South African miner Sibanye-Stillwater has purchased the Santa Rita and Serrote mines in Brazil from Appian Capital Advisory for US$1.0 billion. The deal adds two low-cost, producing assets to the company’s green metals portfolio.
“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,” said Sibanye-Stillwater CEO Neal Froneman. Both assets have been substantially pre-capitalized and as a result, the transaction will be immediately accretive to the miner’s cash flow and earnings.
In addition to generating a strong return on investment based on current operations, there is substantial long-term upside from the potential development of the underground mine at Santa Rita. The transaction included a 5.0% net smelter return (NSR) royalty, currently valued at US$218 million, over potential future underground production at the site.
Santa Rita is one of the largest nickel-cobalt sulphide open pit mines in the world. The mine produces a sulphide concentrate suitable for downstream processing to produce battery precursors. Serrote is an open pit copper mine that is currently in ramp up and on track to achieve commercial production in the fourth quarter of 2021.Source: Sibanye-Stillwater