Wrap Text
Reviewed Condensed Consolidated Interim Financial Information For The Six Months Ended 30 June 2012
WESIZWE PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2003/020161/06)
JSE code: WEZ ISIN: ZAE000075859
(“Wesizwe” or “the Group”)
REVIEWED CONDENSED CONSOLIDATED INTERIM FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 30 JUNE 2012
Highlights
- At 30 June 2012 a total of 68 894 shifts, equalling 655 927 man hours, were recorded free of any fatality or lost time injury. Since the beginning of the project up to 30
June 2012 the project is fatality and injury free.
- The priority attention to safety has again yielded very good results and we also acknowledge the major role that our various contractors play in this result.
- The Bakubung Platinum Mine has over the last six months employed an average of 30% of total workforce from the local community.
- Wesizwe announced a revised capital budget estimate for the Bakubung Platinum Mine of R7.9 billion (real terms in 2011) compared to R6.5 billion previously estimated.
- Appointment of Aveng Grinaker-LTA Mining as the shaft sinking contractor for the Bakubung Platinum Mine.
Condensed consolidated statement of financial position
Six months Six months Year ended
ended ended December
June 2012 June 2011 2011
Reviewed Reviewed Audited
Note R’000 R’000 R’000
ASSETS
Non-current assets 2 886 939 2 584 184 2 664 691
Property, plant and equipment 6 1 951 091 1 657 227 1 734 383
Available-for-sale financial asset 15 719 11 749 13 760
Investment in equity accounted investee 7 920 129 915 208 916 548
Current assets 1 126 632 1 333 820 1 276 472
Loan to the Bakubung community 8 - 4 464 -
Other receivables 31 859 15 212 30 128
Taxation 4 724 - 9 544
Restricted cash 9 61 494 28 244 69 307
Cash and cash equivalents 1 028 555 1 285 900 1 167 493
Total assets 4 013 571 3 918 004 3 941 163
EQUITY AND LIABILITIES
Capital and reserves 3 629 641 3 589 720 3 625 222
Share capital 10 16 16 16
Share premium 10 3 425 528 3 425 528 3 425 528
Share-based payment reserve 472 179 472 179 472 179
Available-for-sale financial asset reserve 1 948 1 012 1 529
Accumulated loss (270 030) (309 015) (274 030)
Non-current liabilities 281 977 285 251 281 362
Deferred tax liability 268 846 285 251 268 775
Environmental rehabilitation obligation 13 131 - 12 587
Current liabilities 101 953 43 033 34 579
Trade and other payables 100 673 23 800 33 299
Taxation 1 280 19 233 1 280
Total equity and liabilities 4 013 571 3 918 004 3 941 163
Condensed consolidated statement of comprehensive income
Six months Six months Year ended
ended ended December
June 2012 June 2011 2011
Reviewed Reviewed Audited
Note R’000 R’000 R’000
Operations
Other income 83 96 -
Administration expenditure (27 256) (17 491) (51 895)
Share of profit/(loss) of equity accounted investee
(net of tax) 7 3 581 (7 012) 3 515
Impairment of loan to the Bakubung community 8 (2 741) (3 793) (8 257)
Loss on dilution of interest in equity accounted
investee - - (9 187)
Net operating costs (26 333) (28 200) (65 824)
Financial
Interest income 35 225 3 403 46 255
Foreign exchange loss - (4 666) (4 666)
Interest expense (1) (2 061) (486)
Net financial income/(expense) 35 224 (3 324) 41 103
Profit/(loss) from operations 8 891 (31 524) (24 721)
Equity financing
Share based payment expense - (408 002) (408 002)
Foreign exchange gain on proceeds - 60 585 60 585
Net equity financing costs - (347 417) (347 417)
Profit/(loss) before tax 8 891 (378 941) (372 138)
Income tax 11 (4 891) (14 371) 13 811
Profit/(loss) for the period 4 000 (393 312) (358 327)
Other comprehensive income
Increase in fair value of the available-for-sale
financial asset 419 - 517
Total other comprehensive income 419 - 517
Total comprehensive income/(loss)
for the period 4 419 (393 312) (357 810)
Earnings/(loss) per share
Basic earnings/(loss) per share (cents) 20 0.25 (36.97) (26.58)
Diluted earnings/(loss) per share (cents) 20 0.25 (36.97) (26.58)
Headline earnings/(loss) per share (cents) 20 0.25 (36.61) (25.90)
