News and Charts for PETMIN MINING

Petmin raises R50m ahead of AIM debut
20 December 2006

Author: Charlotte Mathews
ANTHRACITE and silica producer Petmin said yesterday it had raised about R50,4m before expenses by placing shares ahead of its London’s Alternative Investment Market (AIM) listing today.

Petmin has been listed on the JSE since 1986, but changed its business from granite to gold in the 1990s and to silica and anthracite mining last year.

Since the beginning of last year its share price almost trebled to 145c from 50c. The company placed 40-million shares ahead of its debut on AIM at 126c, or 9p, each, which represents a 9% increase in its issued shares.

Apart from the funds raised in London, Petmin will get about R35m from the sale of its stake in the Baobab joint venture to GVM Metals, announced last week.

The reason for seeking a quotation on AIM was to enable it to access a wider range of opportunities and sources of capital with the intention of becoming an international multicommodity business, it said.

Petmin would use the funds raised in London to undertake a comprehensive drilling programme at its Somkhele anthra-cite mine near Richards Bay to improve the definition of the resource and extend the life of the mine beyond the current 25 years. It would also apply for an additional export allocation at the Richards Bay Coal Terminal, where it now has an allocation of 235 000 tons a year, establish logistics and distribution channels for Somkhele and the Springlake Colliery near Dundee, upgrade plant at its SamQuarz silica operation, finance new projects and acquisitions, and supplement general working capital. According to the group’s latest annual report, it has budgeted R75m for capital projects in the current financial year, of which R60m would be on Somkhele.

At the end of June it held R32m in banking facilities and R70m in cash, and had negotiated a R40m asset-based finance facility for the coal preparation plant at Somkhele.

Petmin’s assets, which are SamQuarz, Springlake Colliery and the Somkhele anthracite project, is estimated to be worth altogether R869m against its market capitalisation of R604,7m based on the placing price.