RBPlat unveils R1bn rights issue to fund Styldrift growth
Royal Bafokeng Platinum is raising up to R1bn in a rights issue to fund future growth ambitions at its the new mine, which has already cost R11.8bn
Royal Bafokeng Platinum (RBPlat) launched a R1bn rights issue as it reported a profit in 2018 in what was a busy year of consolidating its ownership of mines and adding an important concentrator to process ore from its new R11.8bn Styldrift mine.
RBPlat has irrevocable support for the issue of shares at R22 each — a 33% discount to Monday’s closing price — from its largest investors to the value of R769m, representing just shy of 75% of its shares.
The 46.8-million new shares will be on offer from March 18 and will close on March 29. The money raised will be used to lift Styldrift’s production to 230,000 tons a month from 150,000 tons and to upgrade the newly acquired Maseve concentrator, the company said.
RBPlat reported a post-tax profit of R256m for the 12 months to end-December compared with a R657m loss before. Revenue for the year was 4% higher at R3.6bn.
There was a near 10% increase in the selling price of the basket of metals RBPlat produced, with the rand price increasing to R21,006/oz, driven by improvements in palladium and rhodium prices.
Palladium and rhodium sales made up 36% of revenue, and platinum made up 46%. The price of platinum remained subdued in an oversupplied market.
RBPlat increased production of the four key platinum group metals (PGMs) of platinum, palladium, rhodium and gold in concentrate by 12% to 368,000oz, while platinum in concentrate was 13% higher at 239,000oz.
Despite a sharp increase in visits to the mines by the department of mineral resources, to enforce safety compliance, the number of inspectorate-ordered stoppages decreased and there was a loss of 6,700oz of the four PGMs, an 18% reduction compared with 2017.
RBPlat, headed by CEO Steve Phiri, has been one of the most outspoken companies when it comes to unjustified safety stoppages, and the fiercest critic of former mineral resources minister Mosebenzi Zwane.
RBPlat predicted it would produce between 450,000oz and 480,000oz of the four metals in concentrate during 2019.
Towards the end of the year, the Styldrift mine reached the production target of 150,000 tons a month in October and RBPlat intends to lift production to 230,000 tons a month, using the Maseve concentrator it bought from Canadian mining company Platinum Group Metals.
Styldrift’s financial contribution would be reflected in operating profit from the start of January 2019, RBPlat said.
The on-reef development to build underground infrastructure at Styldrift has generated R2.4bn in revenue so far, with R1.4bn of that realised in 2018.
RBPlat commissioned the Maseve concentrator in August. The concentrator at the Bafokeng Rasimone Platinum Mine (BRPM) is fully used.
Maseve’s concentrator has 110,000 tons a month of capacity and RBPlat will increase this in line with its plans to raise mining output at Styldrift, a mine to the south of the Pilanesberg nature reserve.
RBPlat bought Anglo American Platinum’s 33% stake in the BRPM joint venture, using cash, debt and equity. The purchase cost of R2.18bn entailed RBPlat increasing its debt facilities to R3bn from R2bn.
RBPlat bought the Maseve concentrator for R691m. It bought the entire Maseve company and its resources and mining assets for R167m, a fraction of what had been spent on the infrastructure.
Looking ahead, RBPlat warned of potential disruptions coming from wage talks with the National Union of Mineworkers (NUM) to replace an expired five-year wage deal, regional leadership elections within the union as well as the national elections.