Johannesburg, South Africa — MININGREVIEW.COM — 13 August 2009 – Pallinghurst Resources is raising R800 million through a rights offer, and has already secured the funds through irrevocable commitments from shareholders and underwriters.
CEO Arne Frandsen confirmed that the money had been earmarked for specific purposes at the group’s four operations, including consolidation of the area around Platmin’s Pilanesberg platinum mine.
“The money is not being raised for new projects, nor to establish some kind of war chest. We believe in a relationship with our shareholders through which we will return surplus cash to them and come and ask them for money if we need it for a specific purpose,” he said. “The fact that we raised this money from South African investors in just two days was extremely positive, and we view it as a sanity check on our investment strategy,” Frandsen added.
The offer will commence in early September. Pallinghurst already has commitments from shareholders to take up R447 million, while three Cape Town institutions have irrevocably agreed to underwrite the remaining R353 million. These are Trinity Asset Management, Oasis Asset Management and Oasis Crescent Capital.
Pallinghurst chairperson Brian Gilbertson said: “Three of our four investment platforms are now approaching operating status, and some additional funding is required to realise the full potential of all four.” “This capital raising allows Pallinghurst to participate “’ along with our strategic equity partners “’ in our pro rata funding entitlements, so avoiding dilution.”
Frandsen said the intention to come back to the market was clearly indicated when Pallinghurst listed on the JSE last year. About 75% of Pallinghurst stock is held by SA investors.
He revealed that the R800 million would fully fund Pallinghurst’s three mining projects, to the point where they would all be generating positive cash flows and would not need further funds.
At Platmin, the further consolidation of the Pilanesberg region is at the forefront of our minds.
We will also be able to go ahead with construction of our proposed Northern Cape manganese mine when we decide to move forward.”
Pallinghurst’s other two investment platforms are coloured gemstones (which is being driven through AIM-listed Gemfields) and luxury jewellery marketing through the Fabergé brand, which is due to be re-launched on 9 September.