LONDON – South Africa-focused platinum producer Lonmin (LMI.L) is pulling every lever to try to restore confidence in its ailing business, including reopening a major shaft and expanding its biggest operation, its chief executive said.
Lonmin, one of the world’s top platinum producers, has been in the doldrums for years due to low prices and soaring costs, leading the company to tap investors for cash three times in the last eight years.
Analysts have said Lonmin will probably come to the market soon for more cash as its liquidity shrank, bringing it closer to breaching debt covenants following a $146 million (£113.26 million) writedown in May. As of end-March, Lonmin had net cash of $75 million, down 34 percent from a year ago.
“At this stage, our cash is better than post-rights issue 2015 and our liquidity is sufficient,” Chief Executive Ben Magara told Reuters in a telephone interview on Wednesday.
“We are managing to fund from our own funds consistently.” In an interview earlier this month, Lonmin’s chief financial officer said a rights issue was not on the cards.
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