Platinum Group Metals Ltd. has announced positive results from an independent definitive feasibility study (DFS) of the Waterberg palladium-platinum-gold-rhodium (4E) project on the Northern Limb of the Bushveld Complex in South Africa.

The project is a joint venture between Platinum Group (37.05%), Impala Platinum (Implats) (15%), JOGMEC (Japan Oil, Gas and Metals National Corp.) (12.95%), Hanwa Co. (9.75%), and Black Economic Empowerment (BEE) partner Mnombo Wethu Consultants (26%). Platinum Group has a 49.90% interest in Mnombo, yielding the company an effective 50.02% interest in the joint venture.

The Waterberg DFS calls for steady-state 4E production of 420,000 ounces per year (oz/y), plus byproduct copper and nickel. Project capital requirements are estimated at approximately $874 million, including $87 million in contingencies. Life-of-mine average cash costs, inclusive of by-product credits and smelter discounts, under a spot metal price scenario equate to $640/4E oz.

The Waterberg DFS timeline anticipates that a formal construction decision will be taken following the granting of the Mining Right, expected in the first quarter of 2020, with first production 3.5 years later.

The deposit starts 140 meters (m) from surface. The planned decline access provides for rapid and low-cost access to the orebody. Under the DFS mine plan, first production is estimated to occur in late 2023, with ramp-up to steady state by 2027. Mine life based on current mineral reserves extends to 2066.

Current proven and probable mineral reserves stand at 187 million metric tons (mt) at a grade of 3.24 grams/mt 4E for 19.5 million 4E oz, using a 2.5 g/mt 4E cut-off. Measured and indicated mineral resources total 242 million mt at 3.38 g/mt 4E for 26.4 million 4E oz. The deposit remains open on strike to the north.

The DFS mine plan models production at 4.8 million mt/y of ore and 420,000 4E oz/y in concentrate. The mine initially accesses the orebody using two sets of twin decline tunnels, with mining by fully mechanized long-hole stoping methods and paste backfill. Paste backfill allows for a high mining extraction ratio as mining can be completed next to backfilled stopes without leaving internal pillars.

Maintaining safety and reliability were key mine design criteria. As a result of the scale of the orebody, bulk mining on 20- to 40-m sublevels with large underground equipment and conveyors for ore and waste transport provides high efficiency.

The Waterberg DFS was by completed Stantec Consulting International LLC and DRA Projects SA (Pty) Ltd., along with a large team of specialists.