Just a day after Platinum Australia produced the first concentrate from its Smokey Hills mine in South Africa, the newly minted miner entered a trading halt to raise $12million from institutional investors.
Bell Potter is conducting a bookbuild which is expected to close today. Shares in Platinum Australia last traded at 59c, and its managing director, John Lewins, told Xchange new shares were expected to be issued at a "slight discount" to that price.
Platinum Australia will use the funds for working capital and for early repayment of about $US5million ($7.5million) of its $US35million in debt.
Mr Lewins said Platinum Australia was also in negotiations to close out its hedgebook, which is $US15million in the money, to further reduce debt and the $US2.5million in annual interest costs it would have carried.
The company expects to earn $US30million before interest, taxes, depreciation and amortisation this year, even though the platinum price is low, due to its production costs of just $US300 an ounce.
Mr Lewins said he expected the platinum price would rebound to $US1000 an ounce by the end of the year and would rise even further next year as the global economy recovered and demand outpaced supply.
