[miningmx.com] — PLATMIN, which is planning to produce 12,000 oz of platinum a month from end-2011, is to seek a de-listing of its shares from the Toronto and Johannesburg stock exchanges citing marginal business ties with Canada, and a low valuation and poor liquidity of its share. It would re-list when “more favourable conditions return[ed]”.
This was after 95% of the firm’s shareholders approved a special resolution on Monday which also sees it transfer its registration to Guernsey from British Columbia in Canada. The transfer will be conducted under ‘continuance’ regulations, an effect that does not require Platmin to liquidate.
Platmin has struggled to bring its Pilansberg Platinum Mine (PPM) to production on time, but the root cause of the de-listing was poor conditions for equities globally, and the relative low liquidity and turnover of the stock, the company said.
Some 70% of Platmin’s shareholders had agreed not to trade the stock until the de-listing was completed, expected to be by December 15, and to hold the stock until it re-listed. The South African Reserve Bank had also agreed that South African shareholders in Platmin could hold their shares for 12 months from point of de-listing, or until the company relisted.
However, shareholders who wanted to realise their investment in Platmin would be accommodated under an additional resolution in which the company would buy-back not more than 10% of its share capital at a five-day, volume weighted average price of C$0.81/share, the level at which Platmin last traded on December 2.
A 7.6% shareholder in Platmin is Pallinghurst Resources, an investment holdings company which is managed by chairman, Brian Gilbertson and Arne Frandsen, the CEO. There was no information in the announcement regarding Platmin’s CEO, Tom Dale, who will presumably continue in his position.
Platmin lost US$23.2m in the June quarter (2010 June quarter: $24m loss) bringing total losses for the six months to end-June to $58m. As a result of this, and mine riots and other production delays, shares in Platmin have fallen from a 52-week high of 635c to 179c on the JSE.
However, Platmin said that it would continue to seek regional consolidation as an unlisted entity. “The consolidation is well advanced and the Continuance and the voluntary de-listing provide the appropriate structure to facilitate these
initiatives,” it said in the announcement.
Platmin had ample cash reserves but the news of the de-listing and continued production ramp-up woes will be a major disappointment to shareholders, of which Investec, the South African bank, is one.
In May 2010, Platmin completed a US$385m capital raising to fund the completion of the build-up phase of mining operations at PPM and to participate in a consolidating industry. Six months later, Platmin announced the placement of roughly 98 million, raising US$90m, taking Pallinghurst’s stake in the company to 7.6%.
