Platinum Group Metals (PTM) is to raise a further US$20m through a “bought deal” with BMO Capital Markets after raising $25m through a previously held “bought deal” in January.
Shares were issued for the January deal at $1.46 each which was a 10% discount to the then traded price of $1.63 and the latest offer is at $1.30 a share which compares with Tuesday’s closing price on the New York Stock Exchange of $1.47 a share.
PTM’s balance sheet has come under pressure following setbacks at the Maseve platinum mine against which the company was forced to take a $41.4m impairment during 2016 after slower-than-anticipated ramp-up of production.
According to CEO Michael Jones, the latest funds raised will be used for the underground development and production ramp-up of the Maseve mine as well to meet working capital requirements during the start-up phase and repay an outstanding amount of $2.5m which is due to a syndicate of lenders led by Sprott Resource Lending Partnership.
In early April PTM downgraded expected 2017 production from Maseve to 85,000oz of 4E (four element) platinum group metals – platinum, palladium, rhodium and gold – from the previous estimate of 100,000oz. The mine – which is located about 35kms north of Rustenburg – was initially forecast to produce 110,000oz in its first year of production which would then rise to 180,000oz annually.
