UPDATE: Platmin extends bridge loan

Vancouver – Platmin (PPN-T) appears to have successfully navigated through the worst of troubled waters by closing a $69 million private placement and arranging a new deadline for repayment of a US$35 million bridge loan that was to come due May 31.

Platmin says proceeds of the financing will in part be used to pay back the bridge loan which Platmin took on last year so that it could continue building the now operating Pilanesberg platinum-palladium-rhodium-gold mine in South Africa.

Platmin issued about 39 million shares at 92¢ and now has just over 445 million shares outstanding.

Platmin’s share price lost 7¢ to close at 99¢ on the news of the financing.

Since taking on the bridge loan, which it was initially supposed to pay back last fall, Platmin has received a couple of deadline extensions.

The latest extension gives Platmin until Aug. 31 to repay.

The bridge loan is the last remnant of a turbulent fall and winter for Platmin and the start up of its flagship Pilanesberg mine.

Last summer Platmin had arranged US$220 million in debt to finish the mine’s construction.

Unfortunately the imploding credit markets of September and October completely vapourised the US$220 million deal.

But Pallinghurst, an investment group, quickly filled the financing vacumn with an offer that it could not afford to refuse.

For US$175 million Pallinghurst received a healthy majority stake of Platmin.

Despite selling a controlling interest for what some saw as a bargain, the proceeds have nonetheless enabled Platmin to commission the Pilanesberg mine.

According to Platmin’s feasibility study of the project the company plans on producing 250,000 combined oz. of platinum, palladium, rhodium and gold each year in the first 11 years of the 16-year mine.

The bulk of production is platinum and palladium.

The feasibility study forecasts an internal rate of return of 21.7% and a net present value of US$260 million with payback coming within two and a half years.

In proven and probable reserves Pilanesberg holds 67.4 million tonnes grading 1.22 gram platinum per tonne, 0.571 gram palladium per tonne, 0.204 gram rhodium per tonne and 0.041 gram gold per tonne.

Pilanesberg, on the western limb of the Bushveld complex, is one of a number of properties Platmin owns in South Africa.