Wesizwe Platinum confirmed yesterday (28th October) that it intends to press ahead with the development of its flagship Frischgewaagd-Ledig mine project.
The South African company is looking to start production at the mine by 2011 and hopes that it will reach full output of 350,000 oz PGM per annum on average by 2016.
Chief Executive Michael Solomon has explained that despite treacherous market conditions which have seen the platinum price plunge to five-year lows in recent months, the project will continue unabated.
He said: "We are reluctant to risk shareholder value further by delaying the Frischgewaagd-Ledig project unnecessarily because of current market conditions whilst losing sight of inevitable future corrections to the market that should manifest before or at the time we commence production."
The black-owned company has set a timeline of 35 years for the project, which will incorporate an underground mine and a surface concentrator plant and is expected to generate profits from 2013.
However, the project will undoubtedly be a challenging one, not least because Wesizwe has seen its market value crash by 91 per cent to $69 million, with stock being valued at just $37 million.
Indeed, the firm has released a statement clarifying the fact that it will consider its options in an upcoming meeting in light of its original plans to generate funds through a 50-50 split between debt and equity.
One section reads: "The strategic imperative adopted by Wesizwe management will be to technically and financially de-risk the project in response to current market conditions on the one hand and the longer term viability of the project on the other."There are a number of options available to Wesizwe that are being considered by Wesizwe's management. These will be presented to the board of directors on 4th November, 2008, after which a detailed announcement will be made on the path forward."
Wesizwe claimed in August that it has set aside around 500 million rand for the various construction phases planned for 2009 as it looks to move from platinum miner to explorer.
