Frank Hallam

PLATINUM Group Metals updated a feasibility study in September for its 50.01%-owned Waterberg Joint Venture, a platinum group metals prospect in South Africa's Limpopo province. Annual steady state production was put at 353,208 ounces and the life of mine was increased to 54 years from 45 years in line with higher mineral reserves. On the downside, however, a $100/oz lower average price assumption of $1,325/oz means project returns fall to 14.2% from the 20.7% forecast in the previous feasibility study. 

Nonetheless, Waterberg represents a large, strategically important option on the PGM market, which, in the case of the project's 14.9% shareholder, Impala Platinum, seems hard to resist. Implats declared South Africa's PGM sector ex-growth, but it is yet to sell its Waterberg shares. Implats is perhaps mindful of its first option on a concentrate offtake deal from Waterberg JV ahead of financing the $946m venture. 

Platinum Group has not been sitting on its hands, however. In November it upgraded a cooperation agreement first signed with Saudi Arabia's Ajlan & Bros Mining and Metals in 2023 to a memorandum of understanding in terms of which Platinum Group will ship the concentrate mined at Waterberg JV to smelting and refining facilities in Saudi Arabia. The higher freight costs would be offset by lower tax and infrastructural costs in the Kingdom compared to South Africa.

Before that can happen, Platinum Group has to secure an export licence from the South African government to ship the concentrate. In the past, government has been anxious to process metals within the country’s borders. Platinum Group is to work with the government to “identify local beneficiation opportunities”.