Royal Bafokeng Platinum to raise R1.5bn

Johannesburg - South African mid-tier platinum producer Royal Bafokeng Platinum aims to raise 1.5 billion rand ($139 million) in equity through a bookbuild and rights issue to fund its key Styldrift 1 mine project, the company said on Tuesday.

The announcement comes against the backdrop of a sour investment climate in South African mining, especially platinum, with no end in sight for nearly six weeks of strike action rumbling on against the world's top three producers.

Picture: Boxer Ngwenya. Credit: Independent Newspapers

Production at Styldrift is expected to start in 2015 and will double the group's platinum output to more than 400,000 ounces a year. The project's total cost is about 11 billion rand, of which 2.5 billion rand has been funded to date.

The equity raising unveiled on Tuesday will involve a bookbuild of 600 million rand and a rights issue of 900 million rand.

RB Platinum said the bookbuild is expected to close on Tuesday.

“As soon as practicable following completion of the bookbuild, RBPlat intends to announce the terms of the rights offer,” a company statement said.

Rand Merchant Bank, a division of FirstRand Bank, and Morgan Stanley are acting as joint bookrunners for the bookbuild.

RB Platinum announced earlier on Tuesday that 2013 headline earnings per share had risen 66 percent to 173 cents, helped by a weaker rand and cost-saving initiatives. - Reuters