One step left in Stillwater Mining Company sale

By: 
Marlo Pronovost
Stillwater County News Editor

The Stillwater Mining Company (SMC) is one step closer to being sold to Sibayne Gold Limited of South Africa.

SCM announced Monday morning the pending sale had been cleared by the Committee on Foreign Investment in the United States (CFIUS) — meaning no national security issues exist regarding the merger.

SMC and Sibayne jointly requested the CFIUS review, said SMC Investor Relations Officer Mike Beckstead.

The final piece of the transaction will come April 25 with a vote of shareholders of both companies. A majority of each company’s outstanding shareholders are needed to cement the sale. Also needed is the “approval of the related issuance of shares by Sibayne in a rights offering by the holders of at least 75 percent,” according to SMC.

SMC shareholders consist of approximately 40 percent non-U.S. and Sibanye’s shareholders consists of approximately 40 percent U.S. shareholders.

The $2.2 billion all-cash transaction was unanimously approved by the SMC board of directors and publicly announced in December 2016. SMC CEO Mick McMullen has said the board feels that the merger is attractive to shareholders, citing the $18 per share purchase price as well as the diversification it brings.

Should the merger occur, little change is anticipated. Sibayne officials have been to the Nye mine site and the East Boulder site in Sweet Grass County for on-site visits.

Sibanye’s two largest shareholders – Gold One International Ltd. and Public Investment

Corporation Ltd., which in aggregate represent 29 percent of Sibanye’s issued share capital – have confirmed their support of the transaction, with the closing to occur in the second quarter of 2017.

 

Fourth Quarter 

Earnings Report

Fourth quarter earnings were favorable with a $6 million net income, PGM mined sales of 134,500 ounces (compared to 120,300 ounces for the same quarter in 2016) and 169,200 recycled PGM ounces, according to SMC’s fourth quarter earnings report.

The fourth quarter’s mined PGM 132,100 ounces was down slightly from the same quarter in 2015 and attributed mainly to lost shifts from weather-related road closures.

For the entire year, it was a $9.5 million net income and a company record was set with 668,300 ounces of recycled PGM ounces. Also, PGM mined sales totaled 549,200 ounces (compared to 507,300 in 2015) and PGM mined production totaled 545,300 ounces (compared to 520,800 in 2015).

 

Blitz Project

The Blitz Project was significantly expanded with minimal costs and now includes the lower Blitz area below 5,000. The production expectation is now set between 270,000 and 330,000 PGMs per year once the operation is fully ramped up by 2021-2022. It is also running ahead of schedule.

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