PTM secures agreements towards paying off debt
TSX- and NYSE-listed Platinum Group Metals (PTM) has entered into an agreement with BMO Capital Markets whereby BMO agreed to buy 8.3-million common shares of PTM at a price of $1.25 apiece, amounting to about $10.4-million.
PTM granted BMO the option to buy additional common shares equal to up to 15% of the aggregate number of offered shares to be sold in a public offering on the same terms and conditions.
The public offering is expected to close on or about August 21.
Meanwhile, PTM also entered into a series of agreements through which, together with the proceeds from the public offering, it expects to repay its secured loan facility with Liberty Metals and Mining Holdings (LMM) in full.
These agreements include a new credit agreement with Sprott Private Resource Lending II; a subscription agreement with Deepkloof Limited – a subsidiary of Hosken Consolidated Investments – with respect to a private placement of common shares of the company; a payout agreement with LMM; and subscription agreement with LMM with respect to a private placement of common shares of the company.
PTM CEO R Michael Jones said the company was pleased by the support from Hosken and LMM as shareholders.
When closed, the transaction will significantly reduce and defer secured debt, as the company continues work on developing its Waterberg platinum/palladium project, in South Africa.
DEALS IN DETAIL
The new credit facility is a $20-million principal amount senior secured credit facility. The maturity date of the facility will be 24 months from the date of the first advance under the facility.
Under the new credit facility, Sprott will have a first priority lien on the issued shares of PTM and the Waterberg project.
The company will issue Sprott with 800 000 common shares of the company.
The Deepkloof subscription agreement involves the sale of 6.9-million common shares of the company at a price of $1.32 apiece, for aggregate gross proceeds of $9.1-million.
The payout agreement and subscription agreement with LMM entails PTM selling 7.5-million of its shares at $1.32 apiece, for aggregate gross proceeds of $10-million.
The proceeds raised pursuant to the LMM private placement must be used to repay outstanding debt under the LMM facility.
Under the payout agreement, after applying the proceeds from the LMM private placement against the debt, the company will repay the remaining balance of the debt under the LMM facility in full, pursuant to the terms of the payout agreement, by paying LMM $33-million by August 31.
PTM expects to repay the LMM facility in full using the proceeds of the public offering, the private placements and the advance under the new credit facility.
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