Wrap Text
Abridged Group Financial Statements and Notice of Annual General Meeting
WESIZWE PLATINUM LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2003/020161/06)
JSE code: WEZ ISIN: ZAE000075859
("the company" or "Wesizwe")
ABRIDGED GROUP FINANCIAL STATEMENTS AND NOTICE OF ANNUAL GENERAL MEETING
HIGHLIGHTS
- 779m of service shaft development was completed.
- Equipping to shaft bottom of production shaft completed.
- Holing between main shaft and service shaft on 81 level was completed.
- Civil work for surface conveyors commenced.
- The process plant development will be on an EPC model and inquiry process
approved in December 2016.
- Cash on hand as of 31 December 2016 is R455 million.
- Implemented community SLP programs per requirements of the mining license
amounting to an investment of R40 million. Integrated housing project
commenced in September 2016 with bulk infrastructure construction.
- Implemented various Human Resources Development Programs as required by
the Mining Charter, Investment of R19 million was incurred.
- Achieved zero fatalities and the Lost Time Injury Frequency rate for the
period was 0.5.
- Services projects are on schedule.
- Phase 2b power supply was successfully commissioned bringing total
installed capacity to 80MVA.
- Completed and commissioned 1C pipeline and 50ML reservoir.
NOTICE OF ANNUAL GENERAL MEETING
Shareholders are hereby advised that the integrated annual report was
released today, which incorporates the notice of annual general meeting
to be held at Holiday Inn Sandton, 123 Rivonia Road, Sandton, Johannesburg
on Thursday, 4 May 2017 at 09h00. The integrated report will also be
available on the company’s website at www.wesizwe.com. The date on which
shareholders must be recorded as such in the share register for purposes
of being entitled to attend and vote at this meeting is Friday, 28 April
2017 with the last day to trade being Monday, 24 April 2017.
The financial statements have been prepared under the supervision of the
Finance Director, Mr. J Gao prior to his resignation, and subsequently
signed off by the newly appointed Acting Finance Director, Mr. Z. Li.
ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2016
2016 2015
Notes R’000 R’000
ASSETS
Property, plant and equipment 5 6 389 880 5 395 023
Intangible asset 3 601 5 871
Available-for-sale financial
6 510 900 628 000
asset
Restricted cash 7 78 657 134 641
Non-current assets 6 983 038 6 163 535
Other receivables 56 723 32 269
Taxation 9 - 4 916
Restricted cash 7 84 000 27 000
Cash and cash equivalents 455 452 1 398 823
Current assets 596 175 1 463 008
Total assets 7 579 213 7 626 543
EQUITY AND LIABILITIES
Stated capital 8 3 425 544 3 425 544
Accumulated loss (318 419) (621 103)
Capital and reserves 3 107 125 2 804 441
Deferred tax liability 9 302 135 157 763
Interest-bearing borrowings 14 3 996 061 4 548 772
Mine closure and environmental
10 53 889 16 620
rehabilitation obligation
Cash-settled share-based payment
5 946 3 540
liability
Non-current liabilities 4 358 031 4 726 695
Interest-bearing borrowings 13 - -
Trade and other payables 112 499 95 407
Taxation 9 1 558 -
Current liabilities 114 057 95 407
Total equity and liabilities 7 579 213 7 626 543
ABRIDGED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
for the year ended 31 December 2016
2016 2015
Notes R’000 R’000
Operations
Administration expenses (214 179) (216 224)
Project-related expenses capitalised 193 519 186 300
Loss on scrapping of property, plant
(1 497) (13)
and equipment
Net operating costs (22 157) (29 937)
Impairment of available-for-sale
financial asset reclassified from (117 100) (133 000)
other comprehensive income
Financial income/(expense)
Finance income 76 493 83 153
Finance expense (208 692) (142 889)
Foreign exchange gain/loss) 535 373 (1 087 759)
Finance costs capitalised 190 332 554 311
Net finance income/expense) 593 506 (593 184)
Profit/(loss) before tax 454 249 (756 121)
Income tax (expense)/income (151 565) 199 336
Profit/(loss) for the year 302 684 (556 785)
Other comprehensive income
Items that are or may be
reclassified to profit or loss
Loss on fair value movements of
(117 100) (160 700)
available-for-sale asset
Tax on other comprehensive income 11 463 29 967
Reclassification of available-for-
sale financial asset to profit or 117 100 133 000
loss
Related tax (11 463) (24 848)
Total other comprehensive loss - (22 581)
