wesizwe platinum limited strategic overview
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February, 2010. wesizwe platinum limited Strategic Overview. Disclaimer. - PowerPoint PPT PresentationTRANSCRIPT
wesizwe platinum limited
Strategic OverviewFebruary, 2010
Disclaimer
The information in this document (this “Document”) is for information purposes only. This Document will form part of a verbal briefing by members of Wesizwe Platinum Limited and cannot be relied on or used in isolation therefrom. This Document does not constitute an offer of any kind or a solicitation of an offer and does not imply that information contained herein is correct as of any time subsequent to the date of issue. You are to rely on your own independent appraisal of and investigations into all matters and things contemplated by this Document.
Whilst every care has been taken in preparing this Document, no representation, warranty or undertaking (express or implied) is given as to the accuracy, completeness or reasonableness of the information or statements contained herein and no responsibility or liability whatsoever is accepted by Wesizwe Platinum Limited for any direct or consequential loss resulting from the use of this Document.
All opinions and estimates contained in this Document may be changed after publication at any time without notice. This document has been provided to you for your information only and may not be reproduced or redistributed to any other person. By accepting this document, you agree to be bound by the foregoing limitations.
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3
Styldrift
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Zand
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Boschkoppie
Mimosa
Frisch 3 &4
Frisch 11
Elandsfontein
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Boschkoppie
Mimosa
Frisch 3 &4
Frisch 11
Elandsfontein
Western Limb provides 67% of the world’s platinum
Bushveld Complex
Western Limb
Located on the PGM centre of gravity of the Western Limb of the Bushveld
3
Regional Geology
4
At the centre of a fully explored, quality new mining area
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Frisch 11
Frisch 4
Zand
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rspo
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WBJV Project 1 Area
Boschkoppie
North ShaftSouth Shaft
D-Section
Frisch
11Frisch
3&4
BRPM (established benchmark)
• Current margin to cost multiple of 2:1
• 100% Merensky• Pt to Pd ratio = 2.2:1• Base metals increase
revenues by 30%
Impala 20#
Flat lying, thick reef = • Easier, more efficient mining
• Amenability to mechanisation
• Fewer mining levels• Lower cost mining regime
5
Frisch-Ledig
Rigorously explored: 180 boreholes + 3D Geoseismic Survey
6
50m contours shown
Shafts
Boundary fault
Elands river fault
Continuous dip block
Syncline
Koedoesfontein fault
Caldera fault
AMSL
Both MR and UG2 , stable structural geology
7
Merensky
UG2
Qualified to a high level of confidence by intensive drilling and a 3D geoseismic survey
A stable mining platform within a relatively disturbed region
8
TWT
Flat Lying
9
10
Relatively little faultingKoedoesfontein
fault Sill
Shafts
Boundary fault
Elands river fault
Caldera fault
Near shaft fault
Locally down faulted block
Exceptionally thick reef widths
144cm 158cm 115cm 174cm
Highly favourable Prill Split
12
Wesizwe Prill Split LOM
Palladium27.1%
Rhodium7.3%
Gold2.4%
Platinum63.2%
• Pt:Pd Ratio 2,33• High Rhodium kicker
Consolidated Resource Schedule
13
Total Merensky UG2Resource tons x m 78.40 36.00 42.40Resource Grade g/t 5.80 4.50Reserve tons x m 51.10 25.30 25.80Reserve Grade g/t 5.00 3.20Reserve % of Resource 65.2%
Mining Regime
Mining parameters230 ktpm Run of MIne180 ktpm Merensky & 50 ktpm UG2 initially230 ktpm UG2 once Merensky depleted
15
Mining methodsConventional mining on the Merensky
• Jackhammers, face / strike / dip winch scrapers into ore passes.
•Loaded at muck bays on UG2 and trammed to ore passes
Hybrid mining on the UG2• Jackhammers & face scrapers on Face•Drill rig in ASG•Ore loaded in ASG by and trammed to ore passes
16
Overall mining layout: simple because of flat lying nature of reef and well defined sections
17
Mining logisticsTramming levels below UG2 horizonTram ore and waste to shaft.Trackless tramming with trucks back to shaft ore passes.
The layout allows flexibility to negotiate geological structures.
Underground crushing, then ore passes into crushed rock silos
Fed by chute onto belt and into 20t skips Hoisting calculated on 23 day & 18 hrs/day cycles per month.
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Schematic stoping layout
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Flexible mining infrastructure
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Shallow in comparison with existing underground mines
oper
atio
ns
Western Platinum
Union
Wesizwe
Western Platinum
ImpalaKaree
Union
Amandelbult
Union
Impala
Northam
Amandelbult
Northam
Depth m
500
1000
1500
2000
Different shafts
Wesizwe mining at 650-850 m below surface
Juniors vs majors - accessible mine depth (m.b.s.)
