Wednesday's news update on the WBJV Project 2 was pretty difficult to sort through, so I'd thought I would take the time to analyze it a bit here for everyone. First of all, I know a lot of people were concerned about a particular sentence in the NR (I know I was): "Resources do not have demonstrated economic viability." It turns out it is a standard disclaimer for US lawyers (remember, PTM is traded on the AMEX under PLG). Ignore it like you ignore the "We seek safe harbour" at the end.

In short, it was very good news. Wesizwe has completed a positive BFS for the property containing WBJV Project 2, as well as the Ledig property immediately adjacent. Not only that, but construction has been given the go ahead on the back of the positive BFS. You can get more information directly from Wesiswe on the BFS and what it means :
http://www.wesizwe.co.za/
http://www.wesizwe.co.za/investor/do...
http://www.wesizwe.co.za/investor/do...

My first question after I read the release was - how much is 'the majority' - i.e. how many of the resource ounces and how much of the proposed production in theWesizwe report belong to PTM?

Asan aside, I find it a little annoying/disconcerting that I had to dig so much for this information. IMO this should have been a joint announcement between Anglo, PTM and Wesizwe with the numbers separated out for us, but I figure that Wesizwe went it alone due to the differentregulations between South Africa and Canada. Either that or the three companies aren't playing nice nice or are in negotiations or something...

Anyway, the resource/reserve table on page 12 of Wesizwe's BFSPowerPoint (link 2 above) shows 13,491,000 total ounces and a footnote that Wesizwe's portion is 9,149,000 ounces. This tells me two things:

1). PTM's portion of the resources is 50% of the remaining 4,342,000 ounces, or 2,171,000 ounces. Their previous total for this area (Project 2) was 18.5% of 8,584,000 ounces or 1,588,000 ounces. Wesizwe just handed them an additional 583,000 ounces, increasing their totalresource base to 5,342,000 ounces - a 12% increase. You'd think the stock should therefore go up 12%, right?

2).Based on 1). Wesizwe owns 67.8% of the project (this is echoed by theirCEO saying 'about 70%' in the conference call Q&A) giving PTM andAnglo 16.1% each, making their share of the 350,000 ounces per year56,350 ounces per year. Add 37% of Project 1's 250,000 ounces per year, and PTM owns just under 150,000 ounces of annual production worth $300M per year, or almost double PTM's current market cap of $175M. (I had to check my math twice there, to be sure I had that right.)

Note that Eastern Platinum is currently producing less than 120,000 ounces per year and have a $2,200M dollar market cap (13X PTM's!)

Some more notes from the BFS can be taken directly from the presentation on their web site:

1.) Capital construction to proceed on the basis of this BFS
2.) 58 month construction programme commencing in third quarter of 2008 (twins shafts to 900m+, average depth 700m+)
3.) The total annual PGM production during steady state will average350 000 oz per annum, giving a total life of mine yield of 10 million ounces
4.) Anticipated Life of Mine (LOM) of 35 years
5.) Net Present Value of R 9.5 billion (CAD$1.24B)
6.) Real Internal Rate of Return of 18%

So, it looks like it's going to take ~5y to get at the ore, and the project has a NPV of CAD$1.24B and a real rate of return of 18%. Other than the 5 years, very nice numbers. Keep in mind that Project 1 depth is from 0 to 650 metres and should take far less time to access, as opposed to those nearly 5 years. What do you think that will mean for Project 1's NPV and ROR?

D.