[miningmx.com] –THE proposed de-listing of Platmin from the Toronto and Johannesburg stock exchanges was a precursor to the company’s long-planned consolidation of three properties in the western limb of the Bushveld Complex, said Brian Gilbertson, chairman of Platmin’s 7.5% shareholder, Pallinghurst Resources.
“We said we wanted to consolidate [in the region] and this is it. It’s the dawning of that plan. But it’s difficult to get it done under that [Platmin’s] structure,” Gilbertson said in a telephonic interview.
Shares in Platmin fell 35% in Toronto to C$0.12c/share. This compares to the C$0.81c/share at which Platmin would buy-back up to 10% of its share capital if current shareholders wanted out.
“We want them to stay in,” said Gilbertson amid criticism from analysts that Platmin was cynically pushing out minority shareholders, buying the shares at a low level and then relisting them at a higher level.
RBC Capital Markets was punishing. In a note today it said the de-listing was “a questionable decision” by management. It thought Platmin’s struggling mine, Pilansberg Platinum Mines (PPM) was on the verge of improved performance and that shareholders would begin to see the benefit of this.
“This will no longer be the case, as many minority shareholders will be forced to sell out of the stock at a reduced price (the stock is now at all time lows), over a very short time frame,” the stockbroker said.
Said Gilbertson: “We are bringing three properties together into one listed vehicle, but one can only imagine the complications.”
Platmin said in an announcement on Monday that shareholders had voted 95% in favour of the delisting which was also necessary because the company was trading at a far below value. “The company is fully funded. The current value is ridiculous,” Gilbertson said.
The company also said that poor liquidity and low turnover, as well as the fact Platmin had virtually no business ties in Canada, meant it made sense to delist from Toronto.
When the consolidation of mining properties was properly structured, a new company would be re-listed, said Gilbertson. He declined to say where the listing would reside. Currently, Platmin is transferring its company registration to Guernsey from Toronto.
He added that it made sense to wait before a relisting. “You have seen how PGM companies are trading at discounts. But the market will recover. We’ve all seen this countless times. The market will recover.”
Platmin’s main asset is PPM which is aiming to produce about 140,000 ounces of platinum annually. However, the company has plans to incorporate neighbouring property Sedibelo, which separates PPM from another Platmin-owned farm, Magazynskraal.
Platmin also announced in 2010 that it was to buy 10% of Sedibelo from Barrick Gold Corporation, the Canadian gold producer, for $15m.
The remaining 90% of Sedibelo is owned by the Bakgatla-Ba-Kgafela tribe, which also has pre-emptive rights over the Barrick stake. Gilbertson said in a previous interview with Miningmx: “I can envisage this as a grand complex”.
Complex structure
Platmin’s current corporate structure is made complex by various joint ventures it has with empowerment groupings. In essence, however, PPM is 100% owned by a Boynton which is, in turn, 72.39% owned by Platmin. The remainder of Boynton is held in a joint venture between the Bakgatla tribe and Pallinghurst.
Platmin is 41.6% owned by Pallinghurst Luxembourg and Investec Bank with the 41.9% balance in the hands of public shareholders. The 16.5% balance of Platmin is owned by Pallinghurst South Africa.
RBC Capital Markets said the structure certainly sat on Platmin’s price but the underperformance of PPM was a contributing factor.
Said another UK-based asset management firm: “… the operations have performed very poorly and the company has not kept the market informed about progress along the way. The whole investor relations thing has been a disaster as well as the management of the operations.”
Said Gilbertson: “Before the riot [at PPM which damaged the operation] there was a clear sign that dawn had arrived for the mine. The riot set us back. But Tom [Dale, CEO of Platmin] has restructured the contractors and early in the new year we’ll hit our targets”.
