Mike Solomon, CEO, Wesizwe
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Wesizwe eyes new project, rights issue
Allan Seccombe
Posted: Tue, 03 Apr 2007

[miningmx.com] -- WESIZWE may return to the market again for capital this year if either of its two other properties outside its core project area prove to be attractive, CEO Mike Solomon said on Tuesday.

One property with the temporary name Groblersdal, is near Ridge Mining’s Sheba’s Ridge and Blue Ridge projects on the Eastern Limb of the Bushveld Igneous Complex and another near the Eland Platinum, Nkwe Platinum ventures on the southern portion of the Western Limb.

Wesizwe has a cash on hand of R220m, of which it has set aside R210m to complete a bankable feasibility study at its core project just south of the Pilanesberg game reserve on the Western Limb as well as exploring these other two properties.
other good projects around them
“If we feel that the reconnaissance has come up looking good we will go out and raise money for that specific project,” Solomon told Miningmx in a telephonic interview.

Wesizwe will spend R10m doing surface work and a limited number of boreholes on the greenfield projects.

“There are other good projects around them and hopefully there is something there, but I won’t comment until we have done some surface reconnaissance and drilled a borehole or three,” Solomon said.

Wesizwe has raised R260m since May 2006 in three separate transactions. One of the most important was the issue of 30 million shares to black-owned property-focused Vunani Capital for R3.36 each.

Absa bank funded Vunani, which is headed by Ethan Dube.

The reason this is important is that it lifts the diminished black empowerment holding in Wesizwe to just below 50% from about 47%. The aim is to lift that to above 50.1% as part of its merger and acquisition strategy.

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Wesizwe was 51% owned by empowerment groups -- the Bakubung-Ba-Ratheo community held 33% of Wesizwe and black entrepreneurs 18%. – but after share placements to raise capital this fell to 47%.

Black-owned companies are sought after by mining groups seeking empowerment partners in their operations to win credits towards securing new-order prospecting and mining rights.

“We are now close to 50% and we’ve just got a top-up to do. It’s an ongoing challenge,” Solomon said.

Part of the challenge is finding more black companies who are willing to take a stake in a development company that is years away from production and dividend payments if existing black shareholders are unable to follow their rights.

Wesizwe issued its pre-feasibility study last week that showed the financial viability of a R3.6bn to R3.8bn mine that could produce upwards of 280,000 ounces of four platinum group metals. The bankable study should be completed in the first quarter of 2008.

It has a total inferred and indicated resource at the Ledig and Frischgewaagd project of 11.9 million ounces of which 2.8 million ounces are indicated.