Platinum Metals .(PLG) - 2023 Q3 - Quarterly Report

Interim Condensed Consolidated Financial Statements Consolidated Statements of Financial Position As of May 31, 2023, total assets decreased to $48.2 million from $53.7 million at August 31, 2022, primarily due to reduced cash, resulting in a decline in total shareholders' equity to $46.2 million Consolidated Statements of Financial Position (in thousands USD) | | May 31, 2023 | August 31, 2022 | | :--- | :--- | :--- | | Total current assets | $8,788 | $12,764 | | Total assets | $48,169 | $53,679 | | Total current liabilities | $622 | $1,121 | | Total liabilities | $2,000 | $2,124 | | Total shareholders' equity | $46,169 | $51,555 | | Total liabilities and shareholders' equity | $48,169 | $53,679 | - Cash and cash equivalents decreased from $12.3 million at August 31, 2022, to $8.2 million at May 31, 2023[2] Consolidated Statements of Loss and Comprehensive Loss For the nine months ended May 31, 2023, net loss significantly improved to $4.05 million from $7.26 million in the prior year, though comprehensive loss slightly increased to $10.16 million due to currency translation Loss and Comprehensive Loss Summary (in thousands USD) | | Nine months ended May 31, 2023 | Nine months ended May 31, 2022 | | :--- | :--- | :--- | | Total Expenses | $4,514 | $7,005 | | Net Loss for the period | $4,049 | $7,260 | | Currency translation adjustment | $6,108 | $2,792 | | Comprehensive loss for the period | $10,157 | $10,052 | | Basic and diluted loss per share | $0.04 | $0.08 | - General and administrative expenses for the nine months ended May 31, 2023, were $2.92 million, down from $3.26 million in the prior-year period[4] Consolidated Statements of Changes in Equity Total shareholders' equity decreased from $51.56 million to $46.17 million due to net loss and negative currency translation, partially offset by stock-based compensation and share issuances Changes in Equity (Nine months ended May 31, 2023, in thousands USD) | Description | Amount | | :--- | :--- | | Balance August 31, 2022 | $51,555 | | Stock based compensation | $1,744 | | Share issuance - financing | $1,975 | | Share issuance costs | ($354) | | Net loss for the period | ($4,049) | | Currency translation adjustment | ($6,108) | | Other adjustments | $1,406 | | Balance May 31, 2023 | $46,169 | Consolidated Statements of Cash Flows Net cash decreased by $3.74 million to an ending balance of $8.22 million for the nine months ended May 31, 2023, primarily due to significantly lower financing proceeds compared to the prior year Cash Flow Summary (Nine months ended, in thousands USD) | | May 31, 2023 | May 31, 2022 | | :--- | :--- | :--- | | Net cash from Operating Activities | ($3,087) | ($3,800) | | Net cash from Financing Activities | $2,521 | $14,629 | | Net cash from Investing Activities | ($3,172) | ($3,471) | | Net (decrease) increase in cash | ($3,738) | $7,358 | | Cash, end of period | $8,218 | $13,628 | Notes to the Condensed Consolidated Interim Financial Statements These notes detail the company's development-stage status, Waterberg Project, Lion Battery joint venture, repayment of key loans, and provide specifics on share capital, related party transactions, commitments, and segmented financial performance Note 1. Nature of Operations The company is a development-stage entity focused on mineral property development in South Africa, primarily for platinum group metals, operating through subsidiaries including a controlling interest in Waterberg JV Resources - The company is a development stage entity focused on mineral properties in South Africa, with key metals of interest being platinum, palladium, rhodium, gold, copper, and nickel[7] Subsidiaries and Joint Ventures (as at May 31, 2023) | Name of subsidiary | Principal activity | Place of operation | Ownership interest | | :--- | :--- | :--- | :--- | | Platinum Group Metals (RSA) (Pty) Ltd. | Development | South Africa | 100.00% | | Mnombo Wethu Consultants (Pty) Limited | Development | South Africa | 49.95% | | Waterberg JV Resources (Pty) Ltd. | Development | South Africa | 37.05% | | Lion Battery Technologies Inc. | Research | Canada | 52.64% | Note 2. Basis of Presentation and Significant Accounting Policies These interim financial statements are prepared in accordance with IFRS (IAS 34) and use the United States Dollar (USD) as the presentation currency, with consistent accounting policies from the prior annual period - The financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and use the United States Dollar (USD) as the presentation currency[10][12] Key Foreign Exchange Rates Used | Currency Pair | Period-end rate (May 31, 2023) | Period average rate (Nine months ended May 31, 2023) | | :--- | :--- | :--- | | Rand/USD | R19.7488 | R17.8965 | | CAD/USD | C$1.3603 | C$1.3516 | Note 3. Mineral Properties The Waterberg Project in South Africa, with $38.6 million in capitalized costs, is the company's sole active mineral property, where it holds a controlling 50.02% interest, and its mining right has been successfully defended against legal appeals - The company's only active mineral property is the Waterberg Project. The capitalized cost was $38.6 million at May 31, 2023, down