Pallinghurst looking at new opportunities as portfolio matures COMMENT PRINT EMAIL |
By: Henry Lazenby 30th March 2012 TEXT SIZE JOHANNESBURG (miningweekly.com) – JSE-listed Pallinghurst Resources CE Arne Frandsen on Friday said the company intended to pursue a number of new investment opportunities, both within its current portfolio and in developing investment platforms, as its original portfolio matured.
For this reason, the Pallinghurst board approved an R800-million renounceable-rights offer at R2.24 a share.
“As your management team has stressed, we will only raise capital when we have specific use for the funds, and in our best judgement, now is the right time to raise incremental equity capital for the company,” Frandsen stated.
He added that it was likely that luxury brand Fabergé would seek a further capital injection to enable it to complete its strategy.
Besides Fabergé, Pallinghurst also invested in platinum-group metals (PGMs), steelmaking materials, such as the Tshipi Borwa manganese project and coloured gemstones, through Gemfields.
“It has given me pride to witness the transformation of our portfolio companies from what we identified as ‘unloved assets’ upon acquisition, into what is now a portfolio of attractive and valuable investments, well positioned to realise superior investment returns,” chairperson Brian Gilbertson said.
During the financial year ended December 31, the company achieved a modest increase in its rand-denominated asset value, but in US dollar terms, due to the significant drop in the share price of ASX-listed Jupiter Mining, the company recorded a loss for the year.
During the year, Jupiter raised A$150-million and approved its portion of the funding required to build South Africa’s latest openpit manganese mine at Tshipi Borwa, in the Kalahari.
With construction well under way, Tshipi Borwa is on track to start production by the end of the year. The project boasts a sizeable resource capable of sustaining more than 60 years of production.
Frandsen explained that as an example of how the Pallinghurst portfolio is maturing, in 2007 the company adopted the strategy for its subsidiary Gemfields to emulate the diamond major De Beers’ diamond industry model in the fragmented coloured gemstone industry, which was met with scepticism.
“However, Gemfields has now achieved its market recognition in the emerald sector. It is about to apply the same business model to rubies, having recently acquired a world-class deposit in Mozambique.
“In only a few years, what was once an ambitious plan is now close to becoming reality,” he said in a statement.
Frandsen added that when the company first made an investment into the PGM sector, it did so with the aim of creating a significant new industry player, which would benefit from long-life and low-cost production.
On Thursday, Pallinghurst announced the consolidation of four PGM assets in which it had invested. South Africa’s Industrial Development Corporation acquired a 16% stake in the consolidated vehicle for an investment of R3.24-billion.
He said the transaction confirmed the realisation of Pallinghurst’s PGM vision and strategy.
The company’s other brand, the luxury icon Fabergé was relaunched 30 months ago and had recently opened a new boutique in London, and will soon do the same in New York.
Edited by: Creamer Media Reporter
PLA Price at posting:
13.5¢ Sentiment: LT Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)