PTM secures $20m bought deal financing

VANCOUVER (miningweekly.com) – South Africa-focused miner Platinum Group Metals (PTM) has reached agreement with BMO Capital Markets to buy, on a bought deal basis, 15.39-million common shares of the company at $1.30 apiece, for gross proceeds of about $20-million.

Vancouver-based PTM said on Tuesday that it would use the net proceeds for underground development and production ramp-up of the underperforming Maseve mine; for working capital during start-up; for repayment of the $2.5-million outstanding amount of a previous advance under the company's credit agreement with a syndicate of lenders led by Sprott Resource Lending Partnership; and for general corporate purposes.

The company has granted BMO an option, exercisable at the offering price for a period of 30 days following the closing of the offering, to buy up to a further 15% of the offering to cover over-allotments, if any, and for market stabilisation purposes.

The offering is expected to close on April 26, and is subject to customary closing conditions including TSX and NYSE MKT approvals.

PTM on Monday advised it was working with BMO Capital Markets and Macquarie Capital to review and assess corporate and asset-level strategic alternatives as it struggled to achieve positive cash flow at the Maseve mine, near Rustenburg in the North West province. These alternatives included further funding through refinancing its existing debt, issuing new debt, private or public offerings of equity or the sale of project or property interests.

Delays in underground development, stoping rates and planned tonnages have resulted in ounce production delays. The company stated on Monday that such delays had, and would continue to have, a negative impact on working capital requirements until sufficient mined stoped material was produced to allow mine operations to generate positive cash flow.

PTM owns 83% of the Maseve mine.