Raymond James Canada: More Impressive Results at Waterberg
According to Raymond James Canada:
Rating Outperform 2
More Impressive Results at Waterberg
Platinum Group Metals Ltd. (“PTM”) announced on Nov-5-12 new drill results on its Waterberg project, located north of the North Limb of South Africa’s Bushveld Complex.
We continue to believe that Waterberg’s inaugural resource of 6.6 Moz (Pt, Pd, & Au) was just the beginning of something larger, and with every release of additional drill results, the company continues to support our view. Mineralized F layer has been expanded by 2.7 km beyond the initial resource area, effectively doubling the strike length of the deposit. We note, however, that the F layer (the thickest of all the layers discovered to-date at Waterberg) remains at approximate depth of 1 km, and requires additional drilling to define the location where it is expected to extend closer to the surface.
While the known Waterberg deposit, in our view, already represents a potentially very significant deposit, both in terms of quantity of metal and lower-cost mining possibilities, should the currently identified thick intercepts extend to the surface, the economics may improve substantially. PTM’s management believes such an area exists on the ground immediately north of the current Waterberg JV lands, however, PTM is still awaiting the approval of its prospecting permit applications to drill that zone off.
- The latest release includes three holes in the bottom F layer averaging 34 metres at 3.64 g/t PGE+Au, representing a 30% overall grade improvement to the published resource estimate for the same zone. The higher grade was driven by higher prill split for Pd, which offset lower Au content.
- We continue to expect the release of a revised resource estimate in the next two months, with holes #27 and #31 expected to be included. Hole #34 was a 1.5 km step-out, and its strong intercept (16.5 m at 4.4 g/t 2PGE + Au) supports impressive continuity and width of the layer. Only one hole (#33) has so far not intercepted significant values, with PTM continuing its efforts to interpret the results of that hole and any reasons behind the lack of expected intercept.