PLATINUM Group Metals (PTM), the Toronto- and New York-listed exploration company, announced a share consolidation in which issued and outstanding common shares would be reduced to about 29.1 million shares from 291.3 million previously.
Share consolidations are generally aimed at increasing the value of each share in order to attract fresh interest from investors mandated to only invest in a share of a certain value. But they are also done to meet the minimum trading bid size to ensure its listing status on a certain stock exchange.
The company said earlier this year that it was not in compliance with the NYSE listing rules owing to the decline in the value of its share price. Shares in PTM fell to about nine US cents/share in June and hovered around 10c/share from 35c/share at the beginning of the year. They have since recovered to 16c/share.
Platinum companies across the spectrum have been knocked heavily over the last five years following a decline in the dollar price of platinum (although palladium and rhodium prices are strongly higher this year). The impact on PTM was that it didn’t have the price floor to support its Maseve asset after years of development, since sold.
The company is now developing the palladium-rich Waterberg Joint Venture in which Impala Platinum has shares and an option to take control. An investment decision is due in 2019.
