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Sibanye-Stillwater to assume full ownership of Kroondal, doubling its life of mine
Sibanye Stillwater Limited
Incorporated in the Republic of South Africa
Registration number 2014/243852/06
Share codes: SSW (JSE) and SBSW (NYSE)
ISIN – ZAE000259701
Issuer code: SSW
(“Sibanye-Stillwater” or “Company” or “the Group”)
Website: www.sibanyestillwater.com
Sibanye-Stillwater to assume full ownership of Kroondal, doubling its life of mine
Johannesburg, 31 January 2022: Sibanye-Stillwater (JSE: SSW and NYSE: SBSW) is
pleased to announce that it has entered into an agreement with Rustenburg Platinum
Mines Limited (“RPM”) a subsidiary of Anglo American Platinum Limited (“AAP”),
through its subsidiary, Sibanye Rustenburg Platinum Mines Limited (“Rustenburg
operation”), which will result in the Rustenburg operation assuming full ownership
of the low cost, mechanised Kroondal operation. This transaction will facilitate
the life of the Kroondal operation being extended to 2029 and ensure significant
value creation for all stakeholders.
Sibanye-Stillwater currently operates the Kroondal operation, which is located
adjacent to, and up-dip of Sibanye-Stillwater’s Rustenburg operation and the shallow
Klipfontein open pit operation. The Kroondal operation is subject to a 50/50 pool
and share agreement (“Kroondal PSA”) between Kroondal Operations Proprietary Limited
(a 100% held subsidiary of Sibanye-Stillwater) and RPM (“collectively the PSA
Parties”). Sibanye-Stillwater acquired its 50% interest in the Kroondal PSA following
its acquisition of Aquarius Platinum Limited in April 2016.
By the end of 2020 certain shafts at the Kroondal operation had reached the boundaries
of the Kroondal PSA lease area. In order to allow the affected shafts to continue
operating, with effect from January 2021, a contractor mining agreement was agreed
between the PSA Parties and the Rustenburg operation, providing for the mining of
the Rustenburg operation from the Kroondal operation (the “Contractor Agreement”).
The Contractor Agreement permits immediate exploitation of parts of the Rustenburg
operation’s orebody which would otherwise only have been mined from the existing
Rustenburg operation infrastructure sometime in the future, allowing for the early
conversion of a portion of the Rustenburg operation’s mineral resources into reserves
and extending the life of the Kroondal operation.
In addition to the Contractor Agreement, the Rustenburg operation and RPM have
entered into a sale and purchase agreement (“Sale Transaction”) in terms of which
the Rustenburg operation will acquire RPM’s 50% interest and all associated
liabilities in respect of the Kroondal PSA and the Marikana pool and share agreement
(“Marikana PSA”)(which operation was placed on care and maintenance in 2012)
(together “the PSA’s”) for a cash consideration of R1.00 plus the assumption of
RPM’s portion of all associated liabilities, which includes all associated closure
costs and rehabilitation liabilities. The rehabilitation liabilities are currently
calculated at approximately R415 million.
The implementation of the Sale Transaction is subject to the fulfilment of the
following key conditions precedent:
• The delivery of 1,350,000 4E ounces by the Kroondal operation to RPM’s designated
smelters through the mining of both the Kroondal PSA orebody and the Rustenburg
operation’s orebody (together “the Project Area”) and the Klipfontein open pit
operation. The 1,350,000 4E ounces will be delivered in accordance with the terms
of the current Kroondal PSA and the current Kroondal operation purchase of
concentrate (PoC) agreement with RPM. This condition precedent is expected to be
fulfilled early in 2024; and
• Regulatory approvals including Competition Commission approval and Section 11
consent in terms of the Mineral and Petroleum Resources Development Act, 2002 for
the transfer of the mining right, currently held by RPM, to Sibanye-Stillwater’s
Rustenburg operation
On completion of the Sale Transaction, the PSA’s with AAP will be terminated and
Sibanye-Stillwater (through the Rustenburg operation), will be entitled to mine the
remaining PSA ore body and ore from the Rustenburg operation that may be accessed
from the Kroondal operation infrastructure entirely for Sibanye-Stillwater’s
account. The PoC agreement will also fall away on completion of the Sale Transaction,
with all PGM concentrate from the combined operations being subject to the terms of
the current Rustenburg operation’s sale and toll treatment agreement with RPM.
These agreements will more than double the life of the Kroondal operation,
underpinning much needed sustained employment opportunities, and ensuring
significant value creation for all stakeholders through the lower cost and more
efficient extraction of the project area orebody than would have been the case as
two standalone operations.
Sibanye-Stillwater Chief Executive Officer Neal Froneman commented “We welcome this
mutually beneficial transaction which, through the full consolidation of these
operations under a single owner will unlock significant value for all stakeholders
by extending the operating life of the Kroondal operation, which as a standalone
operation, was constrained by the existing PSA agreement. We are unlocking the true
potential of these adjacent mines by utilising the mechanised and low cost Kroondal
operation to mine across the boundary with the Rustenburg operation. This will
accelerate the extraction of more remote parts of the Rustenburg operation orebody,
sustain employment for more than 2,500 people until 2029 and ensure the creation of
significant value for all stakeholders in the region.”
Ends.
