Sibanye-Stillwater has entered into various agreements with DRDGOLD in Sibanye-Stillwater will exchange selected surface gold processing assets and tailings storage facilities for c.265 million newly issued DRDGOLD shares.
This will result in Sibanye-Stillwater holding 38% of the issued share capital of DRDGOLD, post the transaction.
At the current DRDGOLD share price of R4.9 this equates to c.R1.3 billion of crystallised value.
The transaction includes the following assets:
The following currently active TSFs will also be transferred, for no additional consideration, once they have been decommissioned by Sibanye-Stillwater:
The Selected Assets, with the addition of the currently active TSFs, have Probable gold Mineral Reserves of 3.82 Moz and Probable uranium Mineral Reserves of 42.9 Mlb.
The transaction excludes the Cooke uranium and gold assets which comprise: the Cooke TSF, Millsite TSF and the Cooke surface gold plant as well as the Ezulwini gold and uranium plant and associated Ezulwini 4 TSF.
The Cooke and Ezulwini TSFs contain Probable gold Reserves of 2.401 Moz and Probable uranium Reserves of 54.26 Mlb.
Sibanye-Stillwater retains full ownership of these assets and the right to process and deposit this material onto the RTSF, subject to contributing their proportionate capital and operating costs. As such, Sibanye-Stillwater retains full exposure to a higher uranium price environment.
The option has to be exercised in whole, anytime within the option period. The subscription price for the option shares shall be at a 10% discount to the 30 day volume weighted average traded price of DRDGOLD shares on the day prior to the date of exercise.
The transaction allows Sibanye-Stillwater to immediately crystallise c.R1.3 billion in value from the Selected Assets, while partnering with DRDGOLD to further develop the WRTRP.
Furthermore, this partnership presents an opportunity, in an exciting mining segment, to leverage off DRDGOLD’s proven surface retreatment capabilities with the potential to capitalise on further growth opportunities both locally and abroad.
DRDGOLD has significant experience in TSF reclamation and has a proven track record of:
Commenting on the transaction, Neal Froneman, CEO of Sibanye-Stillwater, says: “We are excited about the inherent potential in the investment and look forward to partnering with DRDGOLD in growing an international, industry leading, surface retreatment business. Sibanye-Stillwater will realise immediate value for underutilised surface infrastructure and TSFs, while retaining upside to the West Rand Tailings Retreatment Project and future growth in DRDGOLD.”
DRDGOLD has a network of surface assets that is unrivalled in South Africa and is focused on optimising these assets in order to increase gold production and extend its operational life. DRDGOLD intends developing the Selected Assets through a phased approach.
The first phase will include upgrading the existing Driefontein 2 and 3 plants to process tailings from the high grade Driefontein 5 TSF. Phase 1 must be completed within 24 months after the closing of the transaction while commissioning is expected to take 12 months and will include:
Further evaluation of all the TSFs through the pilot plant located at DP3 within 24 months.
The evaluation of each resource will include:
These cash flows will be prioritised for the development of subsequent phases. Outputs from Phase 1 will enable DRDGOLD to refine the original WRTRP process and engineering design as well as financial and capital models for Phase 2.
Phase 2 will deliver a central, high-volume, CPP capable of processing at least 1 Mtpm of tailings and development of a new RTSF including associated pipeline infrastructure, within an additional 24 month period.