from $40.4 million at August 31, 2022, due to foreign currency translation adjustments[14] - The company holds a controlling 50.02% interest in Waterberg JV Co. Other partners include Implats (15.0%) and HJM (a joint venture of JOGMEC and Hanwa) with 21.95%[15][16] - A mining right for the Waterberg Project was granted and is active. Appeals against the grant were dismissed by the DMRE in October 2022, and a related court interdict application was dismissed in May 2023[17][19][20] Note 4. Lion Battery Technologies Inc. Lion Battery Technologies Inc., a joint venture with Amplats, researches platinum and palladium-based battery technology, holding exclusive rights to five FIU patents and engaging BIC for commercialization, with $3.59 million equally funded by partners - Lion is a joint venture with Amplats to develop battery technology using platinum and palladium. The company and Amplats have funded Lion equally for an aggregate of $3.59 million as of May 31, 2023[27][28] - Lion has exclusive rights to five U.S. patents issued to FIU related to battery cathodes and interlayers using platinum group metals. Further patents are pending[30] - In June 2023, Lion engaged The Battery Innovation Center (BIC) to conduct independent trials and R&D to validate and scale up its technology for commercialization[31] Note 5. Sprott Loan The $20 million Sprott senior secured credit facility was fully repaid in February 2022, releasing the security pledge over South African assets, with no payments made in the current nine-month period - The $20 million Sprott Facility was fully repaid in February 2022, and the security pledge over South African assets was released[32] Note 6. Convertible Notes The $20 million aggregate principal of convertible senior subordinated notes were fully repaid in February 2022 through the issuance of 11,793,509 common shares at $1.695 per share - In February 2022, the company repaid the outstanding $19.99 million of Convertible Notes by issuing 11,793,509 common shares[34] Note 7. Share Capital As of May 31, 2023, 100,251,980 common shares were outstanding, with 1,089,503 shares sold under the ATM program for $1.62 million net proceeds, alongside active incentive stock option, DSU, and RSU plans - As of May 31, 2023, there were 100,251,980 common shares outstanding[36] - In the nine months to May 31, 2023, the company sold 1,089,503 shares under its 2022 ATM program for gross proceeds of $1.975 million[37] Outstanding Share Purchase Options (as at May 31, 2023) | | Number of Share Options | Average Exercise Price in CAD | | :--- | :--- | :--- | | Options outstanding | 4,883,837 | $3.17 | | Options exercisable | 2,431,948 | - | Note 8. Related Party Transactions During the nine months ended May 31, 2023, related party transactions included $234,000 in fees to independent directors, while major shareholder HCI held a 24.8% interest and maintained a board nominee - Paid or accrued $234,000 to independent directors for fees and services during the nine-month period[55] - As of May 31, 2023, major shareholder HCI held a 24.8% interest in the Company and maintained its right to nominate one person to the board of directors[55] Note 9. Contingencies and Commitments Total commitments amount to $820,000, mainly for lease obligations and environmental bonds, while a legal challenge by Africa Wide regarding the Maseve Mine sale was dismissed but is now subject to a late reconsideration application being opposed by the company Commitments Summary (in thousands USD) | | < 1 Year | 1 - 3 Years | 4 - 5 Years | > 5 Years | Total | | :--- | :--- | :--- | :--- | :--- | :--- | | Lease Obligations | $114 | $285 | $175 | $ - | $574 | | Environmental Bonds | $41 | $123 | $82 | $ - | $246 | | Totals | $155 | $408 | $257 | $ - | $820 | - Legal proceedings instituted by Africa Wide to set aside the sale of Maseve were dismissed by the High Court and the Supreme Court of Appeal. Africa Wide has filed a late application for reconsideration, which the Company is opposing[54][55] Note 10. Supplementary Cash Flow Information The net change in non-cash working capital for the nine months ended May 31, 2023, resulted in a $722,000 cash outflow, driven by increased receivables and decreased accounts payable Net change in non-cash working capital (in thousands USD) | Period ended | May 31, 2023 | May 31, 2022 | | :--- | :--- | :--- | | Amounts receivable, prepaid expenses and other assets | $(193) | $(351) | | Accounts payable and other liabilities | (529) | (439) | | Total | $(722) | $(790) | Note 11. Segmented Reporting The company's operations are segmented geographically, with South Africa holding the majority of assets ($40.6 million) and Canada accounting for the majority of liabilities ($1.3 million) and comprehensive loss ($9.6 million) Segmented Information (as at May 31, 2023, in thousands USD) | Segment | Assets | Liabilities | | :--- | :--- | :--- | | Canada | $7,584 | $1,264 | | South Africa | $40,585 | $736 | | Total | $48,169 | $2,000 | Comprehensive Loss by Segment (Nine months ended, in thousands USD) | Segment | May 31, 2023 | May 31, 2022 | | :--- | :--- | :--- | | Canada | $9,640 | $8,354 | | South Africa | $517 | $1,698 | | Total | $10,157 | $10,052 |