Wesizwe Platinum will be taken over by a Chinese consortium in order to help fund the construction of new pgm mine in South Africa, it emerged yesterday (24th May).

The company announced in September 2009 that it was delaying the building of its 350,000 oz-per-year Frischgewaagd-Ledig facility due to a lack of capital.

However, Chinese state-owned pgm miner Jinchuan Group and the China-Africa Development Fund have agreed to purchase a 51 per cent stake in Wesizwe for $227 million.

In addition, the consortium revealed that it has provisionally secured a $650 million financing deal from the China Development Bank in order to complete the project.

"This proposed transaction represents a compelling and strategic value proposition as it provides shareholders with a fully financed project," said Wesizwe Chairman Dawn Mokhobo.

"Importantly, it ensures that there is no further equity dilution through the project's construction phase."

Jinchuan has announced that it will not call upon existing Wesizwe shareholders to provide additional funding until the project has been ramped up to full production.

Furthermore, the company intends to snap up all the pgm concentrate from the new facility as part of a long-term off-take agreement.

Wesizwe Platinum has suggested in its 2009 annual results that the Frischgewaagd-Ledig project is one of the "best unmined pgm projects in South Africa", with a current resource of over 13 million pgm ounces.

Sources:

Wesizwe Platinum Agrees to Takeover by Chinese Group (Update1) (24/05/10)

Wesizwe gets R6,6bn Chinese funding for platinum mine (24/05/10)

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