Platinum Group Metals has revealed that the Waterberg platinum group metal (PGM) project in South Africa will require a total capital expenditure (capex) of $946m, based on the findings of a definitive feasibility study (DFS).
The DFS was completed by a team including engineering firms Stantec Consulting International and DRA Projects. Engineering oversight and project management for the study was provided by Fraser McGill.
Platinum Group Metals said that the latest study is an update to the Waterberg project’s original independent DFS published in September 2019 for a large-scale, shallow, decline-accessible, mechanised, platinum, palladium, rhodium and gold mine.
The latest DFS for the South African project proposes dry stack tailings technology, including a dewatering plant and dry tailings handling system.
According to the DFS, the life of mine (LOM) of the PGM project increased from 45 years to 54 years.
The Waterberg project is expected to have an annual steady state average PGM production in concentrate of 353,208 ounces and peak annual production of 432,950 ounces.
Platinum Group Metals president and CEO Frank Hallam said: “The primary objectives of the 2024 DFS were to update and minimise capital and operating costs and to simplify the construction, ramp up and operating profile of the Waterberg Mine.
“I believe these objectives have been achieved. We look forward to advancing the Waterberg Project for the benefit of our partners and local communities, as well as all the people of South Africa.”
Located on the Northern Limb of the Bushveld Complex, the Waterberg PGM project is a joint venture (JV) between Platinum Group Metals, which holds a 37.19% stake, Impala Platinum with a 14.86% interest, HJ Platinum, holding a 21.95% share and Mnombo Wethu Consultants with 26% stake.
HJ Platinum comprises Japan Oil, Gas and Metals National (JOGMEC) and Hanwa. As a result of Platinum Group’s 49.9% ownership in Mnombo, Platinum Group Metals has an effective interest in the Waterberg JV of 50.16%.
The DFS projects a post-tax net present value (NPV) of $569m for the South African PGM project. It projects an after-tax internal rate of return (IRR) of 14.2%, with a payback period of 5.8 years.
In addition, the study estimates LOM-free after-tax cash flow of $6.5bn for the Waterberg PGM project.
Platinum Group Metals said it is also evaluating the economic feasibility of constructing a smelter and base metal refinery to process the Waterberg project concentrate outside of South Africa.
The company aims to commence construction at the South African PGM project in December 2025, with the first production expected in September 2029. The ramp-up to steady state at the Waterberg project is anticipated by May 2032.
