Bakubung Platinum Mine announces changes in its operational plans
15 March 2019
Bakubung Platinum Mine announces changes in its operational plans. The Board of the Company decided to reprioritize expenditure through curtailing all non-production expenses and to allocate most resources towards the completion of the mine development. To that effect, a new plan entails a development of a 1mtpa mine with an equivalent 1mtpa processing plant. The 1mtpa mine will operate from 2021 to 2026.
WESIZWE PLATINUM LIMITED - Changes in Mine Operati
15 Mar 2019
Changes in Mine Operational Plan
WESIZWE PLATINUM LIMITED
(Incorporated in the Republic of South
Registration number: 2003/020161/06
Share code: WEZ
ISIN number: ZAE000075859
("Wesizwe" or "the Company")
CHANGES IN MINE OPERATIONAL PLAN
The Wesizwe Bakubung Mine project commenced in 2011 after securing project
funding and an equity injection from a major Chinese consortium, CAJIL.
The scope of mine development comprises of: all mine surface installations, a
main shaft, service shaft and multiple ventilation shafts system, underground flat
development around station, all shaft infrastructure, waste development, capital
footprint establishment, mine production equipment, process plant, a tailings
holding facility and a housing complex amongst others.
The prevailing low PGMs market caused by reduced demand has created
negative environment for the mining industry including Wesizwe, which has
negatively impacted the Company's ability to raise the required additional funding
to commission a 3 million tons per annum mine and a processing facility. The
current Pt pricing level of below $ 1000/oz is also adding to cash flow pressure of
mines making it difficult to be sustainable. As a result, many mines are closing
totally, or closing all loss making shafts. The focus for some major producers has
shifted to lower cost shallow, mechanized operations which are in the lowest
quartile of the cost curve.
The Company has continually embarked on an operational review and option
analysis exercises since 2013. The key objective of this analysis is to continuously
review the overall operational outlook in response to the general business
environment, defer and or reduce expenditure whilst continuing to commission a
production facility to produce early revenues to cover cash costs.
As a result of the above, the Board of Wesizwe has decided to reprioritize
expenditure through curtailing all non –production expense to the extent possible
and to allocate all resources to complete the development of the mine to a
producing mine system in-order to enable business sustenance. The threshold for
operating costs is based on the prevailing Pt and PGM basket prices. All measures
of austerity are aimed to keep the company afloat within the current market
challenges whilst continuing to develop an asset that will be maximally exploited
when the market turns.
Shareholders are notified with immediate effect, the Board of the company
resolved to change the current mine plan to implement a new plan which will entail
the development of a 1mtpa (one million tons per annum) mine with an equivalent
1mtpa Processing plant (MF2) to treat the ore. The smaller mine will be operated
for a period of 5 years from 2021 until 2026. Thereafter and subject to market
conditions the Board hopes it will be able to approve a plan to scale up the mine
back to the base case 3mtpa operation.
15 March 2019