Saudi Arabia’s Mining Sector Set for Major Leap: Platinum Group Metals Ltd. (TSX: PTM) (NYSE American: PLG) Targets New Growth with PGM Smelter Deal

• Saudi Arabia aims to increase its mining sector’s contribution to the economy from $17 billion today to $75 billion by 2035, as part of its Vision 2030 initiative.
• Platinum Group Metals Ltd. has entered a cooperation agreement with Ajlan & Bros Mining and Metals Co. to explore the establishment of a platinum group metals smelter and base metals refinery in Saudi Arabia.
• The agreement includes a global market study, a definitive feasibility study and the potential formation of a 50:50 joint venture for project development.

A new, potentially enormous force is sweeping the mining industry. Gulf countries, desperate to diversify away from fossil fuels, are rerouting petrodollars to acquire vital minerals required to produce clean energy. Chief among these nations is Saudi Arabia, which aims for its mining sector to contribute $75 billion to its economy by 2035, up from just $17 billion today, according to the Financial Post (https://ibn.fm/285gC). The area has enormous potential to grow a strong mining sector with lofty goals that, if met, could completely change the face of the economy.

The transition to mining seems like a sensible move to guarantee a consistent supply of raw materials in the face of hydrocarbon’s unpredictable future, since Gulf countries earn about $400 billion in fossil-fuel income each year. Under Crown Prince Mohammed bin Salman’s “Vision 2030” initiative, mining and mineral processing are identified as key pillars of economic modernization, alongside oil, gas and petrochemicals. According to the Financial Post, this strategic focus positions Saudi Arabia to exploit an estimated $2.5 trillion in domestic mineral assets, leveraging partnerships with major entities like Saudi Arabian Oil Co. (Saudi Aramco) and the state mining group Ma’aden.

Platinum Group Metals (TSX: PTM) (NYSE American: PLG), the operator and majority owner of the Waterberg Project, has announced an important collaboration with Ajlan & Bros Mining and Metals Co. to explore establishing a standalone platinum group metals (“PGM”) smelter and base metals refinery (“BMR”) in Saudi Arabia. This agreement, structured into three distinct phases, marks a pivotal step in the company’s strategy to enhance its operational capabilities and secure a stable offtake agreement for its Waterberg Project concentrate.

Overview of the Cooperation Agreement

The cooperation agreement consists of the following phases:

1. Global PGM Concentrate Market Study: This effort includes a comprehensive analysis of potential sources for PGM concentrates that could supplement the processing of concentrate from the Waterberg Project, thereby reducing reliance on a single project, and potentially enhancing the overall smelting and refining operations.
2. Definitive Feasibility Study (“DFS”): Upon completion of the Market Study, the parties will assess the findings and may then jointly commission a DFS for the proposed smelter and BMR. The DFS is estimated to cost approximately US$4 million, with expenses shared equally between Platinum Group and Ajlan.
3. Formation of a Joint Venture: Following the successful completion of the DFS, Platinum Group and Ajlan have the option to establish a 50:50 incorporated joint venture. This venture would focus on financing, constructing, and operating the smelting and refining facilities in Saudi Arabia.

Platinum Group’s President and CEO, Frank Hallam, emphasized the strategic importance of this partnership: “The largest impediment to the development of the Waterberg Project to date has been the need to secure a concentrate offtake agreement amongst the existing South African based PGM smelters. We are pleased to work together with Ajlan to explore a smelting and refining facility in Saudi Arabia as a strategic alternative that may create an exciting path forward.”

The Global PGM Concentrate Market Study is nearing completion and is being assessed by PTM and Ajlan. The proposed DFS would assess various aspects, including infrastructure requirements, technical specifications, capital, and operational costs. The results will be critical in determining the feasibility and scalability of the smelter and BMR project.

Implications for the Waterberg Project

The establishment of a smelting and refining facility in Saudi Arabia could provide essential offtake agreements for the Waterberg Project, which has previously faced challenges in securing concentrate offtake agreements with existing South African smelters.

The Waterberg Project is a bulk underground palladium and platinum deposit located in South Africa’s Limpopo province, with plans to produce approximately 353,000 ounces of PGMs annually at an estimated capital cost of just over $600 million. The Waterberg Project is planned to create approximately 2,000 jobs during construction and approximately 1,425 mostly high-skilled jobs once steady state mining is achieved. These direct jobs would make a significant contribution to local economic development, infrastructure growth, and foreign exchange earnings.

A trade-off study has already indicated that shipping concentrate from South Africa to Saudi Arabia could be economically viable, with shipping costs offset by lower energy and water costs.

Before Waterberg Project concentrate could be processed in Saudi Arabia, a long-term export approval to ship unrefined precious metals in concentrate from South Africa will be required. Platinum Group has engaged with the South African government to secure a long-term permit for the export of unrefined precious metals in concentrate.  As a first step, Platinum Group is working with the Government of South Africa to identify local beneficiation opportunities and to analyze the economic impact of exporting concentrate.

The cooperation agreement with Ajlan & Bros Mining and Metals Co. represents a strategic maneuver for Platinum Group Metals Ltd. as it seeks to overcome the challenges faced at the Waterberg Project and capitalize on the advantages offered by the Saudi Arabian market. This initiative not only aims to unlock the project’s potential but also to create a robust framework for future growth in the PGM sector.

For more information, visit www.PlatinumGroupMetals.net.

NOTE TO INVESTORS: The latest news and updates relating to PLG are available in the company’s newsroom at https://ibn.fm/PLG

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