Wesizwe Platinum Limited · JSE:WEZ
Wesizwe Platinum — Non-Deal Roadshow (June 2010)
50 slides from Wesizwe Platinum's roadshow presentation, Jun 2, 2010
Slide 1: Strategic Overview of Wesizwe Platinum Limited
forward looking &....... focussing on the future Strategic Overview of Wesizwe Platinum Limited June 2010
Slide 2: Wesizwe is located at the centre of gravity of the Western Limb
Wesizwe is located at the centre of gravity of the Western Limb…. Northern Limb Eastern Limb Western Limb 2
Slide 3: High quality resource at the centre of gravity of the Western Limb
High quality resource at the centre of gravity of the Western Limb Northam Ledig Anglo Platinum Wesizwe Pallinghurstand Western Bushveld Joint Styldrift Frisch Frisch Platmin Properties Venture 3 &4 11 Pilanesberg National Anglo Platinum Park Impala Mimosa Royal Bafokeng Wesizwe Properties Northam I
Slide 4: The project is at the centre of a fully explored, quality new mining area
The project is at the centre of a fully explored, quality new mining area Frisch-Ledig WBJV Project 3 Frisch Frisch 4 11 Styldrift WBJV Project 1 Impala 20# Boschkoppie North Shaft South Shaft D-Section 4
Slide 5: One of the best unmined ore bodies in the industry
…one of the best unmined ore bodies in the industry………. NW 1200m SE 670m Shallow ground on Koedoesfontein ~500m below surface TWT UG2P New fault 20m throw 144cm 158cm 115cm 174cm An impressive mining platform – flat lying + structurally stable with abnormally thick reefs 5
Slide 6: Provisional engineering design is completed
.....provisional engineering design is completed... Similar in size and configuration to the nearby, new Impala 20 Shaft 6
Slide 7: Shallow compared to existing underground mines
……shallow compared to the existing community of underground mines…….. wesizwe 650 m …..but even shallower compared to new third generation shafts being developed by Anglo Platinum and Impala….
Slide 8: The Wesizwe Frisch-Ledig Core Project Metrics
The Wesizwe Frisch-Ledig Core Project Metrics
Slide 9: Consolidated Resource Schedule
Consolidated Resource Schedule Total Merensky UG2 Resource tons x m 78.40 36.00 42.40 Resource Grade g/t 5.80 4.50 Reserve tons x m 51.10 25.30 25.80 Reserve Grade g/t 5.00 3.20 Reserve % of Resource 65.2% 9
Slide 10: Basket Prices for Project
Basket Prices for Project Basket Price ZAR/kg R/US$ 7.71 Spot Price Weighted Ave Blended 2 June 2010 Price 4E Prill Split ZAR/KG R 327 316 $1 321 US$/oz $1 321 Platinum $1 540 63.2% R 241 142 Palladium $448 27.1% R 30 097 Rhodium $2 650 7.5% R 49 474 Gold $1 221 2.2% R 6 603 10
Slide 11: Project Capex
Project Capex CBE Amount 2009 Project Elements ZAR x m USD x m Surface Infrastructure 191.7 24.6 Shaft Surface Complex Infrastructure 598.0 76.7 Main Shaft Sinking and Development 2 221.7 284.8 Vent Shaft Sinking and Development 109.0 14.0 Concentrator Plant 1 162.6 149.1 Capital Footprint Developme
Slide 12: Capex Rollout
Capex Rollout Millions FYOS FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 Cumulative Total Gad Cashflow per year Millions 12
Slide 13: Mining OPEX
Mining OPEX Run of Mine Cash Costs ZAR/t USD/t Mining Costs 367.0 47.0 Processing, Transport & Environmental 85.8 11.0 Management Fees 14.2 1.8 Total Unit Operating Cost 467.0 59.9
Slide 14: Average Cash Cost per ton milled competitive with majors
Average Cash Cost per ton milled competitive with majors Average Cash Cost per ton milled 500 450 Simple average cost per ton milled (ZAR) 400 350 300 250 200 150 100 50 0 Northam Anglo Plat EastPlats Lonmin Wesizwe Impala Aquarius 14
Slide 15: NPV Valuations
NPV Valuations Forecasts (long Jan 2010 May 2010 term prices) Consensus Consensus Pt 1,378 1,568 Pd 404 531 Rh 3,150 4,246 Au 824 850 Ni 16.2 16.5 Cu 5.2 4.97 ZAR / US$ 10.8 9.2 Project NPV* 3,376 5,598 *7.5% discount rate (ZAR m) 15
Slide 16: Cash Costs and Margins
