The Platinum Group Metals Corp. (PGMC) is planning to conduct its P10 billion follow on offering in April next year after its backdoor listing on the local bourse through Southeast Asia Cement Holdings Inc. (Seacem).
“Our target is to hold the P10 billion follow on offer by April 1 next year,” Raul Ang, Seacem chairman, told The Manila Times at the sidelines of the firm’s annual stockholders meeting on Wednesday.
Ang said that proceeds from the follow on offer will fund the company’s expansion that includes operations in Surigao, Tawi-Tawi, Palawan and Zambales. A portion of the capital to be raised will be used to build a nickel ore processing plant and a power plant.
“Right now, we’re just exporting nickel ore mostly to China. But we’re exploring to build a nickel processing plant. But if you build that, we will also have to put up our own power supply, with concerns of the incentives and others that come with it. So as of now, we’re still examining it,” said Dante Bravo, PGMC executive vice president and corporate finance secretary.
Bravo also said that the offer shares and stock price for the follow on offering are still under board deliberations.
“Nothing is definite as of the moment, but we’re still in the planning stage,” Ang said.
As of end-August, PGMC booked P3.9 billion in net income and P8 billion in revenues.
Meanwhile, PGMC has mined 5.5 million metric tons (MT) of nickel ore in the first eight months of the year. This is close to the 6.3 million MT target capacity this year, which is 40 percent higher than the 4.5 million MT volume shipments last year.
The company’s nickel ores are exported to China (90 percent) and Australia (10 percent).
Ang said that the company is currently the second largest nickel ore producer in terms of volume, next to Nickel Asia Corp., but it “aims to be the No. 1” in the next few years.
“If we can achieve that in five years, then five years. But for now, we see that our reserves are bigger,” Ang said.
The company has a total of 4,376 hectares of mine reserves in Surigao, of which only 217 hectares were exploited to date.
PGMC President Joseph Sy said that the company expects to grow its production capacity to 7- to 8- million MT next year and 10 million MT in 2016, in line with the company’s expansion plans.
Sy said that the price of nickel ore stood at an average of $44 per MT this year.
Should the price remain at $44 per MT, Sy said the 10 million MT target capacity in 2016 will translate to $440 million total sales (about P19.7 billion) and $240 million net income (about P10.75 billion) on an estimated $200 million operating costs (approximately P8.9 billion).
The backdoor listing of PGMC was done through Seacem’s acquisition of 99 percent stake in PGMC, where PGMC “will become a subsidiary of Seacem” and will change its corporate name to Global Ferronickel Holdings Inc.
The PGMC acquisition was approved by Seacem’s shareholders during its annual stockholders meeting.