Condensed consolidated statement of changes in equity
Share- (Accumu-
based Available- lated loss)/
Share Share payment for-sale retained
capital premium reserve reserves earnings Total
R’000 R’000 R’000 R’000 R’000 R’000
Balance at 1 January 2011 8 1 955 159 65 384 1 012 84 297 2 105 860
Shares issued - Chinese consortium 8 1 505 002 - - - 1 505 010
Share Issue expenses - (34 633) - - - (34 633)
Share-based payment expenditure - - 406 795 - - 406 795
Loss for the period - - - - (393 312) (393 312)
8 1 470 369 406 795 - (393 312) 1 483 860
Balance at 30 June 2011 16 3 425 528 472 179 1 012 (309 015) 3 589 720
Other comprehensive income - - - 517 - 517
Profit for the period - - - - 34 985 34 985
- - - 517 34 985 35 502
Balance at 31 December 2011 16 3 425 528 472 179 1 529 (274 030) 3 625 222
Other comprehensive income - - - 419 - 419
Profit for the period - - - - 4 000 4 000
- - - 419 4 000 4 419
Balance at 30 June 2012 16 3 425 528 472 179 1 948 (270 030) 3 629 641
Condensed consolidated statement of cash flows
Six months Six months Year ended
ended ended December
June 2012 June 2011 2011
Reviewed Reviewed Audited
Note R’000 R’000 R’000
Cash flows from operating activities 19 36 423 (27 015) (61 548)
Finance income 37 008 3 403 26 068
Finance expense (1) (2 061) (156)
Taxation paid - - (15 791)
Cash generated by/(utilised in) operations 73 430 (25 673) (51 427)
Cash flows utilised by investing activities
Acquisition of property, plant and equipment (216 858) (74 284) (139 571)
Purchase of available-for-sale financial asset (1 540) (1 466) (2 960)
Net cash utilised in investing activities (218 398) (75 750) (142 531)
Cash flows from financing activities
Capital raised from issue of shares - 1 565 595 1 565 595
Share issue expenses - (34 633) (34 633)
Bridging loan raised - 17 800 17 800
Bridging loan - (51 070) (51 070)
Equalisation liability repaid - (120 834) (125 830)
Net cash from financing activities - 1 376 858 1 371 862
Net (decrease)/increase in cash and cash
equivalents (144 968) 1 275 435 1 177 904
Cash and cash equivalents at the beginning
of the period 1 216 613 38 709 38 709
Cash and cash equivalents at the end of
the period 1 071 645 1 314 144 1 216 613
Cash and cash equivalents at the end of the
period comprises:
Cash and cash equivalents 1 010 151 1 285 900 1 147 306
Restricted cash 61 494 28 244 69 307
Cash at end of year 1 071 645 1 314 144 1 216 613
Interest accrued 18 404 - 20 187
1 090 049 1 314 144 1 236 800
Notes to the condensed consolidated interim financial information
For the six months ended 30 June 2012
1. Reporting entity
Wesizwe Platinum Limited (“Wesizwe” or “the Company”) is a Company domiciled in the Republic of South Africa. The condensed consolidated interim financial
information of the Company as at 30 June 2012 comprise the Company, its subsidiaries and the Group’s interest in its equity accounted investee (together referred to as
the “Group”). The consolidated financial statements of the Group for the year ended 31 December 2011 are available upon request from the Company’s registered
office at Unit 13, 2nd Floor, 3 Melrose Boulevard, Melrose Arch, Johannesburg, 2076 or at www.wesizwe.com.
2. Statement of compliance
The condensed consolidated interim financial information has been prepared in accordance with IAS 34 Interim Financial Reporting issued by the International
Accounting Standards Board and AC 500 standards issued by the Accounting Practice Committee and the requirements of the Companies Act of South Africa, No 71 of
2008. It does not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated financial statements
of the Group for the year ended 31 December 2011. The condensed consolidated interim financial information was approved by the board of directors on 20 September
2012.
3. Significant accounting policies
The accounting policies applied by the Group in the condensed consolidated interim financial information are the same as those applied by the Group in its
consolidated financial statements for the year ended 31 December 2011.
