Last checked at 7 Aug 2009 10:39
Watermark Global Plc("Watermark" or "The Company")
Resource Verification CompletedNext Stages of Corporate Strategy Announced
Watermark Global, the AIM quoted Company (WET:LSE) that focuses on the treatment of Acid Mine Drainage (AMD) in South Africa, is pleased to announce that its subsidiary, Western Utilities Corporation (WUC), has completed the resource verification following the successful fundraising by Watermark Global Plc in June 2009.
Highlights
The Resource Verification carried out by Golder Associates has confirmed that the daily recharge of the individual voids the in Western, Central and Eastern Basins is 155 million litres per day collectively Validation of the WUC business plan to produce between 50 and 70 mega litres of industrial quality water for re-use by mines, with excess AMD (between 85 and 105 mega litres) being converted to potable water for sale to bulk distributors including Rand Water WUC is now progressing the next steps towards the completion of the Bankable Feasibility Study; including the Engineering Designs, Environmental Impact Assessment and Rand Water off-take agreement.Jaco Schoeman, Managing Director of Watermark Global, commented:
"We are pleased with the results of the Resource Verification which vindicates the feasibility of our business plan. With 155 million litres of AMD per day, Watermark can produce between 50 and 70 mega litres of industrial water and 85 - 105 mega litres of potable water.
"We are now close to completing the Bankable Feasibility Study, with the definitive results expected by the end of September."
RESOURCE VERIFICATION COMPLETED
As part of the Bankable Feasibility Study (BFS), WUC has engaged specialist geohydrologists to determine and define the size of the water to be intercepted and treated from the underground voids along with the daily recharge of these voids from rivers, streams, outcrops, fissures cracks and deep underground aquifers.
The daily recharge of the individual voids (the Western, Central and Eastern Basins) has been confirmed by Golder Associates to be 155 million litres per day collectively. This vindicates the WUC business plan to produce between 50 and 70 Mega Litres of industrial quality water (depending on the daily consumption by the mines) which will be re-used by the mines. The excess AMD (85 to 105 Mega Litres) will be converted to potable water and sold to bulk distributors such as Rand Water.
KEY MILESTONES GOING FORWARD
Engineering Designs August 2009 Submission of Integrated Regulatory Assessments September 2009 Completion of Bankable Feasibility Study end September 2009 Memorandum of Understanding with Rand Water October 2009 Authorisation of Environmental Impact Assessment December 2009 Binding agreement with Rand Water December 2009 Commencement of Plant Construction January 2010 Commissioning of Plant January 2011 Full Production March 2011ENGINEERING DESIGNS - AUGUST 2009
Costing of the collection and distribution network of piping (72.7 km) is complete and WUC is currently finalising the construction packages for this part of the project which will include the detailed engineering work estimated to within a 10% accuracy level.
Engineering designs for the water treatment section of the plant are on track and due for completion towards the end of August 2009. WUC currently envisages some delay in the thermal design portion of the plant, due to the outstanding integration methodologies between the water and thermal portions of the plant. This is because unexpected delays to the completion of the capital raising have actually hampered the execution of detailed engineering on the thermal phases.
SUBMISSION OF INTEGRATED REGULATORY ASSESSMENTS - SEPTEMBER 2009 TBC
The Environmental Impact Assessment (EIA) is proceeding according to plan and the EIA submission for formal approval is expected by mid September 2009. The EIA has reached the final stages of the Scoping Report. This should provide The Company with enough time for authorisation in order to proceed with construction by the first quarter of 2010.
The Integrated Water Use License Application, Air, Noise and Visual Impact Assessment, Heritage Impact Assessment and Public and Worker Safety Assessments will all be submitted at a similar time. All of the above submissions will be subject to authorisation by the regulatory authorities within a statutory time frame of 45 days expected to be by December 2009.
COMPLETION OF BANKABLE FEASIBILITY STUDY - END SEPTEMBER 2009 TBC
Golder Associates has been contracted as an independent third party to sign off on the BFS. WUC previously announced that it expects the BFS to be completed in July 2009. It is envisaged that the BFS will now be completed by the end of September 2009 due to the late start of the thermal engineering design process and EIA protocols.
WUC is confident that construction will still be able to commence in January 2010, as previously announced, however this is dependent upon reaching financial closure on the main Project Financing package which will be based on the outcomes of the BFS at the end of September 2009. Work on securing the required project financing has commenced and the expected timing for this financing to be in place is November 2009.
RAND WATER OFF-TAKE AGREEMENT
MOU - October 2009 Final Agreement - December 2009The off-take agreement with Rand Water (RW) is currently being negotiated. In order to conclude the off-take agreements, WUC and RW need to agree on the quality control protocols and price of the final water product to be delivered to RW.
WUC is not in a position to conclude the pricing with RW until the engineering and costing have been completed. WUC will, however, seek to sign a Memorandum of Understanding (MOU) with RW, whereby RW will, in principle, purchase the water from WUC on condition that the water quality and price can be agreed upon. To this end, meetings have been held with both Rand Water and the Department of Water Affairs and Environment to progress this and further meetings and other avenues are being pursued. Concluding a satisfactory agreement with RW is critical to the economic and operational integrity of the project.
BROAD BASED BLACK ECONOMIC EMPOWERMENT (BBBEE)
The Department of Water Affairs and Environment (DWAE) has issued a Guideline document for BBBEE relating to all future Water Use License Applications (WULA). Although the Guidelines do not specify the percentage BBBEE required, it has become clear to WUC and Watermark Global that they will be encouraged by regulators to include a BBBEE structure. For this reason WUC has appointed Advocate Jerome Brauns to formulate a Broad Based Black Economic Empowerment deal which will comply with both the Mining Charter and the Guidelines for WULA as envisaged by DWAE.
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 | Tel: +44(0) 20 7397 8900 | |
| Financial PR | ||
| Bishopsgate Communications | ||
| Robyn Samuelson/Giang Nguyen | Tel: +44(0) 207562 3355 |
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