document execution. Anglo American Platinum announced on Sept. 11 that it had exercised a first right of refusal to purchase 275,000 oz. per year of platinum, palladium, rhodium and gold in concentrate from WBJV 1. The off-take is a precondition for the loan facility.

A progress update included in the press release indicated that Platinum Group was now averaging around 100 metres per month on its twin declines and employing a workforce of roughly 325 people. In combination with the ramp, the company’s declines are now over 750 metres linear into the underground.

Surface infrastructure for the first phase was completed in early June, and the company is constructing its Eskom substations in addition to polishing off design work for its water connections in anticipation of its second phase of development.

Waterberg is a 137-sq.km land package located 70km north of the town of Mokopane off the northern end of the mapped North Limb. Japan Oil and Gas Mineral Exploration (Jogmec) has earned a 37% interest in the project through US$3.2-million in expenditures. Platinum Group maintains a 49.97% interest, while a black empowerment group holds the remaining share.

Platinum Group announced its maiden resource for Waterberg on Sept. 5. The resource features 16 of 30 holes completed, thus far, and ten drill rigs continue to operate on site. The resource encompasses the T and F mineralized layers, which run for 1.8 km and 2.8 km along strike, respectively. The T layers reportedly truncate up-dip at 140 metres depth, where they meet the overlying Waterberg sediments, while the F layers were interested at 495 metres below surface. Up-dip projections indicate the deposit could approach the surface several hundred metres east of current drilling.

T1 and T2 contained 26.7 million inferred tonnes grading 3.33 grams platinum-palladium-gold per tonne at an average thickness of 3.19 metres for 2.9 million oz. contained platinum-palladium-gold. The FH and FP layers hold 41 million inferred tonnes grading 2.8 grams platinum-palladium-gold at an average thickness of 5.27 metres for 3.7 million contained oz. platinum-palladium-gold.

“This is very exciting work,” commented president and CEO R. Michael Jones, citing ongoing drilling at what appears to be a brand new deposit type. “We have not yet seen the limits of the new system and we are expanding the prolific Bushveld complex with every step out drill hole. It is amazing to see a new type of deposit emerge with extraordinary grade thickness and good platinum and gold value that may be amenable to near surface, mechanized mining with resulting high productivity.”

On Sept. 17, Platinum Group published results from another three holes from its 30-hole program that successfully expanded the T and F layer mineralization. Intercepts were made on the T1 and T2 layers that increased aggregate strike length by roughly 1.5 km to the northeast of the initial resource area, while new cuts at the FH and FP layers also tacked on another 1.5km worth of strike. Drilling is ongoing around 3km northeast of the FH and FP mineral resource.

Highlights from expansion program include: 2 metres averaging 1.06 grams platinum, 2.09 grams palladium, and 0.18 gram gold in the T1 zone from 579 metres depth in hole WB027D0; 3.25 metres grading 1.38 grams platinum, 1.59 grams palladium, and 0.69 gram gold in the T2 layer from 582 metres depth in hole WB030D0; and 4.5 metres of 0.16 gram platinum, 1.43 grams palladium, and 3.14 grams gold in the FH zone from 750 metres depth in hole WB028D0.

Platinum Group received a big boost from the release of its Waterberg resource. The company jumped 49% or 38¢ in the week following the announcement en route to a high of $1.18 per share. The Anglo American announcement provided further traction, as Platinum Group hit a five-month high at $1.23 per share on Sept.13. Since then the company has hovered around the $1 level, closing at 98¢ at time of writing. Platinum Group has 178 million shares outstanding for a $176 million press-time market capitalization.