Cash Costs LOM Cost/Pt equivalent ounce USD/oz Margins Spot Long Term Cash Cost inc Capex USD/oz 623.9 856.4 849.2 Cash Operatring Cost USD/oz 512.5 967.9 960.6 16
Slide 17: Cash Cost Comparative Including Capex
Cash Cost Comparative Including Capex Wesizwe 17
Slide 18: Critical Milestones
Critical Milestones ESKOM power available July 2010 Terracing and earthworks for shafts July 2010 Ventilation shaft – main sink start Jan 2011 Main shaft – main sink start Dec 2011 Production build up commence July 2014 Full production reached Oct 2019 Concentrator module 1 – commissioned Aug 2014 C
Slide 19: The Market
The Market
Slide 20: Pt supply/demand profile
Pt supply/demand profile Forecast global primary platinum supply ‘000 oz 12,000 - 10,000 + 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Mmmm RUSSIA mmm ZIMBABWE NORTH AMERICA Mmm SOUTH AFRICA ame DEMAND ECONDARY PREVIOUS FORECAST Source: SFA (Oxford) 20
Slide 21: Reliance on South African supply
Reliance on South African supply
Slide 22: Platinum price envelopes
Platinum price envelopes Source: SFA (Oxford), Oxford Economics 22
Slide 23: Why China?
Why China?
Slide 24: The China-Africa Economic Symbiosis
The China-Africa Economic Symbiosis Almost an absolute correlation after Beginnings of a growth correlation 1999 – Coincided with Africa’s New Africa Policy 16 1996 1999 2007 14 12 10 Africa real GDP growth 8 China Real GDP % growth 6 4 Africa’s growth is tracking the rapid 2 growth drop in China si
Slide 25: The PGM triangle: the uses of primary PGMs
The pgm triangle: the uses of primary pgms Pt 87% autocatalyst Rh Gasoline autocatalysts Pd Glass/LCD manufacture 15 % of Rhodium demand is recycled metal.
Slide 26: China vehicle manufacturing growth vs other regions
China vehicle manufacturing growth vs other regions Source: SFA (Oxford) from Oxford Economics 26
Slide 27: Global platinum and palladium jewellery fabrication is dominated by China
Global platinum and palladium jewellery fabrication is dominated by China Other regions Other regions Japan 3% 14% 13% Japan 5% North America 13% Europe China 10% 52% China 60% North America 11% Europe 19% Platinum Palladium Source: GFMS, Frontier Advisory 2008 Statistics
Slide 28: Regional platinum jewellery demand and price elasticity
Regional platinum jewellery demand and price elasticity 28
Slide 29: The Jinchuan Deal
The Jinchuan Deal 29
Slide 30: Deal Package
Deal Package JNMC and CADFund will subscribe for 829,9 million new ordinary shares in Wesizwe for US$227 million for 51% of the company at an effective price of R2.07 per share at USD/ZAR: 7.55; JNMC/CADFund will underwrite project finance of USD 650 million to render the project fully funded for it
Slide 31: Off take of PGM concentrate
Off take of PGM concentrate JNMC is to purchase all of the PGM Concentrate from the Project through a long term off-take agreement; The agreement will include price and payment mechanisms consistent with current market practice in South Africa i.e. on terms at least as favourable to that we could se
Slide 32: Project Finance Terms
Project Finance Terms Total debt commitment – US$ 650 million 12 year term (including grace period of 5 years) Interest rate – 6 month LIBOR + 3.5% These terms will be subject to renegotiation should the total interest rate exceed 6% A commitment Fee of 0.15% of project value must be paid upfront We
Slide 33: The project will be fully funded
The project will be fully funded…… No further equity dilution for shareholders – a ground-breaking transaction! Shareholders have upside exposure to one of the best undeveloped PGM projects The value proposition infinitely superior than exiting at current low share price levels The Project is effect
Slide 34: The alternative: massive dilution of existing shareholders
