VANCOUVER, BRITISH COLUMBIA and JOHANNESBURG, SOUTH AFRICA--(Marketwired - July 7, 2017) - Platinum Group Metals Ltd. (TSX:PTM) (NYSE MKT:PLG) ("Platinum Group" or the "Company") is taking steps to restructure its mining operations at the Maseve Mine in South Africa. The restructuring would involve a change in primary mining method and cost reductions to create a sustainable future for the mine. The changes are operationally driven to align costs with a more gradual ramp-up of production using more selective mining methods.
The Maseve Mine has good potential in terms of grades, underground developed access, completed infrastructure and a mill that operates in accordance with design criteria.
As a result of the anticipated restructuring process, there are a large number of employees in the service of independent contractors and staff of Maseve who could be affected. Platinum Group Metals will work closely with all its contractors, including Redpath Mining South Africa, the largest mining contractor on site, to minimize job losses while making the operation self-sustainable. It is likely that Redpath will continue to be the main contractor at the mine.
Contractors will be paid in the normal course, and the Company will honor obligations to its employees. The Company will work with all its contractors and staff under Section 189 and 189A of the Labour Relations Act in South Africa. Severance, job planning and other support will be provided. Platinum Group will also work closely with organized labor during this process.
New opportunities for contractors and employees will be created as the newly planned mining method ramps up. In the long term, the hybrid method is more labor intensive offset with better planned grade compared to bord-and-pillar mining.
"We see good potential for a sustainable mine at Maseve. The South African government and the local community have been very supportive of the Maseve Mine, and we deeply value their assistance and support," said R. Michael Jones, CEO, Platinum Group. "We will work with our contractors, employees and other stakeholders in a climate of mutual respect, as we transition through the proposed restructuring process."
The restructuring aims to reduce ongoing costs and achieve positive, sustainable cash flows as soon as possible, utilizing already-established infrastructure. A "hybrid" mining method is under consideration, which would result in a transition from the current higher volume, mechanized bord-and-pillar mining method. Hybrid mining involves mechanized access drives using the mine's current equipment as well as conventional manual methods for stoping. Both bord-and-pillar and hybrid methods were included in the mine's feasibility study.
Face grades at the Maseve mine have generally met estimates, but the fully mechanized mining method has resulted in excess dilution and therefore lower grades to the plant. The Maseve concentrator plant has performed in excess of design criteria. Completed underground conveyor infrastructure will help reduce the trucking fleet required for mining from Block 11, the target for immediate mining.
The Company has notified the Department of Mineral Resources that a restructuring is required to create a viable operation and to ensure optimal mining of the resource, and that it will comply with the applicable provisions of Section 52 of the Mineral and Petroleum Resources Development Act (MPRDA).
As the Company develops and implements the new hybrid mining ramp-up plan, it will assess its new production guidance. Previous guidance will change. In coming months, Platinum Group will provide operational updates on the results of the hybrid mining ramp-up.
The Company has received waivers from its lenders related to working capital and production covenants to October 31, 2017. The Company will assess the new plan's ability to meet the lending covenants and loan requirements in the months ahead. The Company may require further financing in debt, equity or from asset sales.
The Company continues to work with BMO Capital Markets and Macquarie Capital to review and assess corporate and asset level strategic alternatives.
About Platinum Group Metals Ltd.
Platinum Group, based in Johannesburg, South Africa and Vancouver, Canada, has a successful track record with more than 20 years of experience in exploration, mine discovery, mine construction and mining operations.
Formed in 2002, Platinum Group holds significant mineral rights and large-scale reserves of platinum and palladium in the Bushveld Igneous Complex of South Africa, which is host to over 70% of the world's primary platinum production. The Company is currently focused on ramping up the Maseve Mine, its first near-surface platinum mine, to commercial production.
Platinum Group has delineated new low-cost, near-surface reserves on the North Limb of the Bushveld Complex on the Waterberg Project. Waterberg represents a new bulk type of large-scale, shallow low-cost platinum, palladium and gold deposit. Waterberg is one of the only large-scale dominantly palladium deposits in the world.
Qualified Person
R. Michael Jones, P.Eng., the Company's President, Chief Executive Officer and a significant shareholder of the Company, is a non-independent qualified person as defined in National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") and is responsible for preparing the technical information contained in this news release. He has verified the data by reviewing the detailed information of the geological and engineering staff and the Independent Qualified Person reports as well as visiting the site regularly.
