Platinum Group thinking big on the Bushveld

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 turning its attention to its Waterberg discovery on the North Limb — the least-mined portion of South Africa’s prolific Bushveld igneous complex that is receiving renewed 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 project’s US$100-million first phase is slated for a mid-2014 production date, and focuses on completing declines into the orebody, as well as building surface infrastructure. 

On Oct. 12, the company said 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 the WBJV 1. The offtake is a precondition for the loan facility.

A progress update included in the press release indicated that Platinum Group was 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 linear metres into the underground.

Surface infrastructure for the first phase was completed in early June, and the company is building its Eskom power 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 70 km north of the town of Mokopane off the northern end of the mapped North Limb. Japan Oil and Gas Mineral Exploration has earned a 37% interest in the project through US$3.2 million in expenditures. Platinum Group maintains a 49.97% interest, and the remainder held by black empowerment interests.

Platinum Group tallied a maiden resource for Waterberg on Sept. 5, taking into account 16 of 30 holes completed thus far, though 10 drill rigs are operating on site. The resource encompasses the “T” mineralized layer at 1.8 km along strike, and the “F” mineralized layer at 2.8 km. The T layers reportedly truncate updip at 140 metres depth where they meet the overlying Waterberg sediments, while the F layers were intersected at 495 metres below surface. Updip projections indicate the deposit could approach the surface several hundred metres east of drilling.

T1 and T2 contained 26.7 million inferred tonnes grading 3.33 grams platinum-palladium-gold per tonne at an average thickness of 3.2 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 5.3 metres for 3.7 million contained oz. platinum-palladium-gold.

“This is very exciting work,” president and CEO R. Michael Jones commented, citing drilling at what appears to be a new deposit type. “We have not yet seen the limits of the new system, and we are expanding the prolific Bushveld complex with every stepout 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 expanded the T- and F-layer mineralization. 

Intercepts were made on the T1 and T2 layers that increased aggregate strike length by 1.5 km northeast of the initial resource area, while new cuts at the FH and FP layers tacked on another 1.5 km of strike. 

Drilling is ongoing around 3 km 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 27D0; 3.3 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 30D0; 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 28D0.

Platinum Group received a boost from releasing its Waterberg resource, with shares jumping 49%, or 38¢, over the week 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. 

The company has hovered around the $1 level since then, closing at 98¢ at press time. 

Platinum Group Metals has 178 million shares outstanding, for a $176-million press-time market capitalization.