Portfolio company
Platmin |  |
|---|
Company website | www.platmin.com |
Business sector | Other |
Country of operation | South Africa |
Market | Africa |
Investment status | Current portfolio |
Investment type | Growth capital |
Date of original investment | 2003 |
Office | Johannesburg, South Africa |
Background
Platmin is an early-stage platinum group materials exploration company listed on the Toronto and AIM exchanges. Platmin is exploring four sites on the Bushveld Complex in South Africa, which, estimated to contain around 90 per cent of the world's platinum resources, is the world's largest platinum-producing area. The company has ambitions to become a major producer of platinum.Founded in 1999 by geologist David Twist and lawyer Rudolph de Bruin, Platmin acquired several promising sites and added to these through patiently pegging and acquiring further tenements. When Actis initially invested in October 2003, the company had a small stake in one strategic asset, M'phatlele, and in three other projects at Grootboom, Loskop and Pilanesberg. By listing in August 2006, Platmin had a second strategic asset in Pilanesberg, had increased its stake in M'phatlele from 9 to 70 per cent and lifted its platinum group metal resource base from 4.2 to 16.7 million ounces.
Platmin is now in an excellent position to become a major platinum producer. A trial open pit operation at Pilanesberg has demonstrated that the ore is straight forward to mine and treatable by conventional processing methods. If the projects continue to develop to plan, Platmin could potentially be producing 500,000 ounces per year of platinum group metals, sufficient to build an independent concentrator and smelter. Its position on the Bushveld Complex also allows it further scope to acquire additional sites, providing the opportunity to increase value through economies of scale.
Their needs
When Actis first met Platmin management, it was considering a listing within a six month timeframe. The company was seeking to raise capital to increase its exploration activities and to make the transition from explorer to developer. Platmin were aware that this transformation would require expanding the management team.Our solution
As an experienced investor in the minerals sector, Actis could see Platmin's potential. Actis initially invested US$5m as part of a US$12m 2003 fund-raising for exploration. It was particularly attracted by the prospect of Platmin being able to increase its shareholding in the M'phatlele site. Having anticipated the need for additional capital, when the opportunity arose in 2004, Actis provided a further US$10m to help Platmin buy out Ashanti's 40 per cent stake in the M'phatlele asset.When Platmin's anticipated float was delayed, Actis was able to be a supportive investor. Actis provided a further US$5.25m of follow-on capital to Platmin in October 2005 via the exercise of waarants and through a rights issue in early 2006. Following listing in August 2006, Actis had committed US$35.20 million to Platmin as a 28 percent shareholder.
Actis's added value
With decades of investment experience, Actis was able to help Platmin management even before the firm invested in the company. They were looking for a broker in both London and Toronto; Actis was able to introduce and advise on the most suitable options.Shortly after making the initial investment, Actis appointed the former CEO of Northam Platinum Ian Watson, as a non-executive director of the company. The founders of the business seeing the value add of this new appointment, moved Watson to the position of CEO. With Twist and De Bruin cashing out - a transaction funded by Actis - through their industry network Actis brought in a very strong replacement team lead by Keith Liddell, former CEO of Aquarius Platinum.
Prior to Platmin listing on the Toronto and AIM exchanges, the planned flotation had been delayed for several months by a takeover bid and subsequent shareholder dispute. Actis was able to work with management and shareholders to ensure that Platmin could float successfully. Actis's presence on the share register at listing agave some of the larger London-based resource funds the confidence to invest.
Since investing in Platmin, the company's resource base has more than tripled and the company is well on its way to making the transition from explorer to producer.