VANCOUVER (miningweekly.com) – South Africa-focused precious metals miner Platinum Group Metals (PTM) has reached an agreement with a syndicate of underwriters, led by BMO Capital Markets, to raise $25-million.
The Vancouver-based company recently advised that, for it to achieve positive cash flow and to maintain its working capital covenants under existing loan facilities, it needs to source between C$5-million and C$15-million of additional funding.
Under the terms of the bought-deal financing, the underwriters will buy 17.13-million shares at $1.46 apiece, for gross proceeds of $25-million. PTM will use the net proceeds of the offering for underground development and production ramp-up of the Maseve mine, near Rustenburg in South Africa's North West province, working capital during start-up, and general corporate purposes.
PTM’s stated objective is to turn the Maseve mine to positive cash flow in the first half of 2017. The production ramp-up at the cornerstone Maseve platinum/palladium/rhodium/gold mine has been behind plan since commissioning in April 2016, owing to poor mining contractor performance and delayed infrastructure completion.
The TSX- and NYSE MKT-listed company, which is ramping up production at its Maseve mine and advancing its Waterberg discovery, in South Africa's Limpopo province, has granted the underwriters an overallotment option, exercisable at the offering price for a period of 30 days following the closing, to buy up to a further 15% of the offering.
The offering is expected to close on January 31, subject to customary closing conditions.
Edited by: Chanel de Bruyn
Creamer Media Senior Deputy Editor Online
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