Total comprehensive income/(loss)
302 684 (579 366)
for the year
Profit/(loss) per share
Basic and diluted earnings/(loss)
18.59 (34.20)
per share cents
ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2016
Stated/ Available- (Accumu Total
Share for-sale lated
Capital Reserves loss)
R’000 R’000 R’000 R’000
3 425 3 383
Balance at 1 January 2015 - (64 318)
544 807
Total comprehensive income for
the year
(556
Loss for the year - - (556 785)
785)
Other comprehensive income - (22 581) - (22 581)
2 804
Balance at 31 December 2015 (22 581) (621 103)
3 425 544 441
Total comprehensive income for
the year
Profit for the year - - 302 684 302 684
Other comprehensive income - - - -
3 107
Balance at 31 December 2016 - (318 419)
3 425 544 125
ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2016
2016 2015
Note R’000 R’000
Cash flows from operating activities
Cash receipts from customers - -
Cash paid to suppliers and employees (8 915) (9 104)
Cash utilised in operations (8 915) (9 104)
Finance income received 72 682 33 601
Finance cost paid (17 267) (86 825)
Taxation paid (5 636) (3 109)
Taxation received 4 916 2 556
Cash generated/(utilised)from
45 780 (62 881)
operating activities
Cash flows from investing activities
Acquisition of property, plant and
equipment as a result of increase in (975 200) (859 811)
operations
Acquisition of intangible assets - (693)
Net cash outflow from investing
(975 200) (860 504)
activities
Cash flows from financing activities
Interest-bearing borrowings raised - 1 238 500
Interest-bearing borrowings repaid - -
Net cash inflow from financing
- 1 238 500
activities
Net (decrease)/increase in cash and
(929 420) 315 115
cash equivalents
Cash at beginning of year 1 544 778 1 229 673
Cash at end of year 615 368 1 544 788
Cash at end of year comprises:
Cash balances 455 452 1 398 823
Less: interest accrued (2 741) (15 676)
Cash and cash equivalents 452 711 1 383 147
Restricted cash 7 162 657 161 641
Cash at end of year 615 368 1 544 788
ABRIDGED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
for the year ended 31 December 2016
1. Reporting entity
Wesizwe is a company domiciled in the Republic of South Africa. The
abridged consolidated financial statements for the year ended 31
December 2016 comprise the company and its subsidiaries (together
referred to as the “group”). The audited consolidated financial
statements of the group for the year ended 31 December 2016 will be
available at www.wesizwe.com.
2. Statement of compliance
These abridged consolidated financial statements (“abridged
report”) are prepared in accordance with the framework concepts and
the recognition and measurement principles of International
Financial Reporting Standards (“IFRS”), the presentation and
disclosure requirements of IAS 34 Interim Financial Reporting, the
Companies Act of South Africa and the SAICA Financial Reporting
Guides as issued by the Accounting Practices Committee and
Financial Reporting Pronouncements as issued by Financial Reporting
Standards Council.
These abridged financial statements have been extracted from the
complete set of financial statements, but is itself not audited, on
which the auditors, KPMG Inc, have expressed an unqualified audit
opinion. A copy of the auditor’s report is available for inspection
at the company’s registered office.
The financial statements have been prepared under the supervision
of the Acting Finance Director, Mr. Jianke Gao, prior to his
resignation, and have been signed off by the newly appointed Acting
Finance Director, Mr. Zhimin Li.
The directors of Wesizwe take full responsibility for the
preparation of the abridged report and that the financial
information has been correctly extracted from the underlying
audited annual financial statements.
3. Accounting policies
The accounting policies used to prepare this report are in terms of
IFRS and are consistent with those used in the previous annual
financial statements.
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, as well as income and expense.
Actual results may differ from these estimates.
Except as described below, 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 are consistent with those that applied to the
consolidated financial statements for the year ended 31 December
2015.
During the year management reassessed its estimate in respect of
the available-for-sale financial asset (note 6).
