Platinum Group Metals Ltd. Reports Third Quarter Results
Platinum Group Metals announced its financial results for nine months ending May 31, 2024. The company reported a net loss of $4.02 million, a slight improvement from the $4.05 million loss in the previous year. General and administrative expenses decreased to $2.57 million from $2.92 million. The Waterberg Project in South Africa remains the primary focus, with recent approvals for budgets to continue work programs and updates to the 2019 Definitive Feasibility Study. Notable collaboration initiatives include a potential PGM smelter in Saudi Arabia with Ajlan & Bros and advancements in lithium battery technologies with Lion Battery Technologies. Platinum Group also reported a private placement raising $2.5 million and noted a 26% interest return for major shareholder, Hosken Consolidated Investments. The company holds diverse currencies, and exchange rates have impacted cash holdings. A new at-the-market equity program worth $50 million was announced, with $1.97 million raised so far. Future goals include further development of the Waterberg Project and finalizing concentrate offtake agreements.
- General and administrative expenses decreased to $2.57 million from $2.92 million.
- Recent private placement raised $2.5 million.
- Planned development of Waterberg Project as a low-cost PGM mine.
- Collaboration with Ajlan & Bros to study a PGM smelter in Saudi Arabia.
- Advances in lithium battery technology through Lion Battery Technologies.
- Net loss of $4.02 million reported.
- Implats unable to fund its share of Stage Three Budget leading to dilution in their stake.
- Foreign exchange gain reduced to $0.04 million from $0.29 million.
- No common shares sold in fiscal 2024 via the 2022 ATM equity program.
Insights
Platinum Group Metals Ltd.'s third-quarter results offer a comprehensive view of the company's financial health and strategic advancements related to the Waterberg Project. Key financial metrics indicate a net loss of $4.02 million for the nine-month period, marginally lower than the same period in 2023. This minor reduction in net loss coupled with a decrease in general and administrative expenses suggests effective cost management. However, the decline in finance income from $0.47 million to $0.35 million could be concerning for some investors, indicating potential pressure on interest income streams.
From a liquidity standpoint, the cash holdings in varied currencies could present both opportunities and challenges due to exchange rate fluctuations. Additionally, the private placement raising approximately
Significantly, the approval of the Stage Four Budget and the associated $1.35 million funding will continue to progress the Waterberg Project, albeit with some dilution of Implats' interest. This financial maneuvering underscores the company's strategy to maintain momentum despite capital expenditure restrictions faced by partners.
In summary, while the net loss and diminished finance income are notable concerns, the company's ability to secure funding and effectively manage costs may offset these drawbacks in the eyes of investors.
The Waterberg Project continues to be the focal point of Platinum Group Metals Ltd. with significant advancements in the project's development and funding. The recent approval of the Stage Four Budget of $1.35 million is essential for maintaining project progress. This budget supports a broader
The mechanized, shallow, decline access design of the Waterberg mine is innovative and positions it as one of the largest and lowest cost underground PGM mines globally. Mechanization reduces labor costs and increases safety, making this project highly efficient and scalable. However, the project’s success hinges on securing construction financing and concentrate offtake agreements, both of which are critical for transitioning from development to production phases.
Moreover, the partnership with Ajlan & Bros for establishing a PGM smelter and base metal refinery in Saudi Arabia is strategic. It opens new avenues for processing PGMs, mitigating risks associated with relying on South African infrastructure alone. The current market study and future definitive feasibility study will provide clarity on the economic viability of this initiative.
Overall, the Waterberg Project’s engineering prospects are sound, though they are contingent on successful financing and logistical arrangements.
Platinum Group Metals Ltd. is strategically positioning itself within a dynamic market environment. The focus on the Waterberg Project and the accompanying initiatives reflect a forward-thinking approach. The project's potential as one of the lowest cost underground PGM mines globally offers a competitive edge, particularly as the demand for PGMs is expected to evolve.
As the automotive industry shifts towards electric vehicles (EVs), the traditional demand for PGMs used in catalytic converters may decline. However, the company's initiative through Lion Battery Technologies to integrate platinum and palladium into lithium battery technologies could counterbalance this shift. By differentiating its product offerings and tapping into the growing EV market, Platinum Group Metals Ltd. is diversifying its revenue streams and mitigating risks associated with market changes.
The collaboration with Anglo American Platinum Limited and Florida International University also strengthens its research and development capabilities, potentially allowing the company to lead in high-energy battery technologies. This strategic pivot towards R&D in battery technology not only broadens its market scope but could also enhance its long-term sustainability and market relevance.
In summary, while the immediate financials show a net loss, the market-driven strategies and diversification efforts place Platinum Group Metals Ltd. in a promising position to adapt to future market trends.
