[miningmx.com] – PLATINUM Group Metals (PTM) had opened discussions with potential new investors for its $506m Western Bushveld Joint Venture (WBJV) and said it had consulted with South Africa’s mineral resources department (DMR).
This follows a shock development on October 18 when Wesizwe Platinum subsidiary, Africa Wide Prospecting & Exploration Company (Africa Wide), said it had declined to follow its rights in the further funding of PTM’s proposed 275,000 oz/year platinum group metal (PGM) mine.
“The company has initiated discussions with qualified empowerment groups for investment into the WBJV Project 1 as a replacement for Wesizwe as their interest dilutes,” PTM said in an announcement.
It added that Wesizwe Platinum’s stake in Maseve Investments, the operating company that houses the joint venture, would be diluted in terms of a dilution formula. “The company has also updated senior officials of the South African Department of Minerals Resources on Wesizwe’s decision,” it said.
Investors seemed mollified by PTM’s comments with shares in the company regaining most of the 18% losses sustained last week. The share was 15% higher in early trade on the Toronto Stock Exchange.
Earlier today, Wesizwe Platinum said its decision not to follow its rights in terms of a capital call was based on an independent assessment that found WBJV fell below its investment criteria in the current market.
WBJV, which still requires an estimated C$300m to finance, is 74% owned by PTM with Wesizwe Platinum holding the balance of the shares.
PTM announced on October 18 that it had been informed Africa Wide would not stump up $21.8m (R213m) in funds for the WBJV mine.
PTM said at the time it could suspend development of the project which was scheduled to produce first PGMs in mid-2015. The project is expected to have $506m in peak funding and was to later this year require the draw down of a $260m loan provided by a syndicate of lenders including Barclays/Absa and Standard Bank.
For the time being, however, development of the asset is continuing. “At present Platinum Group is continuing with construction at the WBJV Project 1 with current contractors and will moderate any new contracts,” it said in a statement today.
