HomeNewsWesizwe approves R5.6 billion mine

Wesizwe approves R5.6 billion mine

Mike Solomon, CEO,
Wesizwe Platinum
Johannesburg, South Africa — MININGREVIEW.COM — 01 April, 2008 – Wesizwe Platinum Limited has released its positive bankable feasibility study (BFS) confirming the commercial viability of the Frischgewaagd-Ledix complex of its Pilanesberg project, and has has given the go-ahead for construction of its new R5.6 billion platinum mine.

The BFS – released here yesterday by CEO Mike Solomon – confirmed that capital construction would proceed on the basis of this report. The construction programme would cover a period of 58 months, commencing in the third quarter of 2008 and reaching completion in 2013.

The mine will process 230 000 tpm of ore – 180 000 tpm generated from the Merensky reef and 50 000 tpm from the UG2 reef. “This will yield an average 350 000 PGM4 oz pa,” he revealed. “First production is scheduled for 2011 with a five-year ramp-up to steady state in 2016. Life of mine has been calculated at 35 years.”

Wesizwe is not yet a cash-generating entity and its exploration programme up to BFS has been funded by equity. “The construction phase of the project is expected to be funded by way of a combination of equity and debt finance,” Solomon stated.

“A consortium of South African banks (Deutsche Securities (SA) (Pty) Ltd, ABSA Capital a division of ABSA Bank Limited, and the Development Bank of Southern Africa Limited) has been mandated to arrange this finance,” he announced. “The banks will provide a project debt and equity package and will assist with the equity offering for the equity portion of the financing. The directors and management of Wesizwe will determine the appropriate debt equity ratio for the project finance,” he added.

“This is a significant milestone in the short history of the project, as we are now undergoing the critical transition from pure exploration to being a fully-fledged platinum producer over the next five years,” Solomon commented. “We are delighted with the results of the BFS, which was delivered a full year ahead of schedule,” he pointed out.

“The study confirms the commercial viability of the project with a net present value of R9,5 billion and an IRR of 18 %, which are well within the commercial, economic and technical parameters planned for at the outset,” Solomon continued. “It also cogently demonstrates the success of the reverse engineering approach that we have taken.”

He said that the proposed mine design, comprising an underground mine and a surface concentrator plant, allowed for fast production build-up and flexibility to address the characteristics of the ore body.

“We look forward to an exciting new stage in the company’s life as we continue to build shareholder value through the capital construction phase,” he concluded.