| Wed 25 Apr 2007, 17:43 | | WEZ - Wesizwe - Acquisition of a 26% participation |
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WEZ
WEZ
WEZ - Wesizwe - Acquisition of a 26% participation in the Western Bushveld
joint venture
Wesizwe Platinum Limited
(Incorporated in the Republic of South Africa)
(Registration number 2003/020161/06)
JSE code: WEZ & ISIN: ZAE000075859
(the "Company" or "Wesizwe")
ACQUISITION OF A 26% PARTICIPATION IN THE WESTERN BUSHVELD JOINT VENTURE
Highlights
* Purchase of Africa Wide Mineral Prospecting and Exploration (Pty) Ltd
for R650 million
* A major black empowerment merger in the South African platinum sector
* Gives Wesizwe a 26% interest in the Western Bushveld Joint Venture with
Anglo Platinum and Platinum Group Metals
* Settlement through the issue of Wesizwe shares at R10.48 per share
* In line with Wesizwe`s stated strategy of logical consolidation of the
contiguous projects in the Pilanesberg region
* Resource base attributable to Wesizwe increases by 47.6% to 11.0
million ounces attributable to the Company
* Wesizwe`s attributable share in its core Frishgewaagd Ledig project
increases from 61% to 71%
* HDSA shareholding increases to 52.74%
Michael Solomon, Chief Executive of Wesizwe says "The transaction is highly
significant in terms of both increasing active black influence in the platinum
sector as well as marking the first significant step in Wesizwe`s growth
strategy beyond its core project. It is consistent with the Company`s stated
strategy of using its core project as a value card to grow the Company through
an M&A-based growth strategy and, in so doing, enhance shareholder value. It
fully complements the Company`s aggressive and highly successful exploration
programme".
Introduction
In line with Wesizwe`s stated strategy of logical consolidation with platinum
projects near and adjacent to the Company`s Pilanesberg Project, the Company
has entered into a binding agreement with Africa Wide Investment Holdings
(Proprietary) Limited to acquire Africa Wide Mineral Prospecting and
Exploration (Proprietary) Limited ("Africa Wide") ("the Proposed Transaction").
Rationale for the Proposed Transaction
Wesizwe is a platinum exploration company that is developing a 180 000 ton per
month standalone mining operation located west of the Pilanesberg Complex and
adjacent to properties operated by the Western Bushveld Joint Venture ("WBJV").
The Company released the results of its Pre-feasibility study in March 2007
which confirmed that its core Frischgewaagd-Ledig properties within the
Pilanesberg Project remain firmly within commercial parameters and are
attractive because of their grade, prill split and relatively shallow depth.
The Proposed Transaction is consistent with the Company`s strategy to develop
its current core project as a value card through which it will grow the company
by leveraging into significant corporate opportunities. This dual approach is
directed towards the development of a credible, sustainable South African black-
owned resource company.
Wesizwe believes that the Proposed Transaction will serve to:
* Rationalise and optimise regional resource management, capital
expenditure, operating expenditure, operational and management synergies
thereby enhancing the optimisation and profitable extraction of platinum
group metals ("PGM") from the Pilanesberg Project and surrounding areas;
* Increase Wesizwe`s resource base by some 3.55 million ounces to 11.0
million ounces or by approximately 47.6% as well as increase Wesizwe`s
attributable share of its core project from 61% to 71%;
* Increase Wesizwe`s black ownership and control levels to 52.74%;
* Strengthen management capacity at Wesizwe with the introduction of Africa
Wide members to the team; and
* Further formalise the level of interaction between Wesizwe, Platinum Group
Metals Ltd. ("PTM") and Anglo Platinum Limited ("Anglo Platinum").
The WBJV
Africa Wide holds 26% of the WBJV which is a joint venture with Anglo Platinum
and PTM who each hold 37% in the WBJV.
Located in the platinum-rich Western Limb of the Bushveld complex of South
Africa, the WBJV brings together PTM`s properties along with portions of Anglo
Platinum`s properties, resulting in a large consolidated land position directly
on strike from known mines on the same platinum bearing Merensky and UG2 Reefs.
Furthermore, the WBJV adjoins both Anglo Platinum`s Bafokeng Rasimone Platinum
Mine and the Styldrift Project, a joint venture between Anglo Platinum and
Royal Bafokeng Holdings, the investment arm of the Royal Bafokeng Nation.
The WBJV is divided into three distinct project areas: Projects 1, 2 and 3.
Project 1 contains Measured and Indicated Resources totalling an estimated
6.290 million ounces ("4E"). A Pre-Feasibility Study was completed in January
2007.
Wesizwe and the WBJV each hold a 50% interest in the mineral rights in the
adjacent Portion 11 of the Farm Frischgewaagd. The WBJV recently acquired its
50% interest in Portion 11 through a formal contribution by Anglo Platinum as
the previous holder of the interest.
Wesizwe and the WBJV also share a total estimated 3.06 million ounce inferred
resource on a 50/50 basis in Portion 4 of the Farm Frischgewaagd which is
adjacent to Portion 11. Portions 4 and 11 will form part of the Project 2 area
of the WBJV and this area creates a contiguous shared mineral rights package.
