Sibanye-Stillwater has signed a $500m streaming agreement with Franco-Nevada (Barbados), a subsidiary of Franco-Nevada, to monetise future gold and platinum production from its Marikana, Kroondal, and Rustenburg operations in South Africa.
These projects, currently in various stages of feasibility studies, have the potential to extend the operational life of the Marikana, Kroondal, and Rustenburg platinum group metal (PGM) mines.
The agreement provides long-term, non-debt capital and is aimed at strengthening Sibanye-Stillwater’s financial position while supporting ongoing and future mining projects.
Under the terms of the agreement, Sibanye-Stillwater will receive the full upfront payment in exchange for a portion of gold and platinum production from the designated mining areas.
For gold, the terms include the delivery of 1.1% ounces until 87,500 ounces are supplied, reducing to 0.75% until a total of 237,000 ounces is delivered. Following this, 80% of the gold contained in concentrate will be streamed for the remaining life of the mine.
The company will receive a production payment equivalent to 5% of the spot gold price until 237,000 ounces are delivered, increasing to 10% thereafter.
For platinum, the terms require the delivery of 1% of platinum contained in concentrate until 48,000 ounces are supplied, increasing to 2.1% until a total of 294,000 ounces is delivered.
No further deliveries will be required beyond this point, and Sibanye-Stillwater will receive 5% of the spot platinum price for these deliveries.
Franco-Nevada has also agreed to convert its 5% net profit interest on the Pandora property into a 1% net smelter return (NSR) royalty.
The transaction is subject to approval by the South African Reserve Bank.
In August this year, Sibanye-Stillwater secured a €500m green loan financing facility for its Keliber lithium hydroxide project located in Finland. It was executed through its subsidiary Keliber Technology.
The credit facility included a bank financed €250m export credit agency (ECA) guaranteed tranche, a €150m tranche provided by the European Investment Bank (EIB), and a €100m syndicated commercial bank tranche.
