PLATINUM Group Metals (PTM) is to issue 800,000 shares to its major shareholder Hosken Consolidated Investments Limited (HCI).
The share issue, priced at $1.26 per share, will generate gross proceeds of $1m. This pricing represents a 3.1% premium to the company’s five-day volume weighted average trading price as of May 9. Upon completion, the transaction will restore HCI’s ownership stake to 26% in the company.
The placement will be subject to a four-month and one-day trading restriction.
The primary motivation behind the share issue is to fund critical development stages of the Waterberg Project in South Africa. Proceeds will be directly allocated to pre-construction site work, engineering, and preparatory activities, PTM said.
Beyond project development, the company intends to use a portion of the funds for general corporate purposes and working capital.
This strategic financial move underscores PTM’s commitment to advancing the Waterberg project while maintaining a strong balance sheet, it said.
The Toronto-listed firm said in April it was now studying the possibility of establishing a matte furnace in South Africa capable of smelting Waterberg project concentrate. This was after the South African government expressed a preference for beneficiation in-country following proposals to build a smelter in Saudi Arabia with local partner, Aljan & Bros.
“The convertor matte would be shipped to Saudi Arabia for further processing through a BMR at which time spent auto catalysts and other pgm-bearing material could be co-processed,” said the company in its earlier announcement.
Last year, PTM said in a feasibility study that Waterberg would have annual steady state average concentrate production of 353,208 ounces of platinum group metals at a cost of $946m. The plan was to export the concentrate to Saudi Arabia as this would be potentially cheaper than building a power-hungry facility in South Africa.
By producing converter matte in South Africa, PTM would drop the shipping requirements to Saudi Arabia from 130,000 tons of concentrates annually to 8,000t of matte annually.
PTM said that as well as looking into the Saudi Arabia smelting proposals it continued discussions with several South African smelter operators – including Impala Platinum – looking at negotiating a formal concentrate offtake agreement for Waterberg.
Impala Platinum is a 15% shareholder in the Waterberg project with a right of first refusal over smelting and refining its production but has held back on developing the project declining in 2020 to exercise a control option that it owned.
