Platmin bolsters its war chest by $250m

[] — PLATMIN, the junior platinum group, is to raise $250m via a private placement of new shares towards its capital needs at its Pilanesberg mine and to buy a 10% stake in the Sedibelo platinum project.

Singapore’s state-owned Temasek Holdings said at the end of March it was investing $100m in Platmin in the form of a convertible debenture, which matures at the end of 2010 and is convertible at a price of $1.215 per share or C$1.25, a 10% discount to the five day volume-weighted average price in the five day to 26 March this year.

Pallinghurst Investor Consortium, headed by Brian Gilbertson and Arne Frandsen, have also taken up convertible debentures in Platmin to inject $30m into the company.

The latest fund raising exercise, which was flagged at the time of the Temasek announcement, will entail an offering of new common shares in Platinum via a private placement in South Africa, the United Kingdom and the United States. The offer is not extended to the general public.

RBC Capital Markets will be acting as sole bookrunner, and together with Investec Bank Limited, as joint lead managers for the offering. Closing of the offering is subject to a number of conditions, including regulatory approval and approval of the Toronto Stock Exchange.

“The net proceeds of the offering will be used by the Company for, among other items, operational and working capital funding requirements at the Pilanesberg Platinum Mine, the acquisition of 10% of the Sedibelo platinum project, and exploration, general and administrative expenses,” Platmin said.

Platmin, which is chaired by Gilbertson and has Tom Dale as its CEO, wants to consolidate property around the Pilanesberg project, which is a year behind schedule.

Platmin has agreed with Barrick Gold to buy the gold mining company’s 10% stake in Sedibelo platinum prospect for $15m. The other 90% of the project in held by the Bakgatla-Ba-Kgafela community.

Barrick has also agreed to sell a number of long-lead items needed to develop Sedibelo. The cost of up to $45m is still to be settled.

This stake is important because Sedibelo neighbours Pilanesberg and lies between the mine and the Magazynskraal property, which is the subject of a bankable feasibility study by Platmin.