Sibanye-Stillwater sits out capital raise on copper project

SIBANYE-Stillwater gave further evidence of its domestic priorities, opting not to take up shares in Generation Mining, a Canadian firm developing a copper and platinum group metals project in Ontario.

The Johannesburg-headquartered group’s stake in Generation Mining was diluted to 4.7% from 10.15% after C$240m worth of shares in the exploration firm were issued through a bought deal and private placing totalling 750 million shares.

Sibanye-Stillwater’s decision not to participate is no great surprise: in 2021 it declined to exercise a back-in right to take a 51% stake in Generation Mining. It had bought an initial foothold in the company in 2019 for C$2.9m.

Generation Mining hopes to develop the C$991m Marathon copper and palladium project in northwest Ontario. The project is backed by the Canada Growth Fund and the Canada Infrastructure Bank, while Wheaton Precious Metals has provided streaming finance.

Richard Stewart, CEO of Sibanye-Stillwater, announced earlier this year that the company was investing about R20bn in a fleet of life-extension and growth projects at its South African PGM mines. The projects aim to address a 500,000 oz/year production decline by 2030. If the expansion projects go ahead, output will be 300,000 oz/year higher by 2030, at some 1.5 million oz/year

“We can also go up to 1.8 million oz/year if the markets support it,” Stewart said at a Capital Markets Day in June. “That is the optionality we have and why I say what I do about our portfolio.”

These events come amid a continuing strike at the Nye section of Sibanye-Stillwater’s Stillwater palladium-platinum mine in Montana. The dispute is over a remuneration and benefits plan affecting workers’ healthcare and incentive packages. There have been no formal negotiations between about 400 miners at the Nye section and Sibanye-Stillwater management since September 17, according to local reports.

The impasse throws the continued operation of the 284,000 oz/year Stillwater mine into doubt. Commenting on the proposed new plan, Stewart said on September 2, when the strike began: “If that plan cannot be implemented and the operations remain unsustainable, there may ultimately be no viable basis for the continued operation.”

The proposed changes form part of a wider mechanisation and productivity programme at Stillwater aimed at cutting all-in sustaining costs from about $1,500 per two-element ounce to around $1,000/oz over two to three years.

The US PGM operations produced 137,930 oz in the six months to end-June. Stillwater East contributed 76,334 oz, or about 55%, and East Boulder 61,595 oz. Overall, however, Stillwater is loss-making.

The post Sibanye-Stillwater sits out capital raise on copper project appeared first on Miningmx.