Platinum Group Metals exercises option to secure an additional 19.25% in Project 1 from Wesizwe for R408million
03 February 2011
Wesizwe Platinum is pleased to announce that following the exercising of an option by Platinum Group Metals (RSA) (Pty) Ltd (“PTM”), a deposit of approximately R408 million has been made into an escrow account on behalf of the Company.
In April 2010 Wesizwe received the necessary regulatory approvals required under Project Delta to assume 100% ownership of its core Frischgewaagd-Ledig Project while retaining a 45.25% interest in neighbouring Projects 1 and 3 of Maseve Investments 11 (Pty) Ltd. (“Maseve”).
The terms of this transaction granted PTM the option, within a stipulated time period, to enhance its stake to 74% through an injection of capital into Maseve on behalf of Wesizwe, whose interest would thus be diluted to 26%. The escrow account is held by Maseve but will be used solely for funding Wesizwe’s 26% contribution to project development, making the Company’s participation fully funded.
Wesizwe CEO, Arthur Mashiatshidi, commented: “This was the final step in concluding Project Delta and we are hopeful that the clarified ownership structure will ensure that the market attributes the appropriate value from this project to the Company.”
The Maseve projects are located near Rustenburg in the North West province of South Africa. Project 1 adjoins Wesizwe’s Frischgewaagd-Ledig Project; it also shares a boundary with the Styldrift mine which is under construction as well as the producing Bafokeng Rasimone Platinum Mine, both of which are owned by Royal Bafokeng Platinum Limited (“RBP”).
PTM is the manager and operator of the Maseve Projects 1 and 3 and announced an initial construction budget of US$100 million for the Project 1 Platinum Mine in December 2010. The budget was unanimously approved by the Maseve Board, on which Wesizwe currently holds four seats.
The Project 1 Platinum Mine plan calls for a production rate of 275,000 ounces 4E (platinum, palladium, rhodium and gold). The engineering, procurement and construction management, (“EPCM”) contractor has been appointed and work has begun on the planning of the surface infrastructure and underground mine development. The contractor will work closely with the company’s Project Manager and Owner’s Representative.