Platinum group metals mining house Wesizwe Platinum staged an earnings recovery in the six months ended June, with headline earnings of 7.36c, from a headline loss of 59.63c in the first half of 2023.
Total comprehensive earnings amounted to R119.7m, after a comprehensive loss of R981.5m a year ago.
This came as Wesizwe benefited significantly from the strengthening of the rand against the dollar, resulting in net foreign exchange gains of R170m. This is in stark contrast to a R1.78bn foreign exchange loss in the previous period.
The SA miner also cut down direct investment in property, plants and equipment by 37.5%, resulting in a total investment of R500m – while administrative spending skyrocketed. A nearly eight-fold increase (749%) in administrative expenditure took this total to R35.05m.
Wesizwe’s board elected not to declare a dividend for the period.
Amid Wesizwe’s ongoing efforts to optimise and ramp up production at its flagship project, the Bakubung Platinum Mine (BPM), the group succeeded in raising a further R1.57bn in the first six months of this year.
However, Wesizwe said in its interim report that the group’s available cash resources at the reporting date of R105.6m were “insuffiencent, based on current budgets, to conduct operations and complete the development of the BPM Project until the commencement of production in the third quarter of 2025.”
Added to this is the group’s net current liability of R2.78bn at the reporting date, which includes shareholder’s loans of R2.94bn.
“These events and conditions create a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern in that it may be unable to realise its assets and discharge its liabilities in the normal course of business,” said Wesizwe.
“The ability of the group to continue as a going concern is dependent on the support of the majority shareholder Jinchuan (Hong Kong) Resources (JHK) covering future development costs, commitments, CDB loan repayments and the majority shareholder not calling on the current shareholder’s loans.
“The extent of further funding is dependent on the current updated funding application report for Bakubung Project to achieve Operational Completion as well as approval by the China National Development Reform Committee (NDRC) for JHK to provide such further funding.”
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