5. Property, plant and equipment
Mine
Assets Other Total
R'000 R'000 R'000
Balance at 1 January 2015 4 061 200 58 976 4 120 176
Additions 1 267 175 13 872 1 281 047
Disposals - (13) (13)
Depreciation - (6 187) (6 187)
Balance at 1 January 2016 5 328 375 66 648 5 395 023
Additions 975 445 28 227 1 003 672
Disposals - (17) (17)
Depreciation - (8 798) (8 798)
Balance at 31 December 2016 6 303 820 86 060 6 389 880
6. Available-for-sale financial asset
2016 2015
R’000 R’000
Opening Balance 628 000 788 700
(Loss)/gain included in OCI – fair
(117 100) (160 700)
value adjustment
Closing Balance 510 900 628 000
The group currently holds 17.1% of Maseve Investments 11 (Pty) Ltd
(“Maseve”). The available-for-sale financial asset is classified as
a level 3 fair value as the fair value is determined on inputs not
based on observable market data. The fair value of the unlisted
equity securities are based on the discounted cash flows method.
The valuation model considers the present value of estimated future
cash flows, discounted using a risk-adjusted discount rate.
The significant unobservable inputs are:
2016 2015
US$ exchange rate (ZAR) up to 2021/2025 13.10-14.21 13.10–16.30
US$ exchange rate (ZAR) long-term 14.64 14.85
Pt price (US$/oz) up to 2021/2025 978-1 236 843–1 514
Pt price (US$/oz) long-term 1 326 1 526
Pd price (US$/oz) up to 2021/2025 711 - 930 566–1 043
Pd price (US$/oz) long-term 981 1 046
Rh price (US$/oz) up to 2021/2025 767-898 739–2 239
Rh price (US$/oz) long-term 1 227 3 069
Au price (US$/oz) up to 2021/2025 1 234-1 226 1 125
Au price (US$/oz) long-term 1 309 1 125
Pre-tax discount rate(%)(Real) 13.30 14.94
Sensitivity analysis on the fair value of the investment in Maseve:
2016 2015
R’million R’million
10% increase in the US$ exchange
233.8 211.5
rate
10% decrease in the US$ exchange
(235.8) (214.4)
rate
10% increase in the platinum price 147.7 137.6
10% decrease in the platinum price (148.0) (139.6)
7. Restricted cash
2016 2015
R'000 R'000
Non-Current
Department of Mineral Resources —
1 016 -
Rehabilitation obligation
Eskom — Connection guarantees 77 641 77 641
Aveng Mining Limited — Performance payment
- 57 000
guarantee
78 657 134 641
Current
Department of Mineral Resources —
27 000 27 000
Rehabilitation obligation
Aveng Mining Limited — Performance payment
57 000 -
guarantee
84 000 27 000
Total 162 657 161 641
8. Stated capital
2016 2015
R'000 R'000
Authorised
2 000 000 000 no par value ordinary shares - -
Issued
1 627 827 058 no par value ordinary shares 3 425 544 3 425 544
9. Taxation
9.1 Income tax receivable
2016 2015
R'000 R'000
Balance at the beginning of the year (4 916) (4 363)
Profit or loss charge 7 193 -
Taxation paid (5 635) (3 109)
Taxation refund received 4 916 2 556
Balance at the end of the year 1 558 (4 916)
9.2 Deferred tax
2016 2015
R'000 R'000
Deferred tax liability
Balance at the beginning of the year 157 763 362 218
Current year charges 144 372 (204 455)
Unredeemed exploration expenditure
Property, plant and equipment 272 819 354 893
Available-for-sale financial asset (11 463) (29 967)
Unredeemed mining capex (106 549) (535 819)
Provisions (10 435) 6 438
Balance at the end of the year 302 135 157 763
10.Mine closure and environmental rehabilitation obligation
This long-term obligation reflects the net present value of
closure, restoration and environmental rehabilitation (which
include the dismantling and demolition of infrastructure, removal
of residual materials and remediation of disturbed areas) cost. The
annual changes can be ascribed to additional disturbances caused
during the year and changes in the escalation and discount
rates. This estimate is based on the current cost estimate and
escalated to the future planned closure date and then discounted at
an appropriate rate. The current estimates are based on
environmental plans in accordance with current technology,
environmental and regulatory requirements and the measurements of
an independent professional surveyor. The discount rate is based on
a pre-tax risk-free rate available in the current market.
At the time of establishing the provision, a corresponding asset is
recognised that will be depreciated over the future life of the
asset to which it relates. The provision is re-assessed on an
annual basis for changes in cost estimates, discount rates and
useful lives.