Vancouver, British Columbia and Johannesburg, South Africa--(Newsfile Corp. - July 11, 2024) - Platinum Group Metals Ltd. (TSX: PTM) (NYSE American: PLG) ("Platinum Group", "PTM" or the "Company") reports the Company's financial results for the nine months ended May 31, 2024, and provides an update and outlook. The Company is focused on advancing the Waterberg project located on the Northern Limb of the Bushveld Complex in South Africa (the "Waterberg Project"). The Waterberg Project is planned as a fully mechanised, shallow, decline access platinum, palladium, rhodium and gold ("4E") mine, including by-product copper and nickel production, and is projected to be one of the largest and lowest cost underground platinum group metals ("PGM" or "PGMs") mines globally.
The Company's near-term objectives are to advance the Waterberg Project to a development and construction decision including the arrangement of construction financing and concentrate offtake agreements. The Company is also advancing an initiative through Lion Battery Technologies Inc. ("Lion") using platinum and palladium in lithium battery technologies in collaboration with Anglo American Platinum Limited ("Amplats") and Florida International University ("FIU").
For details of the consolidated interim financial statements for the nine months ended May 31, 2024 (the "Financial Statements") and Management's Discussion and Analysis ("MD&A") for the nine months ended May 31, 2024 please see the Company's filings on SEDAR+ (www.sedarplus.ca) or on EDGAR (www.sec.gov). Shareholders are encouraged to visit the Company's website at www.platinumgroupmetals.net. Shareholders may receive a hard copy of the complete Financial Statements and MD&A from the Company free of charge upon request.
All amounts herein are reported in United States dollars unless otherwise specified. The Company holds cash in Canadian dollars, United States dollars and South African Rand. Changes in exchange rates may create variances in the cash holdings or results reported.
Recent Events
On April 3, 2024, the directors and shareholders of Waterberg JV Resources (Pty) Ltd. ("Waterberg JV Co.") unanimously approved a
On December 20, 2023, the Company announced a Cooperation Agreement (the "Cooperation Agreement") with Ajlan & Bros Mining and Metals Co. ("Ajlan") to study the establishment of a stand-alone PGM smelter ("PGM Smelter") and base metal refinery ("BMR") in Saudi Arabia. Ajlan is a subsidiary of Ajlan & Bros Holdings, one of the largest private sector diversified conglomerates in the Middle East. The Cooperation Agreement encompasses three phases: a global PGM concentrate market study (the "Market Study"), a Definitive Feasibility Study for the construction and operation of the PGM Smelter and BMR in Saudi Arabia (the "Smelter DFS"), and an option to form an incorporated 50:50 joint venture following the completion of the Smelter DFS.
The Market Study, which is currently in process, will seek to identify potential global sources of PGM concentrate that could augment the processing of the Waterberg Project concentrate in Saudi Arabia and minimize the risk of sourcing concentrate from only one project.
Upon the completion of the Market Study, Ajlan and the Company may together commission the Smelter DFS at an estimated cost of approximately
An initial trade-off study has been completed to determine the viability of exporting PGM concentrate from South Africa to Saudi Arabia. A key requirement would be to secure a long-term permit for the export from South Africa of unrefined precious metals in concentrate. Platinum Group is working with the Government of South Africa to identify local beneficiation opportunities and to analyze the possibility of exporting concentrate.
On December 11, 2023, the directors, and shareholders of Waterberg JV Co. unanimously approved a stage three budget of
On September 18, 2023, the Company reported the closing of a non-brokered private placement of common shares at a price of
On June 21, 2023, the Company reported that Lion had engaged the Battery Innovation Center ("BIC") in Newberry, Indiana, to help drive commercialization efforts for its next generation platinum and palladium based battery chemistries. Lion is advancing both proprietary lithium-sulfur and enhanced lithium-ion (NMC) technology using the unique catalytic properties of platinum and palladium. Under a scope of work, BIC is conducting independent small and large scale trials to validate Lion's proprietary platinum and palladium based electrode composition, slurry, and films in both lithium-sulfur and lithium-ion (NMC811) coin and pouch cells. Collaboration with BIC will also include additional research and development focused on improving performance and scale-up with the goal of creating prototypes for commercialization consideration in 2024. Lion's target is to develop batteries with specific energies that are
On June 9, 2023, the Company reported that the Japan Organization for Metals and Energy Security ("JOGMEC") and Hanwa Co. Ltd. ("Hanwa") had established a special purpose company, HJ Platinum Metals Company Ltd. ("HJM"), to hold and fund their future equity interests in the Waterberg Project. The combined interests of JOGMEC (
Results For The Nine Months Ended May 31, 2024
During the nine months ended May 31, 2024, the Company incurred a net loss of
At May 31, 2024, finance income consisting of interest earned in the nine month period amounted to
Accounts receivable at May 31, 2024, totalled
On July 27, 2022, the Company entered into an Equity Distribution Agreement with BMO Nesbitt Burns Inc. and BMO Capital Markets for a new at-the-market equity program (the "2022 ATM") to distribute up to
Total expenditures on the Waterberg Project, before partner reimbursements, for the nine months ended May 31, 2024, were approximately
For more information on mineral properties, see Note 3 of the Financial Statements.
