THE new owner of Eastern Platinum (Eastplats), Ka An Development Company, is to raise $10.3m in a private placement of the company’s shares, according to an announcement to the Johannesburg Stock Exchange.
However, no additional information is provided regarding how the company intends to allocate the capital. Miningmx has yet to receive a response from Eastplats CEO, Diana Hu.
Eastplats said it would issue about 18.4 million common shares in the company at a price of 56 Canadian cents per share, equal to about 19.9% of the company’s shares in issue.
The shares are being issued at a 20% discount to Eastplats share price of 70 Canadian cents/share as of close of the Toronto Stock Exchange on October 27.
Eastplats had some $80m in cash about a year ago whilst it was under the control of a board chaired by David Cohen. Ka An Development Company ousted that board and then scuppered the sale of Eastplats subsidiary, Barplats, for $50m.
“About a year ago, there was still about $80m in the kitty. It seems there was only about $20m there when the Hong Kong company took over,” said a Johannesburg analyst.
Eastplats disclosed in its announcement that a 5% ‘finder’s fee’ of the aggregate gross proceeds of the offering in the amount of C$516,190 would be payable in cash “to an arm’s length party’, Tier Financing Leasing, a Chinese company.
Closing is expected to occur on or about December 2, the company said.
Eastplats’ main operating asset, Crocodile River, produced annualised production of 152,000 ounces of platinum group metals (PGM) in the September quarter of 2010 before it was shut in 2012 amid declining platinum prices.
In attempting to head off the ouster earlier this year, the former Eastplats board was less than complimentary regarding the nominees of Ka An Development saying they had disclosed director and officer roles with 20 publicly traded companies of which nearly all had performed poorly. “Some have suffered cease trade orders or bankruptcy,” it said.
