(Updates with detail)
LONDON, Oct 6 (Reuters) - Lonmin’s lenders have waived some of its debt covenants, allowing the platinum miner to buy the rest of its Pandora joint venture mine, the South African-focused producer said on Friday.
London-listed shares in Lonmin jumped 11 percent to a near four-week high of 82 pence.
The miner, which is also listed in Johannesburg, is battling low platinum prices and operational issues which have forced it to sell assets and restructure its business.
And in May, the company’s auditors flagged that Lonmin was at risk of breaching debt covenants after a $146 million writedown reduced its liquidity.
Lonmin said in statement that the waiver of the net worth covenant runs from Sept. 30 to March 2018 and will allow the miner to extend its Saffy shaft without spending 2.6 billion rand ($190 million).
Lonmin will be able to mine a portion of the loss-making Pandora from the adjacent Saffy shaft.
Lonmin said its banks waived two covenants related to its net worth that were due to be tested at the end of September.
The debt covenant requires the miner’s tangible net worth not to dip below $1.1 billion. Lonmin’s net worth at the end of March was $1.4 billion, it said in May.
As part of the agreement, Lonmin will cancel one of its credit facilities and leave $200 million from its remaining facilities undrawn for the duration of the waiver.
“The Group’s liquidity is expected to be adequate for the Waiver Period...,” Lonmin said.
The company said it expects full-year sales to be slightly above its prior forecast while sticking to its cost and spending targets.
Net cash rose 19 percent to $100 million in the fourth quarter compared to the previous quarter, Lonmin said. ($1 = 13.6888 rand) (Reporting by Radhika Rukmangadhan in Bengaluru and Zandi Shabalala in London; editing by Alexander Smith)