VANCOUVER (miningweekly.com) – South Africa-focused project developer Platinum Group Resources (PTM) has launched a $40-million bought deal financing to raise cash for underground development and production ramp-up of the Project 1 Maseve platinum mine, debt repayment and general corporate purposes.

A syndicate of underwriters led by BMO Capital Markets have agreed to buy 22.23-million shares of the company at $1.80 apiece, for gross proceeds of $40-million, excluding a 15% overallotment option that could take gross proceeds up to $46-million.

The offering is expected to close on or about November 1, and is subject to customary closing conditions including TSX and NYSE MKT approvals.

PTM said the net proceeds of the offering will be used for underground development and production ramp-up of the Project 1 Maseve mine. The proceeds will also be used for working capital during start-up; repayment of all or a portion of the $5-million second advance received by the company under the amended and restated credit agreement dated October 11, between the company and Sprott Resource Lending Partnership, among other lenders; and for general corporate purposes.

Last month, PTM again lowered its production guidance for the first year of operations at its Maseve mine, citing a delay in ramping up stoping tonnes.

Despite monthly output at Maseve increasing to 1 893 oz of platinum, palladium, rhodium and gold (4E), as well as associated copper and nickel in concentrate, the Vancouver-based company lowered its guidance for concentrate production – on a 100% project basis from April 2016 to April 2017 – from 110 000 oz 4E to 91 500 oz 4E.

According to PTM, the Maseve mine is fully constructed and is in the ramp-up phase of production. Development at Maseve has established about 20 ends where the Merensky reef is exposed and, of these, 18 are currently working ends. Further, recent efforts have been focused on primary access development.