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PTM seeks new partner, continues construction at WBJV

21st October 2013

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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JOHANNESBURG (miningweekly.com) – TSX- and NYSE-listed Platinum Group Metals (PTM) plans to continue construction at the Western Bushveld joint venture (WBJV) Project 1 platinum mine, while it seeks a new empowerment partner for the project.

This followed an announcement on Monday that Wesizwe Platinum subsidiary Africa Wide Mineral Prospecting and Exploration would not fund its 26% initial cash call share – at the risk of diluting its stake in operating company Maseve.

PTM announced on Monday that it had initiated discussions with qualified empowerment groups for investment into the WBJV Project 1 as a replacement for Wesizwe as Maseve implemented an undisclosed dilution formula.

Despite previously having warned stakeholders that construction and work at the mine could come to a halt, PTM would now progress the project with its current contractors and would moderate any new contracts.

Wesizwe, which previously supported the proposed project loan and indicated its funding participation through Africa Wide, noted that a definitive due diligence review revealed that the project did not satisfy Africa Wide’s investment criteria under current market conditions and withdrew an intended R213-million funding injection.

PTM claimed that Wesizwe or Africa Wide did not provide any indication until Friday that they would not fund their pro rata share of the project.

The 2008 Project Delta Agreements saw the rationalisation of rights between Anglo American Platinum, PTM – which had earned the right to increase its interest in Maseve to 74% – and Wesizwe.

The cash call to Africa Wide had been timed to coincide with the final expenditure of funds held in escrow by Maseve on behalf of Wesizwe.

Wesizwe, in a statement on Monday, reassured shareholders that the 100%-held Bakubung minerals project remained unaffected – “firmly on track, within budget and well-funded”.

Edited by Chanel de Bruyn
Creamer Media Online Managing Editor

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