PTM suggests it will circumvent Implats’ right of first refusal over Waterberg JV metal

PLATINUM Group Metals (PTM) said on Thursday it might circumvent a right of first refusal Impala Platinum (Implats) has over raw metal the Canadian firm produces from its proposed Waterberg Joint Venture.

Implats has a 15% stake in the project but in 2020 declined to exercise a control option saying it had other uses for its capital. Implats has, however, a first right of refusal to treat concentrate produced from Waterberg JV. Lenders have told PTM an offtake agreement is critical before they can consider financing the project.

Processing capacity for platinum group metals (PGMs) is constrained in South Africa and although Implats has announced plans to expand its furnace and refinery capacity, PTM has suggested it could build its own process facilities. PTM owns just over 37% of the Waterberg JV.

PTM said in a second quarter update this week that processing of Waterberg concentrate “… by one or more of the Waterberg JV partners would not be subject to the Offtake ROFR (right of first refusal) as such an entity would not be a ‘bona fide third party'”.

An offtake agreement with one of the other partners – such as Hanwa Co., a Japanese metal trading company – would be subject to an arms’-length agreement, said PTM. Hanwa, which has a 9.8% stake in Waterberg JV, holds the exclusive right to trade its concentrate.

The other shareholders in the project are Japan Oil, Gas and Metals National Corp. (JOGMEC) with a 12.95% share and Mnombo Wethu Consultants, PTM’s empowerment partner, which has a 26% stake. Owing to PTM’s 49.9% stake in Mnombo, PTM has an effective interest in the Waterberg JV of 50.02%.

Implats said it remained “a committed minority shareholder” with ownership and concentrate treatment rights “… that we intent to uphold and exploit in future to the full benefit of our shareholders”.

“We understand and value the project potential and remain determined to work with all other shareholders to find secure the optimal future value unlock to benefit all stakeholders,” said Johan Theron, spokesman for Implats.

PTM was approached for comment.

Frank Hallam, CEO of PTM, told Miningmx in March that the company would complete a prefeasibility study on a furnace and converter technology for PGMs mined at the Waterberg JV which has been scoped to produce 600,000 ounce a year.

“We will move forward on our own,” said Hallam in reference to Implats’ refusal to become the project’s lead investor. “The joint venture is more than 50% owned by shareholders who want to see the project developed. We don’t begrudge Implats; we would love to have them [actively involved]. But if they don’t want to, that’s also okay.”

“All producers talk about building (processing) capacity. I think that Sibanye [Stillwater] has capacity. That is all wonderful but nobody is actually offering that,” said Hallam. Hallam added that PTM was also open to the idea of building a smaller miner at Waterberg of perhaps 400,000 oz/year of PGM production.