Johannesburg, South Africa — MININGREVIEW.COM — 08 September 2008 – Emerging new generation platinum miner Wesizwe Platinum Limited says it is on track to commence this month with the launch of the capital construction phase of its R5.6 billion Frischgewaagd-Ledig core project on the Western Bushveld complex.
Publishing its interim results for the six months ended 30 June 2008, the company pointed out that to ensure that this target was reached, a successful interim capital raising of R202 million had been undertaken at the height of the market’s weakness.
The company announcement added that the interim raising had been effected in order to allow the structuring of the main capital raise to be negotiated with the syndicated lead financial arrangers – Deutsche Bank, ABSA and the Development Bank of Southern Africa – in an unpressured fashion. This process was proceeding apace and should be completed by the end of the year.
CEO Mike Solomon commented that the six months since the release of the company’s 2007 annual results had been significant. “The period has seen the company complete its exploration programme and metamorphose from an exploration company into a mining company,” he said.
He added that the company’s project was technically and economically viable. “The anticipated head grades are of the highest in the industry, as is the PGM basket. The ore body is thick, flat and structurally stable, and this bodes well for an efficient and cost-effective mining regime,” he added.
“In addition to the release of our own BFS, that of the Western Bushveld Joint Venture (37% Anglo Platinum, 37% Platinum Group Metals and 26% Wesizwe) was released in July and was equally positive, adding R1.2 billion to our own base-case BFS valuation of R9.5 billion,” Solomon revealed.
“The year going forward looks positive,” he added. “We have the financial resources and the technical capacity to proceed with capital construction, I have every confidence in succeeding with the capital raising programme, and we will undoubtedly weather the current market downturn and come through the other end a stronger company.”
The Wesizwe board is satisfied that the group will be able to commence the construction phase of the project during the next twelve months, using the current cash resources as well as draw downs from the proposed project finance facility.
As an exploration group, Wesizwe will not earn revenue from mining activities until such time as a mine is brought into production. The net loss for the six months under review was R20.3 million (compared to a loss of R61.7 million for the same period in 2007).
Exploration and evaluation expenses capitalised for the period under review amounted to R30.2 million, and R24.2 million was spent on mine establishment costs.