HomeBase MetalsSibanye-Stillwater to acquire the Santa Rita and Serrote mines

Sibanye-Stillwater to acquire the Santa Rita and Serrote mines

Sibanye-Stillwater has announced that it has signed definitive purchase and sale agreements with affiliates of funds advised by Appian Capital Advisory to purchase 100% of both the Santa Rita nickel mine and the Serrote copper mine, located in Brazil, for a cash consideration of US$1 billion and a 5.0% net smelter return (NSR) royalty over potential future underground production at Santa Rita.

Commenting on the Transaction, Neal Froneman, CEO of Sibanye-Stillwater said:

“The Transaction is a significant additional step in Sibanye-Stillwater’s ongoing strategy to position the business for continued value creation during our transition into a climate change resilient business, and follows and complements the Keliber, Sandouville and Rhyolite Ridge transactions announced earlier this year.

“The Transaction represents a unique opportunity for Sibanye-Stillwater to acquire significantly pre-developed and pre-capitalised, low-cost, producing nickel and copper assets with strong ESG credentials, which will continue to be managed by a high-quality team with a wealth of operating experience in Brazil.”

Santa Rita

Santa Rita is a top ten global producing nickel sulphide mine in the world. The operation is a conventional open pit nickel operation with a 7 year open pit operating life with significant potential to access underground resources, extending the mine life by a further 27 years.

Following the restart of the mine in 2019, the current management team has undertaken a number of operational improvements, and as a result Santa Rita is now generating strong free cash flow.

Salient features of Santa Rita are:

  • Open pit operation mined with conventional equipment over a 7 year mine life, with average annual production of 16 kt per annum nickel equivalent
  • The existing processing plant which has a capacity of 6.5 Mtpa consists of crushing, grinding, floatation, thickening and filtration producing a saleable nickel concentrate, with 13.50% Ni, 4.57% Cu, 0.25% Co and 1.17g/t Au
  • Floatation tailings are pumped to a tailings storage facility constructed via downstream raises
  • Life of mine by-product C13 operating costs are estimated to average US$1.97/lb nickel
  • Mineral reserves of 43.3 Mt at an average grade of 0.31% nickel, 0.11% copper and 0.01% cobalt, containing approximately 134 kt of nickel, 49 kt of copper and 5 kt of cobalt
  • Mineral resources of 255.1 Mt at an average grade of 0.54% nickel, 0.17% copper and 0.01% cobalt, containing approximately 1,383 kt of nickel, 446 kt of copper and 25 kt of cobalt

Serrote

Serrote is an advanced and pre-developed open pit copper mine with a current reserve life of 13 years and significant resource and optimization potential. The mine is currently in a ramp up phase of approximately 18 months and is on track to achieve commercial production in the fourth quarter of 2021, having completed construction in May 2021, with world class safety records.

Salient features of Serrote are:

  • Open pit operation mined with conventional equipment over a 13 year mine life, with average annual production of 20 kt per annum copper equivalent
  • The existing processing plant with a capacity of 4.1 Mtpa consists of crushing, grinding, floatation, thickening and filtration producing a saleable copper concentrate
  • Floatation tailings are pumped to a tailings storage facility constructed via downstream raises
  • Life of mine by-product C13 operating costs are estimated to average a US$1.11/lb copper
  • Mineral reserves of 50.4 Mt at an average grade of 0.60% copper and 0.10 g/t gold, containing approximately 299 kt of copper and 159 koz of gold
  • Mineral resources of 112.2 Mt at an average grade of 0.54% copper and 0.10 g/t gold, containing approximately 609 kt of copper and 347 koz of gold

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