Sibanye-Stillwater secures US$500m streaming agreement with Franco-Nevada

Johannesburg: Sibanye-Stillwater has announced that it entered into a US$500 million streaming agreement with Franco-Nevada (Barbados) Corporation, a wholly-owned subsidiary of Franco-Nevada Corporation (Franco-Nevada) (the Stream agreement) in exchange for the sale of gold and platinum streams (Stream) with reference to its Marikana, Kroondal, and Rustenburg operations (the Stream Area).

Key terms of the Stream agreement

Sibanye-Stillwater will receive a US$500 million upfront payment (Advance Amount) in exchange for:

• Gold Stream: gold ounces (oz) equal to 1.1% of 4E PGM oz contained in concentrate until delivery of 87,500 oz of gold, then 0.75% of 4E PGM oz contained in concentrate until total delivery of 237,000 oz of gold, then 80% of gold contained in concentrate for the remaining life of mine (LOM)
• Sibanye-Stillwater will receive a production payment price equal to 5% per ounce of the spot gold price on the date of delivery until total delivery of 237,000 oz of gold, which will increase to 10% of the spot gold price thereafter
• Platinum Stream: platinum oz equal to 1.0% of platinum contained in concentrate until delivery of 48,000 oz of platinum, then 2.1% of platinum contained in concentrate until total delivery of 294,000 oz of platinum, then no further deliveries
• Sibanye-Stillwater will receive a production payment price equal to 5% of the spot platinum price on the date of delivery
• The transaction is subject to approval from the South African Reserve Bank
• In addition, Franco-Nevada and Sibanye-Stillwater have agreed to convert the 5% net profit interest that Franco-Nevada holds on the Pandora property to a 1% net smelter return royalty

Neal Froneman, CEO of Sibanye-Stillwater, commented: “We are pleased to have successfully concluded this value accretive transaction in partnership with Franco-Nevada. We have raised US$500m (R8.8bn) of non-debt capital by primarily streaming gold, a minor component of the basket of metals produced from our SA PGM operations and a marginal and finite amount of platinum, which retains significant leverage to higher PGM prices, which we anticipate.     The Group’s financial position has been reinforced at a competitive cost of capital. The financial support from Franco-Nevada further validates the quality and long-term viability of our PGM assets, which continue to generate superior shared value for our stakeholders and we expect will continue for decades in the future. We welcome this opportunity to continue to build our relationship with Franco-Nevada.”