0
500
1000
1500
2000
2500
Mar
ikan
a
Smok
ey H
ills
Pila
nesb
erg
Ever
est S
outh
PPR
ust
Kroo
ndal
Two
Riv
ers
Mot
otol
o
Elan
dsfo
ntei
n
Cro
codi
le R
iver
Lim
popo
Mod
ikw
a
BRP
M
Lebo
wa
Kare
e
Ga-
Phas
ha
WBJ
V
Lonm
in (
WP)
Mar
ula
Blue
Rid
ge
Wes
izw
e
Impa
la L
ease
Rus
tenb
urg
Tjat
e
Uni
on
Akan
ani
Leeu
wko
p
Impa
la 1
6 sh
aft
Aman
delb
ult
Nor
tham
Source: SFA Oxford
Frisch Ledig working depth 650-850 m
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Shallow compared to new mines
wesizwe 650 m
Rapid ramp-up to steady state 230 000 tpm
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• Merensky-dominant production for the first 20 years• Once UG2 dominant, mine is fully developed – reduced costs
0
100000
200000
300000
400000
500000
600000
700000
800000
Qtr
3 2
008
Qtr
4 2
009
Qtr
1 2
011
Qtr
2 2
012
Qtr
3 2
013
Qtr
4 2
014
Qtr
1 2
016
Qtr
2 2
017
Qtr
3 2
018
Qtr
4 2
019
Qtr
1 2
021
Qtr
2 2
022
Qtr
3 2
023
Qtr
4 2
024
Qtr
1 2
026
Qtr
2 2
027
Qtr
3 2
028
Qtr
4 2
029
Qtr
1 2
031
Qtr
2 2
032
Qtr
3 2
033
Qtr
4 2
034
Qtr
1 2
036
Qtr
2 2
037
Qtr
3 2
038
Qtr
4 2
039
Qtr
1 2
041
Qtr
2 2
042
Qtr
3 2
043
Qtr
4 2
044
Qtr
1 2
046
Qtr
2 2
047
Qtr
3 2
048
Qtr
4 2
049
Indicators Mer Total tons Indicators UG2 Total tons Section Waste tons
Koedoesfontein extension extends LOM
Rapid ramp-up to steady state 350 000 oz
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0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,00020
08
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
2036
2038
2040
2042
2044
2046
2048
2050
Oun
ces
Mer 3PGE + Au Content (toz) UG2 3PGE + Au Content (toz)
Ramp-up Steady State Production Depletion
• Merensky-dominant production for the first 20 years• Once UG2 dominant, mine is fully developed – reduced costs
Koedoesfontein extension extends LOM
Extrapolation of primary platinum supply2006-2020 (000's oz)
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
2006 2008 2010 2012 2014 2016 2018 2020
PROBABLE PROJECTSSOUTH AFRICANORTH AMERICAZIMBABWERUSSIA
Supp
ly p
eaks
Dep
letio
n/cl
osur
es
Still
bel
ow 2
006
leve
ls
The market needs new projects to offset the rapid depletion of est. resources
Prod
ucer
targ
ets
+ 5%
p.a
.
Source: SFA (Oxford)
Capex and Opex
Early Capex, rapid drawdown
Shaft Sinking C
omplete
Concentrator
Com
missioned
Achieve Steady
State Production
CApexCapex
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Mining production 193.24Logistics 2,35 Services 34,43 Management & supervision 21,22 Surface ore transport 0,50 Capitalised operating costs 7,86 Total R 259,60
Processing 52.74Concentrate transport 1,48 Capital replacement 4,95 SHE & environment 0,74 Miscellaneous 1,09 Total R 61,00
Note: These cash costs exclude • Smelting• Refining• Marketing• Head office costs
On-mine Cash Cost: R320/tOverheads: R43/tTotal Cash Cost: R363/t
Costs well researched live and zero base
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Average Cash Cost per ton milled competitive with majors
0
50
100
150
200
250
300
350
400
450
500
Northam Anglo Plat EastPlats Lonmin Wesizwe Impala Aquarius
Sim
ple
aver
age
cost
per
ton
mill
ed (Z
AR
)
Average Cash Cost per ton milled
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05
10152025303540455055606570
Wesizwe Power Demand Curve
MW
Understanding Eskom
Shaft Sinking Equipping Concentrator
start-upProduction Ramp-up
Steady
State
Eskom recovery rollout
Complete*
Light Diesel Standby during capital construction
65 MW
Eskom
installation
HFO st
andby c
over
Heavy Fuel Oil (HFO)
Standby for full power requirementOf 10 MW ramping to 65 MW during critical ramp-up
Full 65 MW
supply only
required by 2016
*Medupe and Bravo Power stations built + Grootvlei, Camden and Komati recommissioned
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Project economics
Sensitivity Analysis @ 7.5% Real Discount Rate
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-4,000
-2,000
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
-40% -30% -20% -10% 0% 10% 20% 30% 40%
NPV
(ZAR
Mill
ions
)
Sensitivity Factor
Prices/Exchange Rate/All grades Operating Costs Capital Costs
Indicative value buildup over five years
Pd $315
Rh
$4,20
0
Au $750
Ni $ 20
Cu $2
R/$ 7.50
