Sibanye-Stillwater, a major platinum-group metals producer, is looking to secure over $500 million through a metals streaming deal in order to strengthen its balance sheet after a drastic decline in earnings due to a sharp drop in metal prices. CEO Neal Froneman mentioned that various potential financiers are currently conducting due diligence at the company, with hopes of finalizing the deal by the third quarter of the year.
Last year, Sibanye reported a significant decrease in profits amounting to $2 billion, largely attributed to the unfavorable market conditions and impairments at its mines across different regions. In response to the challenging environment, the company, along with other South African rivals, has been making tough decisions such as cutting jobs and halting new project investments to weather the storm.
Despite the financial challenges, Froneman assured that Sibanye is not in immediate need of funds, emphasizing that the company has sufficient working capital for the next six months. Furthermore, he mentioned that Sibanye’s Keliber lithium project in Finland will continue to progress, despite the volatility in lithium prices.
To facilitate the fundraising, RBC Capital Markets has been assisting Sibanye in engaging with potential streamers interested in the deal. While multiple parties have shown interest, Froneman hinted that a single party is more likely to close the deal with the company. The outcome of this deal will be closely watched by industry observers as Sibanye positions itself for a more stable financial future.
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