4. Estimates
The preparation of the interim financial information requires management to make judgements, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
In preparing the condensed consolidated interim financial information, the significant judgements made by management in applying the Group’s accounting policies
and the key sources of estimation were, except as described below, the same as those that applied to the consolidated financial statements for the year ended 31
December 2011.
During the six months ended 30 June 2012 management reassessed its estimates in respect of:
- The investment in Maseve Investments 11 (Pty) Ltd. (refer note 7)
- Rehabilitation liability (refer to the 2011 integrated report page 97)
5. Going concern
The current cash resources are adequate to fund the project development and administrative costs up to the end of the first quarter 2013. At that stage the Company
will become dependent on the availability of the loan funding in the amount of US$650 million that China-Africa Jinchuan Investments Ltd. is committed to provide in
terms of the subscription agreement signed in May 2011 and is in process, together with the executive directors of Wesizwe, of securing a loan facility with China
Development Bank.
In view of the prevailing market conditions, and recent events in the local platinum sector, management regarded it prudent to make contingency plans in the event
that delays are experienced in finalising the US$650 million debt facility. To this end a local bridging facility is being pursued for an amount sufficient to fund the project
until December 2013. In addition, the Company is in the process of implementing an aggressive cash preservation plan to postpone, or eliminate if possible, all
expenditure not directly associated with the project’s critical path. The Company will maintain a minimum cash reserve to ensure cash commitments can be met at all
times.
Every endeavour is being made to ensure the most favourable result for the Group, but should none of the above come to fruition, a material uncertainty exists whether
the Group would be able to realise its assets and discharge its liabilities in the ordinary course of business.
6. Property, Plant and Equipment
During the period under review an amount of R217.4 million was capitalised to property, plant and equipment as part of the activities to develop the mine.
At the reporting date property, plant and equipment consisted of the following categories of assets:
Property, Construction
plant and work-in Mineral
equipment progress rights Total
R’000 R’000 R’000 R’000
Opening balance 13 139 663 515 1 057 729 1 734 383
Acquisitions during the period 11 201 206 207 - 217 408
Disposals (6) - - (6)
Depreciation (694) - - (694)
Closing balance 23 640 869 722 1 057 729 1 951 091
No additions have been made in respect of mineral rights during the period under review.
7. Investment in equity accounted investee
Six months Six months Year ended
ended ended December
June 2012 June 2011 2011
Reviewed Reviewed Audited
R’000 R’000 R’000
Opening balance 916 548 922 220 922 220
Share of profit/(loss) of equity accounted investee 3 581 (7 012) 3 515
Loss on dilution of interest - - (9 187)
Closing balance 920 129 915 208 916 548
8. Impairment of loan to the Bakubung community
As previously reported, the Company was requested by the DMR to assist the Bakubung-Ba-Ratheo Royal Family and the community in their efforts to obtain proper
accounting for the community’s assets in relation to Wesizwe. Consequently, funds were advanced by Wesizwe by way of direct payment to service providers. In 2010 the
courts made a ruling in favour of the community that the cost of legal proceedings be paid by the respondents.
In evaluating the recoverability of the loan, management is of the opinion that the recoverability of the non-legal fees within the next 6 to 12 months is doubtful and, in
adopting a conservative approach, has accordingly impaired the loan for accounting purposes.
At the reporting date, Wesizwe had accrued for further legal expenses incurred in 2010 with reference to the matter explained above. An amount of R2.7 million was paid
to service providers subsequent to the reporting date on behalf of the community.
Six months Six months Year ended
ended ended December
June 2012 June 2011 2011
Reviewed Reviewed Audited
R’000 R’000 R’000
Opening balance - 8 257 8 257
Loan advanced to the community 2 741 - -
Loan impaired (2 741) (3 793) (8 257)
Closing balance - 4 464 -
9. Restricted cash
Restricted cash covers the following guarantees:
- R28.7 million (June 2011: R27.4 million) in favour of the DMR on issue of the mining licence;
- R0.9 million (June 2011: R0.8 million) guaranteed to the landlord for the operating lease agreement; and
- R31.8 million (June 2011: Rnil) in favour of Eskom for phase 1 bulk power supply to the Bakubung Platinum Mine.
