Platinum Metals .(PLG) - 2023 Q2 - Quarterly Report

Interim Condensed Consolidated Financial Statements Consolidated Statements of Financial Position The company's total assets decreased to $51.15 million by February 28, 2023, primarily due to reduced cash, while total shareholders' equity also declined Consolidated Statements of Financial Position (in thousands USD) | Account | Feb 28, 2023 | Aug 31, 2022 | | :--- | :--- | :--- | | Total Current Assets | $10,718 | $12,764 | | Cash and cash equivalents | $10,022 | $12,330 | | Mineral properties and exploration assets | $39,936 | $40,373 | | Total Assets | $51,150 | $53,679 | | Total Current Liabilities | $901 | $1,121 | | Total Liabilities | $1,908 | $2,124 | | Total Shareholders' Equity | $49,242 | $51,555 | | Total Liabilities and Shareholders' Equity | $51,150 | $53,679 | Interim Condensed Consolidated Statements of Loss and Comprehensive Loss The company reported a net loss of $2.81 million for the six months ended February 28, 2023, a significant improvement from the prior year Statement of Loss Highlights (Six Months Ended Feb 28, in thousands USD) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | General and administrative expenses | $2,026 | $2,440 | | Interest expense | $0 | $1,650 | | Loss for the period | $2,813 | $5,950 | | Comprehensive loss for the period | $6,067 | $8,346 | | Basic and diluted loss per share | $0.03 | $0.07 | | Weighted average shares outstanding | 99,634,171 | 80,393,761 | Consolidated Statements of Changes in Equity Total shareholders' equity decreased to $49.24 million by February 28, 2023, primarily due to net loss and negative currency translation adjustments Changes in Total Equity (in thousands USD) | Description | Amount | | :--- | :--- | | Balance at August 31, 2022 | $51,555 | | Stock based compensation | $1,217 | | Share issuance - financing (net) | $1,639 | | Contributions of Waterberg JV Co. | $856 | | Currency translation adjustment | ($3,254) | | Net loss for the period | ($2,813) | | Balance at February 28, 2023 | $49,242 | Consolidated Statements of Cash Flows The company experienced a net cash decrease of $2.24 million for the six months ended February 28, 2023, with cash ending at $10.02 million Cash Flow Summary (Six Months Ended Feb 28, in thousands USD) | Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash from Operating Activities | ($2,501) | ($2,565) | | Net cash from Financing Activities | $2,562 | $9,005 | | Net cash from Investing Activities | ($2,305) | ($2,864) | | Net (decrease) increase in cash | ($2,242) | $3,576 | | Cash, beginning of period | $12,330 | $6,059 | | Cash, end of period | $10,022 | $9,583 | Notes to the Condensed Consolidated Interim Financial Statements These notes provide detailed information on the company's operations, key projects, financial policies, share capital, and resolution of significant legal matters Note 1: Nature of Operations Platinum Group Metals Ltd. is a development-stage company focused on exploring and developing mineral properties in South Africa - The company is a development stage entity focused on mineral properties in South Africa[6] - The company holds interests in several subsidiaries, including a controlling interest in Waterberg JV Resources (Pty) Ltd. and a 52.64% stake in Lion Battery Technologies Inc., which is accounted for using the equity method[8] Note 2: Basis of Presentation and Significant Accounting Policies Interim financial statements are prepared under IFRS, consistent with annual policies, and presented in United States Dollars - Financial statements are prepared under IFRS and presented in USD[9][11] Note 3: Mineral Properties and Exploration and Evaluation Assets The Waterberg Project, the company's sole active mineral property, had capitalized costs of $39.94 million and its mining right remains active despite dismissed appeals - The company's only active mineral property is the Waterberg Project[14] Waterberg Project Capitalized Costs (in thousands USD) | Description | Amount | | :--- | :--- | | Balance August 31, 2022 | $40,373 | | Additions | $2,038 | | Foreign currency translation adjustment | ($2,745) | | Balance February 28, 2023 | $39,936 | - The company holds a 50.02% controlling interest in Waterberg JV Co. Other partners include Mnombo (26.0%), Implats (15.0%), JOGMEC (12.195%), and Hanwa (9.755%)[16] - The Waterberg Mining Right was granted in 2021 and remains active. In October 2022, the DMRE dismissed several appeals against the grant[17][19] Note 4: Lion Battery Technologies Inc. Lion Battery Technologies Inc., a joint venture with Anglo American Platinum, researches PGM-based battery technology and holds exclusive rights to five U.S. patents - Lion is a joint venture with Anglo American Platinum (Amplats) to research PGM-based battery technology, accounted for using the equity method[27][28] - To date, the company and Amplats have each funded half of the $3.59 million invested into Lion[27] - Lion has exclusive rights to IP from its research program with Florida International University (FIU), which has yielded five U.S. patents for battery technology using platinum and palladium[30] Note 5 & 6: Sprott Loan & Convertible Notes The company fully repaid its $20 million Sprott Facility and $19.99 million Convertible Notes in February 2022, eliminating related interest expense - The $20 million Sprott Facility was fully repaid in February 2022, releasing the pledge of the company's South African assets[31] - The outstanding $19.99 million of Convertible Notes were cancelled in February 2022, settled through the issuance of 11,793,509 common shares[33] Note 7: Share Capital As of February 28, 2023, the company had 100.21 million common shares outstanding, raising $1.64 million from ATM sales and incurring $1.11 million in stock compensation expense - In the six months to Feb 28, 2023, the company sold 1,043,569 shares under its 2022 ATM program for gross proceeds of $1.9 million[36] Stock Option Activity (in CAD) | Description | Number of Options | Average Exercise Price (CAD) | | :--- | :--- | :--- | | Outstanding at Aug 31, 2022 | 3,666,671 | $3.45 | | Granted | 1,158,000 | $2.37 | | Cancelled/Exercised | (140,834) | - | | Outstanding at Feb 28, 2023 | 4,683,837 | $3.19 | - Total stock compensation expense for the six months ended Feb 28, 2023 was $1.11 million, comprising expenses from stock options, DSUs, and RSUs[3][42][47] Note 8: Related Party Transactions The company engaged in related party transactions, including fees to directors, with major shareholder HCI holding a 24.79% interest and a board nominee - As of February 28, 2023, major shareholder HCI held a 24.79% interest in the company and has the right to nominate one director to the board[48] Note 9: Contingencies and Commitments The company has total commitments of $357 thousand, and a significant legal challenge regarding the Maseve Mine sale was fully resolved in its favor - Legal proceedings instituted by Africa Wide to set aside the sale of the Maseve Mine were dismissed by the High Court in June 2022, with a final appeal dismissed by the Supreme Court in November 2022. Africa Wide has no further avenue of appeal[52] Commitments (in thousands USD) | Type | Total | | :--- | :--- | | Lease Obligations | $93 | | Environmental Bonds | $264 | | Total | $357 | Note 11: Segmented Reporting The company's operations are segmented by geography, with the majority of assets ($41.9 million) in South Africa and most comprehensive loss ($5.69 million) attributed to Canada Segmented Information as of Feb 28, 2023 (in thousands USD) | Geography | Assets | Liabilities | Comprehensive Loss (6-months) | | :--- | :--- | :--- | :--- | | Canada | $9,254 | $1,184 | $5,685 | | South Africa | $41,896 | $724 | $382 | | Total | $51,150 | $1,908 | $6,067 |