HomeNewsNortham may no longer need rights offer

Northam may no longer need rights offer

The twin shaft
system at Northam
Johannesburg, South Africa — MININGREVIEW.COM — 24 February 2010 – Northam Platinum Limited “’ the operator of the world’s deepest platinum mine, “’ says it may no longer need a rights offer to fund the US$389 million (R3 billion) first phase of its Booysendal project, in the wake of the improvement in metal prices.

“It’s very possible we won’t have to do a rights issue,” projects manager Rene Rautenbach said in a phone interview here with Bloomberg News. “The world was a very different place last year, when Northam said it planned to sell shares,” he added.

Booysendal would be funded using debt and a rights offer, the company said last October, but platinum gained as much as 22% since then as the world’s biggest economies recovered from recession, stimulating consumer spending.

Northam plans to start building Booysendal in July, and the mine may produce 130 000 ounces a month of platinum and related metals by 2015.

Northam’s net income fell 42% to R216 million in the six months ended 31 December 2009,” it said in a statement, and second-half profit is likely to be similar at current local-currency metal prices.

“Northam’s biggest shareholder, Mvelaphanda Resources Limited, may be less inclined to take up its entitlement should Northam proceed with a rights offer,” Rautenbach said. The price of the Gold Fields Limited shares Mvelaphanda has been selling has decreased 19% over the past year.