RE:RE:RBC: Outperform rating and $2.25 target price for PTM Platinum Group Announces Favourable Award on All Matters in Arbitration with Wesizwe Platinum Limited
Ticker Symbol: U:PLG C:PTM
VANCOUVER, BRITISH COLUMBIA and JOHANNESBURG, SOUTH AFRICA -- (Marketwired) -- 08/21/14
Platinum Group Metals Ltd. (TSX: PTM)(NYSE MKT: PLG) ("Platinum Group" or the "Company") announces that on August 20th an award in the binding arbitration with respect to the calculation of dilution to the ownership of Wesizwe Platinum Limited ("Wesizwe"), through its wholly owned subsidiary, Africa Wide Mineral Prospecting and Exploration (Pty) Ltd. ("Africa Wide"), in the operating company of the WBJV Project 1 Platinum Mine has been completed and delivered to the Company. The arbitrator ruled in favour of Platinum Group on all matters in contention and has ordered that costs are to be paid by Wesizwe.
The favourable award has determined that Africa Wide's shareholding, in the operating company, Maseve Investments 11 (Pty) Ltd. ("Maseve"), falls to be reduced to 21.2766% as a result of Africa Wide's failure to fund its R 213.14 million share of an approved cash call in October 2013.
Based on the dilution formula in the Maseve shareholders' agreement, as confirmed in the arbitration, the Company calculates that Wesizwe's ownership in Maseve will be further diluted to 17.0985% (approximately 17.10%) as a result of Africa Wide's failure to fund its R 234.6 million share of a second approved cash call in February 2014.
Platinum Group expects its shareholding, through its wholly owned subsidiary Platinum Group Metals RSA (Pty) Ltd. ("PTM RSA"), in Maseve will increase to approximately 82.90% based on the two missed cash calls by Africa Wide. Platinum Group is now able to move forward with plans for transferring diluted project points to a qualified black economic empowerment company and to move forward with its final project finance plans for the ongoing mine build at the WBJV Project 1 Platinum Mine.
The details of the arbitrator's award are as follows:
-- The shareholding of Africa Wide in Maseve will fall to 21.2766% as a result of the initial cash call that gave rise to the arbitration and PTM RSA's shareholding will be increased to 78.7234%; -- Africa Wide is directed to take all steps necessary in co-operation with Platinum Group to effect the award, including increasing the authorized capital of Maseve, placing all unissued authorized shares under the control of Maseve's board of directors and authorizing any director of Maseve to take the steps necessary to issue shares to PTM RSA to give effect to the award; and -- Africa Wide is ordered to pay PTM RSA's costs, including the costs of senior counsel and the costs of the arbitration, on the High Court scale.