Platinum Group still considering its options (13/04/10)


Platinum Group Closes 74% Ownership Transaction, Western Bushveld Joint Venture (22/04/10)

Platinum Group Metals is now "actively" assessing a number of strategic options in order to make the most of its pgm interest in South Africa.

The Vancouver-based company revealed last week that it has completed the purchase of a 74 per cent stake in Projects 1 and 3 of the Western Bushveld Joint Venture (WBJV).

Transfers of the final mineral property rights pursuant to the transaction - which includes the 275,000 oz-per-year Project 1 Platinum Mine - have now been approved by South Africa's Department of Mineral Resources.

The company now holds a 74 per cent stake in 8.2 million oz 4E pgm (platinum, palladium, rhodium and gold) in measured and indicated resource for Project 1 and 1.9 million ounces oz 4E pgm inferred in Project 3.

In addition, the reserves for Project 1 are currently 4.67 million ounces 4E pgm, comprising 18Mt at 5.57g/t 4E on the Merensky reef and 13.5Mt at 3.4g/t 4E on the UG2 reef.

Platinum Group Metals President and Chief Executive Michael Jones said: "We are now in a position to advance the Project 1 Platinum Mine and make a final decision on our strategic alternatives in the weeks ahead.

"We have a high degree of interest in the project from several different global players and financing groups at a time when the fundamentals for platinum and palladium have never been better."

Mr Jones had earlier suggested that one of the options available to the company would be to build the Project 1 Platinum Mine using conventional debt and equity.

Alternatively, it may seek to hedge some of the project in a partnership or transaction involving a "minority of the metal flow", or look to sell the company completely.

The WBJV has been restructured, with Anglo Platinum, the world's largest platinum producer, exiting and Wesizwe Platinum taking up the remaining 26 per cent stake, including a 100 per cent interest in Project 2.

Platinum Group Metals believes that WBJV reserves are highly competitive in terms of ore grade and shallow depth, while also predicting that depth, safety and power will restrict supply.

The company used three-year trailing average prices in October 2009 to construct an independent feasibility model for the project, when the 275,000 oz-per-year figure was originally mooted.

With RBC Capital Markets acting as an advisor and discussions with potential investors now at an advanced stage, Platinum Group Metals is expected to make a further announcement in the coming weeks.

© Adfero Ltd