UNCERTAINTY hangs over the liquidity of Wesizwe Platinum after its auditor declined to verify the miner’s going concern status.
SNG Grant Thornton “expressed a disclaimer of review conclusion” on Wesizwe Platinum’s interim results ended June, according to an update to the JSE.
This was after the mining firm was unable to provide proof of future funding from its controlling 45% shareholder, China Africa Jinchuan.
Wesizwe has exceeded a funding cap of about $1.5bn and requires the approval of the China National Development and Reform Committee for more funds.
Wesizwe Platinum has run into problems commissioning its Bakubung project which was initially scoped to produce 420,000 ounces of platinum group metals (PGMs) a year.
“Jinchuan HK and Jinchuan Group are in the process of reviewing the current updated funding application report which will determine the excess funding required for the Bakubung Project to achieve operational completion,” said Wesziwe Platinum today.
“This will be submitted to NDRC to support the approval [of] further funding required for the project. As at the date of this announcement, this process is ongoing and is expected to be completed before the end of December 2024.”
Wesizwe Platinum added that Jinchuan had undertaken to provide additional funds including extending near-dated loans totalling $156m by three years to December 2027.
The PGM sector is under pressure following heavy declines in rhodium and palladium prices over the last two years. Wesizwe Platinum has cut jobs but out of 345 redundant positions, only 13 were retrenched of which seven were absorbed by the company’s training services provider, it said earlier this year.
Last month it said first concentrate would only be processed in the fourth quarter as technical problems had been identified at the concentrator requiring almost a year of remedial work.
According to Wesizwe Platinum a contract had been awarded to an “experienced contractor to commence the concentrator plant rectification plan” after “certain defects” were identified.
A switch in mining method at the Bakubung as well as the effects of two strikes in each of 2022 and 2023, and a third unprotected, five-week stoppage had previously delayed the mine’s development.
