Platinum Metals .(PLG) - 2024 Q1 - Quarterly Report

Interim Condensed Consolidated Financial Statements This section presents the company's financial position, performance, and cash flows for the interim period Interim Consolidated Statements of Financial Position As of November 30, 2023, total assets increased to $50.94 million from $50.02 million, while total liabilities decreased to $1.94 million and total shareholders' equity rose to $49.00 million Consolidated Statements of Financial Position (in thousands USD) | | November 30, 2023 | August 31, 2023 | | :--- | :--- | :--- | | Total current assets | $7,517 | $7,552 | | Total assets | $50,940 | $50,021 | | Total current liabilities | $661 | $1,367 | | Total liabilities | $1,942 | $2,647 | | Total shareholders' equity | $48,998 | $47,374 | | Total liabilities and shareholders' equity | $50,940 | $50,021 | Interim Condensed Consolidated Statements of Loss and Comprehensive Loss For the three months ended November 30, 2023, the company reported a net loss of $1.56 million, a slight improvement from the $1.61 million loss in the prior year period Statements of Loss (in thousands USD) | | Period Ended Nov 30, 2023 | Period Ended Nov 30, 2022 | | :--- | :--- | :--- | | General and administrative | $1,090 | $1,173 | | Stock based compensation expense | $459 | $830 | | Interest income | $(135) | $(138) | | Loss for the period | $1,558 | $1,614 | | Comprehensive loss for the period | $1,650 | $1,706 | | Basic and diluted loss per common share | $0.02 | $0.02 | Interim Consolidated Statements of Changes in Equity Shareholders' equity increased to $49.00 million by November 30, 2023, primarily due to $2.5 million from share issuance and $0.5 million from stock-based compensation, partially offset by the net loss Changes in Equity for the period ended Nov 30, 2023 (in thousands USD) | Description | Amount | | :--- | :--- | | Balance August 31, 2023 | $47,374 | | Stock based compensation | $503 | | Share issuance - financing | $2,500 | | Share issuance costs | $(89) | | Net loss for the period | $(1,558) | | Other adjustments | $(219) | | Balance November 30, 2023 | $48,998 | Interim Consolidated Statements of Cash Flows Cash and cash equivalents increased by $0.12 million to $7.11 million, driven by $2.39 million from financing activities, offset by cash used in operating and investing activities Cash Flow Summary (in thousands USD) | | For the period ended Nov 30, 2023 | For the period ended Nov 30, 2022 | | :--- | :--- | :--- | | Cash used in Operating Activities | $(917) | $(1,906) | | Cash from Financing Activities | $2,389 | $1,561 | | Cash used in Investing Activities | $(1,401) | $(567) | | Net increase (decrease) in cash | $71 | $(912) | | Cash, end of period | $7,105 | $11,566 | Notes to the Condensed Consolidated Interim Financial Statements This section provides detailed explanations and supplementary information for the interim financial statements Note 1: Nature of Operations Platinum Group Metals Ltd. is a development-stage company focused on mineral properties in South Africa, consolidating subsidiaries and using the equity method for its joint venture - The company is a development stage entity focused on mineral properties in South Africa containing platinum group metals[7] - The company holds a 52.3% ownership in Lion Battery Technologies Inc. but accounts for it using the equity method due to joint control[9] - For accounting purposes, the company controls and consolidates Mnombo Wethu Consultants (49.95% ownership) and Waterberg JV Resources (37.05% direct ownership), resulting in an effective ownership of 63.05% in Waterberg JV Co[9][10] Note 2: Basis of Presentation and Material Accounting Policies These interim financial statements are prepared in accordance with IFRS, specifically IAS 34, using the United States Dollar as the presentation currency - The financial statements are prepared in accordance with IFRS, specifically IAS 34 Interim Financial Reporting[11] Foreign Exchange Rates Used | Currency Pair | Period-end rate (Nov 30, 2023) | Period-average rate (Nov 30, 2023) | | :--- | :--- | :--- | | Rand/USD | R18.8718 | R18.8412 | | CAD/USD | C$1.3582 | C$1.3655 | Note 3: Mineral Properties The Waterberg Project in South Africa is the company's sole active mineral property, with capitalized costs increasing to $42.58 million and a controlling 50.02% interest held by the company Waterberg Project Capitalized Costs (in thousands USD) | | Amount | | :--- | :--- | | Balance August 31, 2023 | $41,614 | | Additions | $1,022 | | Foreign currency translation adjustment | $(54) | | Balance November 30, 2023 | $42,582 | - The company holds a controlling 50.02% interest in Waterberg JV Co. Other partners include HJM (JOGMEC and Hanwa) with 21.95%, Implats with 15.0%, and Mnombo with a 26.0% direct interest (of which the company owns 49.9%)[15] - The Waterberg Mining Right was granted on January 28, 2021, and remains active, with all appeals against the grant dismissed by the Minister of the DMRE on October 13, 2022[16][18] - Implats retains a 15.0% interest and a right of