Pan African’s R703m rights offer completed
JOHANNESBURG (miningweekly.com) – JSE- and Aim-listed Pan African said on Monday that its successful R703-million rights offer had enabled the company to “comfortably” acquire Harmony’s R1.5-billion Evander gold mine, in Mpumalanga.
The company issued over 370-million shares at R1.90 each, but reported receiving subscription applications for 645.8-million rights shares – amounting to 175% of the available shares – by closure of the offer on Friday.
“The overwhelming support of the rights offer by investors indicates a strong message of confidence for the Evander acquisition and Pan African’s longer-term strategy,” commented CEO Jan Nelson.
The company had raised sufficient equity funding, which, combined with the group’s strong cash generation from operations and secured revolving line of credit, would allow Pan African to “comfortably fund” the acquisition.
The acquisition of Evander mine was expected to increase Pan African’s gold production to 200 000 oz/y. The Evander operations also recorded a production profit of R638-million for the year ended June 2012, a jump from the R183-million recorded in the previous year.
“We intend to extract maximum benefit from Evander, while eliminating our historical single asset risk by diversifying the company’s risk across two profitable assets,” he added.
The group currently owned the Barberton gold mining operations, in Mpumalanga, which comprised three mines, as well as the near-term Phoenix platinum project, in the North West province, and the potential Manica gold project, in Mozambique.
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