Outlook
The Company's primary business objective is to advance the Waterberg Project to a development and construction decision. PTM is the operator of the Waterberg Project as directed by a technical committee comprised of representatives from joint venture partners Implats, Mnombo Wethu Consultants Proprietary Limited ("Mnombo"), and HJM.
On October 18, 2022, Waterberg JV Co. approved in principle the Work Program, including proposed work on initial road access, water supply, essential site facilities, a first phase accommodation lodge, a site construction power supply from state utility Eskom and advancement of the Waterberg Social & Labour Plan. Work to prepare the DFS Update, including updated mineral resource and mineral reserve estimates, was also approved and is currently in process. The DFS Update is to include a review of cut-off grades, mining methods, infrastructure plans, scheduling, concentrate offtake, dry stack tailings, costing and other potential revisions to the Waterberg Project's mine plan and financial model. A draft of the DFS Update is currently before the joint venture partners for review and approval and is expected during the fourth fiscal quarter of 2024.
Before a construction decision can be undertaken, arrangements will be required for Waterberg Project concentrate offtake or processing. The Company and Waterberg JV Co. are assessing commercial alternatives for mine development financing and concentrate offtake. In addition to the Company's investigation of smelting and base metal refining options in Saudi Arabia, the Company is also in discussion with several South African smelter operators, including Implats, with a view to negotiating formal concentrate offtake arrangements for the Waterberg Project.
The Company continues to work closely with regional and local communities and their leadership on mine development plans to achieve optimal outcomes and best value to all stakeholders.
As the world seeks to decarbonize and look for solutions to climate change, the adoption of battery electric vehicles is forecast to reduce the future demand for PGMs used in autocatalysis. The unique properties of PGMs as powerful catalysts are being applied to various technologies as possible solutions for more efficient energy generation and storage, which may create new demand for PGMs. The Company's battery technology initiative through Lion with partner Amplats represents one such new opportunity in the high-profile lithium battery research and innovation field. The investment in Lion creates a potential vertical integration with a broader industrial market development strategy to bring new technologies to market which use palladium and platinum. Research and development efforts by FIU on behalf of Lion continue. Technical results from Lion's research may have application to most lithium-ion and lithium-sulfur battery chemistries.
Environmental, Social and Governance
Platinum Group recently received its third annual Environmental, Social and Governance ("ESG") disclosure report from Digbee Ltd. ("Digbee"), a United Kingdom based company that has developed an industry standard ESG disclosure framework for the mining sector providing a right-sized, future looking set of frameworks against which they can credibly disclose, track, compare and improve their ESG performance. For 2023, Platinum Group achieved an overall score of BBB with a range of C to AAA based on the information provided. This score is an improvement from the BB score achieved in 2022. Digbee ESG has been developed in consultation with mining companies, ESG specialists and capital providers and is endorsed by leading financial institutions, producing mining companies and other industry stakeholders. Digbee's reporting framework is aligned with global standards, including the Equator Principles. For more details about the Company's 2023 Digbee ESG Report please refer to the Company's MD&A, Annual Information Form ("AIF") and Annual Report on Form 40-F ("Form 40-F").
Regulatory
As well as the discussions within this news release, the reader is encouraged to also see the Company's disclosure made under the heading "Risk Factors" in the Company's current AIF and Form 40-F.
Qualified Person
Rob van Egmond, P.Geo., a consultant geologist to the Company and a former employee, is an independent qualified person as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101"). Mr. van Egmond has reviewed, validated and approved the scientific and technical information contained in this news release and has previously visited the Waterberg Project site.
About Platinum Group Metals Ltd. and the Waterberg Project
Platinum Group Metals Ltd. is the operator of the Waterberg Project, a bulk underground palladium and platinum deposit located in South Africa. The Waterberg Project was discovered by Platinum Group and is being jointly developed with Implats, Mnombo, and HJM.
On behalf of the Board of
Platinum Group Metals Ltd.
Frank R. Hallam
President, CEO and Director
For further information contact:
Kris Begic, VP, Corporate Development
Platinum Group Metals Ltd., Vancouver
Tel: (604) 899-5450 / Toll Free: (866) 899-5450
www.platinumgroupmetals.net
Disclosure
The TSX and the NYSE American have not reviewed and do not accept responsibility for the accuracy or adequacy of this news release, which has been prepared by management.