10. Share capital and share premium
Share capital
Six months Six months Year ended
ended ended December
June 2012 June 2011 2011
Reviewed Reviewed Audited
R’000 R’000 R’000
Authorised
2 000 000 000 (2011: 2 000 000 000) ordinary shares
of R0.00001 each 20 20 20
Issued
1 627 827 058 (2011: 1 627 827 058) ordinary shares
of R0.00001 each 16 16 16
Share premium
Six months Six months Year ended
ended ended December
June 2012 June 2011 2011
Reviewed Reviewed Audited
R’000 R’000 R’000
Opening balance 3 425 528 1 955 159 1 955 159
Premium on issue of shares - 1 505 002 1 505 002
Share issue expenses - (34 633) (34 633)
Closing balance 3 425 528 3 425 528 3 425 528
A special resolution in respect of the Share Capital Conversion and the Memorandum of Incorporation adoption was registered with CIPC on Monday, 3 September 2012.
Shareholders were accordingly advised that the Company’s shares commenced trading as shares of no par value on 6 September 2012.
11. Taxation
Six months Six months Year ended
ended ended December
June 2012 June 2011 2011
Reviewed Reviewed Audited
R’000 R’000 R’000
Current year - normal taxation (4 820) (19 233) (7 527)
Current year - deferred taxation (71) 4 862 21 338
Total (4 891) (14 371) 13 811
Reconciliation of effective tax rate % % %
Standard tax rate 28.0 28.0 28.0
Assessed loss utilised/not utilised - 7.9 7.9
Non-deductible expenses 27.0 (32.1) (32.5)
Share of loss on dilution of equity accounted investee - - 0.3
55.0 3.8 3.7
12. Financial results
As the Group is developing a mine, it will not earn revenue from mining activities until such time as the mine is brought into production.
The profit after tax for the six months under review was R4.0 million (2011: total loss of R393.3 million). The total profit for the period comprises administration expenses of
R27.3 million, share of income of equity accounted investee of R3.6 million, and net finance income of R35.2 million.
Administration expenses of R27.3 million comprise the following:
- Depreciation - R0.7 million (June 2011: R0.6 million)
- Professional fees - R2.9 million (June 2011: R0.5 million)
- Directors’ expenses - R3.5 million (June 2011: R1.5 million)
- Salaries and payroll related expenses - R11.2 million (June 2011: R6.7 million)
- Marketing expenses and investor relations - R2.7 million (June 2011: R1.9 million)
- Community sustainability projects - R1.8 million (June 2011: R1.1 million)
- Other administrative overheads - R4.5 million (June 2011: R5.2 million)
The basic earnings per share for the period was 0.25 cents per share (June 2011: basic loss of 36.97 cents per share). The headline earnings per share was 0.25 cents per
share (June 2011: headline loss of 36.61 cents per share).
13. Independent review
The condensed consolidated statement of financial position at 30 June 2012 and related condensed consolidated statements of comprehensive income, changes in
equity and cash flows for the period have been reviewed by KPMG Inc. Their modified report emphasises the matters described in note 5 and is available for inspection
at the Company’s registered office.
14. Segment reporting
No segmental report has been produced as the Group is conducting activities in one geological location which represents its only business activity.
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and
expenses that relate to transactions with any of the Group’s other components. The operating results for the Group as a whole are reviewed regularly by the Group’s CEO
to make decisions about resources to be allocated and to assess its performance.
15. Mineral resources
There were no changes to the mineral resources for the six months ended 30 June 2012.
16. Judgements by Directors and Management
Other than the impairment reported earlier, the management of Wesizwe is confident that the assets of the Group are not impaired.
17. Subsequent events
There were no events that occurred after the reporting date that required further disclosure in these financial results. Refer note 8 and 10.
18. Commitments
At 30 June 2012 the Group had commitments to the value of R1.7 billion. This amount includes the commitment in respect of the shaft sinking agreement, which amounts
to R1.4 billion (more than 90% of the total commitments). This amount will be incurred over the next 6 years until June 2018, and payments are to be made on physical
progress.
