Wesizwe Platinum is a junior mining and exploration company which aims to exploit PGM resources on the Western Limb of the Bushveld Complex of South Africa.

The group’s flagship project is the development of an underground mine in one of the last remaining viable and sizeable Merensky and Upper Group 2 Chromite layers, on the site of the Bakubung Platinum Mine (BPM) near Rustenburg. The project is forecast to commence production by mid-2017, with full-scale production of 250 000 tonnes per month targeted by 2025.

Wesizwe also holds a 17.1% stake in the neighboring two projects of Maseve Investments, held through subsidiary company Africa Wide Mineral Prsopecting and Exploration.

Wesizwe shares are today up for sale on the Johannesburg Stock Exchange (JSE) with a market cap of R1.2 billion.

Wesizwe is mainly focused on successful development of the Bakubung Platinum Mine, which will comprise an underground mine with twin vertical shafts and a shorter third shaft. An initial 230 000 tonnes per month will be mined from the Merensky Reef, with an additional 20 000 tonnes coming from the secondary Upper Group 2 Reef. Life of Mine is expected to be sustained over a period of 30 years.

As the group is currently in development phase, revenue will not be achieved until 2019, when the mine’s concentrator plant is first brought into production. Project and capital financing of US$300 million is currently being provided by the China Development Bank, along with the issue of Wesizwe shares available to buy on the JSE. The company currently has cash on hand of just over R1 billion, which is enough to advance development until the first quarter of 2018.

By end of June 2016, total capital expenditure was R2.8 billion, and the project is running several months ahead of its intended schedule. Despite the difficult conditions within the platinum trade, Wesizwe has managed to secure funding and investor interest, something many of its competitors have failed to do.

In order to stay relevant, the group has announced an intention to buy into business optimisation initiatives and revising project strategy in response to market conditions. Project management has been converted to an outsourced model, whilst keeping procurement and construction management in-house. This aligns with the company’s intent to build capacity and ensure readiness. The management team has also visited China as part of a global strategy to lower capital costs and be more competitive.

Investors don’t have much of a Wesizwe share price history on which to base their decision to buy Wesizwe shares. But the company has proven that it is able to secure funding, and all construction targets are ahead of schedule. The Bakubung Platinum Mine has been widely recognised as a high-potential asset, and commencement of production should see Wesizwe shares rising up the live online JSE stocks chart. Investors may wish to buy the shares now at their cheap price and get on the train early.

Basic Materials

Mining

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