Investor relations contact:
Email: ir@sibanyestillwater.com
James Wellsted
Head of Public Relations
Tel: +27 (0) 83 453 4014
Website: www.sibanyestillwater.com
Sponsor: J.P. Morgan Equities South Africa Proprietary Limited
FORWARD LOOKING STATEMENTS
The information in this document may contain forward-looking statements within the
meaning of the “safe harbour” provisions of the United States Private Securities
Litigation Reform Act of 1995. These forward-looking statements, including, among others,
those relating to Sibanye Stillwater Limited’s (“Sibanye-Stillwater” or the “Group”)
financial positions, business strategies, plans and objectives of management for future
operations, are necessarily estimates reflecting the best judgment of the senior
management and directors of Sibanye-Stillwater and involve a number of risks and
uncertainties that could cause actual results to differ materially from those suggested
by the forward-looking statements. As a consequence, these forward-looking statements
should be considered in light of various important factors, including those set forth
in this report.
All statements other than statements of historical facts included in this report may be
forward-looking statements. Forward-looking statements also often use words such as
“will”, “forecast”, “potential”, “estimate”, “expect”, “plan”, “anticipate” and words
of similar meaning. By their nature, forward-looking statements involve risk and
uncertainty because they relate to future events and circumstances and should be
considered in light of various important factors, including those set forth in this
disclaimer. Readers are cautioned not to place undue reliance on such statements.
The important factors that could cause Sibanye-Stillwater’s actual results, performance
or achievements to differ materially from estimates or projections contained in the
forward-looking statements include, without limitation, Sibanye-Stillwater’s future
financial position, plans, strategies, objectives, capital expenditures, projected costs
and anticipated cost savings, financing plans, debt position and ability to reduce debt
leverage; economic, business, political and social conditions in South Africa, Zimbabwe,
the United States and elsewhere; plans and objectives of management for future
operations; Sibanye-Stillwater’s ability to obtain the benefits of any streaming
arrangements or pipeline financing; the ability of Sibanye-Stillwater to comply with
loan and other covenants and restrictions and difficulties in obtaining additional
financing or refinancing; Sibanye-Stillwater’s ability to service its bond instruments;
changes in assumptions underlying Sibanye-Stillwater’s estimation of its current mineral
reserves; any failure of a tailings storage facility; the ability to achieve anticipated
efficiencies and other cost savings in connection with, and the ability to successfully
integrate, past, ongoing and future acquisitions, as well as at existing operations; the
ability of Sibanye-Stillwater to complete any ongoing or future acquisitions; the success
of Sibanye-Stillwater’s business strategy and exploration and development activities;
the ability of Sibanye-Stillwater to comply with requirements that it operate in ways
that provide progressive benefits to affected communities; changes in the market price
of gold and PGMs; the occurrence of hazards associated with underground and surface
mining; any further downgrade of South Africa’s credit rating; a challenge regarding the
title to any of Sibanye-Stillwater’s properties by claimants to land under restitution
and other legislation; Sibanye-Stillwater’s ability to implement its strategy and any
changes thereto; the occurrence of labour disruptions and industrial actions; the
availability, terms and deployment of capital or credit; changes in the imposition of
regulatory costs and relevant government regulations, particularly environmental, tax,
health and safety regulations and new legislation affecting water, mining, mineral rights
and business ownership, including any interpretation thereof which may be subject to
dispute; the outcome and consequence of any potential or pending litigation or regulatory
proceedings or environmental, health or safety issues; the concentration of all final
refining activity and a large portion of Sibanye-Stillwater’s PGM sales from mine
production in the United States with one entity; the identification of a material
weakness in disclosure and internal controls over financial reporting; the effect of US
tax reform legislation on Sibanye-Stillwater and its subsidiaries; the effect of South
African Exchange Control Regulations on Sibanye-Stillwater’s financial flexibility;
operating in new geographies and regulatory environments where Sibanye-Stillwater has
no previous experience; power disruptions, constraints and cost increases; supply chain
shortages and increases in the price of production inputs; the regional concentration
of Sibanye-Stillwater’s operations; fluctuations in exchange rates, currency
devaluations, inflation and other macro-economic monetary policies; the occurrence of
temporary stoppages of mines for safety incidents and unplanned maintenance; Sibanye-
Stillwater’s ability to hire and retain senior management or sufficient technically
skilled employees, as well as its ability to achieve sufficient representation of
historically disadvantaged South Africans in its management positions; failure of
Sibanye-Stillwater’s information technology and communications systems; the adequacy of
Sibanye-Stillwater’s insurance coverage; social unrest, sickness or natural or man-made
disaster at informal settlements in the vicinity of some of Sibanye-Stillwater’s South
African-based operations; and the impact of HIV, tuberculosis and the spread of other
contagious diseases, such as the coronavirus disease (COVID-19). Further details of
potential risks and uncertainties affecting Sibanye-Stillwater are described in Sibanye-
Stillwater’s filings with the Johannesburg Stock Exchange and the United States
Securities and Exchange Commission, including the Integrated Annual Report 2020 and the
Annual Report on Form 20-F for the fiscal year ended 31 December 2020.
These forward-looking statements speak only as of the date of the content. Sibanye-
Stillwater expressly disclaims any obligation or undertaking to update or revise any
forward-looking statement (except to the extent legally required). These forward-looking
statements have not been reviewed or reported on by the Group’s external auditors.
Date: 31-01-2022 08:00:00
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