Vancouver, British Columbia and Johannesburg, South Africa--(Newsfile Corp. - November 24, 2021) - Platinum Group Metals Ltd. (TSX: PTM) (NYSE: PLG) (NYSE American: PLG) ("Platinum Group", "PTM" or the "Company") reports the Company's financial results for the year ended August 31, 2021 and provides an update and outlook. The Company is focussed on advancing the palladium dominant 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 palladium, platinum, gold and rhodium ("4E") mine 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 and complete construction funding and concentrate offtake arrangements. The Company is also advancing an initiative through Lion Battery Technologies Inc. ("Lion") using platinum and palladium in lithium battery technology in collaboration with Anglo American Platinum Limited ("Anglo") and Florida International University ("FIU"). Lion is focussed on securing further patents for technologies developed through its ongoing research and development.
The Company has filed a Form 20-F annual report ("Form 20-F"), including the Company's audited consolidated financial statements (the "Financial Statements"), for the year ended August 31, 2021 with the U.S. Securities and Exchange Commission (the "SEC") on EDGAR (www.sec.gov) and an Annual Information Form ("AIF") and Management's Discussion and Analysis with Canadian securities regulators on SEDAR (www.sedar.com). The Form 20-F and AIF are also available on the Company's website at www.platinumgroupmetals.net. Shareholders may receive a hard copy of the complete Financial Statements 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.
On October 14, 2021, the Company reported completion of a geotechnical drilling campaign at the Waterberg Project. The campaign consisted of 46 boreholes drilled along the planned centerline of two sets of twin declines and box-cut positions. A total of 5,966 metres of drill core were recovered and a total of 2,696 metres of core were geotechnically logged from within the zone of interest. Downhole geophysical surveys were conducted. Core samples of all the major geotechnical units encountered were collected and subjected to laboratory testing. Geotechnical qualified persons monitoring the drill programme have stated that in general, the rock mass encountered along both decline routes is competent and can support the planned excavations with no major problem areas expected.
On July 6, 2021, Waterberg JV Resources Proprietary Limited ("Waterberg JV Co.") completed the registration of the Waterberg Mining Right at the Minerals and Petroleum Titles Registration Office. The Waterberg Mining Right was notarially executed by the Department of Mineral Resources and Energy ("DMRE") on April 13, 2021 and remains active.
On June 15, 2021, the U.S. Patent and Trademark Office issued Patent No. US 11,038,160 B2 entitled "Battery Cathodes for Improved Stability" to FIU. The patent covers a preparation method using PGM catalysts in carbon materials for use as cathodes with increased emphasis on Lithium Sulphur Batteries. The patent broadens protection for Patent No. US 10,734,636 B2 issued to FIU on August 4, 2020, covering the composition of carbon cathodes containing PGMs. Under a sponsored research agreement, the Company's subsidiary Lion has exclusive rights to such battery technology being developed by FIU, including patents granted. Lion was jointly formed in 2019 by Platinum Group and Anglo to accelerate the development of next-generation battery technology using platinum and palladium.
On and following March 5, 2021, three notices of appeal were filed by individual appellants against the January 28, 2021 granting of the Waterberg Mining Right. Counsel acting for one group filed an application for an order in the High Court of South Africa to review and set aside the decision by the Minister of the Department of Forestry, Fisheries, and the Environment to refuse condonation for the late filing of that group's appeal against the grant of an Environmental Authorization for the Waterberg Mine in November 2020. Waterberg JV Co. has filed formal rebuttals to each action. On July 30, 2021, a group located near planned surface infrastructure filed an urgent interdict application. Waterberg JV Co. promptly filed an answering affidavit denying urgency and arguing that the application is without merit. The applicants did not respond and were obliged to remove their application from the urgent court roll. Host community Ketting has applied to join as an interested party to the application and another host community submitted a confirmatory affidavit, both communities being in support of the Waterberg Mine. A time frame for a hearing of the interdict application is uncertain or may never occur.
On February 5, 2021, the Company entered into an Equity Distribution Agreement with BMO Capital Markets Corp. ("BMO") to sell its common shares from time to time for up to $50.0 million in aggregate sales proceeds in "at-the-market" transactions (the "2021 ATM"). At August 31, 2021, the Company had sold 2,502,790 common shares at an average price of $4.3754 pursuant to the 2021 ATM for net proceeds of $10.7 million after fees and expenses of $954 thousand, including brokerage fees of $274 thousand. As of November 24, 2021, the Company has issued a total of 4,433,448 common shares at an average price of US$2.63, pursuant to the 2021 ATM for net proceeds of $11.4 million. No offers or sales of common shares were made in Canada, to anyone known to be a resident of Canada or on or through the facilities of the Toronto Stock Exchange (the "TSX") or other trading markets in Canada.
On January 28, 2021, the DMRE granted Waterberg JV Co. the Waterberg Mining Right.
On December 8, 2020, the Company closed a non-brokered private placement of 1,121,076 common shares at a price of $2.23 per share to existing major beneficial shareholder, Hosken Consolidated Investments Limited ("HCI") through its subsidiary Deepkloof Limited ("Deepkloof"), resulting in gross proceeds to the Company of $2.5 million and allowing HCI to maintain approximately a 31% interest in the Company as they held prior to the at-the-market offering completed by the Company on November 30, 2020 (the "2020 ATM"), as described below.
