While gold, oil and other commodity prices move higher, the fairest of them all has been palladium, topping $1,000 an ounce for the first time in 16 years.
Palladium, which is used in catalytic converters in gasoline-powered cars, has been spiking due to concerns about a shortfall amid rising demand.
Palladium's sister, platinum, - used in autocatalysts for diesel cars - has had a much more modest 2017 due to demand has been curbed in part because of rising diesel prices and plenty of bad press about automakers cheating on emissions tests for diesel vehicles.
Against the backdrop, it may seem like it should have been a fruitful year so far for Platinum Group Metals Ltd. (TSX:PTM) (NYSE MKT:PLG), but it hasn't. PTM stock has sunk from over C$3.00 in February to as low at 43 Canadian cents at the end of September. Shares are up from there in recent week, though, including a spike in Monday action, making it one of the best performing TSX-listed stocks.
Shares are being bid up today on news that a Impala Platinum Holdings Ltd., the producer of about one-quarter of the world's primary platinum currently, has penned definitive agreements with Platinum Group and others to purchase a 15.0% interest in the Waterberg Platinum Group Metals (PGM) Project in South Africa. The project is part of the Bushveld Igneous Complex that is host to more than 70% of the world's primary platinum production.
Discovered by Platinum Group and partners, the project is considered one of the world's lowest cost, undeveloped PGM assets in the world with probable reserves of 12.3 million ounces, broken down into 61% palladium, 30% platinum, 8% gold and 1% rhodium plus 191 and 33 million pounds of copper and nickel, respectively.
Per the deal, Impala will pay $30.0 million U.S. in cash for a 15.0% stake in the project and retain an option to up its stake to 50.01% through additional purchases and earn-in arrangements totaling $166.0 million U.S. following the completion of a Definitive Feasibility Study. Moreover, Impala will have first right of refusal to smelt and refine the concentrate from Waterberg.
Platinum Group is selling Impala an 8.6% interest for $17.2 million U.S. The remaining 6.4% in the first sale is coming from Japan Oil, Gas and Metals National Corporation, one of the project's partners. If Impala exercises all its options, Platinum Group which now owns 37.05% of the project, would still retain a 31.96% stake.
Traders on both Bay and Wall Streets are cheering the cash infusion and news the project is moving forward with one of the world's top platinum group metal players now in the mix. Toronto-listed shares of PTM are up 22.6% at 65 Canadian cents, while U.S.-listed shares of PLG have jumped 21.7% to 51 cents.
