Supply from the South African PGM mining industry continues to 

be constrained.

The legacy producers are faced with challenging ore bodies as increasing depth and diminishing grades erode profitability. Recent strife in South Africa has added a new level of uncertainty around supply as cost escalation related to labour has become a continuing trend. The major South African PGM producers have deferred capital investments due to a lack of certainly and operating flexibility. Their ability to ramp up production when demand resurfaces is highly unlikely. Given the vast majority of primary PGM production comes from South Africa, higher metal prices will likely be required to incentivize future production.


Platinum Group Metals controls a portfolio of low cost assets. The WBJV Project 1 mine when online as planned would then be one of the few new mines brought into production over the next several years in South Africa. With a relatively low capital cost and strong operating margin at current metal prices, the WBJV Project 1 is well positioned to overcome the hurdles facing existing producers. The Waterberg JV Project, although at an earlier stage, holds significant potential as it will likely be amenable to mechanization limiting exposure to escalating labour costs.