19. Reconciliation of profit/(loss) for the period to cash flows from operating activities
Six months Six months Year ended
ended ended December
June 2012 June 2011 2011
Reviewed Reviewed Audited
Note R’000 R’000 R’000
Profit/(loss) from operations 8 891 (31 524) (24 721)
Interest income (35 225) (3 403) (46 255)
Interest expense 1 2 061 486
Foreign exchange loss - - 4 666
Share of profit/(loss) of equity accounted
investee (net of tax) (3 581) 7 012 (3 515)
Depreciation 694 609 1 326
Loss on dilution of interest in equity accounted
investee - - 9 187
Impairment of loan to Bakubung community 8 2 741 3 793 8 257
Share-based payment expenditure - (1 207) (1 207)
Operating loss before working capital
changes (26 479) (22 659) (51 776)
Changes in working capital 62 902 (4 356) (9 772)
Increase in other receivables (1 731) (5 941) (20 857)
Increase in trade and other payables 64 633 1 585 11 085
Cash flows from operating activities 36 423 (27 015) (61 548)
20. Earnings/(loss) per share
Six months Six months Year ended
ended ended December
June 2012 June 2011 2011
Reviewed Reviewed Audited
R’000 R’000 R’000
The basis of calculation of basic earnings/(loss)
per share is:
Attributable profit/(loss) to ordinary shareholders
(Rand) 4 000 355 (393 310 141) (358 326 233)
Weighted average number of ordinary shares
in issue (shares) 1 627 827 058 1 063 872 425 1 348 167 363
Basic earnings/(loss) per share (cents) 0.25 (36.97) (26.58)
The basis of calculation of diluted earnings/(loss) per
share is:
Attributable profit/(loss) to ordinary shareholders
(Rand) 4 000 355 (393 310 141) (358 326 233)
Weighted average number of ordinary shares in
issue (shares) 1 627 827 058 1 063 872 425 1 348 167 363
Diluted earnings/(loss) per share (cents) 0.25 (36.97) (26.58)
The basis of calculation of headline earnings/(loss)
per share is:
Attributable profit/(loss) to ordinary shareholders
(Rand) 4 000 355 (393 310 141) (358 326 233)
Adjustments: - 3 793 036 9 186 957
Impairment of loan to the Bakubung community - 3 793 036 -
Loss on dilution of interest in equity accounted
investee - - 9 186 957
Headline earnings/(loss) (Rand) 4 000 355 (389 517 105) (349 139 276)
Weighted average number of ordinary shares in
issue (shares) 1 627 827 058 1 063 872 425 1 348 167 363
Headline and diluted headline earnings/(loss)
per share (cents) 0.25 (36.61) (25.90)
Commentary
Financial overview
The profit for the six months under review was R4.0 million (June 2011: loss of R393.3 million). The profit for the six month period comprises administration expenditure of
R27.3 million (June 2011: R17.5 million), net interest income of R35.2 million (June 2011: R3.4 million) and an equity accounted share of profit of Maseve Investments 11 (Pty)
Ltd of R3.6 million (June 2011: loss of R7.0 million).
The basic earnings per share for the period was 0.25 cents per share (June 2011: basic loss of 36.97 cents per share). The headline earnings per share was 0.25 cents per
share (June 2011: headline loss of 36.61 cents per share).
The change from a basic loss per share in June 2011 to basic earnings per share in June 2012 is as a result of interest income recognised in the Statement of
Comprehensive Income for the period under review as well as a once-off share based payment expense of R408.0 million that was recognised in the Statement of
Comprehensive Income according to IFRS 2 in June 2011. The share-based payment expense arose as a result of the subscription for 829 884 460 new shares by Jinchuan,
CADFund and Micawber 809 (Pty) Ltd. in Wesizwe on 4 May 2011 at an effective subscription price of R1.81 per share, compared to a market price of R2.30 per share on
the date of closure.
During the six months under review the administration expenses increased with 55.8% compared to the corresponding period in 2011. This was as a result of the ramp up
of the Bakubung Platinum Mine project. R217.4 million was capitalised to the cost of the mine, represented by work on the common surface infrastructure, bulk services
and preparatory work for the shaft sinking activities. Wesizwe aims to contain administrative cost and control the capital expenditure on the Bakubung Platinum Mine to
deliver the project on time and within budget.
