Sibanye-Stillwater today, 16 July 2018, secured a $500 million upfront cash payment for an amount of gold and palladium equal to a fixed percentage of production through a streaming agreement with the Canada-based pure precious metals streaming company, Wheaton Precious Metals International.
According to the agreement, Sibanye-Stillwater committed to deliver a percentage of gold and palladium produced from its United States platinum group metals operations comprising its East Boulder and Stillwater mining operations.
Wheaton International will receive an amount of gold equal to 100 percent of the Stillwater gold production for the life of mine and an amount of palladium equal to 4.5 percent of Stillwater palladium production, decreasing to 2.25 percent and then one percent based on defined delivery thresholds, for the life of mine.
Neal Froneman, Sibanye-Stillwater Chief Executive Officer, says the streaming transaction was further delivery on the group’s strategic commitments and validates the value it had identified in the Stillwater assets in Montana, US.
“Importantly the transaction results in a significant reduction in group leverage, improving flexibility and reducing financing costs and risk. We are extremely pleased to have secured this competitively priced financing arrangement with a company of the quality of Wheaton International,” says Froneman.
Randy Smallwood, Wheaton’s president and chief executive said they were attracted by the quality and size of the reef deposit, coupled with the ongoing expansion at the Stillwater blitz project.
“With a mine life extending well into the foreseeable future, we believe Stillwater will be one of Wheaton’s foundational assets for many years to come. Finally, the acquisition will be funded through our current revolving credit facility, which we are comfortable utilizing given our industry leading cash flow,” says Smallwood.