Wrap Text
Sibanye-Stillwater secures US$500m (R8.8bn) streaming agreement with Franco-Nevada
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 the "Group" or the "Company")
Website: www.sibanyestillwater.com
Sibanye-Stillwater secures US$500m (R8.8bn) streaming agreement with Franco-Nevada
Johannesburg, 19 December 2024: Sibanye-Stillwater (JSE: SSW and NYSE: SBSW) is
pleased to announce that it has entered into a US$500 million streaming agreement
with Franco-Nevada (Barbados) Corporation, a wholly-owned subsidiary of Franco-Nevada
Corporation (Franco-Nevada) (the Stream agreement) in exchange for the sale of gold
and platinum streams (Stream) with reference to its Marikana, Kroondal, and Rustenburg
operations (the Stream Area).
Key terms of the Stream agreement
Sibanye-Stillwater will receive a US$500 million upfront payment (Advance Amount) in
exchange for:
• Gold Stream: gold ounces (oz) equal to 1.1% of 4E PGM oz contained in concentrate
until delivery of 87,500 oz of gold, then 0.75% of 4E PGM oz contained in concentrate
until total delivery of 237,000 oz of gold, then 80% of gold contained in concentrate
for the remaining life of mine (LOM)
- Sibanye-Stillwater will receive a production payment price equal to 5% per ounce
of the spot gold price on the date of delivery until total delivery of 237,000
oz of gold, which will increase to 10% of the spot gold price thereafter
• Platinum Stream: platinum oz equal to 1.0% of platinum contained in concentrate
until delivery of 48,000 oz of platinum, then 2.1% of platinum contained in
concentrate until total delivery of 294,000 oz of platinum, then no further
deliveries
- Sibanye-Stillwater will receive a production payment price equal to 5% of the
spot platinum price on the date of delivery
• The transaction is subject to approval from the South African Reserve Bank
• In addition, Franco-Nevada and Sibanye-Stillwater have agreed to convert the 5% net
profit interest that Franco-Nevada holds on the Pandora property to a 1% net smelter
return royalty
Streaming agreement highlights
Neal Froneman, CEO of Sibanye-Stillwater, commented: "We are pleased to have
successfully concluded this value accretive transaction in partnership with Franco-
Nevada. We have raised US$500m (R8.8bn) of non-debt capital by primarily streaming
gold, a minor component of the basket of metals produced from our SA PGM operations
and a marginal and finite amount of platinum, which retains significant leverage to
higher PGM prices, which we anticipate. The Group's financial position has been
reinforced at a competitive cost of capital. The financial support from Franco-Nevada
further validates the quality and long-term viability of our PGM assets, which
continue to generate superior shared value for our stakeholders and we expect will
continue for decades in the future. We welcome this opportunity to continue to build
our relationship with Franco-Nevada."
Crystalising further value and retaining upside leverage
The Stream monetises the future value of gold produced from the Stream Area. Gold is
a small component of the total basket of metals produced from the Stream Area. The
platinum stream concludes after 294,000 oz of platinum have been delivered
(approximately 25 years) and represents a marginal amount of total annual platinum
production from the Stream Area, which retains significant leverage to higher PGM
prices. Sibanye-Stillwater also has the option to substitute gold deliveries for
platinum deliveries under the Stream Agreement, in certain circumstances.
Improved capital structure and balance sheet
The US$500 million Advance Amount, further enhances the Group capital structure,
improves Balance sheet headroom and liquidity and reduces Net debt:adjusted EBITDA1,
2
by between 0.70x and 0.60x3 placing the Group in a secure and sustainable financial
position.
1 The Group reports adjusted earnings before interest, taxes, depreciation and amortisation
(EBITDA) based on the formula included in the facility agreements for compliance with the
debt covenant formula. Adjusted EBITDA may not be comparable to similarly titled measures
of other companies. Adjusted EBITDA is not a measure of performance under IFRS and should
be considered in addition to and not as a substitute for any other measure of financial
performance and liquidity. For a reconciliation of profit/(loss) before royalties and tax
to adjusted EBITDA, see "Adjusted EBITDA reconciliation - Quarters" as disclosed in results
booklets from the Group, available at https://www.sibanyestillwater.com/news-
investors/reports/quarterly/2024/
2 Certain information contained in this announcement, including EBITDA and adjusted EBITDA,
is considered pro forma financial information under the JSE Listing Requirements. This pro-
forma financial information is the responsibility of the Group's Board of Directors and is
presented for illustration purposes only. Any pro forma financial information has not been
reviewed or reported on by the Company's external auditors.
3 Based on an exchange rate of between R/US$17.09 and R18.08
Competitive non-debt financing
The Stream provides long-term, non-debt capital for Sibanye-Stillwater, at an
attractive cost of capital. No repayment of the Advance Amount is required and there
are no minimum delivery obligations.
Stream Area
The Stream Agreement will apply to any production that may arise from the Marikana,
Kroondal, and Rustenburg operations, including the development of underground growth
or replacement projects within the Stream Area. These operations have extensive
underground resources, which offer potential for the development of low capital cost,
brownfields, and replacement projects. These projects, in various stages of pre-
feasibility and feasibility studies, offer the potential to maintain higher levels
of sustained production and meaningfully extend the life of such operations.
The chart (available within the announcement on the website at
https://www.sibanyestillwater.com/transactions/franco-nevada-streaming-agreement)
illustrates the potential proforma production profile for the assets within the Stream
Area, considering the Board-approved ore reserve life of mine (LOM) at 31 December
2023 and highlighting projects currently subject to feasibility studies (including
the Kroondal depth extension projects, E3, E4, and Saffy projects) on the assumption
these projects are developed. The development and timing of these replacement projects
are subject to achieving positive commercial and economic outcomes from the
feasibility studies underway. Further information regarding these replacement
projects will be shared with the market following the completion of the feasibility
studies.
