The disposal of Sibanye-Stillwater’s Beatrix 4 Shaft for R500 million to Neo Energy Metals will help it prioritise capital allocation from its balance sheet towards projects that are currently under development.
Sibanye-Stillwater operates platinum group metals and gold mining operations in South Africa.
Beatrix, including the Beatrix 4 Shaft located in the Free State gold fields, was one of the three assets acquired from Gold Fields International in February 2013 and also holds uranium deposits.
The Beatrix 4 operation had been placed under care and maintenance in September last year due to depleting gold reserves and depressed uranium prices.
As at the end of last year, the entire Beatrix operation had total surface and underground gold mineral reserves of 700 000 ounces and mineral resources of 7.6 million ounces.
The Beatrix 4 Shaft, however, had an additional 27 million pounds in uranium resources specifically contained in the Beisa Reef. The reef and deposits is accessed through the upper sections of the Beatrix 4 Shaft infrastructure.
Now, Sibanye-Stillwater has disposed of the Beatrix 4 Shaft to Neo Energy, saying the transaction will help clean up demands for capital from its balance sheet. Shares in Sibanye-Stillwater surged 4.42% to R18.41 in afternoon trade on the JSE yesterday.
The company will, however, still be exposed to uranium mining as it has an direct interest in Neo Energy.
“Through our direct shareholding in Neo Energy, we retain exposure to the uranium price and the future development of the project, while prioritising allocation of capital from the group balance sheet for projects currently under development,” said Neal Froneman, CEO of Sibanye-Stillwater.
Froneman added that the sale of Beartix 4 Shaft, encompassing the Beisa uranium project was “in line” with its strategy “to unlock value” from uranium assets under its portfolio.
Following this transaction, Neo Energy, a uranium exploration and development company listed in London and on the A2X market in South Africa, will develop the Beisa uranium project.
The company said uranium prices have been recovering from the lows of 2023 that partly forced it to place the Beatrix 4 Shaft under care and maintenance. Uranium prices peaked at $106 per pound in January, with the outlook for the uranium market remaining positive.
“Although the Beisa uranium project is not a capital priority for Sibanye-Stillwater, the transaction presents an opportunity for Neo Energy to develop the project while allowing Sibanye-Stillwater to maintain exposure to uranium production,” said the company.
Of the R500m total consideration for the transaction, R250m is payable in cash while a similar amount will be accounted for newly issued shares in Neo Energy.
On signing the R250m in shares equates to Sibanye-Stillwater owning 40% in Neo Energy. Sibanye-Stillwater will also receive a royalty on all uranium sold from the Beisa uranium project while Neo Energy assumes responsibility for all Beatrix 4 shaft rehabilitation and environmental liabilities.
Jason Brewer, chairman of Neo Energy, described the transaction as “truly transformational and sets us up with mining and processing infrastructure to fast track” production.
BUSINESS REPORT