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
2008 2009 2010 2011 2012 2013 2014
Time
NPV
Pt 1,150
Pt 1,550
10%9%
8%
7%6%
5%
3%
Real discount rate
NPV Build-up curve - each year NPV increases as spend takes place - risk is reduced so discount rate falls - share price will rise to reflect this build up in NPV
Source: Qinisele Resources
The Aquarius/Kroondal Experience
Placement originally at 1150cUnable to raise required amountFinally priced at 750c with option strike 1150cKPM finally de-listed at value of US$ 205
KROONDAL PLATINUM MINES (2600)
420500600
800
1000
1500
2000
3000
4000
S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S1998 1999 2000 2001
Listed process initiated
Production Started
Capital Construction
Debt Repaid
AJJM
Listing with capital raised of R149m plus US$35m debt
1100
Impala strategic alliance signed
Everest South and North acquisitions
Earnings start
AQP buys remaining 55% of KPM for
US$113m
150
300
450
600
750Today Aquarius at 12200c after a three way split
PLATINUM PRICE
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Shareholder Spread
Fund Managers by Country
South Africa74%
Switzerland14%
USA11%
FUND MANAGERS BY COUNTRY
Shareholder type
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Other , 1%Investment
Companies, 2%Mutual Funds, 3%
Private Companies, 7%
Insurance Companies, 8%
Nominees and Trusts, 8%
Banks, 10%
Individuals, 16%
Empowerment, 45%
Other
Investment Companies
Mutual Funds
Private Companies
Insurance Companies
Nominees and Trusts
Banks
Individuals
Empowerment
Recent Acquisition of WBJV from Anglo Platinum
The components of the deal
38
Platinum Group Metals/WB JV
Wesizwe
Anglo Platinum/BRPM JV
Styldrift
Boschkoppie
North Shaft
South Shaft
D-Section
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Frisch 11
Frisch 4
Mimosa
Frisch-Ledig Core Project 100%
Bafokeng Rasimone Platinum Mine
WBJV
WBJV
WBJV Project 1
WBJV
Project 3
26%
26%
Impala 20#
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Boschkoppie
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Frisch 3 &4
Frisch 11
Elandsfontein
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Boschkoppie
Mimosa
Frisch 3 &4
Frisch 11
Elandsfontein26% WBJV
WBJV held 50% in x-hatched areasWesizwe held 26% of WBJV
Pre-transaction ownership structure
39
WBJV
RPM PTM SA
Wesizwe Frisch-Ledig Core project Project 1 & 3 - WBJV
37% 37%
32% 100%
Africa Wide
26%
Bakubung
68%*
*Wesizwe total attributable participation in Project 2 (including Africa Wide) is 76%
Post-transaction ownership structure
40
Holdco
Africa Wide PTM SA
Wesizwe Frisch-Ledig Core project Project 1& 3 Co
100% 100%
Bakubung
100%100% 100%
26.57%
100% economic interest in Project 2
74% economic interest in Project 1&3
26% economic interest in Project 1&3
In summary…….
What we have is……….
Excellent technical fundamentals • A superb ore body• Fully explored with drill holes a general 250 m grid
and 125 m grid in the capital footprint verified and confirmed by 3D seismic survey
• High level of confidence in the economic and structural geology with continuous, flatly dipping reef (3-5 deg) that lends itself to optimal mechanised mining of MR and UG2
• High Merensky reef grades with higher than average prill splits (metals basket value) with an excellent Rhodium kicker
42
as well as........
Viable fundamentals• A good Bankable Feasibility Study showing a tangible
mine – it is being built• Costs derived from live database of existing
operations• Costs underpinned by zero-based costing• Planning is based on actual experience before during
and after project establishment• Note: this is single shaft operation with no massive
corporate overheads
43
in addition to which…..
Project is relatively opex / capex insensitive Power contingency in place Feasibility undertaken by highly experienced team
with real costing based on same sized shaft Funding options still being considered, interim
arrangements concluded
44
The project is right on track……
Simple easy mine design, done many times before, and we have the Impala 20 # team
Highly experienced project management team with a delivery track record focused on building the mine
REAL TEAM ,REAL MINE, REAL VALUE 45
46www.wesizwe.com
thenext name
inplatinu
m