Johannesburg - The question of whether Wesizwe Platinum would have the funding required for developing its core project, the Bakubung Platinum Mine, in North West, came under the spotlight as the miner posted its trading update for the six months to June yesterday.
Wesizwe, which is 45 percent-owned by the China-Africa Development Fund and Jinchuan, said earnings per share would jump between 3 466 and 3 479 percent in headline earnings of between 10.34 cents and 10.38 cents a share for the six months to June 30. The headline earnings per share for the previous comparable period was 0.29 cents a share.
Wesizwe said it expected the basic loss per share for the half year to June to be 107 percent and 121 percent lower to between 0.02 cents a share and 0.06 a share for the period compared with the 0.29 cents a share basic earnings during previous comparable period.
Vunani Securities head of research Hurbey Geldenhuys said yesterday the earnings per share were meaningless as the platinum miner was still in the development stage. “The most important thing for Wesizwe is whether they have all the financing in place to complete the Bakubung project.”
The mine is expected to comprise of an underground mine with a twin vertical shaft system and a process plant.
“The latest results suggest a significant funding shortfall still exist and it may be difficult for them to raise the capital in the current business environment. They still need to do a lot of development and build a plant,” said Geldenhuys.
Geldenhuys noted that Wesizwe planned to do most of their development using mechanised equipment and this was an area where South African mining did not have a lot of skills. “Most South African miners have overestimated the benefits that mechanisation bring, especially in the early years of a project.”
Wesizwe last week announced the appointment of two new non-executive directors. It said it had appointed Li Pengfei an executive director of the Investment in China Africa Development Fund, and Zhou Xiaoyin an in-house counsel for Jinchuan.
Jinchuan is a diversified and vertically integrated mining and metals company founded 50 years ago, while the fund is a Chinese government initiative established in 2007 to support Chinese companies operating in Africa.
Wesizwe shares rose 3.7 percent on the JSE yesterday to close at 0.56 cents.
BUSINESS REPORT