Results and commentary for the six months ended 30 June 2010
28 September 2010
- Negotiations progressing with a Chinese consortium to secure a US$877 million financing package
- Department of Mineral Resources grants approval enabling the Project Delta transaction to be concluded whereby Wesizwe is now the holder of 100% of theFrischgewaagd-Ledig Project
- An interim funding facility of R91 million secured from the Bank of China on favourable terms
- Early-stage preparatory work underway at the Frischgewaagd-Ledig Project site
- Arthur Mashiatshidi appointed as CEO of the Company
Wesizwe Platinum Limited (“Wesizwe” or “the Company”) has today announced the release of its interim results for the six months ended 30 June 2010. The results show a positive comprehensive income of R334.8 million, compared with a R14.9 million loss, reported in June 2009, but continue to show a headline loss consistent with the Company’s developmental position.
Arthur Mashiatshidi, who becomes the CEO of Wesizwe from 1 October 2010, commented: “These results are in line with the development stage of Wesizwe, which is moving from exploration into mine construction. The positive comprehensive income position proves that the consolidation activities of Project Delta were value creative for the shareholders. The accounting treatment for the transaction resulted in what is known as a ‘bargain purchase’ in terms of the IFRS 3: Business Combinations and IAS 27: Consolidated and Separate Financial Statements standards.”
In April 2010, the Department of Mineral Resources granted the requisite concerts enabling the conclusion of Project Delta.
Project Delta relates to the consolidation and rationalisation of the various projects adjacent to and near the Company’s core project area, the Frischgewaagd-Ledig Project. Following the conclusion of Project Delta, the Company now has full ownership of the Frischgewaagd-Ledig Project, whilst holding a 45.25% shareholding in a new company, Maseve Investments 11 (Pty) Ltd, with the remaining 54.75% being held by Platinum Group Metals (RSA) (Pty) Ltd. Maseve is the holder of Project 1 and Project 3 rights.
The Wesizwe settlement for the Delta transaction was pegged from the outset at 211 850 125 shares (which were then trading at R5.50 per share). At the close of the transaction, the Wesizwe share was trading at R2.20 per share. Rustenburg Platinum Mines Limited (“RPM”), a company wholly owned by Anglo Platinum Limited, was issued with the settlement shares at the closing ruling share price. The difference between the initial share price set at the outset (R5.50) and the effective share price at transaction closure (R2.20), resulted in the transaction being classified as a ‘bargain purchase’ thus resulting in negative goodwill. RPM is currently the largest single shareholder in Wesizwe with a 26.9% interest.