JOHANNESBURG (miningweekly.com) – JSE-listed platinum junior Wesizwe said on Monday it had signed a R91-million interim funding deal with the Bank of China for the development of its flagship Frischgewaagd-Ledig project in South Africa.

Wesizwe said in a statement that the facility would be used for ongoing capital construction of the Frischgewaagd-Ledig project, while it was still concluding negotiations for the comprehensive funding of the project.

"The facility was agreed at very favourable terms and will be repaid once the full funding for the project has been secured."

The company's share price jumped by nearly 8% on the announcement to R178 a share.

Wesizwe announced in June that it had signed a deal with a Chinese consortium to provide the R6,6-billion required for the development of the greenfield platinum mine.

Prior to that, it had been in negotiations with local funders, but the onset of the global economic crisis had seen the project finance deals fall through.

In line with the inked deal, the consortium, which comprised Chinese State-owned base-metals and platinum-group metals miner Jinchuan Group (JNMC) and the China-Africa Development Fund (CADFund), would subscribe for 51% of the enlarged share capital of Wesizwe for about $227-million.

Further, JNMC and the CADFund had secured a letter of commitment from the China Development Bank for the provision of a $650-million project finance facility.

The miner started phase one of the Frischgewaagd-Ledig project in July, and planned to ramp up production at the mine in 2011, reaching a steady state output of 230 000 t/m by 2016.

However, the project had been somewhat delayed by funding matters, while focus had continuously shifted from the development of the project by shareholder issues.

Wesizwe had been suffering at the hands of acrimonious shareholder polarisation since its annual general meeting (AGM) last year, while this year's AGM was once again blocked by a court order relating to the shareholder voting rights of its empowered communities.

Latest studies showed that the Frischgewaagd-Ledig project has an estimated life-of-mine of 35 years at a production rate of 230 000 t/m, producing an average of 350 000 oz/y of platinum-group elements during steady state production.