This news release contains forward-looking information within the meaning of Canadian securities laws and forward-looking statements within the meaning of U.S. securities laws (collectively "forward-looking statements"). Forward-looking statements are typically identified by words such as: "believe", "expect", "anticipate", "intend", "estimate", "may", "plans", "postulate" and similar expressions, or are those, which, by their nature, refer to future events. All statements that are not statements of historical fact are forward-looking statements. Forward-looking statements in this news release include, but are not limited to, statements regarding the success of the Company's objective to advance the Waterberg Project to a development and construction decision, the approval and completion of the various phases of the Work Program, the planned DFS Update, the plan for and development of the Waterberg Project and the potential benefits and results thereof including that it is projected to become one of the largest and lowest cost underground PGM mines globally, financing and mine development of the Waterberg Project, potential commercial alternatives for mine development, obtaining concentrate offtake, the size and cost of the Waterberg Project, the economic feasibility of establishing a new PGM Smelter and BMR, the planned Smelter DFS, work with local communities, the development of new battery technologies and the potential benefits of utilizing palladium and platinum therein, the commercialization thereof and Lion's development of next generation battery technology, the success of Lion's and FIU's research and development efforts, the expansion of Lion's research work into additional battery chemistries, the ability of the Company to obtain all required permitting, surface access, and infrastructure servitudes, the effect of battery electric vehicles on the market for PGMs, the use of PGMs in solutions to climate change, the results of the Market Study and the Company's other future plans and expectations. Although the Company believes any forward-looking statements in this news release are reasonable, it can give no assurance that the expectations and assumptions in such statements will prove to be correct.
The Company cautions investors that any forward-looking statements by the Company are not guarantees of future results or performance and that actual results may differ materially from those in forward-looking statements as a result of various factors, including the Company's inability to generate sufficient cash flow or raise additional capital, and to comply with the terms of any new indebtedness; additional financing requirements; and any new indebtedness may be secured, which potentially could result in the loss of any assets pledged by the Company; the Company's history of losses and negative cash flow; the Company's properties may not be brought into a state of commercial production; uncertainty of estimated production, development plans and cost estimates for the Waterberg Project; discrepancies between actual and estimated mineral reserves and mineral resources, between actual and estimated development and operating costs, between actual and estimated metallurgical recoveries and between estimated and actual production; fluctuations in the relative values of the U.S. Dollar, the Rand and the Canadian Dollar; volatility in metals prices; the uncertainty of alternative funding sources for Waterberg JV Co.; the Company may become subject to the U.S. Investment Company Act; the failure of the Company or the other shareholders to fund their pro rata share of funding obligations for the Waterberg Project; any disputes or disagreements with the other shareholders of Waterberg JV Co. or Mnombo; the ability of the Company to retain its key management employees and skilled and experienced personnel; conflicts of interest; litigation or other administrative proceedings brought against the Company; actual or alleged breaches of governance processes or instances of fraud, bribery or corruption; exploration, development and mining risks and the inherently dangerous nature of the mining industry, and the risk of inadequate insurance or inability to obtain insurance to cover these risks and other risks and uncertainties; property and mineral title risks including defective title to mineral claims or property; changes in national and local government legislation, taxation, controls, regulations and political or economic developments in Canada and South Africa; equipment shortages and the ability of the Company to acquire necessary access rights and infrastructure for its mineral properties; environmental regulations and the ability to obtain and maintain necessary permits, including environmental authorizations and water use licences; extreme competition in the mineral exploration industry; delays in obtaining, or a failure to obtain, permits necessary for current or future operations or failures to comply with the terms of such permits; risks of doing business in South Africa, including but not limited to, labour, economic and political instability and potential changes to and failures to comply with legislation; pandemics and other public health crises; the Company's common shares may be delisted from the NYSE American or the TSX if it cannot maintain compliance with the applicable listing requirements; and other risk factors described in the Company's most recent AIF and Form 40-F, other filings with the Canadian securities regulators and SEC , which may be viewed at www.sedarplus.ca and www.sec.gov, respectively. Proposed changes in the mineral law in South Africa, if implemented as proposed, may have a material adverse effect on the Company's business and potential interest in projects. Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether because of new information, future events or results or otherwise.
The technical and scientific information contained herein has been prepared in accordance with NI 43-101, which differs from the standards adopted by the SEC. Accordingly, the technical and scientific information contained herein, including any estimates of mineral reserves and mineral resources, may not be comparable to similar information disclosed by U.S. companies subject to the disclosure requirements of the SEC.
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