JOHANNESBURG (miningweekly.com) – Unremitting challenging economic and operational conditions and continuing capital outlay have resulted in JSE-listed Northam Platinum implementing a restructured R1-billion funding programme to reinforce the group’s medium-term financial position.

The programme, initiated after an extensive review, comprises a R600-million equity capital raising through a fully subscribed renounceable claw back offer of 15-million shares at R40 a share and a new R400-million medium-term revolving credit facility (RCF) that will expire on March 31, 2015.

Northam had reassessed the company’s capital and funding requirements and existing funding arrangements with a view to strengthen the balance sheet and medium-term funding capacity, while limiting key short- to medium-term potential borrowing risks and exposure.

The group also revised certain key terms, including a special covenant holiday and other amendments, of its current R1-billion RCF, which had been fully drawn down.

Besides depressed platinum-group-metal basket prices, volatile exchange rates, rising costs and a complex industrial relations environment, Northam had been weighed down by excess capital costs at both the Zondereinde and Booysendal mines.

The platinum miner had committed R350-million in capital expenditure (capex) for Zondereinde’s development and maintenance, as well as R55-million for activities related to the smelter rebuild.

Further, a three-week strike at the mine during April had caused the loss of R192-million in revenue.

Northam would also need to inject the R530-million balance of its capex programme during 2014 to ensure the completion of the Booysendal mine.

Earnings and cash flow from the mine, which would be ramped up to design capacity of 150 000 t/m during the next two financial years, were expected to be negative during the current financial year.

The company, however, remained confident that the new funding programme would adequately tackle specific short- to medium-term capital and funding requirements.