PTM declares dispute with Wesizwe subsidiary over stake dilution
TORONTO (miningweekly.com) – Canadian project developer Platinum Group Metals (PTM) has declared a dispute with Wesizwe Platinum subsidiary Africa Wide Prospecting & Exploration, over the extent of dilution of Africa Wide’s interest in PTM’s Western Bushveld Joint Venture (WBJV) Project 1, in South Africa.
Empowerment partner Africa Wide announced last month that it would not fund a R213-million (about $21.8-million) cash call for its 26% share of an approved six-month construction budget for Project 1.
PTM said this week that should it fail to secure a new lending facility and restructure the existing loan facility, it might have to change its business plan, which could involve suspending the project’s second phase and selling ore already mined from Project 1.
PTM said that as a result of its decision, Africa Wide’s share in the Project 1 operating company, Maseve Investments 11, would be diluted by about 5% based on a formula in Maseve's shareholders agreement, reducing Africa Wide to an about 21% interest. Africa Wide, however, contended that the dilution would be about 3.5%.
The actual dilution had now been submitted to arbitration.
PTM was now working on a plan to sell Africa Wide's diluted interest in Maseve to another black economic-empowerment partner.
The mine plan for Project 1 envisages the construction of a platinum mine and concentrator to produce between 234 000 oz/y and 300 000 oz/y of combined platinum, palladium, rhodium and gold (4E) in concentrate from mid-2015. During nine years of peak production, about 275 000 oz/y of 4E in concentrate will be produced from the project’s Merensky reef horizon.
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