Platinum Metals .(PLG) - 2023 Q4 - Annual Report

Introduction and Business Focus PTM focuses on advancing its Waterberg Project and developing platinum and palladium applications in lithium batteries - The company's main focus is advancing the Waterberg Project, a planned fully mechanized, shallow, decline access 4E mine projected to be one of the largest and lowest-cost underground PGM mines globally[1] - Near-term objectives include arranging construction financing and concentrate offtake agreements for the Waterberg Project[2] - The company is also advancing an initiative through Lion Battery Technologies Inc. to use platinum and palladium in lithium battery technologies, in collaboration with Anglo American Platinum and Florida International University[2] Recent Events Key 2023 milestones include securing financing, advancing Waterberg, progressing battery tech, and resolving legal issues - A Stage Three Budget of $1.62 million for the Waterberg Project is being approved for the period from September 1, 2023, to February 29, 2024[5] - Closed a non-brokered private placement of approximately $2.5 million with major shareholder Hosken Consolidated Investments Limited (HCI), allowing HCI to return to a near 27% interest in the Company[6] - Lion Battery Technologies Inc. engaged The Battery Innovation Center (BIC) to help commercialize its platinum and palladium-based battery chemistries, aiming for prototypes in 2024[7] - Japanese partners JOGMEC and Hanwa consolidated their interests into a new special purpose company, HJM, holding a combined 21.95% interest in the Waterberg Project[8] - Positive results were reported from the infill drill campaign at the Waterberg Project for both T Zone and F Zone boreholes, with results to be incorporated into a definitive feasibility study update[10][14] - The South African Supreme Court of Appeal denied Africa Wide's application for reconsideration regarding the 2018 Maseve Mine sale, ordering Africa Wide to pay costs[15] Financial Results (Fiscal Year 2023) FY2023 saw a reduced net loss of $5.66 million due to eliminated interest expense and successful ATM equity raises Fiscal Year 2023 vs. 2022 Financial Highlights | Financial Metric | FY 2023 (ended Aug 31) | FY 2022 (ended Aug 31) | Change | | :--- | :--- | :--- | :--- | | Net Loss | $5.66 million | $8.24 million | Improvement | | Loss Per Share | $0.06 | $0.09 | Improvement | | General & Admin Expenses | $3.89 million | $4.34 million | Decrease | | Interest Expense | $nil | $1.65 million | Eliminated | | Finance Income | $0.58 million | $0.18 million | Increase | - The company raised gross proceeds of $1.98 million by issuing 1,089,503 common shares through its at-the-market (ATM) equity program at an average price of $1.81 per share[23] - Total expenditures on the Waterberg Project for the fiscal year were approximately $4.44 million, bringing the total capitalized costs since inception to $85.4 million[25] Outlook The company's outlook focuses on advancing the Waterberg Project, optimizing concentrate processing, and developing battery technology Waterberg Project Advancement The primary objective is advancing the Waterberg Project to a construction decision through a phased $21.0 million pre-construction work program - The main business objective is to advance the Waterberg Project to a development and construction decision, operated by PTM under a technical committee with JV partners[26] - A $21.0 million pre-construction Work Program is in progress, set to conclude by August 31, 2024. It includes work on infrastructure, site facilities, and a DFS Update[27] - The Work Program is being executed in phased budgets: an Initial Budget ($2.5M, complete), a Stage Two Budget ($3.6M, complete), a Stage Three Budget ($1.62M, in approval), and a final Stage Four to be considered in early 2024[28] Concentrate Processing and Offtake Strategy The company is exploring alternative concentrate processing and offtake strategies, including building its own refinery in South Africa or abroad - The company is assessing the economic feasibility of constructing a matte furnace and base metal refinery in South Africa to process Waterberg concentrate[31] - An alternative being studied is building a refinery outside of South Africa, where a trade-off study indicates savings on power and water could offset additional transport costs. This would require government approval for concentrate export[32] Battery Technology Initiative (Lion Battery) The Lion Battery initiative aims to create new PGM demand by developing platinum and palladium applications in advanced lithium-ion batteries - The company acknowledges that the adoption of battery electric vehicles may reduce future demand for PGMs in autocatalysis[33] - The investment in Lion Battery Technologies Inc. represents an opportunity to create new demand for PGMs in the high-profile lithium battery field, potentially offsetting declines from other sectors[33] Environmental, Social and Governance (ESG) The company improved its ESG performance, achieving an overall 'BBB' score in its 2023 Digbee disclosure report, up from 'BB' in 2022 - The company received its third annual ESG disclosure report from Digbee Ltd., a UK-based firm with an industry-standard framework for the mining sector[34] - For 2023, the company achieved an overall ESG score of BBB, an improvement from the BB score in 2022[34] Regulatory and Disclosure This section outlines important regulatory and disclosure information, including risk factors, qualified person details, and forward-looking statement cautions - The reader is encouraged to review the 'Risk Factors' section in the Company's current AIF and Form 40-F[36] - Rob van Egmond, P.Geo., is the independent qualified person as defined in NI 43-101 who has reviewed and approved the scientific and technical information[37] - The news release contains forward-looking statements, and the company cautions that actual results may differ materially from those expressed due to a variety of risk factors[40][43] - The technical and scientific information has been prepared in accordance with Canadian NI 43-101 standards, which differ from SEC standards, and may not be comparable to disclosures by U.S. companies[44]