first refusal for offtake, but elected not to exercise its option to increase its stake to 50.01% in June 2020 due to economic uncertainty from the COVID-19 pandemic[22] Note 4: Lion Battery Technologies Inc. Lion Battery Technologies Inc., a joint venture with Amplats, focuses on developing lithium battery technology using platinum and palladium, having funded $4.512 million and secured five U.S. patents - Lion is a joint venture with Amplats to research lithium battery technology using platinum and palladium. The partners have funded a total of $4.512 million as of November 30, 2023, including a $362 thousand tranche in November 2023[26] - Lion has exclusive rights to intellectual property developed under a Sponsored Research Agreement with Florida International University (FIU), which has resulted in five issued U.S. patents related to battery cathodes and interlayers using platinum and palladium[28] - To advance commercialization, Lion has engaged The Battery Innovation Center (BIC) to conduct independent trials and validation of its proprietary electrode compositions in both lithium-sulfur and lithium-ion (NMC) cells[29] Note 5: Share Capital The company's share capital activities included a $2.5 million private placement with HCI, with 4,446,787 stock options outstanding and active DSU and RSU plans Shares Issued In fiscal 2024, the company completed a $2.5 million private placement with HCI's subsidiary, issuing 2,118,645 common shares at $1.18 each - On September 18, 2023, the company closed a non-brokered private placement with a subsidiary of major shareholder HCI for 2,118,645 common shares at $1.18 each, raising gross proceeds of $2.5 million[31] Incentive stock options As of November 30, 2023, 4,446,787 share purchase options were outstanding with a weighted average exercise price of C$2.24, with $0.384 million in related stock compensation expense Share Purchase Option Activity | | Number of Share Options | Average Exercise Price (CAD) | | :--- | :--- | :--- | | Outstanding at Aug 31, 2023 | 4,793,837 | $3.17 | | Granted | 589,950 | $1.52 | | Cancelled | (937,000) | $6.58 | | Outstanding at Nov 30, 2023 | 4,446,787 | $2.24 | - Of the 4,446,787 options outstanding at November 30, 2023, a total of 2,147,170 were exercisable[35] Deferred and Restricted Share Units The company maintains DSU and RSU plans, with 754,212 DSUs and 732,338 RSUs outstanding as of November 30, 2023, and $120 thousand in RSU stock compensation expense recorded - At November 30, 2023, a total of 754,212 Deferred Share Units (DSUs) were issued and outstanding for non-executive directors[39][40] - At November 30, 2023, there were 732,338 Restricted Share Units (RSUs) issued and outstanding for officers and employees, with none being vested[41][42] Note 6: Related Party Transactions The company engaged in transactions with related parties, including a $2.5 million private placement with major shareholder HCI, which holds a 26.3% interest - Major shareholder HCI, which has the right to nominate one director, participated in a $2.5 million private placement in September 2023. As of November 30, 2023, HCI held a 26.3% interest in the Company[46] - During the period, $79 thousand was paid or accrued to independent directors for fees and services[46] Note 7: Contingencies and Commitments The company has $0.528 million in future lease commitments, and a long-standing legal action by Africa Wide was dismissed, with the court ordering Africa Wide to pay $159 thousand in legal costs Commitments (in thousands USD) | | < 1 Year | 1 - 3 Years | 4 - 5 Years | Total | | :--- | :--- | :--- | :--- | :--- | | Lease Obligations | $118 | $285 | $125 | $528 | | Environmental Bonds | $43 | $129 | $86 | $258 | | Totals | $161 | $414 | $211 | $786 | - Legal proceedings instituted by Africa Wide in 2018 to set aside the sale of Maseve have been dismissed by the South Africa Supreme Court of Appeal. Africa Wide's final application for reconsideration was dismissed on October 6, 2023[46][47] - The High Court determined that Africa Wide owes the Company $159 thousand (R2.99 million) in costs, and a demand for payment was served on November 29, 2023[47] Note 8: Supplementary Cash Flow Information This note details the components of the net change in non-cash working capital, which was a minimal outflow of $1 thousand for the period ended November 30, 2023 Net change in non-cash working capital (in thousands USD) | | Nov 30, 2023 | Nov 30, 2022 | | :--- | :--- | :--- | | Amounts receivable, prepaid expenses and other assets | $150 | $(505) | | Accounts payable and other liabilities | $(151) | $(347) | | Total | $(1) | $(852) | Note 9: Segmented Reporting The company operates in Canada and South Africa, with South Africa holding the majority of assets ($44.0 million) and reporting a larger loss of $1.48 million for the period Segmented Information as of Nov 30, 2023 (in thousands USD) | Segment | Assets | Liabilities | Loss for the period | | :--- | :--- | :--- | :--- | | Canada | $6,903 | $1,699 | $175 | | South Africa | $44,037 | $243 | $1,475 | | Total | $50,940 | $1,942 | $1,650 |