[miningmx.com] – ROYAL Bafokeng Platinum (RBPlat) has unveiled plans to foot R1.5bn of its obligation to the R8.5bn outstanding on the Styldrift project in a book-build and rights offer.
Some R900m would be raised through the issue of shares to existing shareholders with RBPlats and Anglo American Platinum (Amplats) agreeing to follow their rights equal to 68.9% of the company.
First, however, the company will issue shares in a R600m book-build. Martin Prinsloo, commercial director for RBPlats, said the book-build had been three times over-subscribed at a price of R62/share. The book-build was managed by Rand Merchant Bank and Morgan Stanley. The full terms of the book build will be published March 5, RBPlats said.
The balance of the R11bn Styldrift project would be financed through a combination of company cash flow and debt. So far, RBPlat and Amplats have spent about R2.5bn on the project of which R681m was spent by RBPlat in the year under review. It is required to finance about 67% of the project.
In November, RBPlat said it had edged down capital on the project by R750m after choosing to extend the concentrator at its Bafokeng-Rasimone Platinum Mine (BRPM) rather than build a new, standalone plant at Styldrift for R2.4bn.
In 2012, RBPlat said Styldrift would cost R11.8bn to build; it has therefore managed to contain project inflation and overruns. The pricing of RBPlat shares will be interesting to see, however, as the capital markets are tough for mining companies at present. On a 12-month return basis, shares in RBPlat are 20% higher.
The fund-raising efforts were announced simultaneously with RBPlat’s full-year results today in which headline share earnings were a third higher at 173 cents a share. The firm ended the year with net cash on hand of R772.9m.
Commenting on progress at Styldrift, RBPlat said some 39.2% of the project had been completed against a budget for 2013 of 37.5%.
The current financial year represents a quantum leap, however, with contractors on site increasing to 21 from 11 companies as the project peaks in terms of the mining and infrastructural work.
Total company capital expenditure for 2014 was forecast to be R2.4bn, increasing to about R3.1bn in the 2015 financial year.
Total milled tonnes from BPRM was just over 2 million tonnes for the 2013 financial year at a head grade of about 4.38 g/t (4E). Production for 2014 was forecast to be around 2.3 million tonnes at a built-up head grade of approximately 4.2 g/t (4E).
“Overall, the project (Styldrift) remains on schedule to commence with stoping ramp-up in July 2015, reaching steady state in June 2018,” the company said in its year-end statement.
The outlook for the current 2014 financial year will be influenced by the ability of RBPlat to renegotiate its wage agreement which falls due.
RBPlat said it had “a stable operating environment” having successfully restructured its workforce during 2013. In terms of its previous three-year wage agreement the company undertook building of homes for its employees with the first phase of this project “well under way” by the end of 2013, it said.
