Johannesburg - Listed silica and anthracite producer Petmin (PET), which is scheduled to list on the London Stock Exchange's Alternative Investment Market (AIM) on Wednesday December 20, plans to raise R50.4m in a share placement, the group said on Tuesday.
Petmin is to place 40 million new ordinary shares - representing approximately 10% of the company's issued share capital - of 9pence, or approximately R1.26 - each to raise around £3.6m - or around R50.4m - before expenses, it said.
The AIM listing will enable the company to access a wider range of opportunities and sources of capital, and is a further step towards it become an international multi-commodity minerals business, it added.
The issue has been conducted under the company's general authority to issue up to 15% of its share capital.
The placing price of 9p is equivalent to a discount of 3.9% to the weighted average Petmin share price over the last 30 days prior to the date of finalisation of this announcement.
The proceeds are intended to fund future growth, including a comprehensive drilling programme at Petmin's Somkhele Anthracite Mine near Richards Bay in KwaZulu-Natal, to move resources to proven reserves and extend the life of mine beyond 25 years; the acquisition of additional Richards Bay Coal Terminal (RBCT) allocation to support planned growth in the company's exports; logistics and distribution channels for Somkhele and the Springlake Colliery near Dundee in KwaZulu-Natal; a plant upgrade at the SamQuarz silica operation near Delmas in Mpumalanga; and the financing of new projects and acquisitions and general working capital requirements, it noted.
Petmin also announced an agreement with GVM Metals (GVM) in terms of which GVM will acquire 100% of the issued share capital of Petmin subsidiary Baobab Mining & Exploration for a consideration of £2.5m - or around R35m.
Baobab has an effective 50% interest in the Baobab Joint Venture, which holds greenfields exploration tenements over soft coking and steam coal deposits near Musina in South Africa's Limpopo Province.
Baobab was acquired as part of the acquisition by Petmin of Springlake Holdings in November 2005. Petmin attributed no value to Baobab at the time of the acquisition. The disposal of Baobab is in line with Petmin's strategy to focus on cash- or near cash-producing assets.
SamQuarz, South Africa's largest silica mine, has been in operation since 1955. Acquired by Petmin in September 2004, it currently produces 1.3 million run of mine tonnes of silica a year, primarily for the domestic metallurgical and glass manufacturing sectors.
SamQuarz's current life of mine is more than 10 years but - based on the Competent Person's Report - the directors estimate that there are a further 30 years of mineable reserves at an average ROM production level of 1.6 million tonnes a year - 1.3 million tonnes a year of saleable product.
© 2009 Petmin Limited