The alternative: massive dilution of existing shareholders Peak Capital Required (nominal terms) 8,294 Issue price equity offering (R) (excl. discount) 2 Number of new shares to be issued (mil) 4,147 Current number of shares in issue (mil) 798 Potential dilution of current shareholders 84.0% 34
Slide 35: The Value Proposition of investment in Wesizwe
The Value Proposition of investment in Wesizwe 35
Slide 36: Value Curve Progression presented to Wesizwe Shareholders in 2005
Value Curve Progression presented to Wesizwe Shareholders in 2005 Junior Company Activity Majors’ Activity Pre- Capex Exploration Valuation Production development Construction Resources Bankable Reserves Feasibility Study 2009 Measured Proven 2009 Primary zone for acquisitions and partnerships Disco
Slide 37: Value development achieved until 2008
Value development achieved until 2008 7 000.00 Market Capitalisation Global economic crisis 6 000.00 Cumulative Total Cash outflow 5 000.00 6 month moving average 4 000.00 3 000.00 2 000.00 1 000.00 0.00 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 2009 2009 37
Slide 38: NPV build-up going forward: 2010
NPV build-up going forward: 2010 16 000 NPV Buildup ZAR x m 14 000 12 000 10 000 8 000 6 000 4 000 2 000 0 38
Slide 39: LOM Value Curve Profile: 2010-2025
LOM Value Curve Profile: 2010-2025 NPV Buildup ZAR x m 16000 14000 12000 10000 8000 6000 4000 2000 0 39
Slide 40: Current Market P/NPVs for Platinum
Current Market P/NPVs for Platinum Merril JP Deutsche RBC Average Lynch Morgan Bank AMS 3 1.04 1.14 1.8 1.75 ARQ 2.5 1.54 0.88 1.25 1.54 IMP 2.5 1.27 1.03 2 1.7 LON 4 1.05 1.04 2 2.02 NHM 2 0.98 1.25 1.41 EPL 0.84 1.25 1.05 PLA 1.25 1.25 Average 1.53 40
Slide 41: The Aquarius/Kroondal Experience
The Aquarius/Kroondal Experience Today Aquarius at 12200c after a three way split 750 4000 Listed Production Debt Repaid process Started initiated 3000 Impala strategic alliance signed Listing with capital 600 2000 raised of R149m plus US$35m debt AQP buys remaining 55% of KPM for 1500 US$113m Capit
Slide 42: Project Sensitivities
Project Sensitivities NPV, R Millions 10 000 8 000 6 000 Rand Prices/All grades 4 000 Exchange Rates 2 000 Operating Costs Capital Costs - -2 000 -4 000 -40% -30% -20% -10% 0% 10% 20% 30% 40% 42
Slide 43: Wesizwe featured prominently in JSE Rankings
Prior to the downturn…… Wesizwe featured prominently in JSE Rankings….. The company’s underlying value has been considerably enhanced since those halcyon days As the company returns to centre stage it will resume its rightful position in the market….. Wesizwe represented on 8 JSE Indexes J203 – JSE
Slide 44: Relative Share Performance
Relative Share Performance 44
Slide 45: Wesizwe vs Peers since Listing
Wesizwe vs Peers since Listing 45
Slide 46: Wesizwe vs Peers Year on Year
Wesizwe vs Peers Year on Year 46
Slide 47: Wesizwe remains an exciting company with significant growth momentum
Wesizwe...... remains an exciting company with significant growth momentum; has a core asset is of the highest quality; achieved outstanding development in a short space of time with phenomenal value creation; has a current Market Cap substantially below its underlying value and this must recover as
Slide 48: Conclusion
Conclusion The Frischgewaagd-Ledig project remains one of the best un-mined PGM assets in South Africa The feasibility study shows a robust (oven-ready) project With the project being fully funded on highly competitive terms, would realise immediate value unlock With the Jinchuan deal, Wesizwe would
Slide 49: Final Thought: the Value Proposition
Final Thought: the Value Proposition The value proposition in an investment in Wesizwe is clear: ….Wesizwe will undergo a rapid build-up of underlying value (NPV) as capital construction progresses. Empirically, this will reflect in the Market Cap (at par value or at a premium) and this will flow th
Slide 50: Wesizwe: the next name in platinum
a wesizwe the next name In platinum — wesizwe