London, England — 20 December 2012 – Platinum miner Lonmin has used the bulk of its US$817 million rights issue raised earlier this month to repay its US$700 million bank debt, the company said in an announcement.
Miningmx reports that it also cancelled a US$300 million term loan under these facilities, denominated in US dollars, which left the company with access to US$400 million in revolving credit facilities that it would draw upon when required. The amended US$400 million revolving credit facilities became effective on December 19, the company stated.
Lonmin said in October that it would rein-in its capital expenditure for the next two years by 23% as it sought to map its way forward following the events at Marikana during August.
The company has now truly abandoned its previously stated objective of achieving output of 950,000oz of PGMs by 2016, saying its new target for that year would be 800,000oz.
Lonmin’s previously envisaged target of 950,000oz by 2016, from 750,000oz in 2012, would have been achieved by consistently spending US$450 million in capex each year until that time. It was pushed to reduce its capex forecast for 2013 and 2014 by 40% – to US$250 million per year – in July, largely motivated by the ongoing weak market prospects for PGMs.
The company’s revised strategy now forecasts investment of around US$175 million in 2013 and US$210 million in 2014, targeting sales of 680,000oz in 2013 and 750,000oz during the two years after that.
For 2013 and the following year, most of Lonmin’s capex would be directed at maintaining the group’s ore reserve flexibility which equated to 18 months of mining on September 30.
“The company’s planned capital expenditure over the next two financial years is expected at least to maintain this level of reserve availability,” Lonmin said.