Wesizwe has concerns over financials despite healthy 2019 profit
JSE-listed Wesizwe Platinum achieved increased headline earnings of 5.95c apiece in the year ended December 31, 2019, which is a 212% increase compared with a headline loss a share of 5.31c in the year ended December 31, 2018.
The company reported a 217% increase in earnings a share to 6.33c in the year under review, compared with an earnings loss of 5.40c apiece in the prior year.
However, the company incurred higher administration expenses, at R65-million, which was 222% higher than the R20-million in administration expenses incurred in the prior year.
Wesizwe, nonetheless, still made a profit before tax of R146-million in 2019, compared with a loss of R108-million in 2018.
Even though the company had R2.1-billion in cash resources at the end of the year under review, it was not sufficient to conduct operations and complete the development of the company’s Bakubung mine project.
Therefore, the directors have concluded that it is appropriate to prepare the financial statements on a going concern basis. “The ability of the company to continue as a going concern is dependent on the support of the majority shareholder.
“These conditions indicate that a material uncertainty exists which may cast doubt as to the ability of Wesizwe and its subsidiaries to continue as a going concern in that they may be unable to realise their assets and discharge their liabilities in the normal course of business,” the company stated.
Wesizwe’s main strategic aim is to build and operate the Bakubung platinum mine, which will make the company a significant midtier precious metals producer.
The project comprises an underground accessed by twin independent vertical shafts and a shorter third shaft.
The company currently has a shareholding in the Maseve mines, in South Africa's North West, as well as the Bafokeng Rasimone platinum mine.
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