Africa Wide, a subsidiary of Wesizwe, will not be funding a R213 million cash call for its 26% share of a 6 month forward budget for the WBJV project, writes Vicky Sidler.The cash call to Africa Wide for the project had been timed to coincide with the final expenditure of funds held in escrow by Maseve for Africa Wide. Wesizwe’s 26% interest in Maseve was derived from the conclusion of the 2008 “Project Delta Agreements” which saw the rationalisation of rights between Anglo American Platinum, Platinum Group Metals (PTM) and Wesizwe Platinum. In the process of the rationalisation, PTM earned the right to increase its interest in Maseve to 74%. The proceeds of PTM’s increased interest in Maseve were escrowed by Maseve on behalf of Wesizwe to partially fund Wesizwe’s interest in the development of the project (the original escrowed amount was ZAR408.81 million).
Wesizwe considered the cash call and the project fundamentals in detail, which included a definitive due-diligence review supported by third party experts, and concluded that the project does not satisfy its investment criteria under current market conditions.In terms of the Maseve shareholder’s agreement, any non-participation in the funding by Africa Wide and the subsequent continued funding by PTM could result in the dilution of Africa Wide’s equity interest in Maseve. The aforementioned potential dillutionary effect is uncertain at this stage and in the event of it materialising, shareholders would be duly informed thereof in a further announcement. Wesizwe wishes to confirm that its 100% held Bakubung Minerals project remains firmly on track, within budget and well-funded. Shareholders are referred to Wesizwe’s recently announced interim results for further details in this regard.