Funding
The Company’s current cash resources, remaining from the equity contribution by China-Africa Jinchuan Investments Ltd, will cover the planned project and
administrative expenses up to the end of the first quarter 2013. At that stage the Company will become dependent on the funding to be secured in terms of the joint and
several undertaking by Jinchuan and CADFund in terms of the subscription agreement that was concluded on 4 May 2011. A facility of US$650 million with China
Development Bank is in the process of application and negotiation. The finalisation of an off take agreement, which has been agreed in principle, is an important
condition to be complied with.
In view of the prevailing market conditions, and recent events in the local platinum sector, management regarded it prudent to make contingency plans in the event
that delays are experienced in finalising the debt facility. To this end a local bridging facility is being pursued for an amount sufficient to fund the project until December
2013. In addition, the Company is in the process of implementing an aggressive cash preservation plan to postpone, or eliminate if possible, all expenditure not directly
associated with the project’s critical path. The Company will maintain a minimum cash reserve to ensure cash commitments can be met at all times.
Project Overview
Bakubung Platinum Mine
In April 2012, Wesizwe announced a revised capital budget estimate figure for the development of its Bakubung Platinum Mine amounting to R7.9 billion in real terms. The
shaft sinking contract was awarded in March 2012 while the supply of bulk services and supporting infrastructure progressed in line with the project plan.
The expenditure on property, plant and equipment for the six months under review amounted to R217,4 million, and is mostly related to the preparatory work for shaft
sinking and bulk services which are on the project’s critical path.
Maseve Investments 11 (Pty) Ltd.
This project, in which the Group holds a 26% equity share, is on schedule and has been put through vigorous internal review and various due diligence studies as required
by the funding consortium consisting of local and international banks. Based on this updated bankable feasibility review the funding consortium submitted the funding for
final approval to their various credit committees. We reported previously that it was foreseen that the balance of funding, required to bring this project into production,
will be secured in full from the loan by the above mentioned consortium. However as a result of the current international economic climate and the specific impact on
the platinum industry the funding consortium requires a proportional contribution and overrun reserve from the shareholders. This investment is currently under
consideration. Should Wesizwe elect not to participate in this contribution, due to the importance of its own core project and funding constraints, it will result in a dilution
of its shareholding in Maseve.
Markets and project attractiveness
An interim review of supply, demand and prices was conducted in collaboration with the advisers that Wesizwe make use of and although current forecasts predict a
deeper and even longer lasting downturn than previous projections we are still confident that the market conditions will be favourable by the time Wesizwe’s projects go
into production.
The terms quoted in the various proposals received from smelters are more favourable than the conservative terms used in the feasibility study and will have a positive
impact on the project value in terms of a discounted cash flow.
Based on the aforegoing, Wesizwe is still confident about its project discounted cash flow results as published in the 2011 integrated report.
Bakubung Platinum Mine development project provides local employment opportunities
In line with the Group’s commitment to supporting sustainable local economic development, job creation and skills development, Wesizwe has provided on average 30%
of the total workforce to local people recruited from the nearby Bakubung-Ba-Ratheo community with employment opportunities at its Bakubung Platinum Mine project.
This follows on-going community skills audit and recruitment efforts to determine the collective base of local skills, competence and knowledge. Over 2 500 people are
captured in a skills database for current and future use. In addition to the recruitment of local skilled labour at the Bakubung Platinum Mine, the skills audit has helped to
guide the development of a focused skills development programme to address the scarcity of skills in the local community and the lack of capacity in the current
potential labour force.
Appointment of Aveng Grinaker-LTA Mining as the shaft sinking contractor for the Bakubung Platinum Mine
In March 2012, Wesizwe announced another significant step towards the development of the Bakubung Platinum Mine. The shaft sinking contract amounting to R1.4
billion was awarded to Aveng Grinaker-LTA Mining and makes up the bulk of the total shaft sinking budget of R1.6 billion. The sinking of the shafts represents one of the
most significant milestones in the delivery of a world-class underground PGM mine.
Following the commencement of the pre-sink on the ventilation shaft on 27 July 2012, all the necessary preparatory work for the start of the main shaft pre-sinking had
been completed by the end of August 2012. The pre-sink on the main shaft commenced on 11 September 2012. Both the ventilation and main shafts are scheduled for
commissioning in 2017 and 2018 respectively.
