[miningmx.com] — PLATINUM Exploration and development company WESIZWE PLATINUM LIMITED on Tuesday reported the widening of its first half headline loss to 6.25 cents a share from 2.56 cents a share previously.
This was despite the swing in profit for the period to a R334.8m for the six months to end June 2010 from a loss for the period of R14.9m for the six months to end June 2009.
Basic earnings per share were 50.47 cents per share, compared to a basic loss of 2.55 cents per share for the same period in 2009.
As an exploration and development company, Wesizwe does not generate any
operational revenues.
Reported losses are made up of expenditure into capital development activities, which are intended to prompt capital growth.
Wesizwe’s gross expenditure for the six months to end June 2010 amounted
to R46.7m, against the previous year’s gross expenditure of R26.9m.
The company’s strategic intent is to build and operate a platinum group metals (PGMs) mine at the Frischgewaagd-Ledig Project.
This project has the potential of positioning the company as a mid-tier precious metals producer.
In May 2010, the company signed a term sheet with a Chinese consortium, consisting of the Jinchuan Group and the China-Africa Development Fund, whereby the Chinese consortium will provide Wesizwe with a total financing solution of $877m by way of debt and equity for the development of its core asset.
Wesizwe said it is in advanced in the discussions relating to the conclusion of this transaction, and it is expected that legal agreements will be finalised over the coming months.
In the meantime, the company has subsequently secured an interim debt draw-down facility of R91m on favourable terms from the Bank of China.
These funds will be used exclusively for capital development activities on the Frischgewaagd-Ledig Project.
As at end June 2010, Wesizwe had total cash on hand of R83m, of which the restricted cash component amounted to R27.8m.
Turning to development at the Frischgewaagd-Ledig Project, the company said the level of activity at the project site was consistent with the level of capital currently available.
It said that over the last six months, significant ground-breaking work began in preparation for the full-scale development of the project into a mine.
“The interim funding from the Bank of China will ensure the continuation of the steady-state development work. This paves the way for the sinking of the shaft to commence in 2011 when capital becomes available,” the company said.
