Jubilee Platinum's all-share offer for Braemore Resources is another indicator of the tough landscape currently facing platinum miners, a new report in Business Day claimed yesterday (6th July).

Platinum prices have dropped markedly during the global financial crisis, while the rand has strengthened against the dollar, thus creating difficulties for companies looking to raise capital.

The Jubilee offer, which values Braemore at about £25.96 million, includes a R7 million commitment to cover the company's expenses and R25 million to settle its liabilities.

Shares in Braemore plunged by over 30 per cent on the Johannesburg Stock Exchange on Friday after it was revealed that Jubilee is putting forward one of its shares for every 15,818 in Braemore.

However, David Russell, Corporate Development Executive at Braemore, told the news provider that the drop represented a "knee-jerk reaction from investors taking a short-term view of the ratio of shares".

He also explained that the offer has a number of positives for his firm, which is attempting to secure platinum deposits in order to compliment its mine-to-metals strategy.

Furthermore, Braemore's Directors - who are already overseeing the upgrade of its test plant in Randburg, including processing Jubilee concentrate from tailings - have recommended that the offer is accepted.

Jubilee is currently producing a bankable feasibility study on the potential creation of a mine at its Tjate project that could generate about 330,000 oz pgm annually over a 20-year period.

Source:

Braemore shares plunge after offer (06/07/09)

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