Platinum Group Metals Ltd. (TSX: T.PTM, Stock Forum) said that a wholly-owned subsidiary of Anglo American Platinum Ltd., has exercised its first right of refusal to purchase the off-take of concentrate from the Western Bushveld Project 1 Platinum Mine.
Project 1, located in South Africa, has an estimated mine life in excess of 20 years and construction is in progress with first production planned in 2014. The project is owned 74% by Platinum Group and 26% by Wesizwe Platinum.
According to the press release, Anglo Platinum's decision to exercise its right demonstrates that the planned 275,000 ounces per year of platinum, palladium, rhodium and gold in concentrate from Project 1 is attractive in the current market.
“We have a long term positive relationship with Anglo Platinum and we look forward to completing the detailed agreements for off-take promptly,” said R. Michael Jones, CEO of Platinum Group. “This is another important milestone completed for all stakeholders including shareholders, communities and Government.”
In exchange for their interests, Anglo Platinum acquired a significant shareholding in Wesizwe and retained a 60 day first right of refusal for purchase of concentrate or ore from the former properties of the joint venture.
A formal off-take agreement is a condition precedent for a planned $US 260 million project financing package, which is in the final stages of completion. The project loan mandate is led by Barclays Bank plc, Absa Capital to whom it is affiliated, Standard Bank and Caterpillar Financial.
Platinum Group has an experienced mine building and operating team based in Vancouver, Canada and Johannesburg, South Africa.
On Tuesday, Platinum Group was trading at $1.11 a share. The company has a market cap of $197.1 million, based on 177.6 million shares outstanding. The 52-week high and low was $1.70 and $0.74 respectively.