The Project 3 area of the WBJV is primarily comprised of the 2,795 ha
Koedoesfontein property, lying north of the Project 2 area. Project 3 is
currently being drilled by the WBJV and no attributable PGM ounces have been
reported by the WBJV to date.
About 40% of the WBJV project area has now been classified as a resource by the
drilling to date. Drilling is planned to continue on Projects 2 and 3 as
Project 1 advances through the final engineering and mine design process as
part of the bankable feasibility study. Continued exploration by the WBJV has
seen ounces moving to the higher confidence categories of Indicated and
Measured.
WBJV Attributable Resource
Estimated Aggregate Merensky 26%
Resource Reef -MR Attributable
and UG2 to Africa
Reef Wide
Blended
Cut- Mt g/t Average Tonnes Moz
off Mining PGE
(cm Width (4E) Moz
g/t) (m)
Measured - 100 4.453 5.20 1.33 23.153 0.744 0.193
Proj 1
Reported by
WBJV
Indicated -
100 40.926 4.31 1.43 176.561 5.676 1.476
Proj 1
Reported by
WBJV
Inferred -
100 14.363 4.03 1.45 57.953 1.863 0.484
Proj 1
Reported by
WBJV
Inferred -
100 21.480 5.14 - 110.310 2.040 0.530
Proj 2
Reported by
WBJV
Inferred -
100 19.191 5.38 1.58 103.263
Portion 11 3.32 0.8632
Reported by
Wesizwe
Total resource 13.643 3.54718
Terms of the Proposed Transaction
Wesizwe has agreed, with effect from the date of successful fulfilment of the
conditions precedent, to acquire the entire issued share capital of Africa Wide
for R650 million. The purchase price will be settled through the issue of
62,022,901 new Wesizwe shares at an issue price of R10.48 per share. The issue
price was calculated using the 30 day volume weighted average price of Wesizwe
on the JSE Limited up to and including 18 April 2007, the last practical date
prior to the finalisation of the terms of the Proposed Transaction.
The Africa Wide assets to be acquired include:
* A 26% participation in the WBJV; and
* A 30% interest in the Tweespalk property and a 15% interest in the
Oorlogsfontein property, which are PGM exploration projects on the
Northern Limb of the Bushveld Complex.
Africa Wide has existing and ongoing obligations under the WBJV which will be
investigated during the due diligence process referred to below.
Conditions precedent to the Proposed Transaction
The Proposed Transaction is subject, inter alia, to the fulfilment of the
following Conditions Precedent:
* The approval of Wesizwe`s shareholders in general meeting to the increase
in the authorized share capital of the Company;
* The satisfactory completion by Wesizwe of a due diligence review of Africa
Wide;
* The requisite regulatory approvals being obtained, including that of the
South African competition authorities, the JSE Limited and the South
African Department of Minerals and Energy;
* The conversion of the old order mineral rights which are held by the WBJV,
and any other joint ventures to which Africa Wide is a party, into new
order mineral rights; and
* To the extent necessary, to satisfy the terms of all pre-emptive rights in
relation to the WBJV agreement (and any other joint venture agreement to
which Africa Wide is a party) by the co-parties to that agreement.
Unaudited pro forma financial effects of the acquisition
The table below sets out the unaudited pro forma financial effects of the
Proposed Transaction on Wesizwe. The unaudited pro forma effects are prepared
for illustrative purposes only and may not fairly present Wesizwe`s results,
financial position and changes in equity after the Proposed Transaction. It has
been assumed for the purposes of the pro forma financial effects that the
Proposed Transaction took place with effect from 1 January 2006 for income
statement purposes and 31 December 2006 for balance sheet purposes.
The unaudited pro forma financial effects are the responsibility of the
directors of Wesizwe.
Before Adjustment After Percentage
Change %
Loss for the year 19,799,418 - 19,799,418 -
Headline loss for 19,799,418 -- 19,799,418 -
the year
No of shares in 399,239,152 62,022,901 461,262,052 -
issue
Weighted average 368,754,699 62,022,901 430,777,599 -
number of shares
in issue
Net asset value 145,060,391 650,000,000 795,060,391 -
Intangible assets 107,854,903 650,000,000 757,854,903 -
Net tangible 37,205,488 - 37,205,488 -
assets
Basic loss per 5.37 - 4.60 14.34
share cents
Headline loss per 5.37 - 4.60 14.34
share cents
Net asset value 36.33 - 172.37 374.46
per share cents
Net tangible asset 9.32 - 8.07 (13.41)
per share cents
Notes:
I. The "Before" financial information is based on Wesizwe`s published
reviewed condensed provisional results for the year ended 31 December 2006.
II. The "After" basic loss and headline loss per share have been adjusted to
include the issue of the 62,022,901 ordinary shares at R10.48.
III. The "After" nest asset value per share have been adjusted to include the
issue of the 62,022,901 ordinary shares at R10.48 per share,
Illovo, Johannesburg
25th April 2007
Corporate advisor Legal advisor Sponsor
Qinisele Resources Bell Dewar Hall Investec Bank
(Pty) Limited Limited
Enquiries
College Hill +27 11 447 3030
Nick Williams
Fred Cornet
Wesizwe Platinum +27 11 215 2375
Mike Solomon, CEO
Melanie Low, Corporate Affairs Manager
www.wesizwe.com
Date: 25/04/2007 17:43:01 Produced by the JSE SENS Department.
