Platinum Group Metals Ltd. reported that it has entered into a Cooperation Agreement with Ajlan & Bros Mining and Metals Co. to study the establishment of a stand-alone platinum group metals ("PGM") smelter and base metals refinery ("BMR") in Saudi Arabia. The Cooperation Agreement encompasses three phases: a global PGM concentrate market study (the "Market Study"), a Definitive Feasibility Study ("DFS") for the construction and operation of PGM smelter and BMR in Saudi Arabia, and an option to form an incorporated 50:50 joint venture following the completion of the DFS.

The DFS will assume the export of PGM concentrate from the Waterberg Project in South Africa to a port facility in Saudi Arabia. In order to minimize the risk of sourcing concentrate from only one project, and to attain scale, a Market Study to be conducted by a third party will be commissioned to identify potential global sources of PGM concentrate that could augment the processing of Waterberg Project concentrate. There are currently several PGM and base metal projects globally seeking offtake and beneficiation solutions.

Upon the completion of the Market Study, and assuming a favorable outcome, Ajlan and the Company may together commission a DFS for the construction of a PGM smelter and BMR to process Waterberg Project concentrate and other concentrate feed in Saudi Arabia at an estimated cost for the DFS of USD 4.0 million. The scope for the DFS will encompass options related to infrastructure, location, technical specifications, capital, and operating costs. All expenses related to the DFS are to be split on a 50:50 basis between Platinum Group and Ajlan, including certain costs already incurred by Platinum Group in previous independent beneficiation studies.

Upon completion of the DFS, Platinum Group and Ajlan will have the option to form an incorporated joint venture on a 50:50 basis, on terms to be mutually agreed, for the purpose of financing, constructing, and operating smelting and refining facilities as contemplated in the DFS. Saudi Arabia offers significant investment incentives and the new incorporated joint venture would apply for these incentives. Upon formation, the incorporated joint venture would then be in a position to offer concentrate offtake terms to Waterberg JV Resources (Pty) Limited, the owner and operator of the Waterberg Project.

An initial tradeoff study has been completed to determine the viability of exporting PGM concentrate from South Africa to Saudi Arabia. Shipping costs are generally offset by lower energy costs and water costs. The facility would also benefit from existing infrastructure.

A key requirement would be to secure a long-term permit from South Africa for the export of unrefined precious metals in concentrate. Platinum Group is working with the Government of South Africa to identify local beneficiation opportunities and to analyze the possible impact of exporting concentrate on the value chain. The company believes that construction and operation of the Waterberg Project mine represents a significant foreign direct investment into South Africa with benefits including the creation of over 1,300 direct jobs, infrastructure development, and foreign exchange earnings.

Beacon Securities Ltd. acted as an advisor to Platinum Group in relation to the Ajlan Cooperation Agreement.