Wesizwe Platinum announced yesterday (30th September) that it is delaying the construction of its flagship Frischgewaagd-Ledig project over financial concerns.

The South African company had originally intended to commence ramping up to full output at the site in 2011, with steady-state production being achieved by 2016.

However, it has now decided to shelve the plans after nine months of fruitless negotiations with financial advisers Absa Bank and the Development Bank of South Africa.

The slump in pgm market conditions also played a part in Wesizwe's unsuccessful attempts to secure funding for the project, which could offer 350,000 oz per year.

Chief Executive Michael Solomon said: "The company was caught between scarce project finance which, where it was available, was extremely expensive and came with very onerous terms and conditions for lending, and low share prices, which made equity finance highly dilutive.

"With this conundrum of wishing to advance the project on the one hand, but to conserve cash resources and shareholder value on the other, management was forced to review the entire approach to funding the project."

However, Mr Solomon also revealed that the platinum junior is now in "advanced" talks with alternative parties about the possibility of securing the required financing.

Development of the project was scheduled to be undertaken in stages, with the first phase - a shaft sinking operation costing R1.8 billion - completed within two years.

Wesizwe Platinum was first listed on the Johannesburg Stock Exchange on 21st December 2005.

Source:

Wesizwe delays Frischgewaagd mine development (30/09/09)

© Adfero Ltd