Waterburg Project

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This is the Waterberg Joint Venture (JV) Project which is made up of four prospecting licences covering an area of 25,465ha that consist of licences 1265 PR (15257 ha), 10667 PR and 10809 PR (6254.8 ha, and 10668 PR (3953.05 ha. The prospecting rights allow the owners to apply for the conversion of the prospecting right into a mining right within the renewal period of three years. On May 26, 2015 all of the Waterburg properties, including the extension, were consolidated into one agreement. With this the Extension included 6 prospecting rights that cover 86,417ha and extends some 42km from north to south and 42km from east to west. The prospecting rights included are 10804 PR (26961.59 ha), 10805 PR (17734.8 ha), 10805 PR Section102 (4475.13 ha), 10806 PR (13143.53 ha), 10810 PR (4189.86 ha), 11286 PR (19912.44 ha).

The original ownership in the Waterberg JV Project was 37% Platinum Group Metals (PGM), 37% Japan Oil Gas and Metals National Corporation (JOGMEC), and 26% in private empowerment partner Mnombo Wethu Consultants Pty Ltd. Platinum Group owns 49.9% of Mnombo. On November 6, 2017 PGM announced a change in the ownership structure where Impala Platinum Holdings Ltd would become a partner in the project. Impala paid US$17.2 million to PGM the purchase 8.6% of their interest, and they paid JOGMEC US $12.8 million for 6.4% of their portion. After that transaction and other deals, and as of March 2018, the ownership structure was: Platinum Group Metals 37.05%, JOGMEC 21.95%, Wethu Consultants Pty Ltd 26%, Impala Platinum Holdings 15%. As part of deal Impala retains the option to increase its stake to 50.01% through additional purchases and earn-in arrangements following completion of a Definitive Feasibility Study. They also have a right of first refusal to smelt and refine Waterberg concentrate. JOGMEC retains a right to all metal marketing.

Waterburg is located on the Northern Limb of the Bushveld Complex, which is one the largest mafic/ultramafic layered intrusions in the world, covering an extent exceeding exceed 66,000km2. It compromises the largest known Platinum Group Metals resource in the world. At Waterburg PGM mineralization occurs in two main layers: the T-Zone and the F-Zone.

The T-Zone occurs within the Main Zone just beneath the contact of the overlaying Upper Zone. Although the T-Zone has several mineralized layers only three potential economical layers were identified, T1, T2HW and T2 layers. Their composition is mainly of anorthosite, pegmatoidal gabbros, pyroxenite, troctolite, harzburgite, gabbronorite and norite.

The F-Zone occurs in a cyclic unit of olivine rich lithologies towards the base of the Main Zone towards the bottom of the Bushveld Complex. This zone consists of alternating units of harzburgite, troctolite and pyroxenites.

At Waterburg the Bushveld suite strikes southwest to northeast with a general dip of 34º-38º. However, some structural blocks may be tilted at different angles depending on structural and /or tectonic controls. The Bushveld Upper Zone is overlain by a 120m to 760m thick Waterberg Group which is a sedimentary package predominantly made up of sandstones, and within the project area that sedimentary formations known as the Setlaole and Makgabeng Formations constitute the Waterberg Group. The Waterberg package is flat lying with dip angles ranging from to 2º to 5º. As of March 2018 the estimated proble reserves of Platinum Group Elements at Waterburg were 12.3 million ounces, comprising 61% palladium, 30% platinum, 8% gold, 1% rhodium plus 191, and 333 million pounds of copper and nickel.

Initially the mine will be accessed by 3 twin shaft declines with one of the declines used for personnel and material access, and the second decline hosting the conveyor system. The muck bays are aligned with the connections between the declines and are 12m in length. The dimensions of the access declines are 6.0m (W) x 6.0 m (H), while the main conveyor declines have dimensions of 5.5 m (W) x 5.5 m (H). The declines will dip at -9° in a general easterly direction. The southmost shaft will access the T-Zone, the central shaft will access the Central F Zone, and the northmost shaft will access the F North Zone. There is a small community located where the southmost shaft will be called Ketting with about 100 homes that will have to be relocated to the farm next to Ketting, which is also owned by the same community.

The top of mining zones in the plan occur at depths ranging from 170m to approximately 350m below surface. Due to the thickness of the zones mechanized mining will be utilized, and depending on the dip one of three mining methods: Blind Longitudinal Retreat (BLR), Transverse Sub-level open stoping (TSLOS), and Longitudinal Sub-level open stoping (LSLOS). The typical angle and thickness is noted below:

Method Angle Thickness

BLR = 35° 3 - 15m
LSLOS > 35° 3 - 15m
TSLOS > 15m N/A

The underground silo and vertical dam are positioned at the end of the main declines. From the main declines there is a breakaway towards the production area from which the spiral ramp will access the main levels and sublevels. Workshops are located at the decline breakaway as close as possible to the production areas in order to reduce the travelling distance required to service the mining equipment.

From the underground silo position, a secondary conveyor decline is developed along the footwall of the ore body and will be connected to the production areas by means of tipping points. Each leg of the secondary conveyor will have one tipping access and the conveyor decline will be developed up to the tipping point. The tipping access will have a 15m maneuvering bay for trucks.