Chart removed to enable filing on SENS format, but available at:
https://www.sibanyestillwater.com/transactions/franco-nevada-streaming-agreement
Footnotes of the chart: Production profiles of the first three data sets (in blue shade) are
based on Mineral reserves declared as at 31 December 2023 on a 100% basis and exclude existing
tailings reprocessing. Projects included represent E4, E3 deepening, Saffy Deeps and
Siphumelele UG2. Price assumptions to support the attached profile are US$923/oz pt,
US$1,055/oz pd, US$4,350/oz rh US$1,925/oz gold. The approved total Mineral reserve LOM 4E
prill split has been disclosed in the Reserve and resources supplement available at
https://www.sibanyestillwater.com/news-investors/reports/annual/2023/.
Section 45(5)
Notice is hereby given that, in terms of the provisions of Section 45(5) of the
Companies Act, 71 of 2008 (the "Companies Act"), and pursuant to the special
resolution passed at the annual general meeting of the Company held on 28 May 2024,
the board of directors of the Company (the "Board") has adopted a resolution to
guarantee obligations of members of the Group under the Stream Agreement, which
guarantee constitutes the giving of direct and/or indirect financial assistance to
related and inter-related companies and corporations of the Company in terms of the
provisions of Section 45 of the Companies Act (the "Financial Assistance").
Shareholders are notified for purposes of section 45(5)(a) of the Companies Act that
the Financial Assistance exceeds one-tenth of 1% of the Company's net worth.
Having considered all reasonable financial circumstances of the Company in terms of
and pursuant to the provisions of Section 45, as read with Section 4 of the Companies
Act, the Board is satisfied that:
• immediately after providing the Financial Assistance referred to above, the Company
would satisfy the solvency and liquidity test contemplated in Section 4 of the
Companies Act;
• all relevant conditions and restrictions relating to the granting of the Financial
Assistance by the Company contained in the Company's memorandum of incorporation
are satisfied; and
• the terms and conditions on which the Financial Assistance is to be given are fair
and reasonable to the Company
About Sibanye-Stillwater
Sibanye-Stillwater is a multinational mining and metals processing group with a diverse
portfolio of operations, projects and investments across five continents. The Group is also
one of the foremost global recyclers of PGM autocatalysts and has interests in leading mine
tailings retreatment operations.
Sibanye-Stillwater is one of the world's largest primary producers of platinum, palladium,
and rhodium and is a top tier gold producer. It also produces and refines iridium and
ruthenium, nickel, chrome, copper and cobalt. The Group has recently begun to diversify its
asset portfolio into battery metals mining and processing and increase its presence in the
circular economy by growing its recycling and tailings reprocessing exposure globally. For
more information refer to www.sibanyestillwater.com.
Investor relations contact:
Email: ir@sibanyestillwater.com
James Wellsted
Executive Vice President: Investor Relations and Corporate Affairs
Tel: +27 (0) 83 453 4014
Website: www.sibanyestillwater.com
LinkedIn: https://www.linkedin.com/company/sibanye-stillwater
Facebook: https://www.facebook.com/SibanyeStillwater
YouTube: https://www.youtube.com/@sibanyestillwater/videos
X: https://twitter.com/SIBSTILL
Sponsor: J.P. Morgan Equities South Africa Proprietary Limited
Advisors
RBC Capital Markets is acting as financial advisor to Sibanye-Stillwater. McCarthy Tétrault
LLP is acting as legal advisor to Sibanye-Stillwater.
FORWARD LOOKING STATEMENTS
This announcement contains forward-looking statements within the meaning of the "safe harbour" provisions of the
United States Private Securities Litigation Reform Act of 1995. All statements other than statements of historical
fact included in this announcement may be forward-looking statements. Forward-looking statements may be identified
by the use of words such as "will", "would", "expect", "forecast", "potential", "may", "could", "believe", "aim",
"anticipate", "target", "estimate" and words of similar meaning.
These forward-looking statements are necessarily estimates reflecting the best judgement of Sibanye Stillwater
Limited's ("Sibanye-Stillwater") senior management. Readers are cautioned not to place undue reliance on such
statements.
Forward-looking statements involve a number of known and unknown risks, uncertainties and other factors, many of
which are difficult to predict and generally beyond the control of Sibanye-Stillwater that could cause its actual
results and outcomes to be materially different from historical results or from any future results expressed or
implied by such forward-looking statements. As a consequence, these forward-looking statements should be considered
in light of various important factors, including those set forth in Sibanye-Stillwater's 2023 Integrated Report and
annual report on Form 20-F filed with the United States Securities and Exchange Commission on 26 April 2024 (SEC
File no. 333-234096). These forward-looking statements speak only as of the date of this announcement. Sibanye-
Stillwater expressly disclaims any obligation or undertaking to update or revise any forward-looking statement
(except to the extent legally required).
Any forward-looking statement contained in this announcement has not been reviewed and reported on by Sibanye-
Stillwater's external auditors.
Sibanye-Stillwater Mineral Resources and Mineral Reserves
Sibanye-Stillwater's Mineral Resources and Mineral Reserves are estimates at a particular date (as at 31 December
2023), and are affected by fluctuations in mineral prices, the exchange rates, operating costs, mining permits,
changes in legislation and operating factors. Sibanye-Stillwater reports its Mineral Resources and Mineral Reserves
in accordance with the rules and regulations promulgated by each of the United States Securities and Exchange
Commission (SEC) and the JSE at all managed operations, development, and exploration properties.
Websites
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location and such information is not incorporated in, and does not form part of, this document.
Date: 19-12-2024 08:00:00
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