A syndicate of underwriters led by BMO Capital Markets has signed an agreement to purchase 22.23 million common shares of Platinum Group Metals at $1.80 per common share for gross proceeds of $40m.
Platinum Group has given underwriters an option to exercise the offering price for a period of 30 days after closure of the deal to buy up to an additional 15% of shares to cover over-allotments.
Expected to close around 1 November, the offering is subject to customary closing conditions that include Toronto Stock Exchange and NYSE MKT approvals.
Net proceeds of the offering will be used for underground development and production ramp-up of the Project 1 Maseve Platinum Mine, and as working capital during the start-up. In addition, proceeds will be used to repay some of the $5m second advance received by the Platinum Group under the amended and restated credit agreement on 11 October, as well as for general corporate purposes.
The offering follows an effective shelf registration statement earlier filed with the US Securities and Exchange Commission and a corresponding Canadian base shelf prospectus filed with the securities regulatory authority in the provinces of Canada, with the exception of Quebec.
With offices in Johannesburg, South Africa, and Vancouver, Canada, Platinum Group is currently focused on operation of the Project 1 Maseve platinum mine, as well as exploration and feasibility engineering on the newly discovered Waterberg platinum deposit, where it is operator with JOGMEC and Mnombo.
Image: Platinum crystals. Photo: courtesy of Periodictableru/ Wikipedia.