Platmin

Platmin is seeking up to $250m (£160m) to fund its projects in South Africa’s Bushveld.

Based in South Africa and quoted there, on AIM and in Canada, Platmin is raising the money in a private placing handled by RBC and Investec, at a price to be fixed after a ‘marketing period’. The company says it will use the proceeds chiefly to develop its Pilanesberg platinum mine, where it hopes to produce 160,000 oz of platinum group metals and gold this year, with an annual production rate of 250,000 oz targeted by early 2011.

Platmin, where Brian Gilbertson, former boss of mining giant BHP Billiton, replaced entrepreneurial Keith Liddell as chairman in December, says it will also use some of the placing proceeds to buy 10% of the Bakgatia-Ba-Kgafela tribe’s Sedilebo platinum project from Barrick Gold. Gilbertson’s Pallinghurst vehicle is a shareholder in Platmin, which lost $11.1m (£7.2m) last year.

The company, steered by chief executive officer Tom Dale, estimates a capital cost of $424.2m (£275m) for Pilanesberg. With platinum trading at more than $1,600 an ounce, the economics of the project look decidedly robust.

Floated in 2006 at 190p, Platmin shares fell to 42.5p during the past 12 months, but have more recently been rallying. Recommended by Growth Company Investor at 60.5p last May, they have now reached 82.5p, down 0.5p this morning.

Partial profit taking might be prudent, while holding on to a significant chunk for the possibility of worthwhile future gains.