Wesizwe CEO
Mike Solomon
 
Johannesburg, South Africa — MININGREVIEW.COM — 25 May 2010 – Wesizwe Platinum has secured US$877 million (R6.6 billion) in funding from a Chinese consortium, comprising the Jinchuan Group (JNMC) and the China Africa Development Fund, which gives it a 51% stake in the platinum junior.

A statement released here said this development provided Wesizwe with the funds it needed to build a platinum mine on its well-explored prospect on the Western Limb of the Bushveld Igneous Complex. Miningmx reports that the market liked the news, driving the shares up 9 % to 218 cents on the JSE.

According to the term sheet the parties signed, the transaction would include an equity as well as a debt component. There would also be an off-take agreement that would guarantee the sale of all platinum group metal concentrate.

It added that the Chinese consortium would, subject to certain conditions, subscribe for 51% or nearly 830 million new shares in Wesziwe for US$227 million (R1.7 billion), which translates to 207 South African cents per Wesziwe share.

“The debt funding has been secured at globally competitive financing rates and the provision of financial guarantees, provided by JNMC, enhances the certainty that Wesizwe Platinum’s shareholders will not be called upon for further funding,” said Wesizwe CEO Mike Solomon.

“In the event of any funding shortfall, JNMC has undertaken to provide the funding needed for the project to reach full production via a shareholders loan to Wesizwe Platinum on the same commercial terms as the debt component,” he added.

Wesizwe had frozen work on a R6 billion project to build a twin-shaft mine and concentrator at its Frischgewaagd-Ledig property. The project entailed a 980-metre deep mine capable of producing 350 000 oz of platinum group metals a year.

JNMC and the China-Africa Development Fund (CAD Fund) have a letter of commitment from the China Development Bank for a US$650 million (R4.9 billion) project finance facility.

“The introduction of JNMC means that Wesizwe Platinum has secured an experienced mining, financial and technical partner, and this transaction also provides Wesizwe Platinum with the financial muscle to enable it to examine future growth opportunities, which is an objective of both JNMC and the CADFund,” Solomon said.