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» Barplats backer in windfall cash-out
» Barplats targets 250k oz by 2007


EastPlats sets out C$130m Barplats bid
David McKay
Posted: Thu, 16 Mar 2006

[miningmx.com] -- EASTERN Platinum (East Plats), the Vancouver-listed venture capital firm, has set out plans for the C$130m purchase and recapitalisation of Barplats, the 120,000 oz/year South African platinum producer.

The capital, which is C$30m more than initially planned in a statement by East Plats dated February 21, will be raised through the placing of 104 million shares at C$1.25/share and an three-year option priced at C$1.80/share. The offering was proposed to close on or about March 28, 2006, it said. There was an over-allotment provision in which a further C$20m would be raised.

Barplats said on March 6 that its liabilities exceeded assets by about R50m. “There is significant doubt that the company will be able to meet its obligations in the normal course of business,” it said in a statement.

Finance raised would be to pay a syndicate of Barplats investors, known as the Platinum Consortium and which owned about 69% of Barplats, some C$27.7m in cash.

An additional C$60m would be used to develop, over two years, the Zandfontein and Maroelabult mines at Barplats’ Crocodile River Mine complex. Crocodile River, Barplats’ operating mine, has had a chequered history having been put in mothballs by former owner, Impala Platinum Holdings, before it was reopened and operated at a loss.

This announcement comes amid more evidence of an acceleration in the development of platinum mines in South Africa.

On March 16, Eland Platinum, operated by former executives employed at Barplats, outlined plans to list shares at R21/share on March 29. It said it hoped to bring its Eland Platinum Mines into full production of some 260,000 oz/year by early 2008.

For East Plats’ part, a further C$10m would be used to upgrade Crocodile River’s beneficiation plant by reinstalling a second mill and constructing a second dense medium separation unit, it said.

In addition to other explorations at the Mareesburg and Spitzkop properties, funds would be spent on assessing the feasibility of Kennedy’s Vale.
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Barplats chairman, Allan Palmiere, has said in the past that Kennedy’s Vale could be a significant producer of platinum group metals.

Ian Rozier, CEO and president of East Plats, said the company intended to become an important player in South Africa’s platinum producing industry.

“This financing will enable Eastplats to provide Barplats the capital necessary for the expansion of operations at the Crocodile River Mine,” he said. Crocodile River would mine at an estimated rate of 240,000 tons/month over a two year period.