Sibanye-Stillwater bags $500m deal with Franco-Nevada
SIBANYE-Stillwater will receive a welcome upfront injection of $500m (R8.8bn) from a gold and platinum streaming deal entered into with Franco Nevada which will place it in a “secure and sustainable financial position”, it said on Thursday.While Sibanye remains well within its bank covenants, the level of debt on the group’s balance sheet has raised some investor concerns because of the sustained period of PGM price weakness. At interim stage the group held R18.7bn of net debt and its net debt: adjusted EBITDA ratio was 1.43 times. In the past six months it has entered into various transactions to inject fresh capital.In return for the upfront capital injection from Franco Nevada, Sibanye-Stillwater has committed to deliver a defined volume of the gold production from its Marikana, Kroondal and Rustenburg operations in South Africa. Gold is a relatively minor element in the basket of platinum group metals (PGMs) it mines at these sites. It will also sell 294,000oz of platinum mined from these operations over the next 25 years to Franco Nevada, which also represents a very small proportion of expected platinum production over this period. There are no minimum delivery obligations. When delivery is made, Sibanye will receive a small percentage of the spot price of gold and platinum.It has also agreed to convert the 5% net profit interest that Franco Nevada holds in the Pandora property to a 1% net smelter return royalty.Sibanye CEO Neal Froneman said the advantage of the arrangement was that it raised non-debt capital for Sibanye, which retains significant leverage to higher PGM prices. The deal reduces Sibanye’s net debt: adjusted EBITDA by between 0.7 and 0.6 times, on a pro forma basis.In August Sibanye agreed to receive prepayment of R1.8bn in exchange for making 1,497kg of gold deliveries between October 2024 and November 2026. It said it would use the funds to partially repay its rand revolving credit facility. Earlier this month it raised R250m in cash and R250m in shares by selling its interests in the Beatrix No 4 shaft and Beisa project to Neo Energy, giving it a 40% stake in Neo.The post Sibanye-Stillwater bags $500m gold deal with Franco-Nevada appeared first on Miningmx.Weiter zum vollständigen Artikel bei Mining.com
Quelle: Mining.com
