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14 May 2010 08:40
Watermark Global Plc
("Watermark" or the "Company")
Further Project Update 14th May, 2010
Project Update
On 21st April 2010, Watermark provided the market with a project update in relation to its wholly-owned subsidiary, Western Utilities Corporation Limited ("WUC") and its water treatment project. In that update the Company said it would need to reassess its financial position should the South African Government's decision regarding the project be delayed by more than three weeks.
As at today's date, Watermark has still received no decision from the government concerning the interim solution to address the acid mine drainage("AMD") issue. WUC is continuing discussions with the mines to assist in the further funding of its operating costs pending a Government decision.
The Board is also working with the Company's broker, Cenkos, on a capital raising programme. It has received strong indicative interest from several UK and Australian shareholders and intends to conclude this fundraising as soon as possible given that the funding commitments in place from certain mining houses will cover WUC's operating costs until the end of May 2010.
While there is no guarantee that a fundraising will be successfully completed ( and we expect to provide the market with a further update in this respect during the next week) the Board remains confident and believes the WUC proposal is the most viable solution to the AMD issue. However, if the current delays in decision-making by the authorities continue in the long term, the future of the project, WUC's involvement and the financial viability of WUC itself will be in doubt, a situation which clearly will have implications for Watermark itself.
A further announcement will be made as appropriate.
Further Background
The South African Government continues to require a solution for the treatment of AMD, a problem recognized as a potential environmental disaster. The Department of Water Affairs and Environment ("DWAE") has accepted their responsibility and liability associated with ownerless and abandoned mines within the project area.
WUC has provided the Government and the mining houses with a clear, well documented, detailed and practical solution to the treatment of AMD and believes it is several years ahead of the competition in terms of work already completed. In simple terms, WUC has:
conducted pilot plant tests for the optimum method of treating AMD; completed 14 specialist studies as part of the EIA process and which will form the basis of the Environmental Impact Report (EIR); completed a Definitive Feasibility Study (DFS) which has been signed off by Golder & Associates; and positioned itself so it is now ready to commence the construction of the required infrastructureDespite a number of recent speeches and debates in the South African Parliament, in which the DWAE and Government have recognised the gravity of the situation and the need to act, they have to date, failed to make any decision regarding an interim or long term solution.
Enquiries:
Watermark Global
Dirk Kotze, Chief Financial Officer Tel: + 44(0) 20 7233 1462
dkotze@watermarkglobalplc.com
Charles Zorab, Investor Relations Tel: + 44(0) 20 7233 1462
czorab@watermarkglobalplc.com
Nominated Adviser
Cenkos Securities
Ian Soanes /Elizabeth Bowman/Beth McKiernan Tel: +44(0) 20 7397 8900
Financial PR
Bishopsgate Communications
Nick Rome/Giang Nguyen Tel: +44(0) 207562 3350
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