Community engagement
Wesizwe remains highly committed to sustainable community development and empowerment. As a result of findings from the previously conducted community
stakeholder perception survey in 2011, the Company has now developed and launched a new corporate affairs and stakeholder engagement strategy, including the
roll-out of a series of proactive communication interventions in the local community. These will include a series of regular stakeholder forums, open days and dialogues
involving government (National, Provincial, District & Local Spheres), Traditional Leadership, Community Leadership Groups, local SMMEs, farmer associations and local
residents, to address community concerns about the impact of the Bakubung Platinum Mine project, and to establish meaningful two-way engagement and
communications with the local community.
Wesizwe is continuing to build sustainable communication initiatives within the community to encourage participation and proactive communications flow, and
provides sponsorship and management support to the Ledig Sun community newspaper project which is published monthly and distributed free of charge to all
local residents.
We continue to ensure accelerated implementation of the social and labour plan. We have acquired a high-value farm intended to ensure local economic
development through agriculture projects and are currently in the process of finalising a sustainable project in partnership with the local stakeholders. We are still
committed to ensuring that the highly needed water resource is delivered to our host community through daily filling of tanks at a cost of R140 000 per month.
Discussions around the development of a water pipeline to ensure a permanent solution to the water shortage is currently at an advanced stage with other
relevant parties.
The North West Department of Local Government and Traditional Affairs announced during September that “a lasting solution” has been found to the issue relating
to the dispute around the Bakubung-Ba-Ratheo chieftainship and other related matters. The Department announced to the community the much accepted news
that Solomon Mphuphuthe Monnakgotla is the recognised legitimate Kgosi of Bakubung-Ba-Ratheo. It was further announced that the Royal Family also reached
an agreement to elect Princess Margaret Monnakgotla to assist Kgosi Solomon Monnakgotla due to his ill health. This announcement came at a time where stability
within the community is of great priority for the benefit of both Wesizwe and all other stakeholders.
Investor relations outlook
Wesizwe recognises that progress on the project, within budget and schedule, would be one pivotal aspect towards gaining the market’s trust. The focus is on
instilling confidence and improving its communication and engagement with shareholders. To this end, a new investor relations strategy and broader stakeholder
engagement strategy has been finalised. It is aimed at raising the profile of the company, building greater awareness around its core Bakubung Platinum Mine
project, and providing its management with effective strategic relationships and reputational management building platforms.
Board and management changes
The board of directors would like to thank the following people, who resigned during the period under review, for the contributions they have made to the
Company during their tenure:
- Prof Robert Garnett resigned as an independent non-executive director and member of the audit and risk committee with effect from 19 July 2012,
- Mr Qiyin (James) Zhang resigned as a non-executive director with effect from 19 July 2012,
- Mr Mlibo Mgudlwa was not re-elected as a non-executive director at the Annual General Meeting held on 19 July 2012,
- Prof Wiseman Nkuhlu resigned as independent non-executive director and chairman of the audit and risk committee with effect from 27 August 2012,
- Mrs Sirkien van Schalkwyk resigned as company secretary with effect from 25 July 2012.
Corporate governance
As a result of the abovementioned resignations, the audit and risk committee is currently not properly constituted in terms of the Companies Act of South Africa, No
71 of 2008. Until such time as two independent non-executive directors are appointed, Mr Barrie Van Der Merwe will be acting chairman of the committee. Mr Van
Der Merwe has previously chaired this committee and has the relevant experience in this regard.
The board, per the remuneration and nomination committee, is in the process of reviewing the composition of the board and board sub-committees to ensure
compliance with the Companies Act, King III and the JSE Listing Requirements. Shareholders will be advised on any changes in this regard.
By order of the board:
Dawn Mokhobo Chairman
Sponsors: PSG Capital (Pty) Limited
Directors: DNM Mokhobo (Chairman)*, D Chen (Deputy Chairman)*#, J Gao (Chief Executive Officer)#, W Ma (Financial Director)#, WM Eksteen*, J Li#, LV Ngculu*,
L Teng*#, BJ van der Merwe*
*Non Executive
#Chinese
Registered address: Unit 13, 2nd Floor, 3 Melrose Boulevard, Melrose Arch, 2076
The financial statements have been prepared under the supervision of the Finance Director, Mr Wenliang (Michael) Ma.
Date: 26/09/2012 05:45:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
Sharenet Sites 
