| Wed 18 Oct 2006, 12:26 | | Wesizwe Platinum Limited - Completion of independe |
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WEZ
WEZ
Wesizwe Platinum Limited - Completion of independent engineers report and
commissioning of the pre-feasibility study
Wesizwe Platinum Limited
(Incorporated in the Republic of South Africa)
(Registration number 2003/020161/06)
JSE code: WEZ & ISIN: ZAE000075859
Completion of Independent Engineers Report and commissioning of the Pre-
feasibility Study
* Wesizwe commissions Pre-feasibility Study on the back of economic
viability shown in the Independent Engineers Report and positive
drilling results end September 2006
* Independent Engineers Report is further confirmation of the robustness
of a standalone project for Wesizwe"s Pilanesberg Project
* Results of pre-feasibility study expected to be released in first
quarter 2007
* Wesizwe remains on schedule and well within all defined project
parameters
Says Michael Solomon, CEO: "The commissioning of the Pre-feasibility Study
and the results of the Independent Engineers Report, supported by our
latest published drilling results, are a defining moment in the evolution
of Wesizwe. This exercise enables us to quantify and qualify the core
project"s commercial parameters with a substantially greater degree of
confidence than pur previous assessments. Importantly, it allows the
Wesizwe team to competently benchmark both project progress and value
performance.
"This is completely consistent with our approach of reverse engineering
from the outset and ensuring that the project remains within the technical
and commercial targets set at that time. The scoping study undertaken in
January 2005 by TWP Consulting provided the project targets. The
Independent Engineers Report (also by TWP Consulting and finalised October
2006), has taken live project results and tested them against the original
project parameters.
"Not only have we over delivered on the exploration components of those
targets but we remain firmly within the commercial objectives for the
project. The Independent Engineers Report shows the project to be both
robust and attractive within a range of economic scenarios.
"This gives us further confidence to proceed with the Pre-feasibility
Study. Should this exercise confirm the results of the Independent
Engineers Report, we will be in a position to proceed directly to Bankable
Feasibility Study (BFS). In addition, given the robustness of the project,
we are initiating several time critical aspects of the BFS ahead of
schedule".
The completion of the Independent Engineers Report
During the first half of 2006, Wesizwe Platinum Limited ("WPL")
commissioned TWP Consulting to complete an Independent Engineers Report.
This encompassed a Preliminary Assessment and Techno-Economic Analysis of
Wesizwe Platinum Limited"s Current Resources for the Pilanesberg Project
(herein referred to as the Independent Engineers Report. It includes the
suitability to target production capacity of approximately 220 000 oz
Platinum per annum mine on the farms Ledig 909 JQ and Frischgewaagd 96 JQ
(current focus of Wesizwe"s Pilanesberg Project).
The Independent Engineers Report is an appraisal and assessment of the
programme requirements for development of the Wesizwe platinum mine, the
capital costs, the estimated operating costs, potential techno-economic
value, and all the related and appropriate aspects of the Wesizwe mineral
properties. It is the first independent assessment of the economic
viability of the proposed operation and is based on the resources declared
to date. The assessment clearly demonstrates that Wesizwe has the
resources to sustain a mining operation of 180 000 tons per month, yielding
some 360 000 ounces of PGM 4E metals (platinum, palladium, rhodium and
gold) per annum over a life of 25 years.
On the basis that the results from the Pre-feasibility and BFS studies do
not delineate any fatal flaws, Wesizwe intends to commence with the
establishment of a mine to develop, stope and concentrate the 4E metals.
Commissioning of the Pre-feasibility Study
Wesizwe Platinum has commissioned the Pre-feasibility Study for its
Pilanesberg Project in the Frischgewaad Ledig Complex. This follows the
release of the results of the Independent Engineers Report and the
September drilling results.
The Company has appointed TWP Consulting as the independent engineers and
The Mineral Corporation as the Competent Person. TWP Consulting has been
selected specifically because of their extensive experience in shaft and
infrastructure design in the platinum industry. Most notably the company
has been involved with both Anglo Platinum and the Royal Bafokeng"s nearby
BRPM operation and the Styldrift project. More importantly they have been
the consulting engineers for the Impala 20 Shaft which is the closest
underground operation to Wesizwe"s property, and is of an almost identical
configuration to that planned for Wesizwe.
The Mineral Corporation were responsible for the Competent Person"s Report
(CPR) for the Pre-listing Statement for Wesizwe Platinum"s listing on the
Johannesburg Stock Exchange Limited on 21 Dec 2005. They are also
consultants to the Royal Bafokeng whose property at Styldrift is contiguous
with Wesizwe"s Frischgewaad Ledig Complex.
Wesizwe"s core project is situated on the extension of the Styldrift
orebody. This includes a flat lying thick critical zone of up to a 1.5 -
2.0 m channel in width which is suitable for mechanised or hybrid
mechanised mining. The BRPM Styldrift Joint Venture (JV) between the Royal
Bafokeng and Anglo Platinum (50% JV) is currently undertaking a Bankable
Feasibility Study (BFS) on the Styldrift project.
