Johannesburg - Wesizwe Platinum is considering the disposal of its minority stake in Platinum Group Metals’ Maseve mine as it focuses on developing its Bakubung project, chief executive Jianke Gao said.
“The Maseve project is not aligned with our strategy,” Gao said in a February 21 interview at Wesizwe’s Johannesburg office.
“Our priority is to build up the Bakubung project on time and on budget, or to reach full production earlier.”
In the case of a sale of its stake in Maseve, Vancouver-based Platinum Group Metals would need to find another partner to meet its legal obligation to ensure black shareholders own at least 26 percent of the asset.
Platinum Group Metals said that Wesizwe told the company in October it would not fund its $21.8 million share of the continued development of Maseve.
Wesizwe’s stake was 26 percent before it pulled out of the funding.
The project will probably produce 234,000 ounces to 300,000 ounces of platinum, palladium, rhodium and gold a year from mid-2015.
“They have been unreliable and unpredictable,” Platinum Group Metals President R. Michael Jones said in an interview from Vancouver on February 21.
“We have sufficient funds so that we can continue without further funding from Wesizwe.”
Wesizwe’s stake in Maseve was diluted by about 5 percentage points after it didn’t participate in the cash call and Platinum Group Metals is seeking a black economic empowerment partner to buy the diluted percentage, PTM said on January 10.
Wesizwe contends its dilution will be about 3.5 percentage points, PTM said.
‘No Issues’
Mnombo Wethu Consultants, Platinum Group Metals’ black empowerment partner at its Waterberg project, is available to take over Wesizwe’s stake, Jones said.
“There are no issues with the black empowerment component.”
Wesizwe, 45 percent-held by China’s Jinchuan Group and the China-Africa Development Fund, said in January 2013 it secured a $650 million loan from China Development Bank Corporation to develop its Bakubung mine in South Africa’s North West province.
Bakubung will produce about 350,000 ounces of platinum group metals a year for about 35 years, according to the company’s website.
Wesizwe won’t pursue the possibility of sharing infrastructure with its neighbours, Maseve and Royal Bafokeng Platinum’s Styldrift project, Gao said.
Wesizwe’s shares have fallen 6.3 percent in Johannesburg this year to 74 South African cents, giving the company a market value of 1.2 billion rand.
The six-member FTSE/JSE Africa Platinum Mining Index has risen 4.1 percent. - Bloomberg News