[miningmx.com] – JUPITER Mines, the Australian-listed manganese
exploration company, plans to raise up to A$125m from shareholders, of which
A$10m (R84m) will be used to complete development of the 2.5 million tonne/year
Tshipi Borwa manganese mine in South Africa’s Northern Cape province.
The Tshipi Borwa mine, which is due to ship its first manganese before the year-end,
is owned by Tshipi e Ntle Manganese Mining, an empowerment company in which
Jupiter Mines has a 49.9% stake. Pallinghurst Resources also has a stake in Jupiter
Mines and is likely to follow its rights.
Jupiter Mines said this morning it had raised A$40m in a private placement with
Netherlands-based institutional investor Stichting Pensioenfonds ABP (ABP) at a
price of A$0.16/share. Jupiter Mines is currently trading at A$0.15/share after the
stock shed 3% on the Sydney Stock Exchange.
A further A$85m will be raised in a 5 for 19 rights issue with existing Jupiter Mines
shareholders, which includes JSE-listed Pallinghurst Resources. Pallinghurst
announced on June 11 that it had tapped shareholders for a total of R800m, of
which R202m to R283m is likely to be used to follow its rights in Jupiter Mines.
“This is the perfect time to be raising capital and its shows what a well-organised
and supported group can do,’ said Brian Gilbertson, Chairman of Pallinghurst
Resources and Jupiter Mines. “You can get contracts competitively priced and you’ve
got your timing right,’ he said of Tshipi’s prospects amid a climb down in mining
stock valuations amid a shrinkage in growth in China’s economy.
“This fund raising enables Jupiter to remain debt-free as it closes in on first
production and cash flow from Tshipi manganese project,’ he said in Jupiter’s press
announcement earlier this morning.
First production from Tshipi Borwa is due by the fourth quarter this year. Transport
negotiations with Transnet were underway while contracts to buy the manganese
had been negotiated with Posco, the Korean steelmaker which is also a shareholder
in Jupiter Mines. The balance of manganese would be sold into China.
Asked if there was scaleability in the Tshipi manganese project, Gilbertson said there
was too much tendency to seek the next expansion before the first phase was
completed. “My time is well focused on this project and need to get it finished on
time,’ Gilbertson said.
South Africa’s manganese industry has been rocked recently following a dispute
between joint venture partners Kalahari Resources and ArcelorMittal, which has
accused the former of corporate governance violations. Daphne Mashile-Nkosi, CEO
of Kalahari Resources, told Business Day this week that she would seek to
“buy out’ ArcelorMittal’s 50% stake in their joint venture company, Kalagadi
Manganese. Asked if this investment might interest him, Gilbertson responded: “No’.