On November 30, 2020, the Company completed the 2020 ATM, first announced on September 4, 2020, pursuant to an Equity Distribution Agreement with BMO whereby Platinum Group sold 5,440,186 common shares in the capital of the Company at an average price of $2.21 for gross proceeds of $12.0 million. No offers or sales of common shares were made in Canada, to anyone known to be a resident of Canada or on or through the facilities of the TSX or other trading markets in Canada.
Results For The Year Ended August 31, 2021
During fiscal 2021, the Company continued its efforts to lower costs. During the year ended August 31, 2021, the Company incurred a net loss of $13.1 million (August 31, 2020 - net loss of $7.1 million). The loss in the previous comparable year was lower due to a $3.1 million realized gain on the expiry of warrants in the previous comparable year. Share based compensation was $3.2 million (August 31, 2020 $1.6 million) with the increase due to a higher fair value for options granted during the current year resulting from a higher share price at the grant date. General and administrative expenses during the year were $5.1 million (August 31, 2020 - $3.7 million) with the increase due mostly to a $0.828 million severance payment to the Company's former CEO pursuant to a formal separation agreement. Interest expense of $5.1 million (August 31, 2020 - $5.5 million) was lower due to the reduction in debt during the current year. The currency translation adjustment recognized in the year is a gain of $4.9 million (August 31, 2020 - $4.5 million loss) due to the Rand increasing in value relative to the U.S. Dollar during the current year.
At August 31, 2021, finance income consisting of interest earned and property rental fees in the year amounted to $0.1 million (August 31, 2020 - $0.2 million). Loss per share for the year amounted to $0.18 as compared to a loss of $0.11 per share for fiscal 2020.
Accounts receivable at August 31, 2021 totalled $0.3 million (August 31, 2020 - $0.2 million) while accounts payable and other liabilities amounted to $2.5 million (August 31, 2020 - $1.4 million). Accounts receivables were comprised mainly of value added taxes repayable to the Company in South Africa. Accounts payable consisted primarily of payables related to geotechnical drilling on the Waterberg Project.
Total expenditures on the Waterberg Project, before partner reimbursements, for the year were approximately $3.7 million (August 31, 2020 - $3.0 million). At year end, $44.0 million in accumulated net costs had been capitalized to the Waterberg Project (August 31, 2020 - $34.9 million). Total expenditures on the property since inception to August 31, 2021 are approximately $77.5 million.
For more information on mineral properties, see Note 4 of the Financial Statements.
The Company's primary business objective is to advance the Waterberg Project to a development and construction decision. The Company and Waterberg JV Co. are in process to design, budget and carry out pre-construction work programmes for the Waterberg Project, including the erection of fences, ground clearing, geotechnical drilling and infrastructure engineering and surveying. The Company continues to work closely with regional and local communities and their leadership on how the mine can be developed to provide optimal outcomes and best value to all stakeholders. The Company continues to work on advancing project permitting, infrastructure servitudes and community relationships with its partners Impala Platinum Holdings Ltd. ("Implats"), Mnombo Wethu Consultants (Pty) Ltd. ("Mnombo"), Japan Oil, Gas and Metals National Corporation ("JOGMEC") and Hanwa Co. Ltd. ("Hanwa") through a technical committee of Waterberg JV Co.
The Member of the Executive Committee ("MEC") for the Limpopo Department of Economic Development, Environment and Tourism, Mr. Thabo Andrew Mokone, recently undertook to investigate the appeals and court actions described above. During September 2021, the MEC held regular engagements with representatives of Waterberg JV Co. and the community leaders of Kgatlu village. In late October 2021, a mediation process commenced between the parties with the objective of resolving matters of concern.
The Company and Waterberg JV Co. have begun a process to assess commercial alternatives for mine development, financing and concentrate offtake. Several parties are currently in discussions with the Company. Implats' offtake right of first refusal allows Implats the opportunity to match any offtake terms offered by a bona fide third party. Discussions with Implats on concentrate offtake also continue. Further, the Company is conducting research and formal studies to assess the economic feasibility of establishing a dedicated Waterberg matte furnace as an alternative to a traditional concentrate offtake arrangement.
The market for PGMs, palladium and rhodium in particular, has generally improved since 2019. In 2021, the impact of a global shortage of semi-conductor chips did result in reduced global automotive production, resulting in a concurrent reduction in demand for PGMs. Prices for each of the PGMs have fallen from their zeniths in approximately February to April of 2021. Auto market recovery to pre-COVID production levels is forecast by some market analysts in 2023/2024.
The Company's battery technology initiative through Lion with Anglo represents a 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 battery chemistries and the scope of Lion's research work is being expanded.
Environmental, Social and Governance
Platinum Group recently submitted its inaugural Environmental, Social and Governance ("ESG") disclosure submission with Digbee Ltd. ("Digbee"), a United Kingdom based company with a new mining-focused expert network and ESG disclosure platform aimed at providing improved disclosure and better access to capital markets for mining companies involved with strong ESG practices. Digbee has been endorsed by leading financial firms who support the Digbee ESG initiative such as Blackrock, BMO, and Dundee Corporation. Digbee's reporting framework is aligned with global standards, including the Equator Principles, which provide a framework for financial institutions to assess environmental and social risks in projects. For more details refer to the Company's Form 20-F and AIF.
The Company also advises that its consolidated Financial Statements for the fiscal year ended August 31, 2021, included in the Company's Form 20-F, contain an audit report from its independent registered public accounting firm that includes a going concern emphasis of matter. The foregoing statement is required by Section 610(b) of the NYSE American Company Guide.
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 Form 20-F and AIF.
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, JOGMEC and Hanwa.
On behalf of the Board of
Platinum Group Metals Ltd.