An aerial view of
Wesizwe’s Frischgewaagd
-Ledig core project
area on the
Western Bushveld
 
Johannesburg, South Africa — MINGREVIEW.COM — 13 August 2008 – Emerging new generation platinum miner Wesizwe Platinum Limited – poised to launch the capital construction phase of its R5.6 billion Frischgewaagd-Ledig core project on the Western Bushveld complex next month – has had yet another very successful year which effectively marked the beginning of its transition from an exploration player to fully-fledged platinum producer.

Addressing the company’s annual general meeting here, chairman Robert Rainey said the single most important milestone reached had been the completion of the bankable feasibility study (BFS) for the project in March a year ahead of schedule. The positive results had warranted the unconditional go-ahead for the capital construction set to begin in the next few months, with first run-of-mine ore scheduled for 2011.

“In a nutshell,” he added, “the BFS showed the project to have a positive net present value of R9.5billion and an IRR of 18%, using very conservative economic factors. The estimated life of mine is 35 years at a monthly production rate of 230 000 tpm, yielding an average of 350 000 PGE (4) oz per annum at steady state production, which will be achieved in 2016,” said Rainey.

“The energy crisis experienced at the beginning of the year, and the resulting uncertainty in terms of long-term supply ability in the mining sector, saw Wesizwe put in place an electrical self-generation contingency as part of the BFS,” he pointed out. “This will cover the project for any possible electricity supply delays by Eskom, It is supported by an extensive study concluded by the company in June 2008, and will eliminate any energy supply uncertainty while having only a limited impact on capital and working costs,” Rainey continued.

He re-iterated that Wesizwe had undertaken two successful capital raisings amounting to some R500 million. The first R300 million tranche had been used for the procurement of long lead capital items, while the second tranche of R200 million raised in July 2008 would accommodate the early works programme and the initial project construction phase, including bulk earth works, site civil preparation, engineering and capital items necessary to see the project through until early 2009.

The financing structure for the project – a combination of debt and equity instruments which is being handled by a syndicate of Deutsche Bank, ABSA and the Development Bank of Southern Africa – is on schedule and is currently being finalised.