As required by the Department of Mineral Resources a deposit of
R28.0 million (2015: R27.0 million) is held with a financial
institution. The deposit has been guaranteed to the Department of
Mineral Resources for the mine closure and environmental
rehabilitation.
11.Segment reporting
No segment reporting has been included as the group is conducting
activities in one geological location which represents only one
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 companies. 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.
12.Subsequent events
No other material events have occurred after the reporting period
and up to the date of this report that required further disclosure
in these financial results.
13.Interest-bearing borrowings
2016 2015
R’000 R’000
Non-current
Opening balance 4 548 772 2 310 114
China Development Bank – drawdown - 1 238 500
Interest accrual 207 080 132 731
China Development Bank – interest
(224 343) (219 453)
repayment
Realised foreign exchange loss 11 439 (18 261)
Unrealised foreign exchange loss (546 887) 1 105 141
Closing balance 3 996 061 4 548 772
The group has a secured US$650 million loan of which US$300 million
was drawn down at year end (2015: US$300 million). The interest rate
on the facility is determined six monthly in advance as the six-month
LIBOR rate plus 3.5%. The term of the loan is 15 years and no capital
repayments are due during the first six years. Repayments in semi-
annual instalments over the last nine years of the facility commence
at an amount equal 0.077% of the outstanding balance at the end of
the sixth year, after which every instalment increase until the second
last payment amounts to 8.5% of the initial outstanding amount. The
last instalment repays the total balance. A facility fee amounting
to 0.5% of the unutilized balance is payable annually. The interest
expense is payable bi-annually. The interest expense and facility fee
is included in the effective interest rate calculation.
14.Headline earnings/(loss) per share
The basis of calculation of headline earnings/(loss) and diluted
headline earnings/(loss) per share is:
2016 2015
R R
Profit/(loss) attributable to
ordinary shareholders (rand) 302 683 874 (556 784 945)
Loss on scrapping of property, plant
and equipment 1 497 534 12 931
Reclassification of gains or losses
upon impairment of available-for-sale
financial asset 117 100 000 133 000 000
Loss on adjustment of value in
interest in equity-accounted investee - -
Total tax effects of adjustments (11 882 182) (24 851 996)
Headline earnings/(loss) 409 399 226 (448 624 010)
Weighted average number of ordinary
shares in issue (shares) 1 627 827 058 1 627 827 058
Headline earnings/(loss) and diluted
headline earnings/(loss) per share
(cents) 25.15 (27.56)
15.Capital Commitments
Capital commitments for the next 12 months’ amounts to R399.0 million
(2015: R465 million).
16.Mineral Resources and Reserves
There were no changes to the mineral resources and reserves for the
year ended 31 December 2016.
17.Dividends
No dividends were declared for the year ended 31 December 2016.
18.Prospects
The Bakubung project remains on target both in terms of full
planned concentrate production output and project construction
costs budget. The updated feasibility study of the Bakubung project
was tested by the auditors for an impairment assessment and still
continues to yield very encouraging results.
19.Changes to the Board of Directors
Mr. Jikang Li has resigned from his position as non-executive
director with effect form 28 January 2016. Mr. Wenliang Ma has
resigned from his position as financial director with effect from
15 September 2016. Mr. Liliang Teng has resigned from his position
as non-executive director with effect from 13 September 2016. Mr Li
Pengfei and Ms ZhoU Xiaoyin, have been appointed to the board as
non-executive directors on 21 September 2016.
Mr. Jianke Gao has resigned from his position as chief executive
officer and acting financial director with effect from 14 February
2017. Mr. Zhimin Li was appointed to the board as the chief
executive officer and acting financial director on 15 February
2017.
By order of the board:
Dawn Mokhobo (Chairman) Zhimin Li (Chief Executive Officer)
Sponsors: PSG Capital Proprietary Limited
Directors: DNM Mokhobo (Chairman)*, Dexin Chen* (Deputy Chairman), Z
Li (Chief Executive Officer) #, LV Ngculu*, TV Mabuza*, K Mokoka*, P
Li#, X Zhou#
*Non-Executive #Chinese
Company secretary: V Mhlongo
Registered address: Wesizwe House, Devcon Park, 9 Autumn Road Rivonia
Ext 3, 2128, South Africa
www.wesizwe.com
30 March 2017
Johannesburg
Date: 30/03/2017 04:27:00 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 
