Platinum Group to drawdown $40m working capital facility

2 November 2015 (Last Updated November 2nd, 2015 18:30)

Platinum Group Metals has delivered notice to Sprott Resource Lending Partnership for the drawdown of a previously announced $40m working capital facility.

Platinum Group Metals has delivered notice to Sprott Resource Lending Partnership for the drawdown of a previously announced $40m working capital facility.

Simultaneously, the company signed agreements with its shareholder Liberty Metals & Mining for a further $40m loan facility.

The facility is subject to approvals by shareholders and Waterberg Project partner.

According to the company, the financing will enable it to complete its production ramp-up at the Western Bushveld Joint Venture (WBJV) Project 1 platinum mine in South Africa, as well as for general working capital.

"These important financing steps avoid the equity market and allow our team to focus on the commencement of production and ramp-up."

Located on the west of the Bushveld Complex, 35km north-west of the town of Rustenburg, Project 1 is being constructed to extract and process platinum group metals and associated minerals from the Merensky and UG2 Reefs.

At Project 1, cold commissioning is taking place, with platinum and palladium concentrate production set to begin soon.

Platinum Group plans the delivery of first concentrate to Anglo Platinum's Waterval smelter at Rustenburg in January 2016.

Platinum Group Metals CEO and co-founder Michael Jones said: "We are pleased to finalise these arrangements and we will be looking for prompt approval by regulators and shareholders.

"These important financing steps avoid the equity market and allow our team to focus on the commencement of production and ramp-up".

Platinum Group's Project 1 is expected to have cash cost of $625 per 4E ounce at steady state production in 2018.

The company said it is also working at the Japan Oil, Gas and Metals National-funded Waterberg Project.

Continued drilling, resource modelling, mine design, metallurgy and infrastructure planning at the project are in progress, in addition to exploration to expand and further delineate it.

Waterberg is a palladium deposit with associated platinum, gold, copper and nickel.