Platinum Group Metals Reports Q3 Results

Vancouver-based Platinum Group Metals (TSX:PTM, NYSEAMERICAN:PLG) incurred in a net loss of C$37.6 million during the nine-month period ended May 31, 2018, down significantly from the net loss of C$286 million this time last year, the company announced on Monday (July 16).

In addition to revealing its financial results upon closing out Q3, the company also provided an update on its Waterberg project in South Africa.

“During the nine-month period approximately C$5.7 million was spent at the Waterberg project for engineering and exploration activities. At period end, C$28 million in net costs had been capitalized to the Waterberg project. Total expenditures on the property since inception are approximately C$58 million,” the company said in a press release.

The Waterberg project is dominated by palladium and has reserves in platinum, rhodium, gold, copper and nickel. Impala Platinum Holdings (JSE:IMP) made a strategic investment of US$30 million in November 2017 to purchase a 15-percent stake in the asset.

Platinum Group Metals also reported a foreign exchange loss of C$3.9 million compared to a year-on-year C$1.8 million loss. The decrease was due to strong US dollar, as it increased in value relative to the Canadian dollar.  

The company also gained  on fair value of financial instruments of C$2.7 million in the current period due to a decrease in the value of the embedded derivatives in the company’s convertible notes, which did not exist in the previous comparable period.

By the end of the quarter, the company’s accounts receivable totalled C$0.9 million, comprised of value added taxes repayable to the company in South Africa and amounts due to/from partners. Accounts payable and accrued liabilities amounted to $2.7 million down from C$16.4 million year-on-year.

Looking forward, the company’s key objectives are to advance the Waterberg project and repay secured lender LMM. The company plans to do this by increasing its profile, focusing on the competitive nature of the large-scale Waterberg palladium reserves, since palladium is currently attracting market attention and supply is estimated to be in deficit.

The company plans to advance the Waterberg Project to completion of a definitive feasibility study (DFS) by early 2019.  While an initial DFS drill program was completed in May, 2018, an updated resource estimate for use in the DFS is expected in July or August of this year.  

“The Waterberg Project has the potential to be a low-cost platinum and palladium producer based on a fully mechanized mine plan. The deposit is dominated by palladium. The price of palladium has nearly doubled since 2015 due to its primary use in catalytic converters for automobiles and limited market supply,” the company stated.

As of 2:00 p.m. EST on Wednesday (July 18), PGM was trading at US$0.13.

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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.