Scope of the study
The pre-feasibility will cover the techno-economic factors that will impact
on the exploitability of the established resource. These include
* Structural geology
* Resource evaluation
* Appropriate mining method
* Appropriate shaft access
* Specification of metallurgical plant
* Surface infrastructure
* Concommitant capital costs
* Estimated operating costs
* Cashflow and financial modelling
* Net present value (NPV) and Internal Rates of Return (IRR)
Techno-economic factors to be considered for the Pre-feasibility Study
The brief provided to the technical teams undertaking the pre-feasibility
study is as follows:
Geology
Initial estimates of geological losses on the WPL properties, based upon
those reported by The Mineral Corporation ("MC") in the CPR dated 30 June
2006, are 28% on average. This compares favourably with operations nearby
Wesizwe"s Pilanesberg Project.
Total Mineral Resources of 73.5 mt @ 5,03 g/t have been delineated by the
current drilling programme. Further drilling and increasing confidence in
the orebody has yielded a SAMREC compliant Indicated Resource of 2,8
million ounces and an inferred resource of 9.1 million ounces. The resource
inventory of 4E ounces totals 11.897 moz of which 7.272 are attributable to
Wesizwe (61%).
Drilling results for Frischgewaagd and Ledig at end September 2006
Resource Base Resource Type Tonne 4E Grade Total 4E Wesizwe
(million) (g/t) ozs Attributable
(million) % Moz
Indicated Resources
Ledig
Merensky Reef Indicated 0.466 5.43 0.081 100% 0.081
UG2 Reef Indicated 0.355 5.56 0.064 100% 0.064
Ledig Indicated 0.821 5.48 0.145 100% 0.145
Frischgewaagd
Merensky Reef Indicated 10.571 5.52 1.877 50% 0.939
UG2 Reef Indicated 5.352 4.58 0.789 50% 0.394
Frisch Indicated
Indicated 15.923 5.21 2.666 50% 1.333
Total Indicated 16.744 5.22 2.811 53% 1.478
Inferred Resources
Ledig
Merensky Reef Inferred 7.504 4.83 1.164 100% 1.164
UG2 Reef Inferred 9.590 4.34 1.338 100% 1.338
Ledig Inferred All Inferred 17.095 4.55 2.502 100% 2.502
Frischgewaagd
Merensky Reef Inferred 14.415 6.64 3.077 50% 1.539
UG2 Reef Inferred 25.265 4.32 3.507 50% 1.754
Frisch Inferred All Inferred 39.680 5.16 6.585 50% 3.292
Total Inferred 56.774 4.98 9.087 64% 5.794
Total Resource Base
Indicated
& Inferred 73.519 5.03 11.897 61% 7.272
Mining
Geological conditions on existing adjacent operations where geological
conditions have been shown to be similar to Wesizwe"s Frischgewaagd-Ledig
complex confirm that the mining methods and other practices employed in
this study to be appropriate. To this end, the the study will rely on
information provided by the Preliminary Assesment and the structural
geology and resource value assesemnts of quartlery results released on 2
October 2006
In line with what is known of the neighbouring projects, two vertical
shafts (an 8.5 metre diameter Men and Materials Shaft and and a 6.5 metre
Ventilation Shaft) will be sunk to an approximate depth of 1000 m. Because
of the flat lying nature of the reef, the shaft will have a single level
entry point ot the reef. All underground service infrasturcure will be
located on this level. Rapid access and build-up will be gained using
mechanized development techniques on reef with initial hybrid mining
establishment of the capital footprint while development of permanent
footwall transport infrastructure is to be completed below the UG2 reef.
The capex estimate is to provide for a surface-located refrigeration plant
and an airflow reticulation system, as well as a service water cooling
facility as benchmarked against similar projects.
Metallurgical comparisons will be made on the basis of public domain
information available for existing operating mines. The design capacity of
the WPL concentrator is to be 180,000 tpm scalable to 240,000 tpm ROM (run
of mine ore). Recoveries on the Merensky Reef Ores will be taken as an
average between 90% and 94%, while on the UG2 Ores will be assumed to be an
average between 86% and 90% which is consistent with existing recoveries
for operations similar to that anticipated for the Frischgewaagd-Ledig
complex.
For the conceptual shaft systems for Wesizwe, the installation of major
infrastructure will be standardised in line with selected benchmarks.
The independent engineers undertaking the Pre-feasibility Study will
include provisions for decommissioning and reclamation costs, based on
commitments to be proposed for the final EMP. This in turn willl be
premised on site inspections, industry standards and a detailed analysis of
appropriate quantified meaures to be put in place on the completion of
mining.
The mining scenarios to be considered will be a range of hybrid stoping and
cleaning methods which will incorporate conventional drilling and blasting
and an evaluation of both conventional face cleaning (scrapers) or
mechanised cleaning (LHDs). Mining extraction of 93%, based on the
standard mining layout at nearby operations, will be used. Additional
dilution tonnages at nil grades will be taken as 10%, an industry norm for
conventional stoping on the Western Bushveld Complex. Other unaccounted
for losses will applied at the rate of 5% for the stoping operations.
Valuation
Standard methods of financial valuation will be employed in the structuring
of the techno-economic scenario model from which investment indicators will
be derived.
Timeline for the study
It is anticipated that the results of the Pre feasibility Study will be
released during the first quarter of 2007. Should the results prove
positive, the pre-feasibility team will move directly into a BFS for the
project.
Registered office: Second Floor, AMB Capital, 18 Fricker Road,
Illovo 2196
Investor relations College Hill, Fred Cornet
enquiries: Telephone: +27 11 447 3030
Wesizwe Platinum Limited, Melanie Low
Telephone: +27 11 215 2375
Web site: http://www.wesizwe.com
Date: 18/10/2006 12:26:24 PM Produced by the JSE SENS Department
